Commons Sitting of 24 June 1982

Preamble
The House met at half-past Two o' clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  TEES AND HARTLEPOOL PORT AUTHORITY BILL
  Read the Third time, and passed.

  ALEXANDRA PARK AND PALACE BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Thursday 1 July.

Oral Answers to Questions
  HOME DEPARTMENT

    Complaints Against the Police
    Mr. Farrasked the Secretary of State for the Home Department what reforms he proposes to improve the system of complaints against the police.
    Mr. Meacherasked the Secretary of State for the Home Department when he expects to publish a White Paper on reform of the police complaints procedure.
    Mr. Flanneryasked the Secretary of State for the Home Department if he has yet arrived at a decision regarding the recommendations in the Scarman report of an independent element in the police complaints procedure.
    Mr. Hooleyasked the Secretary of State for the Home Department what further consideration he has given to the creation of a wholly independent system of investigation of complaints against the police; and if he will make a statement.
    The Secretary of State for the Home Department (Mr. William Whitelaw): The Government are now considering the recommendations in the Home Affairs Select Committee's report on police complaints procedures, published on 9 June. We shall announce our conclusions as soon as practicable.
    Several Hon. Members rose—
    Mr. Speaker: Order. I shall call first those hon. Members whose questions are being answered.
    Mr. Farr: I am grateful to my right hon. Friend for his reply, but, during his deliberations, will he bear in mind that in October 1974 the Conservative Party election
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    manifesto stated that we would bring into effect an independent element on complaints against the police? Will my right hon. Friend bear in mind that there is a widespread view throughout the country that that is necessary?
    Mr. Whitelaw: Most certainly. Since that date the Labour Government introduced a Bill purporting to do much the same, but that measure has been found to be unsatisfactory.
    Mr. Meacher: Does the right hon. Gentleman accept Lord Seaman's view that anything short of an independent system of investigation will be regarded as little more than cosmetic and will do nothing to restore public confidence? Does the right hon. Gentleman acknowledge that, in the absence of a Crown prosecutor system, an independent assessor will overcome none of the present problems arising from the police investigating themselves, such as a secret police report not shown to the complainant and the Director of Public Prosecutions not having direct access to the complainant? Does the right hon. Gentleman acknowledge that only an independent ombudsman will fully overcome those constraints?
    Mr. Whitelaw: The Select Committee on Home Affairs looked at all these matters, and the majority report did not agree with the hon. Gentleman's conclusions.
    Mr. Flannery: Does the Home Secretary accept that there is real worry among the population on the question of the police examining themselves? Most people believe that real democracy demands that the general public should have their representatives assisting in any complaints procedure. Does the right hon. Gentleman agree that was at one stage accepted by the Police Federation and later withdrawn?
    Mr. Whitelaw: I agreed to consider the Select Committee's report. Again, the majority report does not wholly accord with the hon. Gentleman's views. I also agreed to consult all the police organisations. When I have done that and fully considered the report, I shall bring proposals to the House.
    Mr. Hooley: Is the Home Secretary aware that it is in the interests of the police that there should be a completely independent system for inquiring into complaints? In the light of the revelations now appearing about corruption in the highest levels of the police, does the right hon. Gentleman agree that it is vital for public confidence to have a completely independent system to deal with complaints against the police?
    Mr. Whitelaw: On what is best for the police, it must be remembered that it is also right that chief constables should have the right to deal with any problems of discipline among their own officers. Otherwise, the much vaunted accountability of chief officers, which is very important, would simply not be there. There are serious complaints, but, in view of the vast number of contacts satisfactorily carried out between the police and the public, I hope that the hon. Gentleman will not make too much of this matter.
    Mr. Edward Gardner: I welcome the possibility of a new independent authority to deal with complaints against the police, but will my right hon. Friend bear in mind that there is no one more able than the police themselves to investigate all allegations of misconduct, whether against

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    members of the public or of the police? Moreover, does my right hon. Friend agree that to restrict the police in this duty would be to insult their general and high reputation for fairness and impartiality?
    Mr. Whitelaw: We shall have to consider all these matters, but I am grateful to my hon. and learned Friend for underlining the point that I made. In view of the amount of contact that there is between the police and the public, it is remarkable how much support there is for the police and how few complaints there are.
    Mr. Kilroy-Silk: Does the Home Secretary accept that to remove the police from potential allegations of partiality and to restore public confidence in them it will be necessary to implement a totally independent system of investigating the police, as recommended in the minority report of the Select Committee signed by myself and my hon. Friend the Member for Battersea, South (Mr. Dubs)? That minority report, not the majority report to which the right hon. Gentleman has alluded, gained overwhelming support in the media and in the country as a whole.
    Mr. Whitelaw: The hon. Gentleman falls into the trap that perhaps he might accuse me of falling into—namely, reading only those things that suit one's case. If so, he has not read those newspapers that did not agree with him. There is always an opportunity to take such a selective approach. The hon. Gentleman talked about restoring public confidence in the police. I very much resent the word "restore". There is already a large measure of public confidence in the police.
    Mr. Nicholas Baker: Does my right hon. Friend accept that events such as next week's proposed rail strike are likely to increase to a dangerous level the number of complaints against the police? Will he consider easing the parking restrictions in central London and elsewhere to allow the commercial life of the capital to continue?
    Mr. Whitelaw: That matter does not arise on this question. If, alas and unfortunately, there is industrial disruption next week, matters such as those that my hon. Friend has in mind will be carefully considered.

    Terrorism (Metropolitan Police Area)
    Sir David Priceasked the Secretary of State for the Home Department whether there has been any increase in acts of terrorism within the Metropolitan Police area over the last 10 years.
    Mr. Whitelaw: There does not appear to have been an increase in crimes connected with terrorism in this period.
    Sir David Price: Has my right hon. Friend any evidence, as has been suggested in the press, that a number of embassies in London have assisted a certain number of terrorists, both actively and passively? If so, what measures can he take in response to complaints against embassies for abusing their privileges?
    Mr. Whitelaw: I have not read the evidence referred to by my hon. Friend. I should have to discuss this matter with my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs.

    Papal Visit (Metropolitan Police)
    Sir William van Straubenzeeasked the Secretary of State for the Home Department what was the charge on public funds of the deployment of the Metropolitan Police during the recent visit of His Holiness the Pope.
    The Minister of State, Home Office (Mr. Patrick Mayhew): Additional police costs of the order of £290,000 were incurred by the Metropolitan Police as a result of the visit. The additional cost of civilian support services has yet to be quantified. The Roman Catholic Church will be charged for the policing of events which took place on private property.
    Sir William van Straubenzee: I appreciate that these are substantial funds—I speak as an inner London ratepayer twice over—but does my hon. and learned Friend understand that this was one of the most remarkable visits that the capital has ever received? It was greatly uplifting and enlightening and was welcomed by a large number of people, not only members of the Roman Catholic Church or, indeed, any church at all.
    Mr. Mayhew: My impression is that the Pope's visit was widely regarded throughout the country as having been a very good thing indeed.
    Sir John Biggs-Davison: I played a minute part in raising funds towards the personal security of the Pope during his visit. Is my hon. and learned Friend aware that many Catholics would not wish there to be a heavy charge on general ratepayers as a result of this pastoral visit? However, this seems as worthy an expenditure of public funds as the expense of controlling CND and other such demonstrations.
    Mr. Mayhew: I think that my hon. Friend's wish will be accommodated in accordance with the usual arrangements that apply in these respects.

    Moor Court Open Prison, Oakamoor
    Mr. Knoxasked the Secretary of State for the Home Department when he expects to make his decision on the future of Moor Court open prison, Oakamoor.
    Mr. Mayhew: My right hon. Friend hopes to make a final decision soon.
    Mr. Knox: Is my hon. and learned Friend aware that Moor Court has been a model open prison? Is he further aware that past and present prisoners, the staff and the people who live in the area are strongly opposed to the closure of that prison? Will he give full weight to that opposition before a final decision is reached?
    Mr. Mayhew: Yes. My right hon. Friend is considering the representations that have been made to him by the various staff associations and the Prison Officers Association. He will certainly take into account the matters to which my hon. Friend has referred, and he hopes to make an early decision.

    Immigrants (Assisted Repatriation)
    Mr. Marlowasked the Secretary of State for the Home Department if, pursuant to the reply to the hon. Member for Basildon (Mr. Proctor) on 8 June, Official Report, c. 19, he will break down the numbers of

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    immigrants who have taken advantage of schemes for assisted repatriation in each of the past five years by age group.
    The Minister of State, Home Office (Mr. Timothy Raison): We regret that a detailed breakdown of the age groups of those who have received assistance with repatriation expenses could be provided only at disproportionate cost, but we understand that the majority of those assisted are either approaching or have attained pensionable age.
    Mr. Marlow: Like many hon. Members, my right hon. Friend must be aware that many of these people, particularly West Indians, especially as they near pensionable age, want to go home to the land of their origin to see out their retirement. For humanitarian reasons, if for no other, will he try to ensure that the resettlement allowances available to such people are increased?
    Mr. Raison: I am sure that many West Indians dream of going to the West Indies, just as many English people do, but I do not think that hard evidence bears out the claim that there is a large demand for repatriation to the West Indies. I do not believe that a policy of encouraging repatriation would help race relations.
    Mr. Bidwell: Will the right hon. Gentleman reaffirm that under both Tory and Labour Governments there is no question of the mass repatriation of former immigrants who are working so hard and are such an asset to the British economy? Will he try to cut across the small enclave in his party that persistently pushes questions of this kind, which injure certain people in Northampton just as much as they injure people in my constituency?
    Mr. Raison: I think that I have made our views on this subject quite clear.
    Mrs. Knight: Will my right hon. Friend consider the alteration of some of the conditions on which help is available for those who wish to return to their country particularly the condition that they must be going to a job? If such people have no job here, they are perhaps keen to go back to sit in the sun. Is it not possible to allow them to do so?
    Mr. Raison: If my hon. Friend wishes to raise a specific point of that kind, I should be willing to consider it. At present, we have no plans to change the existing system.
    Mr. Jim Marshall: The Minister's views on this matter will be welcomed. He does a great deal to assist race relations when he refutes the kind of allegations made by his hon. Friends. Does he accept that everyone in the country, from the West Indies or wherever, wishes to see a reversal of the Government's economic policies so that the aspirations of their children in terms of jobs can be satisfied? Getting rid of that problem to the West Indies will do nothing to solve our race relations problems.
    Mr. Raison: One of the things that strikes me about many members of our ethnic minorities is their economic good sense. Like us, they believe that Britain needs to put its economic house in order and that, when that happens, everyone, including the ethnic minorities, will gain greatly.

    Television Licences
    Mr. Chapmanasked the Secretary of State for the Home Department if he is satisfied with arrangements to discourage the evasion of payment of television licences.
    Mr. Raison: We are concerned at the extent of evasion of television licence fees and would like to see it reduced. In the circumstances we consider that the measures to discourage evasion are necessary and appropriate. They are kept under review.
    Mr. Chapman: I agree with my right hon. Friend, but will he confirm that the latest estimates suggest that 1·2 million people evade the payment of the television licence fee and that that probably represents a loss to the Exchequer in excess of £40 million? Will he therefore consider additional measures—for example, declaratory statements on tax and other official returns?
    Mr. Raison: I confirm the figures that my hon. Friend has given. They represent a serious problem. We pursue a number of different measures in our endeavours to deal with this problem, but we would think carefully about any new measures that are put forward. I am not sure whether my hon. Friend's suggestion would be an appropriate use of tax information, but I am prepared to consider any ideas that are put forward.
    Mr. Michael McNair-Wilson: Does my right hon. Friend have any idea of the number of people who are not paying for television licences because they are expressing dissatisfaction with the BBC and some of its programmes, especially the "Panorama" programme, which, on the day that Port Stanley was freed, seemed to do nothing but carp and criticise rather than praise the outstanding bravery of our Service men?
    Mr. Raison: I know that from time to time many people are dissatisfied with BBC programmes, but not paying licence fees is a wholly inappropriate way of demonstrating disapproval.
    Mr. Stallard: How many people who do not pay for licences are pensioners who cannot afford to do so because of increased standing charges and licence fees?
    Mr. Raison: One cannot give a breakdown of those who do not pay their licence fees. I should be surprised if there were large numbers of pensioners among them. The retail price index reflects increases in the cost of television licences. It also reflects annual increases in the retirement pension.

    Custodial Remand
    Mr. Kilroy-Silkasked the Secretary of State for the Home Department what is the longest period of time a person currently in prison has been on remand in custody; and what steps he proposes to take to reduce the number of persons held on remand in custody.
    Mr. Mayhew: The first part of the question could be answered only at disproportionate cost. The size of the remand population of prisons depends on the volume of prosecutions where remand in custody may be justified and on the time that cases take to come to trial. Several initiatives to reduce waiting times have been taken.
    Mr. Kilroy-Silk: Why could the first part of the question be answered only at disproportionate cost when

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    the hon. and learned Gentleman has told me that two people in prison have been on remand for more than two years? Surely one needs only to know which of the two has been waiting the longest. Does he agree that that appallingly inadequate answer disguises the fact that 117 prisoners have been in custody on remand in the most appalling conditions for between 18 months and two years? Does he agree that that is a serious and indefensible blot on our criminal justice system?
    Mr. Mayhew: It is regrettable when people must wait in custody for anything like the time that the hon. Gentleman mentioned. The question that was answered on 27 May was more specific and capable of being answered without disproportionate cost. That is not so with this question.
    Mr. Greenway: Is my hon. and learned Friend aware that I spent the morning in Wormwood Scrubs and that examining the provision of education there was a salutory experience? I found the provision of education for prisoners on remand to be low—indeed, almost non-existent.
    Mr. Speaker: Order. The hon. Gentleman has made an interesting observation, but he must ask a question.
    Mr. Greenway: Will my hon. and learned Friend examine the question of education for prisoners on remand, especially those who are on remand for a long time?
    Mr. Mayhew: I welcome my hon. Friend back. I acknowledge that education is one of the services that are impeded by the present overcrowding in remand prisons. My right hon. Friend's firm intention is to do everything in his power to reduce overcrowding.
    Mr. Hattersley: What is the objection to adopting the Scottish system and specifying the period within which a person on remand must be brought to trial?
    Mr. Mayhew: The objections were set out fully when the matter was debated in Committee and on Report of the Criminal Justice Bill. That system would make little difference here. When the delay is not shown to be the fault of the prosecution, the 110-day rule is waived.
    Mr. John Wells: Is my hon. and learned Friend aware that the entire prison population seems to want to come and live in Maidstone? Day by day and week by week I receive letters from prisoners who want to be moved to Maidstone, because Kent is a nice area. Is that plethora of letters exceptional, or do others want to go to other prisons?
    Mr. Mayhew: My right hon. Friend cannot be responsible for the consequences of my hon. Friend's popularity as Member of Parliament for Maidstone. I am sorry that he is to retire. Maidstone is a training prison. The regime of a training prison is in many respects much more attractive to inmates than that of other prisons.
    Mr. Clinton Davis: Will the Minister take steps to require prison authorities to ensure that administrative convenience is not placed above the interests of justice? Will he also ensure that, when a judge recommends that a prisoner should not be transferred prior to his trial so that he can be properly represented in the week before his trial, that recommendation will be adhered to?
    Mr. Mayhew: I am sure that it is the desire of all who are concerned with these difficult matters to do all that is practicable to ensure that the interests of justice are served.

    Community Liaison Groups
    Mr. Pittasked the Secretary of State for the Home Department what progress has so far been made in setting up community liaison groups as recommended in the Scarman report.
    Mr. Raison: My right hon. Friend has issued guidance on procedure and best practice for local consultation arrangements between the community and the police. We have been encouraged by the good work already being done in many places. We are sure that chief officers and police authorities and the Commissioner and boroughs and districts in London will build on this in the light of the guidance. It will be important to develop arrangements suited to each area.
    Mr. Pitt: I am grateful for and somewhat encouraged by the Minister's reply. How many liaison groups have been set up as a result of the anxiety of minority communities that they should have proper and good relationships with the police?
    Mr. Raison: I am glad that the hon. Gentleman derives some encouragement from the way in which matters are developing. He is right to do so, although some problems lie ahead. I cannot give an exact figure, but we are witnessing something important taking place. It will develop.
    Mr. Tilley: Does the Minister accept that guidelines and good will are not sufficient to ensure that liaison committees are successful? I remind him of the experience of Lambeth, where a consultative group was set up as a result of his and the Secretary of State's initiative. The problem there is now one of funds. Is he aware that the amount that the Home Office is willing to allow for the minimal running costs of that liaison committee is less than what the group now believes is necessary? Will he be sympathetic towards the request for more money—that request may have arrived already—to ensure that the community liaison group in the key area of Brixton works?
    Mr. Raison: I accept that guidance and good will are not everything. Nevertheless, they are an important start. Funding for the Lambeth group is now being carefully discussed. I am sure that it will be resolved correctly.
    Mr. Stokes: In ancient, civilised, tolerant and law-abiding England, are the special new types of groups strictly necessary? May there not be a danger of their becoming hotbeds for malcontents? Does not everybody want to be treated the same and to have the law applied equally?
    Mr. Raison: Ancient, tolerant and civilised England has a long tradition of policing by consent. It is one of the marks of our society. If we must think about developing new ways of implementing that policy, it is right to do so. What is happening now will not in any way undermine our tradition.
    Mr. George Cunningham: Will the Minister confirm that the Secretary of State would not regard it as in keeping with the guidance that he has issued on the subject if any local authority in the London area endeavoured to exclude Members of Parliament from the groups, because of the constitutional position in London, or to exercise a political veto over elected representatives of a party to which the council did not adhere?
    Mr. Raison: We do not envisage local authorities exercising political vetoes to shape adversely the pattern of consultation groups.
    With regard to London, my right hon. Friend, who is the police authority for London, has made it quite clear that it is desirable for London Members of Parliament to be included in the groups.
    Mr. Wheeler: Is there already a liaison arrangement between the 32 London boroughs and their local police stations? If so, is that a satisfactory basis upon which to build the liaison arrangements?
    Mr. Raison: I think that there is already such a liaison arrangement. We believe that the London boroughs, working together, can help us to get consultation right in London.

    Resident Informants
    Mr. Christopher Priceasked the Secretary of State for the Home Department if he has considered giving guidance to chief officers of police on the procedures which should be followed in connection with resident informants held in custody by them.
    Mr. Whitelaw: This is under active consideration.
    Mr. Price: Is the Home Secretary really satisfied with the way in which supergrasses—a word that I was not allowed to use in the main question—
    Mr. Speaker: Order. What is out of order in the Table Office is out of order here.
    Mr. Price: Is the Home Secretary aware that as the word "supergrass" is out of order I shall have to use the term "resident informant"? Is he satisfied with the use being made by the Metropolitan Police and other police forces of this method of obtaining convictions in court? Is he further aware that one supergrass—I am sorry, I mean one resident informant—has recently escaped from the custody of the Metropolitan Police? Is he satisfied that that did not take place with police collusion?
    Mr. Whitelaw: On the first point, despite the very difficult questions involved, I am satisfied that informants of this nature are necessary in cases of serious crime—provided that they are dealt with in accordance with very clear guidence, which is issued to the chief constables concerned.
    With regard to the escape to which the hon. Gentleman referred, it would not be right for me to anticipate the results of the inquiry that the Metropolitan Police Commissioner has undertaken into that.
    Mr. Speaker: Order. I do not want that word included in "Erskine May" in the list of words not to be used. As I am trying to find out why it is out of order, I should indicate to the hon. Gentleman that it would be in order on another occasion, but not on this one.
    Mr. Kilroy-Silk: Well done.

    Immigration Rules
    Mr. Tilleyasked the Secretary of State for the Home Department whether he will seek to introduce a change to the Immigration Rules to entitle all women who are British citizens under the Nationality Act 1981 to be joined in the United Kingdom by their husbands.
    Mr. Raison: We are still considering what changes will be required in the Immigration Rules when the new British Nationality Act comes into effect and we shall announce our proposals in due course.
    Mr. Tilley: If, when the Act comes into force on 1 January, one group of hundreds and possibly thousands of young women in this country will be the only citizens without the right to live with their spouses in this country, does the right hon. Gentleman agree that that group, which we know consists largely of young Asian women, will effectively be second-class British citizens, as they will have fewer rights than all the rest of British citizens?
    Mr. Raison: If I understood the hon. Gentleman correctly, the people of whom he speaks are not British citizens. But perhaps I have misunderstood. We have not yet determined what our policy in this area will be. We shall make an announcement in due course, before the new rules come in.
    Mr. Jessel: Is not a wife's place where her husband belongs?
    Mr. Raison: That is a generalisation of such a sweeping nature that I think that it would be imprudent for me to reply to it.
    Dr. Summerskill: If the right hon. Gentleman will read the question, he will see that it refers to women who are British citizens. Will he bear in mind that the last Conservative general election manifesto stated that the rights of all British citizens legally settled here are equal before the law? Does he accept that if the rules are not changed he will have to add the words, "unless the citizens are women"?
    Mr. Raison: I know that the original question referred to British citizens, but I understood the tenor of the hon. Gentleman's supplementary question to be that the women concerned were not British citizens.
    Mr. Stanbrook: Is my right hon. Friend aware that there will be ample support from Conservative Members if he decides to maintain the existing rule about foreign husbands? When does he intend to bring in such changes as will be needed in the Immigration Rules as a result of the British Nationality Act coming into force? Will he also confirm that the Act will be brought into force on 1 January next year?
    Mr. Raison: I am aware that there are strong feelings on both sides of the argument. It is our expectation that the British Nationality Act will come into force on 1 January next year. The changes in the rules will have to be brought in ahead of the implementation of the Act, but I cannot say on exactly what date we shall make our announcements.

    West Yorkshire and Greater Manchester (Boundary Commission Report)
    Mr. Freudasked the Secretary of State for the Home Department, pursuant to his answer to the hon. Member for Colne Valley (Mr. Wainwright), 6 April, Official Report, column 273, whether he is now able to give a more precise date for the submission by the Boundary Commission of its report containing its final recommendations.
    Mr. Mayhew: It remains the position that the Boundary Commission for England hopes to complete its current general review by the end of 1982, and that it intends to submit its report as soon as possible thereafter.
    Mr. Freud: I am not entirely ungrateful to the Minister for that reply, but will he tell the House whether he intends to fight the next election on the old or the new boundaries?
    Mr. Mayhew: Personally, I should be equally happy to fight it on either—not that the Boundary Commission's proposals leave me unscathed, as I stand to lose the "Royal" in Royal Tunbridge Wells.

    Young Persons (Convictions)
    Mr. Edwin Wainwrightasked the Secretary of State for the Home Department how many young persons between the age of 12 and 20 years were convicted during each of the past four years.
    Mr. Mayhew: In 1980 about 210,000 persons aged 12 and under 21 were found guilty of indictable offences. In each of the three previous years the number was about 190,000. Information for 1981 is not yet available.
    Mr. Wainwright: Does the Minister agree that the number of young people committing such offences must be a matter of sadness to any Government? Does he believe that the present economic situation has any bearing on this, in that for young people aged 12 to 14 standards at home are much lower than they should be, while those of 15 and 16 and upwards are highly frustrated due to the lack of jobs when they are ready to go to work?
    Mr. Mayhew: I agree, of course, that it is both sad and reprehensible that so many offences are committed by young people in this age group. As a student of these matters, the hon. Gentleman will know that the origins and roots of crime are very tangled and complex. I do not think that unemployment can be said to have a direct bearing on the 12 to 14 age group, and certainly no causative link has been proved to exist between the level of unemployment and the level of crime.
    Mr. Bill Walker: Does my hon. and learned Friend agree that the problems of young people becoming involved in crime have their basis in the home? Does he agree also that one of the difficulties that we face is that stability in the home is no longer what it was, due to trendy legislation which, among other things, makes for easier divorce and one-parent families?
    Mr. Mayhew: I should not do justice to the last subject if I attempted to answer it at Question Time. I believe that there is scope for initiatives across a number of Departments to see whether there are ways in which opportunities for crime can be diminished. Those initiatives are now being taken.
    Mr. Kilroy-Silk: Will the Minister confirm that the Home Office research unit study into the disorders in Handsworth last year concluded that unemployment was a major contributory factor in the riots?
    Mr. Mayhew: I do not believe that anyone has ever disputed that unemployment offers an occasion for criminality, but it never offers an excuse and it would be a great disservice to the proper study of these matters if undue weight were placed on that factor alone.
    Dr. Summerskill: Will the hon. and learned Gentleman bear in mind that this week in another place the Government were deservedly defeated because they opposed a realistic amendment making it harder for courts to impose custodial sentences on young offenders?
    Mr. Mayhew: No, the hon. Lady is misinformed. The amendment did not make it harder. It sought to spell out in statutory language considerations that the courts need to have in mind before thay may sentence to custody. I explained at length in this House—and I obtained the approval of this House—that it is better to legislate in general terms and to allow the Court of Appeal to develop, in a series of judgments, the proper guidance to the courts.

    Demonstrations (Police Film)
    Mr. Winnickasked the Secretary of State for the Home Department how much of the film taken by police of demonstrations is retained by them; and for how long.
    Mr. Whitelaw: These are matters within the discretion of individual chief officers of police, and there is no central record of their procedures.
    Mr. Winnick: Is the Home Secretary aware that there is considerable and understandable disquiet over filming by police of demonstrators, as occurred on the CND demonstration recently? In the interests of civil liberties, would it not be right for such police practices to cease forthwith?
    Mr. Whitelaw: The answer to the first question is that I was not aware. The answer to the second question is "No, Sir"
    Mr. Eldon Griffiths: Why should not the police use modern methods to detect and identify criminals? Will my right hon. Friend encourage the police service if, by this method, they can identify in advance terrorists, whether actual or potential?
    Mr. Whitelaw: I should make it clear to my hon. Friend that the purpose of the filming was for future briefing and training in the policing of large-scale events. That was a large-scale event.
    Mr. Christopher Price: Will the Home Secretary arrange for a showing in Westminster Hall of the films so that we can all have a look at them?
    Mr. Whitelaw: An awful number of people would be bored if they had to look at them.

    Shoplifting
    Mr. Adleyasked the Secretary of State for the Home Department whether he has any proposals to amend the law as it relates to shoplifting; and if he will make a statement.
    Mr. Mayhew: No, Sir. We are not persuaded that the law relating to theft from shops requires amendment.
    Mr. Adley: Does my hon. and learned Friend recall that it is now almost 10 years since his Department produced the document "Shoplifting and Thefts by Shop Staff'? Since then, all that has happened has been a proliferation of anti-customer security devices by many of the large stores rather than the tackling of the problem that is really caused by their trading methods. Will he now

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    review that document and, in particular, will he closely consult magistrates, many of whom have to deal with the tragic parts of these cases, involving people who previously led blameless lives and who find themselves on serious criminal charges?
    Mr. Mayhew: The Home Office standing committee on crime prevention has been reviewing the report to which my hon. Friend refers. That review is almost complete but the fact remains that stealing from a shop is stealing, none the less. It would be wrong to make any change in the law that suggested that such stealing is somehow less serious than stealing from another area.

    Complaints Against the Police
    Mr. Altonasked the Secretary of State for the Home Department what representations he has received urging an independent police complaints procedure.
    Mr. Whitelaw: I have received representations from hon. Members and others in favour of changes in the present arrangements, a few proposing a wholly independent system of investigation.
    Mr. Alton: Does the Home Secretary accept that one of the major causes of the disturbances in many of our cities last year was the feeling among many of those participating that they could not get a fair hearing when they had a complaint against the police? Does he agree that we need urgently an independent police complaints procedure?
    Mr. Whitelaw: I do not accept for one moment the premise of the hon. Gentleman's first point. On the second point, I have made it clear to the House that we are studying the report of the Select Committee on Home Affairs. I am having discussions with all the police organisations and I shall come forward to the House in due course with proposals.
    Mr. Jessel: Would it not be better to set up a procedure for praising the police?
    Mr. Whitelaw: I am delighted to say that many people do that already, but I wish that some people would pay slightly less attention to complaints, which are getting slightly out of proportion.

    Glue Sniffing
    Mr. Newensasked the Secretary of State for the Home Department what recent representations he has received about the growth of the practice of glue sniffing among young people.
    Mr. Mayhew: Since the reply given to the hon. Member for Carlisle (Mr. Lewis) on 11 March, we have received four letters from hon. Members about solvent abuse and 11 from members of the public.
    Mr. Newens: Is the Minister aware that there is widespread concern among all those who deal with the problems of young people at the spread of this repugnant practice, which has been proved to be dangerous to young people's health? Is he also aware that many people are concerned about Home Office complacency? Will he further examine the matter to see whether it is possible to require that an agent should be included in the glues used for glue sniffing so as to make those who participate violently sick?
    Mr. Mayhew: I am aware of the concern referred to in the first part of the question. In tackling the problem, the Government place most reliance on persuasion and education at local level. In a debate on 20 April my hon. Friend the Under-Secretary of State for Health and Social Security set out the Government's policy and the action being taken. He outlined the plans for strengthening the capabilities of local services.
    Mr. Snape: Will the hon. and learned Gentleman accept that this is a widespread and worrying problem, particularly among young people and unemployed young people in the West Midlands? Will the Home Office consider setting up a working party or at least holding discussions with the manufacturers of glues and other solvents to see whether an additive could be placed in their products as outlined by my hon. Friend the Member for Harlow (Mr. Newens)?
    Mr. Mayhew: I am aware of the concern. The problem with putting in an additive is that an enormous variety of solvents can be sniffed for kicks. The demands on that additive would be so great that investigations have shown that a solution to the problem along those lines is unlikely.

  PRIME MINISTER

    Engagements
    Mr. Adleyasked the Prime Minister if she will list her official engagements for 24 June.
    The Prime Minister (Mrs. Margaret Thatcher): This morning, following my return from the United States, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Adley: Is my right hon. Friend aware of the mounting frustation and anger at the proposed strike on the railways next week among the customers, the board and last, but by no means least, a large number of members of the National Union of Railwaymen, who have had no ballot, have not been consulted and many of whom do not seem to understand why their union proposes to call them out on strike? Would my right hon. Friend please take note of this and—as I hope she recognises that I am a supporter of the railways—can she see what can be done at this stage to prevent the railway industry from embarking on a strike that will be suicidal for the industry?
    The Prime Minister: I am certain that my hon. Friend is correct when he says that a number of railwaymen do not wish to take part in a strike, realising that a strike could bleed the railways of the financial resources that they need, and could eventually take away the jobs of many railwaymen as well as stopping the creation of an efficient railway service. Sir Peter Parker has sent letters to all the work force setting out the implications of a strike. I hope that each and every member of the work force will consider the letter carefully.
    Mr. David Steel: Since the Prime Minister is still considering the form of the Falkland Islands inquiry, and in the light of the statements by the captain of the "Endurance" and her letter to the lady in Beaconsfield, will she make it clear that, whatever form the inquiry

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    takes, it should be set up under the authority of the House so that all Members and not just party leaders can indicate its scope?
    The Prime Minister: I have communicated with the right hon. Gentleman and a number of other right hon. Members about the form of the inquiry that I was proposing and which I had hoped would find favour. If it does not, perhaps the right hon. Gentleman will put forward other proposals. If it is to be thorough it will involve handling a good deal of intelligence material. That is a factor in considering what type of inquiry we should set up.
    Mr. Farrasked the Prime Minister if she will list her official engagements for 24 June.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Farr: First, may I congratulate my right hon. Friend on an excellent speech in New York and also on her remarkable stamina? If my right hon. Friend has a chance to do so later today, will she examine the situation that has arisen over the Spanish application to join the EEC? It is reported that France will veto the application. Spanish membership would have severe implications for agriculturists and horticulturists in Britain. Will she examine the position to see whether, if Spain is to join, there can be the longest run-in period, in the interests of our own producers?
    The Prime Minister: I am grateful to my hon. Friend for his kind comments at the beginning of his question. With regard to the possible entry of Spain into the Community, I realise that British horticulturists may face increased competition for certain products, notably early potatoes and some fruit and vegetables. I fully agree with him that it is up to the British Government to safeguard the interests of the British horticulture industry and to see that we can achieve as long a transitional period as possible, as my hon. Friend requires.
    Mr. John Morris: Has the Prime Minister had time to consider the letter that I sent her recently expressing my dismay at the fact that our forces on the Falklands had to pay up to £15 to make telephone calls home to say that they were safe and well? Will she consider my suggestion that the British taxpayer should have the privilege of chipping in to save our soldiers having to pay?
    The Prime Minister: I have received the right hon. and learned Gentleman's letter. Where possible, arrangements are made for injured members of the task force to make one telephone call home, which is paid for out of welfare funds. We have no immediate plans to make free telephone facilities available to members of the task force.
    Mr. Kilroy-Silk: Why not?
    The Prime Minister: If the hon. Gentleman will wait for one moment I shall give him the reason. There are no shore-based telephone links between the Falklands and the United Kingdom and it may be some time before they can be repaired. We therefore think that the limited facilities available on ships should go first to those who are injured. If we were to try to arrange an equitable system for the 20,000 members of the task force to make free telephone calls, it would pose considerable administrative problems but, more importantly, difficult operational problems.
    Mr. Lyell: Does my right hon. Friend deplore the deliberate scare tactics of Mr. Arthur Scargill in walking out of his very first meeting with the new National Coal Board chairman after only three and a half minutes and shouting about a hit-list of pit closures? Is it not the case that the miners who worked in the pits that closed last year have found new and better jobs in more modern pits or have been retired on very generous terms? Surely it is wrong for the miners' leader to seek to exploit the situation and to obstruct the coal board's future by exploiting the fears of elderly miners?
    The Prime Minister: I agree very much with my hon. and learned Friend. I understand that the National Coal Board made it clear to the National Union of Mineworkers that there is no so-called hit-list of pits earmarked for closure. As my hon. Friend said, those who are made redundant in the coal industry receive very generous redundancy payments. Many of the younger miners find jobs in better and more productive pits. I believe that that will be so when the new coalfields come into operation. Mr. Scargill's response in walking out of a meeting, for which the National Union of Mineworkers had asked, only three and a half minutes after it had started is, to put it mildly, hardly constructive.
    Mr. James Callaghan: I take up the supplementary question of the hon. Member for Harborough (Mr. Farr). Does the right hon. Lady recall an earlier occasion last February when her hon. Friend asked her a question which directed her attention to the proposed possible invasion of the Falkland Islands by the Argentines and invited her to consider various reports? Did she take any action on that at that stage? If not, does she not consider that she made a gross error of judgment in failing to take preventive action in time? Whatever form an inquiry may take, ultimate responsibility for what took place rests upon her.
    The Prime Minister: The right hon. Gentleman is in a position to know of the many threats that have been made by the Argentines over the years. The latest ones had to be judged against the background of those that had been made previously. I am happy to report to the right hon. Gentleman that the Argentines who landed on Southern Thule during his time have now been removed.
    Mr. Donald Stewartasked the Prime Minister if she will list her official engagements for Thursday 24 June.
    The Prime Minister: I refer the right hon. Gentleman to the reply that I gave some moments ago.
    Mr. Stewart: Is the right hon. Lady aware that there is widespread and, in my view, well-founded belief that the nurses have been dealt with abominably and shabbily by successive Governments? As the Secretary of State for Social Services says that the nurses have a special case, will the right hon. Lady use her influence to ensure that they are put in the same league for pay rises as senior civil servants and judges?
    The Prime Minister: A final offer has been made to the nurses. I understand that they are considering it. It is, of course, a greater offer than the one made to the other people who work in the Health Service, and we undertook that that should be so. We are also trying with them to find a new method of establishing their pay, and we hope to have that in place by 1983.
    Mr. Foot: Will the right hon. Lady reconsider the answer that she gave to my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan)? Does she not understand her responsibilities in this matter? Is she suggesting that she can shuffle off those responsibilities on to others, because the Labour Government dealt with them in a very different way from her own way? Does she mean to say, against the background of the letter that she wrote to Mrs. Nichols and the message that she received from Captain Baker, that all the signs were not there? Can she tell us why she neglected those signs?
    The Prime Minister: Judging from what the right hon. Gentleman said throughout the Falklands affair and judging from what some of his hon. Friends have said, the fact is that a Labour Government would never have fired a shot—
    Mr. Winnick: Rubbish.
    The Prime Minister: My letter to Mrs. Nichols was written in the early part of February. We were at that time doing exactly what I believe that right hon. Gentleman would have wished us to do. We were in negotiations with the Argentines. Two or three weeks after the letter was written we met the Argentines in New York. That meeting was described in a communiqúe as cordial and friendly. It took place two or three weeks after the letter was sent.
    Mr. Graham: The right hon. Lady was conned.
    The Prime Minister: Finally, the Argentines landed on British sovereign territory during the lifetime of the Labour Government. In spite of what the official Opposition say now, the Labour Government did nothing about it.
    Mr. Foot: The right hon. Lady has a jaundiced view of the history. We will have all that out in the inquiry. I wonder whether the right hon. Lady will answer a direct question about her own responsibilities. Captain Barker said that all the signs were there. Does she agree with him?
    The Prime Minister: That was in relation to "Endurance"—[HON. MEMBERS: "Answer".] As the right
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    hon. Gentleman knows, I am willing and anxious to have every single bit of evidence—[HON. MEMBERS: "Answer".]—before an inquiry. I do not wish to hide everything. I wish everything to be out, including every single thing under this Government and previous Governments.
    Mr. Shersby: Does my right hon. Friend recall that the Marines were stationed on the Falkland Islands following a landing by a group of Argentines who described themselves as the Condor Group? Does she further recall that those Argentines landed on the race course in a hijacked Aerolineas Argentinas DC3? Does she agree with me that the level of defence that was provided by the Marines following that incident was quite consistent with the threat that was posed by those people?
    The Prime Minister: My hon. Friend has put the facts, and I agree with him.
    Mr. Joseph Deanasked the Prime Minister if she will list her official engagements for Thursday 24 June.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Dean: Will the Prime Minister arrange today for copies to be made available of any correspondence that has been received complaining about the inefficiency or conduct of the four distinguished chairmen of health authorities whom the Secretary of State for Social Services has decided not to reappoint? If no such correspondence has been received, why did the right hon. Gentleman make that despicable and partisan decision?
    The Prime Minister: At the end of the contracts of service of those appointed to the National Health Service, my right hon. Friend the Secretary of State decided not to renew some of them, but to renew others. He is perfectly entitled to do that. Previous Governments have done the same thing. Among those who hold office there are some Conservatives, some Labour Party supporters and some who have no politics at all.

United States (Prime Minister's Visit)
3.30 pm
The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I will make a statement on my visit to New York and Washington yesterday.
In New York, I addressed the United Nations special session on disarmament and had discussions with the United Nations Secretary-General and the President of the General Assembly. I have placed in the Library a copy of my speech to the special session. I emphasised that disarmament, properly defined, is the balanced and verifiable reduction of armaments in a manner which enhances peace and security.
As regards nuclear weapons, I welcomed President Reagan's radical proposals for substantial cuts in strategic weapons and for eliminating a whole class of intermediate-range systems—the zero option. I called for a balanced reduction in conventional weapons; commended the fresh proposals which are being made in the Vienna talks on mutual and balanced force reductions; urged a new impetus for a convention banning the development and possession of chemical weapons; and advocated a special effort to agree on new mandatory confidence and security-building measures in Europe.
Throughout, I emphasised the need for stringent verification of arms control agreements. And I expressed my conviction that the aim of all these measures must be to defend the values in which we believe and to uphold international law and the United Nations charter. We have a right and a duty to defend our own people whenever and wherever their liberty is challenged.
In my discussions with Mr. Perez de Cuellar, we reviewed the prospects for a ceasefire in the Lebanon and discussed how such a ceasefire could be maintained.
I gave the Secretary-General an account of the present situation in the Falkland Islands. I emphasised our wish for a permanent cessation of hostilities, though I have to report that so far the Argentine's response has been negative. I also referred to the repatriation of well over 10,000 prisoners, but I explained that we could not return them all until we were satisfied that hostilities would not be reopened. The Falkland Islanders would be preoccupied for some time to come with the task of reconstruction, none the less, Britain would in due course seek to bring the islands to full self-government. Mr. Perez de Cuellar stated that he remained ready to act as a channel of communication between Britain and Argentina, if this would help.
My talks with Mr. Kittani, the President of the General Assembly, were devoted mainly to the special session and Middle East matters.
I was particularly glad to be in New York during the last week of Sir Anthony Parsons' term of service as our representative at the United Nations. His contribution and abilities have been widely and rightly praised. [HON. MEMBERS: "Hear, hear."]
Subsequently, at the invitation of President Reagan, I visited Washington where we had valuable and friendly discussions. We discussed at some length the tragic situation in the Lebanon. The President described the latest American efforts, through Mr. Habib, to promote a solution. We also discussed the current situation in the Falkland Islands. I emphasised our wish to do all we can to promote peace and stability in the South Atlantic. The
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President repeated his view that our action to repossess the islands had been taken to uphold the vital principle that aggression should not pay.
We discussed East—West relations. The President explained that his recent decision to extend restrictions on trade with the Soviet Union had been based on the principle that normal relations with that country were not possible so long as there was no progress towards liberalisation in Poland. I endorsed the need for such progress while reiterating the reasons why we thought existing commercial contracts should be exempted from the American restrictions.
I also conveyed the concern felt in this country, and elsewhere in the European Community, at the decision by the United States Government to impose countervailing duties on steel imports from the Community.
Finally, I expressed my gratitude for the impressive success of the FBI in defeating attempts by the Provisional IRA illegally to purchase weapons in the United States of America and to export them for use in Northern Ireland.
Mr. Michael Foot: May I express our concurrence with the representations that the Prime Minister made on those last two matters? All of us should join in the tribute that she paid to Sir Anthony Parsons, because he played a conspicuous part in securing support for resolution 502. We certainly wish to congratulate him on the part that he played.
Some of the matters that the Prime Minister raised will be discussed in coming weeks, but I should like to press her on the discussions that she may have had with President Reagan about the Lebanon and the extremely critical situation there. Did she support the proposal for maintaining a United Nations peacekeeping force in Lebanon? What proposal will she and President Reagan put forward to secure that? What other measures should be taken? Does she agree with the President about trying to re-establish the rights of the State of Lebanon and will she give us an account of that?
The report that the Prime Minister has given us today about her speech on disarmament had a slightly better tone than the original speech. Are the proposals that she made and those outlined in her statement the beginning and end of the proposals that the Government intend to put forward at the disarmament conference? We believe that there should be a debate in the House on the special session and discussions about the further proposals that the British Government should advance. At the special session, did she put forward disarmament proposals that differ in any way from those put forward by the President of the United States? Finally, will she consider fresh representations on disarmament to try to make the special session a success?
The Prime Minister: The right hon. Gentleman has asked me about the Lebanon. Yesterday a ceasefire was negotiated. It was the eighth ceasefire during the sad and tragic sequence of events. However, I believe that it has now been broken. Obviously our great desire is to stop further fighting in West Beirut and on the main road to Damascus. Mr. Habib continues to make efforts to achieve a ceasefire that will hold.
Most people wish to see once again a fully independent Lebanon under the control of its own strong Government. It is easy to say that, but, as the right hon. Gentleman knows from Lebanon's history, it is very difficult to obtain. However, although it will not be easy, we must

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continue to try. The life of the UNIFIL forces has been extended by two months by a United Nations resolution that we voted for. It is important to try to keep them in position and to encourage various nations to take part.
The disarmament proposals that I put forward were pretty comprehensive and covered nuclear, conventional and chemical weapons. I congratulated those who had negotiated the agreements on outer space and on the sea bed and I also called for further confidence and security-building measures. There was not much that was not covered.
Several Hon. Members rose—
Mr. Speaker: I remind the House that there is a further statement, and that the main business is covered by an allocation of time motion. Therefore, I propose to allow questions only until five minutes to four, by the clock.
Mr. David Steel: I endorse what the Prime Minister has said about Sir Anthony Parsons, who has had both a distinguished and a strenuous period of service at the United Nations. During the Prime Minister's talks at the United Nations, was there any discussion about strengthening the mandate and the organisation of the United Nations peacekeeping forces? Does the right hon. Lady have any hope that the permanent members of the Security Council will take some action about that?
The Prime Minister: No. I am afraid that it is one of the ironies and tragedies that the mandatory resolutions of the Security Council cannot be implemented because the United Nations does not have its own peacekeeping force. I do not know anyone who sees any immediate possibility of securing such a peacekeeping force.
Sir Anthony Kershaw: The whole House will endorse the Prime Minister's view that the development of the Falkland Islands is desirable. However, no State or financial institution will invest in the Falkland Islands if there is any prospect, however remote, that the Argentines will resume sovereignty over the area.
The Prime Minister: I entirely agree with my hon. Friend. That has been one of the problems in securing sufficient investment and has stoped various Governments from making greater investment. It is one of the reasons why we shall have to consider the longer-term defence of the islands. There is not the slightest shadow of a doubt that in the immediate future and the middle term that will have to carried out by us.
Mr. Stanley Newens: Did the right hon. Lady raise the question of the pernicious international arms trade that facilitated the supply of arms to Argentina in its aggression against the Falkland Islands, and facilitates the supply of arms to Israel while it invades the Lebanon? Is it not time that the right hon. Lady took action to stop the trade in weapons of death?
The Prime Minister: That matter was not discussed at the United Nations General Assembly yesterday. There have been various proposals made on a regional basis, but none of them has ever proved practicable. The hon. Gentleman is wrong if he suggests that there should be no supply of arms. Each and every nation has the right to defend its own people and territories. The fact that we sell arms helps us to have our weapons at a lower cost and keeps some 140,000 people in work.
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With regard to the sale of arms to Argentina, as I said to the right hon. Member for Ebbw Vale (Mr. Foot) on Tuesday, Governments of both parties have sold arms to Argentina. We carried it on on the same basis—of considering the matter on its merits.
Dr. David Owen: Is the Prime Minister aware that the Government will be judged, not by cheap jibes about whether they are ready to fire shots, but by whether they so conduct themselves that no shots need to be fired? The tone of the Prime Minister's speech in New York was such that it sounded more as if she wanted to beat ploughshares into arms. [Interruption.] Hon. Members should read the speech. Will the Prime Minister say whether in the two arms negotiations in which Great Britain should be playing a major part—the comprehensive test ban treaty and the mutual and balanced force reduction talks in Vienna—there has been one positive step taken during her Premiership?
The Prime Minister: The talks in Vienna have continued for over nine years—and that period covers rather a lot of Labour government. It is unfortunate that not much has been achieved. If the right hon. Gentleman takes a reasonable view, he will know why. We have found it difficult to obtain from the Soviet Union the actual numbers of forces they have in conjunction with the Warsaw Pact countries.
I am sure that the right hon. Gentleman will be extremely disappointed to know that the speech I made to the General Assembly received more applause than any other speech made during the last three weeks.
Sir Frederic Bennett: Reverting to the tragic position in Lebanon, the Prime Minister will doubtless recall that a couple of days ago both Front Bench spokesmen emphasised that, however hard Europe might try, the main responsibility for ending the Israeli attack upon Lebanon lies with the United States of America. Did my right hon. Friend find that there was an awareness of that fact that can be speedily acted upon?
The Prime Minister: I agree with my hon. Friend. The only country that can bring pressure to bear upon Israel is the United States of America, and it is very much aware of that. I tried to get across the fact that if there is to be a proper solution of this problem there must be a solution to the problem of the future of the Palestinian people.
Mr. Dick Douglas: Did the Prime Minister obtain from President Reagan an understanding that our defence role would be a North Atlantic role? Was there any intimation from the President that he would be willing to have United States forces in the Falkland Islands as we would be straining our international defence role if we had to garrison and keep naval forces there?
The Prime Minister: We did not discuss very much the possibility of a multi-national force in the Falkland Islands. I say "very much" because such a multi-national force is frequently mentioned. There is no possibility of having one for some months. It is too early to consider it.
Sir Bernard Braine: In her discussions with the President and the Secretary-General of the United Nations, did my right hon. Friend glean any evidence that they were aware of the utter unfitness of Argentina to have any control over the democratic Falkland Islands community? Did she remind them that among the thousands of people who had disappeared, most

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of whom had been tortured and killed, in Argentina—in the years that the Labour Party was in office—there were United Kingdom subjects, who can be named, and that successive British Governments had been pressurised by international communities into negotiating with Argentina? Did she make that plain to those two gentlemen?
The Prime Minister: I have made it perfectly clear time and again, both to the American Government and a number of others, that there is no question of sovereignty to negotiate. The islands are British sovereign territory and their people are British subjects who wish to keep their British way of life. There is nothing on sovereignty to negotiate. We negotiate on sovereignty only with the people of the territory itself. I pointed out to the United Nations that there are 45 nations in the United Nations who obtained their independence through us. I said that with us they enjoyed democracy, which is something that the Argentine citizens would love to have.
Mr. Ioan Evans: As the world is spending over $500 billion on the arms race and there are 50,000 weapons with the destructive power of a million Hiroshimas, would the right hon. Lady address herself to the fears of mankind about the arms race and adopt a more constructive approach to reducing military expenditure? Will she withdraw the White Paper, "Statement on the Defence Estimates 1982", which embarks on a massive programme of spending on the Trident as well as £14,000 million on the arms race?
The Prime Minister: With regard to what the hon. Gentleman said about nuclear weapons, 90 per cent. of world expenditure is on conventional arms. There has been no nuclear warfare since the bomb was dropped on Nagasaki, but there have been some 140 conventional conflicts which have led to about 10 million deaths.
With regard to what he said about disarmament, of course people have fears. A few moments ago Opposition Members were accusing us of not having had sufficient armaments in the Falkland Islands and of that having attracted war.
Sir John Biggs-Davison: On the issue of the equipment that my right hon. Friend did well to obtain from the United States, was she able to inform the President that Her Majesty's Government are compiling a record of Argentine war crimes, including the indiscriminate laying of mines which requires this equipment and the bestial pillaging by the soldiery of civilian property?
The Prime Minister: I gave the President a very full account of the situation in the Falkland Islands. I gave as much detail as I possibly could, incorporating some of the treatment of the islanders by the Argentine troops. I also told him of the great difficulty we were experiencing over the indiscriminate laying of plastic mines which cannot be detected. It is customary under the Geneva convention to mark the fields and positions where mines have been laid. That has not been done by the Argentines. There is also a disarmament convention which forbids the laying of plastic mines but, of course, the Argentine is not a signatory.
Mr. Frank Hooley: Did the Prime Minister point out to President Reagan that it is grotesque for his Administration to encourage American farmers to earn millions and millions of dollars by exporting grain to the Soviet Union while it tries to put British workers out of work at John Brown by refusing permission for it to supply essential equipment for the Siberian gas line and also inhibits exports from Sheffield of important steel products?
The Prime Minister: As the hon. Gentleman will have gathered from my statement, I spoke strongly about John Brown's contracts. Normally, when new restrictions are put on trade, it is customary to exempt existing contracts. I pointed out the relationship with the wheat exports to which the hon. Gentleman has referred and the fact that these would be likely to continue. The President pointed out that there would be restraint on manufactured exports from the United States. Finally, I said to the President that if we were suddenly to have prohibitions from the United States on exports of vital parts of equipment that we need to export from here, people in future would not put orders with the United States because they would be liable to cancellation. All these points were made. I shall be taking the matter further.
Sir William Clark: Is my right hon. Friend aware that the overwhelming majority of people in this country are delighted by the warm welcome that she received at the United Nations? Is this not proof that world leaders admire the firm stand that the Government took over the Falklands issue? Was the question of interest rates raised during her discussions with the President in order to accelerate the disappearance of the world recession?
The Prime Minister: The phrase most frequently used by those with whom I conversed afterwards was that the speech at the United Nations was realistic and balanced. They welcome both realism and balance in these matters.
I did not discuss interest rates with the President. I discussed them with a number of other people whom I met because the matter is causing us some concern. It is also causing some concern in the United States. It is stopping the very expansion that the United States needs. I made clear that we wish to have the deficit down because we are ready to take advantage of an expansion in world trade. We wish therefore to see American interest rates come down so that ours can stay down where they are now, or go lower.
Mr. James Lamond: Since the United Nations' own specialist committee has reported that there is no problem on verification of disarmament, and since Mr. Gromyko, in his speech earlier in the session, said that the Soviet Union was ready to sign an agreement banning the development of all chemical weapons, that it was ready to make the statement unilaterally that the Soviet Union would never use nuclear arms first and that it was in full support of the freeze proposals put forward in the American Congress by Senator Edward Kennedy, what other steps are required before the right hon. Lady and the President of the United States are ready to talk meaningfully about disarmament?
The Prime Minister: Not all the problems over verification have been solved by a very long way. Words are not enough. There has to be readiness to have inspection on the spot. That is difficult to maintain.

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There have been disquieting but fairly well-documented reports that chemical weapons have been used in South-East Asia. We have urged the United Nations to consider the evidence. The hon. Gentleman mentioned the Russian undertaking not to use nuclear weapons first. I have pointed out that the more effective undertaking is that recently given by NATO not to use any of its military weapons to attack first. That is the undertaking we await from the Soviet Union—if it could be given with full, proper, trustworthy and credible assurances.

Business of the House
3.55 pm
The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen): I wish to make a business statement.
The business for next week will be as follows:
MONDAY 28 JUNE—Supply (21st Allotted Day). There will be a debate on an Opposition motion on the repressive operation of the Immigration Regulations.
Motion relating to the Town and Country Planning (Vauxhall Cross) Special Development Order.
Proceedings on the Iron and Steel Bill [Lords] which is a consolidation measure.
TUESDAY 29 JUNE—Remaining stages of the Northern Ireland Bill.
WEDNESDAY 30 JUNE—Until about seven o'clock, consideration of Lords amendments to the Local Government Finance (No. 2) Bill.
Afterwards, Motions on the Northern Ireland (Emergency Provisions) Act 1978 (Continuance) Order, and on the Northern Ireland Act 1974 (Interim Period Extension) Order.
THURSDAY I JULY—Debate on a motion to approve the Statement on the Defence Estimates 1982, Command No. 8529.—(first day).
FRIDAY 2 JULY—Consideration of Lords amendments to the Local Government (Miscellaneous Provisions) Bill.
MONDAY 5 JULY—Private Members' motions until seven o'clock.
Afterwards, Supply (22nd Allotted Day)—(first part). Debate on a subject to be chosen by the Liberal Party.
Mr. Foot: I should like first to thank the right hon. Gentleman for having rearranged some business proposed for next week to assist us following representations that we made to him. I should like, however, to raise three matters.
On the issue of disarmament about which the Prime Minister was speaking a few minutes ago, we asked that there should be a debate in the House on the subject and the proposals to be put to the special session in New York before the right hon. Lady spoke there. We believe that the speech that she delivered makes it all the more necessary that there should be a debate in this House on the whole question. We regard her speech as quite unsatisfactory in representing the full British case on disarmament. We wish therefore to have a debate in the House while the special session is in progress to enable the House of Commons to give its view. I ask the right hon. Gentleman to make that arrangement.
In view of the appalling increase of 40,000 in the seasonally adjusted unemployment figure announced this week and the strong likelihood that unemployment on this scale, especially long-term unemployment, will continue for a long time, I must require that the right hon. Gentleman should arrange for a debate on the figures in the next week or two.
On the subject of the British Rail dispute, we have asked time and again that the Government should intervene. We believe that we are heading for a very serious dispute that could have grievous effects on the nation's industry. I urge the right hon. Gentleman, the Prime Minister and the Government to make sure that the

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Secretary of State for Employment does his job and mediates in this dispute and that he comes to the House to tell us what he is doing.
Mr. Biffen: On the issue of the rail dispute, I can assure the right hon. Gentleman that there will be no dereliction of duty on the part of my right hon. Friends. But they will not be preachers of appeasement in this matter. I recognise that the House will wish to be kept informed on the rail dispute if unfortunately it occurs. I hope, however, that the right hon. Gentleman will join with me in appealing to the unions to call off their proposed industrial action.
The right hon. Gentleman will appreciate that the House debated unemployment on Monday of this week, and there will of course be an opportunity to consider the wider aspects of the economy when the Finance Bill returns to the House.
Finally, I note the right hon. Gentleman's specific request on disarmament, but I can say no more than that I note what he says. The question of the level and balance of arms is central to any debate on the defence Estimates, which is to take place next week. So the House will have opportunities to discuss these matters. However, I take note of the terms in which the right hon. Gentleman made his request.
Mr. Foot: I thank the right hon. Gentleman for what he said about the disarmament proposals, but a debate on the defence White Paper is not a satisfactory way to deal with the matter. We want to discuss what proposals can still be placed before the special session by the British Government. That is not the same as the matters that will be considered in the debate on the defence White Paper, particularly as that White Paper raises many other questions involving the conduct of the Secretary of State for Defence that right hon. and hon. Members on both sides will wish to debate.
We hold the Government guilty of a dereliction of duty on the British Rail dispute. In our view, the Secretary of State for Employment has not exerted himself in the way that he should have done to try to prevent this crash.
Mr. John Stokes: Will my right hon. Friend allow time next week for a debate on the attitude of the press and the media to the fighting in the South Atlantic, bearing in mind the fact that, although our correspondents with Her Majesty's Forces were absolutely magnificent, the attitude of some of the journalists and others who took part in the debates in this country was far less satisfactory?
Mr. Biffen: I am sure that there is a range of views in the House about the way in which the media handled the performance of our forces in the, South Atlantic. However, the situation will not be much improved by having a debate next week, and in any case there is simply no time for one.
Mr. Andrew Faulds: As the Middle East debate the other night was somewhat unbalanced, in that a disproportionate number of pro-Zionists were called, when will the House have another opportunity to debate the appalling—(Interruption.]
Mr. Speaker: Order. The hon. Gentleman knows that, if he wishes to cast reflection on the conduct of the debate,
442
he should table a motion, which he is welcome to do. Meanwhile, he is not free to pass a comment of that sort, which in fact is not true.
Mr. Faulds: I shall not argue that matter on the Floor of the House with you, Mr. Speaker. I shall simply examine the names of the right hon. and hon. Members who were called that evening and, if necessary, table a motion. Perhaps I might now complete my question.
Can we have another early opportunity to debate the appalling circumstances of what is happening in the Middle East, particularly the fact that Palestinian prisoners are denied the protection of the Geneva convention by the appalling decision of the Israeli Government that they are not to be included as organised bands of guerrillas? When will the House also have an opportunity—No, perhaps I shall leave it at that, because that is the most important issue.
Mr. Biffen: I realise that the conflict in the Middle East unleashes the most intense passions in this Chamber, but I believe that the House will concur that our debate a few days ago was a most helpful one from the Government's point of view. Certainly I could not find time for another debate on that topic next week.
Mr. Nicholas Winterton: Is my right hon. Friend aware that Lord Shackleton is currently undertaking an update of his 1976 report? Will my right hon. Friend therefore find time for an early debate on the future of the Falkland Islands, bearing in mind the fact that my right hon. Friend the Prime Minister described the Falkland Islands as an area which commands the sea routes of the South Atlantic, and that they are the gateway to the Antarctic?Could we, therefore, have a debate so that hon. Members could suggest that the Falkland Islands might become an independent country within the Commonwealth, guaranteeing its security within the Commonwealth, with the support of other countries which have territorial claims in the Antarctic region?
Mr. Biffen: I do not for one moment disparage the importance of the topic that my hon. Friend raises, but I regret that there is no time for a debate on it next week.
Mr. Christopher Price: Is the Leader of the House aware that it would be a disgrace if, on the Report stage of the Administration of Justice Bill, which is not even receiving a Second Reading in this House, he were to introduce amendments which would completely change the nature of the jury system in this country? If the right hon. Gentleman wants changes to be made in the jury system whereby a large number of citizens will be ineligible, he should introduce a Bill on juries, and not try to slip in amendments to a Lords Bill in the final stages of its passage through this House.
Mr. Biffen: I shall look at that point.
Mr. Eldon Griffiths: Will my right hon. Friend say how soon he expects the Prime Minister to make an announcement in the House about the form and terms of reference of the Falkland Islands inquiry? Has he noticed that already a debate is starting across the Floor of the House on this matter, and does he accept that surely that debate would be much better conducted after the inquiry had reached a conclusion?
Mr. Biffen: My right hon. Friend is in the process of consulting the leaders of the other parties. As my hon. Friend will appreciate, it is her intention that the matter be expedited as speedily as possible.
Mr. George Foulkes: Does the Leader of the House believe that, in the light of the publication of the Madge Nichols letter, the House should have an opportunity to debate whether it is appropriate for the Prime Minister, who herself will be a subject of that inquiry, to set up the inquiry? As the Foreign Affairs Select Committee and the Defence Select Committee have already started the inquiry, would it not be appropriate for the House to discuss this matter before it becomes as big a mess as the situation which led to the invasion itself?
Mr. Biffen: The letter to which the hon. Gentleman refers could well form part of the material that will be subjected to investigation.
Mr. Antony Buck: Is my right hon. Friend aware that the whole House will welcome the fact that there is to be a day's debate on the defence White Paper next week? Will he confirm that, at a later stage, in accordance with custom, a second day will be made available to debate this document?
Mr. Biffen: Yes, Sir.
Mr. Tam Dalyell: The Leader of the House was in his place on Monday to hear the Minister of Trade and on Tuesday to hear the Foreign Secretary give a sympathetic reply about the difficult issue of end user certificates. Does he understand that, as long as end user certificates continue to be abused, the chance of serious hostilities breaking out again is less than remote? Will he make a statement on this matter, to which his colleagues gave sympathetic replies, and say what the British Government can do?
Mr. Biffen: I can hold out no hope of a statement next week, but there are other parliamentary opportunities—and no one is more adept than the hon. Gentleman at exploiting them—by which the matter can be pursued.
Mr. Kenneth Lewis: Does my right hon. Friend agree, on reflection, that it might have been better to have a two-day debate on defence a week or two from now, because clearly, although there are different views on the matter, the Falkland Islands situation must have had some effect on defence, and we need a little time to digest it before we debate it?
Mr. Biffen: My hon. Friend is conscious of the irritations that arise from having a debate fairly soon after the successful conclusion of the Falklands exercise. I can well imagine the irritations that would arise if the debate had been postponed and had been followed almost immediately by individual debates on the Armed Services.
Mr. John Roper: In view of the critical meeting of the Community Fisheries Council next week, will the Leader of the House find time for the House to express its views before the Minister of Agriculture, Fisheries and Food goes to that meeting? Will he find time next week for a debate on the prayer which my right hon. and hon. Friends have tabled on the National Health Service (Charges to Overseas Visitors) Regulations?
Mr. Biffen: I should like to consider the hon. Gentleman's specific point. I am aware that the Scrutiny
444
Committee has already made some observations on documents relating to the fisheries issue. I cannot answer more specifically than that.
Mr. David Winnick: Does the Leader of the House recognise that the nature of the inquiry on events leading up to the invasion of the Falklands is a matter of deep concern to the House? The Prime Minister's letter of 3 February showed the extent of her blunders and misjudgments in this regard. Is the right hon. Gentleman aware of the determination of the House that there should be no whitewash or cover-up in that inquiry?
The Prime Minister: Of any Government. I agree.
Mr. Biffen: There will be no whitewash or cover-up. Although heroic attempts are being made to convert the Madge Nicholas letter into a suburban Zinoviev, I do not think that they will be successful.
Mr. Sydney Chapman: Further to the Leader of the Opposition's request for a debate on disarmament, will my right hon. Friend bear in mind that that would be welcome to all hon. Members?
Does my right hon. Friend recollect that the Prime Minister was one of only 13 Prime Ministers and Heads of State, or their equivalent, who bothered to turn up, or intend to turn up, at the United Nations to speak on that crucial subject? While my constituents do not doubt the Government's commitment to putting multilateral disarmament at the head of the agenda, they would be reassured if Parliament had the opportunity to debate such an important issue.
Mr. Biffen: I note what my hon. Friend says. I accept at once the importance of the issue.
Mr. Bob Cryer: In a previous answer, the Leader of the House seemed to suggest that the debate on the defence Estimates would be an adequate opportunity to debate the United Nations second special session on disarmament. In spite of the clapometer register, it seemed to my hon. Friends that the Prime Minister made a warmongering speech. We want an opportunity to debate the positive results, programmes and policies that will emerge from the debate and discussions at the United Nations so that the Government's programme of escalating the nuclear programme through Trident and the installation of cruise missiles—which are not easily verifiable—can be brought to the fore and an impetus given to the march for peace.
Mr. Biffen: I note what the hon. Gentleman says. For a significant section of the Labour Party, disarmament is a defence policy. Therefore, it would seem that the two could reasonably be debated at one and the same time.
Several Hon. Members rose—
Mr. Speaker: Order. Only if questions are brief shall I be able to call all those hon. Members who wish to speak.
Mr. Michael Colvin: Has my right hon. Friend seen early-day motion 363 which refers to children's play?
[That this House acknowledges that the welfare of Britain's children is the nation's future, and that provision for their leisure time play is crucial to their healthy development; and accordingly calls upon Her Majesty's Government to recognise the importance of children's

445
play, particularly in inner city areas, and to accept overall responsibility for a service to promote it under the co-ordination of one designated Minister.]
This motion has support throughout the House and the political spectrum. It now carries 207 signatures. No doubt it is the matter to which the hon. Member for Bolsover (Mr. Skinner) is attempting to attract your attention, Mr. Speaker. He has sponsored another motion which is sympathetic to that subject.
The motion calls on the Government to designate one Minister with responsibility for children's play. The nation is concerned with other important matters at present. Nevertheless, it is time—
Mr. Speaker: Order. This is not the opportunity to make speeches. The hon. Gentleman should ask a question on next week's business.
Mr. Colvin: I was simply drawing attention to the importance to future generations of deliberations in the Chamber. Will my right hon. Friend allow parliamentary time for a debate on this important issue?
Mr. Biffen: As my hon. Friend says, this is an important topic. I wish him every success in his free enterprise operation to find time. I am afraid that no time can be provided by the Government next week.
Mr. Alfred Dubs: In the light of the recent report by the Select Committee, will the Leader of the House give hon. Members an opportunity to debate the question of police complaints before the Home Office has finally made up its mind as to the nature of the legislation to be brought forward next Session?
Mr. Biffen: I believe that that matter was touched on in Question Time today. I certainly could not hold out any hope of time being made available next week.
Mr. Robert Kilroy-Silk: As the Prime Minister constantly reiterates, quite rightly, that British forces were fighting in the South Atlantic to liberate British citizens and protect the British way of life, will the Leader of the House give an assurance that he will provide Government time to the Bill that was given an unopposed First Reading on Tuesday to give to those 400 Falkland Islanders that British citizenship which was denied to them by the British Nationality Act?
Mr. Biffen: No, Sir.
Mr. Kilroy-Silk: No? What were we fighting for then?
Mr. Dennis Skinner: When I raised the matter of the closure of 33 cancer beds at the Royal Marsden hospital in London last week because of a cash deficit reputed to be about £750,000, does the Leader of the House recall that he said that the matter would be looked at and that a statement might be made?
Now that that matter has been aired again in the columns of The Guardian and other newspapers in exactly the same way as I described it last week, is it not about time that this heartless Government brought somebody to the Dispatch Box to say that that £750,000 will be found so that those cancer beds can remain in the Royal Marsden hospital? That should be done next week.
Mr. Biffen: I appreciate the public interest that there is in this topic. However, the hon. Gentleman misunderstands me in thinking that I promised a statement this week. I shall certainly draw the matter to the attention of my right hon. Friend the Secretary of State for Social Services.
Mr. James Lamond: As the Leader of the House is a sensible and reasonable man, how can he expect us to accept that, if two days are needed to debate the defence White Paper year in year out, on this occasion, after a four-week special session of the United Nations, disarmament must also be debated in those two days? It is only the second such session in the history of disarmament. It was important enough for the Prime Minister to make a special visit to New York. It was addressed by the President of the United States, there was a special message from President Brezhnev and it has been addressed by dozens of other Foreign Secretaries and world leaders.
Mr. Biffen: The hon. Gentleman eloquently makes the same point that was made by my hon. Friend the Member for Chipping Barnet (Mr. Chapman). Parliamentary time is very restricted, particularly at this time of year.
Mr. John Silkin: The Leader of the House said twice in answer to questions that the debate next Thursday and the following week will be on the defence Estimates. Can he confirm that they will be on the statement to the defence Estimates and that there will be a separate later debate on the Estimates themselves?
Mr. Biffen: That is right. It was a shorthand which was unintentionally misleading. I am grateful to the right hon. Gentleman for making that point.

Royal Birth
4.17 pm
The Prime Minister: I beg to move,
That an humble Address be presented to Her Majesty offering the congratulations of this House to Her Majesty, His Royal Highness The Duke of Edinburgh and their Royal Highnesses The Prince and Princess of Wales on the birth of a son to Her Royal Highness the Princess of Wales, and signifying to Her Majesty the great pleasure given to Her faithful Commons by this happy event.
For generations, Mr. Speaker, there has been an opportunity for the House to express its happiness at the birth of a Royal Prince or Princess, and to assure the Sovereign of our enduring loyalty.
Every new young Prince or Princess represents the continuity of our Royal Family, and reminds us of the unique service which our monarchy renders to the British people at home and abroad.
When Sir Winston Churchill spoke in this House on the birth of the Prince of Wales, he recalled that it is the British monarchy which
"presides … over all the treasures that have been saved from the past and all the glories we write in the annals of our country".—[Official Report, 16 November 1948, Vol. 458, c. 212–3.]
I can find no better words than those to express our loyalty to Her Majesty, and to record the debt we owe to the Royal Family. The world has changed dramatically since the Prince of Wales was born, but the traditions of the monarchy are cherished by the British people as deeply as ever.
Today is not just an historic occasion. It is also a family occasion. Over the past 35 years, the nation has shared in the joy and pride of Her Majesty's family. We have watched as each Prince and Princess grew to adulthood, and we have admired the example set by the Royal Family in their devotion to duty. Now we see the beginnings of a new family, and the House will unite in offering our congratulations to Her Majesty and the Duke of Edinburgh, and to the Prince and Princess of Wales. We will be joined as well by the millions round the world whose hearts were captured by the Prince and his young bride last summer.
We wish the new Prince health, happiness and long life. His birth has brought great joy to us all.
4.20 pm
Mr. Michael Foot: I am glad to join the Prime Minister in supporting the motion. In doing so, the House will have echoed a widespread feeling throughout the country. It is proper that we should also express that feeling. I see that my hon. Friend the Member for Bolsover (Mr. Skinner) has tabled a notable addition to the motion. We were not told at the beginning of the proceedings whether the amendment was to be called. If it were, that would have the happy effect of making the motion unanimous. I should also be glad to support that.
I fully accept that the humble Address will be widely supported throughout the country. The newspapers published the genealogical table. That showed the interesting fact that both the Prince and Princess of Wales are descended from James I.
Mr. Andrew Faulds: James VI.
Mr. Foot: James VI of Scotland, but James I of England. Both the Prince and Princess of Wales are descended from James I. He is not my favourite Monarch,
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but we cannot all be pleased all the time. At school we used to hear the jingle about James I—that he never said a foolish thing and never did a wise one. In the light of what has occurred, we must revise our judgment on the matter. All should be congratulated.
All of us join in congratulating the Prince and Princess of Wales. I join the Prime Minister in wishing them the best of success in the many years that I am sure they will be here to assist the good purposes of the nation.
Several Hon. Members rose—
Mr. Speaker: Order. I apologise for not having told the House that I had not selected the amendment.
4.22 pm
Mr. David Steel: I am not sure whether the Leader of the Opposition got his Kings right. On behalf of my Liberal colleagues and the Social Democratic Party, the Ulster Unionist Party and the Scottish National Party—
Mr. Bob Cryer: The leader.
Mr. Dennis Skinner: Where is Jenkins? Where is Owen? They are out canvassing.
Mr. Steel: They have asked on this happy occasion to be associated with the humble Address. I gladly join the Prime Minister and the Leader of the Opposition in sending our greetings and congratulations to Her Majesty and the Royal Family.
The birth of a first child is a uniquely special event in any family. As the Prime Minister said, the Prince and Princess of Wales have in a short time endeared themselves as a couple to the people of our country. They will have done so further in the past few days by the example of the Prince of Wales being present with his wife at the birth of their son. The safe arrival of the future heir to the Throne is an appropriate time for the House to express its gratitude for the tradition of constitutional monarchy, which makes the British monarchy the most ancient and secure in the world.
We salute our future King and wish him and his family continued health and happiness.
4.24 pm
Mr. Dennis Skinner: When I saw the motion yesterday, I felt that it was not as broad as it should be. When one considers that the Prince of Wales and Lady Diana have been round the country visiting towns and cities meeting thousands of families it seems appropriate to broaden the motion to include all those who became parents last week as well as all those who became parents in 1982, although the amendment does not specify that. It would be more sensible for the House to convey a message to the nation and to the Royal Family stating that we were concerned about the plight of all our people.
In her address the Prime Minister said that this was a family occasion. Of course, it is a family occasion, but it should be an occasion for the whole of the family and the whole of the nation. The right hon. Lady said when she first became Prime Minister that she was concerned about the nation as a whole. Therefore, we should understand that this event is set against a background of a great deal of misery for many members of our nation family. There are 4 million people out of work and many parents among them. I have no doubt that they are concerned about how they will bring up their children in the next five, l0 or 15

449
years. We should consider all those who are wandering about in Tebbit's YOP scheme, the "out of work" schemes and all the other schemes.
The Royal Family should understand that in the House some of us believe that on these occasions and on all others messages should go out stating that we are concerned about the whole nation family, as the Prime Minister said. We should also recall the wonderful way in which the nurses and ancillary workers deliver babies.
Mr. Cryer: That is right.
Mr. Speaker: Order.
Mr. Skinner: What is wrong with that?
Mr. Speaker: The hon. Member for Bolsover must wait and find out. He strayed far from the motion, which is simple and relates to whether the House should send a message of congratulation to the Royal Family on the birth of the child. That is the motion before the House and it is no wider than that.
Mr. Skinner: However, we all know that many people ensure that all the new babies in the country are brought up in decent conditions. I have no doubt that there are parents working in Buckingham Palace who are struggling to make ends meet.
The motion is not broad enough. It is too narrow. The inclusion of my amendment is the sensible way of getting across my message. All the Government's attacks on all our families should be ended to ensure that child benefit—
Mr. Speaker: Order. This is not the occasion for such a speech. The motion before the House is clear in its terms.
Mr. Skinner: If my speech helps to get a few more nursery schools and such provision for our children, if it ensures that no children will be evicted because their parents are up to their neck in rent arrears because of the rent increase imposed by the Government, and if it turns the Government one inch from their attack on families, it will not have done any harm.
4.29 pm
Mr. William Hamilton: I hope that the country, the House and the world will note that on this auspicious occasion fewer than 40 Conservative Members are present, and fewer than 20 Labour Members are present, I am glad to say. That is a measure of the great loyalty expressed by the Prime Minister. I thought that the House might like to hear a few abrasively constructive comments on the motion. [HON. MEMBERS: "No thanks."]
The Prime Minister and the Leader of the Opposition have expressed their congratulations. When there is cosy collusion between the two Front Benches it makes me feel a little queasy. It is amazing how corrupting our language can be when we speak of the institution of monarchy in the House. [AN HON. MEMBER: "Ask your wife."]
The Government are trying to get through the House, with the minimum of publicity and debate, a Bill relating directly to the people mentioned in the motion. I refer to the Duchy of Cornwall Management Bill. The
450
Government have sought to prevent debate of the Bill on the Floor of the House. It is apposite because very soon after the event which is the subject of the motion, I guess that the father of this infant will come to the Chancellor and demand that he gets the full tax-free income from the Duchy of Cornwall—which amounts to well over £1 million a year—to keep the wolf from the infant's door.
It is as well that we should say these things when the occasion arises, because the occasion does not arise very often on the Floor of the House to say some of the things that many of my hon. Friends have said to me in private but are unwilling to say in public. The media, the Government and the establishment have brainwashed even Members of Parliament about the sanctity of the institution of monarchy. We are awash. The media have soddened us with slush, mush and sentimental rubbish over the past few weeks. We shall get weeks and months and years of it. It is unhealthy to put any institution or any individual belonging to that institution on a pedestal.
I object strongly to the lauding of the monarchy or any other institution. It should be subject to healthy and abrasive criticism more often in the House. I hope that we shall very soon get a radical Government who will be prepared to modernise and democratise the monarchy and make it much more accountable to the House and to the nation.
4.33 pm
Mr. Andrew Faulds: I should like to make a small contribution to the debate. I endorse heartily the sending of such an Address. I should like to comment on the somewhat prejudicial remarks of my hon. Friend the Member for Fife, Central (Mr. Hamilton) about the numbers present in the House. He should know, as most of us know, that we cannot all sit here all day on all the matters that are before the House. At this moment the House is suffering from the English addiction to tea, which is the main reason why there are so few hon. Members here.
Mr. William Hamilton: More important than the Royal Family.
Mr. Faulds: Not every day. There are occasions when the Royal Family is slightly more important than a cup of tea.
I hope I have the agreement of the House when I suggest that the most valuable gift that this young boy and his mother can be given is that, as he and she share his years of development, they are spared the lupine attentions of irresponsible sections of the British press. The young boy's life would be much happier if that unlikely eventuality were to happen.
Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty offering the congratulations of this House to Her Majesty, His Royal Highness the Duke of Edinburgh and their Royal Highnesses the Prince and Princess of Wales on the birth of a son to Her Royal Highness the Princess of Wales, and signifying to Her Majesty the great pleasure given to Her faithful Commons by this happy event.
To be presented by Privy Councillors or Members of Her Majesty's Household.

Oil and Gas (Enterprise) Bill (Allocation of Time)
Ordered,
That the Order of the House [8th March] be supplemented as follows:—

Oil and Gas (Enterprise) Bill (Allocation of Time)

  Lords Amendments
  1. The proceedings on Consideration of Lords Amendments shall be completed at this day's sitting and, subject to the provisions of the Order of a 8 March each part of those proceedings shall, if not prevously brought to a conclusion, be brought to a conclusion at the time specified in the second column of the Table set out below.

  TABLE

  Proceedings

  Lords Amendments

  Time for conclusion

  1 to 9

  6.30 p.m

  10 to 23

  9.30 p.m.

  24 to 67

  10 p.m.

  2.—(1) For the purposes of bringing any proceedings to a conclusion in accordance with paragraph 1 above—

  (a) Mr. Speaker shall first put forthwith any Question which has already been proposed from the Chair and not yet decided and, if that Question is for the Amendment of a Lords Amendment, shall then put forthwith the Question on any further Amendment of the said Lords Amendment moved by a Minister of the Crown and on any Motion made by a Minister of the Crown, That this House doth agree or disagree with the Lords in the said Lords Amendment, or as the case may be, in the said Lords Amendment as amended;

  (b) Mr. Speaker shall then designate such of the remaining Lords Amendments as appear to him to involve questions of Privilege and shall—

  (i) put forthwith the Question on any Amendment moved by a Minister of the Crown to a Lords Amendment and then put forthwith the Question on any Motion made by a Minister of the Crown, That this House doth agree or disagree with the Lords in their Amendment, or, as the case may be, in their Amendment as amended;

  (ii) put forthwith the Question on any Motion made by a Minister of the Crown, That this House doth disagree with the Lords in a Lords Amendment;

  (iii) put forthwith with respect to each Amendment designated by Mr. Speaker which has not been disposed of the Question, That this House doth agree with the Lords in their Amendment; and

  452

  (iv) put forthwith the Question, that this House doth agree with the Lords in all the remaining Lords Amendments;

  (c) as soon as the House has agreed or disagreed with the Lords in any of their Amendments Mr. Speaker shall put forthwith a separate Question on any other Amendment moved by a Minister of the Crown relevant to that Lords Amendment.

  (2) Proceedings under sub-paragraph (1) above shall not be interrupted under any Standing Order relating to the sittings of the House.

  Stages subsequent to first Consideration of Lords Amendments
  3. The proceedings on any further Message from the Lords on the Bill shall be brought to a conclusion one hour after the commencement of the proceedings.
  4. For the purpose of bringing those proceedings to a conclusion—

  (a) Mr. Speaker shall first put forthwith any Question which has already been proposed from the Chair and not yet decided, and shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair;

  (b) Mr. Speaker shall then—

  (i) put forthwith the Questions on any Motion made by a Minister of the Crown on any item in the Lords Message;

  (ii) put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Proposals.

  Supplemental
  5.—(1) In this paragraph 'the proceedings' means proceedings on any further Message from the Lords on the Bill, on the appointment and quorum of a Committee to draw up Reasons and the Report of such a Committee.
  (2) Mr. Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the consideration forthwith of the Message or, as the case may be, for the appointment and quorum of the Committee.
  (3) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which they are appointed.
  (4) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings.
  (5) No dilatory Motion with respect to, or in the course of, the proceedings shall be made except by a Member of the Government, and the Question on any such Motion shall be put forthwith.
  (6) If the proceedings are interrupted by a motion for the Adjournment of the House under Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) a period equal to the duration of the proceedings on the Motion shall be added to the period at the end of which the proceedings are to be brought to a conclusion.—[Mr. Biffen.]

Orders of the Day

  Oil and Gas (Enterprise) Bill
  [ALLOTTED DAY]
  Lords amendments considered.

  Oil and Gas (Enterprise) Bill
    Clause 2

      PROVISIONS SUPPLEMENTARY TO SECTION I
      4.33 pm
      Mr. Merlyn Rees: On a point of order, Mr. Speaker. There is a small point that I wish to put to you. In the discussion of the Bill on the first part of the guillotine we want to separate amendments Nos. 5 and 6. It may be that the form of the debate will separate them. We want to ensure that we can treat amendments Nos. 5 and 6 separately because, in the minimum of discussion that we shall have, they should be dealt with separately.
      Mr. Speaker: I shall do my best to help the right hon. Gentleman as we go along.
      Lords amendment: No. 1, in page 2, line 38, at end insert
      ", to secure increases in the capital of subsidiaries"
      The Secretary of State for Energy (Mr. Nigel Lawson): I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Speaker: With this it will be convenient to take Lords amendments Nos. 2, 3, 4, 5, 6, 7 and 8.
      Mr. Lawson: I shall deal with the amendments in the group separately and as clearly as I can. If, as I understand from what the right hon. Member for Leeds, South (Mr. Rees) said, the Opposition want to make separate points on amendments Nos. 5 and 6, when I reply to the debate I shall reply separately to those two debates within the debate. I hope that will be for the convenience of the Opposition and the House.
      These amendments are somewhat complex and occasionally rather opaque. They fall into three categories. First, they seek to establish beyond doubt that the participation agreement between BNOC and Britoil can be put in place as part of the scheme. Second, there are a number of technical amendments concerning the preparation of accounts of Britoil and its opening balance sheet under the scheme. Third, there are some minor drafting improvements simply to clarify the scheme-making provisions. In order to see the effect of the amendments more clearly, subsections (3) and (4), as revised, have been set out in their entirety.
      Two important changes introduced by these amendments take account of major concerns expressed on more than one occasion by Labour Members during the earlier stages of the Bill. These were that the participation agreement should be in place well before the flotation of Britoil, and that the Bill should allow any commencing debt under clause 4 to be passed to Britoil. I hope that in meeting these concerns the amendments will be welcome to the House.
      The first four amendments fall into the category of minor drafting improvements. The amendment to
      454
      subsection (1) makes clear that BNOC has the power to increase the capital of subsidiaries as well as to establish subsidiaries for the purpose of facilitating an eventual disposal. The substitution of "specified" for "prescribed" in amendments 2 and 4 facilitates the detailed drafting of the scheme. The last minor change, the deletion of "or" between paragraphs (a) and (b) of subsection (2), is to make quite clear that the scheme can adopt either or both the approaches set out in those paragraphs.
      Amendment No. 5, in which the Opposition have indicated that they have an interest, is more important. It largely repeats the present subsection (3) and paragraph (a) of subsection (4). The introduction of the words
      "for the purpose of dealing with matters arising out of or relating to the transfer"
      has important policy implications. It is these words that enable the participation agreement between BNOC and Britoil to be put in place as part of the scheme. While the Government originally envisaged that the participation agreement would not form part of the scheme, I have carefully considered the points made in debate, particularly those in Standing Committee by the hon. Member for Merthyr Tydfil (Mr. Rowlands).
      The amendment ensures that not only can there be no doubt about Britoil's participation commitments to BNOC but also that the arrangements can be put in place at the time of the transfer of assets to Britoil, and hence well before flotation. This underlines the importance we attach to these arrangements and the contribution participation oil makes to our security of oil supplies. The hon. Member for Merthyr Tydfil may have specific points to make to which I will do my best to reply fully towards the end of the debate.
      The other amendment mentioned specifically by the right hon. Member for Leeds, South was amendment No. 6. I should first like to make it clear that the underlying objective of clause 2 is unchanged by the amendment. It still provides for BNOC's oil-producing assets to be transferred to Britoil in preparation for the disposal of shares. The objective of providing for continuity between BNOC's and Britoil's accounts in respect of the assets and liabilities transferred is unaltered.
      The amendment serves three main purposes. First, it introduces the concept of consideration into the scheme-making powers as set out in the new paragraph (a) of subsection (4). This simply brings together two transactions which, under the Bill as originally drafted, would have been separate events. The first is the transfer of the oil-producing assets to Britoil. The second is the issuing by Britoil of securities to BNOC. The linking of these events—the issue of securities in return for the transfer of the oil-producing business—will help to place Britoil's accounts on a more normal footing. The House will appreciate that for Britoil to have received the oil-producing assets without offering anything in return as part of the deal would have resulted in a highly unusual situation. It would also have created technical problems with its future tax liabilities. The concept of consideration helps to overcome these problems.
      Secondly, the securities that Britoil would issue in return for the assets are widely defined—in a later amendment, No. 45—to include shares, debentures or bonds, which could take the form of loan stock. This therefore takes full account of the point raised in discussions in Committee, particularly by the hon. Member for Merthyr Tydfil, that it should be possible to

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      transfer any commencing debt as defined under clause 4 to Britoil. No decisions have yet been taken, but we are making sure that the flexibility is there.
      Mr. Dick Douglas: One of the questions that was put in the other place was that of the possibility, indeed probability, of this transfer creating what was tantamount to a share premium account in Britoil's account. In view of the statement made today by the Financial Times that we are well on the way to seeing this privatisation measure taking place before the end of the year, can the Secretary of State confirm that such an account would be in place in Britoil's account?
      Mr. Lawson: I shall come to that point in due course. It would help the House if I could take the amendments in logical sequence. I shall come to the question of share premium accounts.
      Thirdly, the amendments allow for the creation of reserves in Britoil's balance sheet, part of which may be made available for distribution to shareholders. The objectives are, once again, unchanged, but the method of achieving them is modified to take account of the fact that the acquisition of assets in consideration of the transfer of shares will lead to the creation of a share premium account on the books of Britoil. This would be the difference between the nominal value of the shares issued in consideration and the net value of the assets transferred from BNOC, after taking account of any debt imposed on Britoil.
      The amendment then goes on to enable a part of what would have been the share premium account to be set aside in a reserve that would be available for distribution to shareholders. This reflects the element of retained profits usually found in a company's balance sheet. Paragraph (c) of subsection (4) therefore provides that this reserve should not exceed BNOC's accumulated realised profits. And paragraph (d) provides for any distributable reserves to be deducted from the share premium account.
      The other provisions in the amendments, particularly those in paragraphs (b) and (e), refine the objective of continuity in the treatment of assets between BNOC's and Britoil's accounts. They allow the value of the assets, which would have been given in BNOC's books, to be repeated in Britoil's opening books. This, together with the concept of consideration, greatly simplifies the technical complexities which otherwise would have occurred in drawing up Britoil's balance sheet.
      The remaining two amendments come at the end of clause 2. The first, amendment No. 7, is consistent with the principle established by the earlier amendments of maintaining continuity between the two sets of accounts. It is chiefly to enable the assets to be transferred at book value without the application of the normal company law principle that where shares are issued in consideration of the acquisition of an asset the true value of the asset determines the value of the shares issued, which would be inappropriate in this case.
      Although it may seem slightly strange to be waiving the normal legal provisions in this case, amendment No. 7 essentially reflects the fact that the transfer of assets under the scheme-making powers in clause 2 is not a normal occurrence in company law. It is therefore not surprising that provisions need to be made to overcome the unusual problems created by statutory investing. I am sure that the hon. Member for Dunfermline (Mr. Douglas) will be
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      aware that in the other place, when this was discussed, that eminent Law Lord, Lord Wilberforce, examined this carefully and was satisfied that the effect was limited and appropriate.
      The last amendment, No. 8, gives the definitions of "statutory accounts" and "prescribed" which are two of the new terms introduced into clause 2. I have already mentioned that the other new term, "securities", is defined in a later amendment.
      Finally, I should add that parallel amendments are proposed to clause 10 of the Bill in relation to the gas provisions.
      I appreciate that the amendments to subsection (4) are of a technical nature and deal with detailed and sometimes abstruse issues concerning the accounts of both Britoil and BNOC, but I hope that I have adequately described their purpose and effect which can be summarised as providing continuity and flexibility in establishing Britoil's capital structure.
      I hope too that the proposals to put the participation agreement in place as part of the scheme, which is a rather more important element in this group of amendments, and the provision to enable the transfer of any commencing debt to Britoil will be welcome to Labour Members.
      4.45 pm
      Mr. Douglas: On a point of order, Mr. Speaker. In view of the statement made by my right hon. Friend the Member for Leeds, South (Mr. Rees) on the way that the Opposition would prefer to treat these amendments, I trust that it will be in order, after the Opposition Front Bench spokesmen have spoken on amendment No. 5, for you to call Back Bench speakers on that amendment, and when Front Bench spokesmen have spoken on amendment No. 6 I hope that Back Benchers may speak on that amendment, in order not to confuse the issue.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): As Mr. Speaker said, we shall try to help as we go along. I shall bear that point in mind.
      Mr. Edward Rowlands: The case for splitting the discussions on these amendments was illustrated by the speech of the Secretary of State, not because we disagree with parts of it but because of the complexity and the separate nature of the issues raised in the amendments. I should like to concentrate almost entirely on amendment No. 5. I agree with the Secretary of State that it concerns a matter of considerable importance because it paves the way for providing a participation agreement as an integral part of the scheme of things under clause 2. It was a point that we hammered at throughout the Committee.
      We shall want to consider amendment No. 6 separately. The Secretary of State will not be surprised if we do not buy him on amendment No. 7, and the explanation that he gave. What is more, he quoted Lord Wilberforce, who on amendment No. 7 said:
      "We shall see it popping up in all sorts of contexts which may be much more far-reaching that the present one."—[Official Report, House of Lords, 21 June 1982; Vol. 431, c. 806.]
      The House should realise the precedent that might be created by amendment No. 7.
      I wish to probe the Secretary of State about what he envisages the participation agreement will be about. The whole purpose of amendment No. 5 is to pave the way for

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      putting participation agreements into the scheme of things under clause 2. The most relevant aspect of the amendment and the changes made by it are the words
      "for the purpose of dealing with matters arising out of or related to the transfer".
      It is those matters that I hope to probe.
      It is worth reminding ourselves—because we could lose the general issue among the details and the complexities, the "opaqueness" to which the Secretary of State referred—what participation agreements are. They are the means by which we ensure that there is national control over the majority of our oil supplies and their destination. Therefore, these are not just marginal issues; they are matters of detailed policy and are fundamental to the question of ownership and control over our oil supplies. They are a vital part of the national control of our oil resources. Our contention is that any weakening or undermining of the participation agreement weakens the nation's control over its oil supplies.
      It is also worth reminding ourselves of the role of the British National Oil Corporation as it was, still is, but will not be if the Bill is enacted, in those participation agreements relating to the control of our oil supplies. BNOC was the instrument for that control—as a trader in participation oil from other countries and, most importantly, as a major equity holder in interests throughout the series of licences from which its participation agreement and control stem.
      If the vandalistic act of breaking up BNOC is carried through, there will be considerable danger of losing control over the destination of our oil. That has been one of our arguments during the many weeks that we have debated the Bill here and in another place.
      Unless a new, comprehensive and effective participation agreement, without loopholes, is signed between BNOC and British Oil before flotation we shall be continually anxious about the loss of control over our oil supplies as result of the breaking up of BNOC. Any agreement must ensure that there is no loss of control over every barrel of oil over which we would have had control through the various arrangements made under the first to fourth round licences, participation agreements and equity involvement under the fifth and sixth round licences. Those are the principles on which the Opposition have argued about the nature of participation agreements. There must be nothing partial in any agreement between BNOC and Britoil.
      I appreciate the generous spirit in which the right hon. Gentleman introduced amendment No. 5. The amendment enables such an agreement to be part and parcel of the scheme-making powers in clause 2. It establishes the vital importance and significance of participation agreements as an essential part of the whole process of devising a scheme for the division of the spoils between Britoil and BNOC.
      Any scheme under clause 2 will not be subject to any form of parliamentary supervision or control. That is why I shall spend some time in dealing with the various aspects of the amendment. The Opposition have continually tried to introduce a form of parliamentary supervision over any scheme under clause 2. There is no such control. No order has to be laid. A scheme does not have to be laid before Parliament for approval. But the right hon. Gentleman
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      stated that an integral part of the scheme, and one of its most important elements, will be the participation agreement between Britoil and BNOC.
      Today's debate will be the last chance for the House to pick over the bones of the Bill, to put forward arguments, or to seek assurances from the Secretary of State about the nature of the participation agreements. It is, therefore, right that we should probe the right hon. Gentleman on exactly what the participation agreement will be, and to secure the assurances that we believe to be essential.
      The Government and Opposition recognised, during the long days and nights of debate in Committee and in another place, that there were three basic aspects to any participation arrangement. A participation agreement had to cover the existing oil coming from existing licences—the first to fourth round licences on oil already in place and covered by participation arrangements. In the fifth round licences the participation agreement is of a different kind. It is not based upon an understanding or a right by BNOC to acquire oil. It is underpinned by its 51 per cent. equity holding on every licence in the fifth round. That is the significant difference between the participation arrangements under the first to fourth round licences and the fifth round licences.
      The sixth round is different again. That contains provision for a 51 per cent. minimum, and a series of other interests were introduced—carried interest, put options, and so on—which I shall deal with shortly. There is a fourth aspect to the participation agreements on information rights that I shall deal with briefly later.
      Will the Minister assure us that in any participation agreement signed between Britoil and BNOC there will be a comprehensive arrangement for existing oil under the first to fourth rounds? In other words, will the Minister guarantee that the participation agreement will cover all the licences in the first to fourth rounds as an integral part of the scheme? It should not be organised on a licence-by-licence basis. There must be a full and comprehensive arrangement.
      The Minister has given us assurances that I shall not repeat as I am sure that he does not challenge them. He is genuinely concerned about the nature of the participation arrangement. He has accepted our view that a major comprehensive participation agreement is an integral part of protecting the nation's oil supplies following the breaking up of BNOC. I therefore seek the simple assurance from the Minister that an integral part of an agreement will be that the whole of the first to fourth round licence interests and the BNOC rights of participation will be comprehensively secured in any participation agreement and that there will not be piece by piece negotiation, licence by licence. Anything of that nature will be a grave withdrawal from the Minister's commitments throughout the various stages of the Bill.
      To summarise, therefore, I hope that the first to fourth round licences will form part of a comprehensive agreement envisaged as an attachment to or part of any scheme that is devised under clause 2. Moreover, I hope that the Minister will ensure that as part of that agreement there will be a total arrangement between BNOC and Britoil on the first to fourth rounds.
      When the right hon. Gentleman introduced the amendment he said, significantly, that he accepts the principle that a comprehensive participation agreement should be an integral part of a scheme prepared and completed prior to flotation. I ask the right hon.

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      Gentleman to confirm that the first to fourth round licence oil—that is, existing oil because there is nothing coming from the fifth to sixth round licences—will be an integral part of the participation agreement. I hope that that will be done before flotation so that everyone will know what is happening.
      5 pm
      I ask for a simple assurance on that point, and I hope that the right hon. Gentleman will give it to us. I hope that there will not be a licence-by-licence approach, which will drag on when the Government have lost all the negotiating power that they now have over Britoil and BNOC. They should drive that bargain very clearly.
      Dr. J. Dickson Mabon: I am trying to follow the hon. Gentleman's argument. He has said that Britoil and BNOC should not adopt a licence-by-licence approach. What about the third parties? Will they be consulted?
      Mr. Rowlands: It is not for me to present the Government's case. The Secretary of State can do that. As part of this envisaged comprehensive participation agreement, for which the amendments pave the way, and as a part of the scheme before flotation, we hope that part of the comprehensive agreement will cover the first to fourth round licences. Such an assurance should be put on the record.
      A very different set of issues arises over the fifth round licences, as we continually pointed out on Second Reading and in Committee. In that case, participation agreements will, in effect, be the equity interests of BNOC. We notice the slightly weasel words of the Minister in the other place when he talked about the fifth and sixth rounds. He said that the Government will sign an agreement for 51 per cent, of Britoil's oil. However, when the equity interest is handed over from BNOC to Britoil, which was the basis of the participation agreements under the fifth round, and there is only a 51 per cent. participation agreement, it really means that there will be a 25 per cent. participation oil agreement because that is the mathematical logic of the proposition. Unless something in addition is included, we shall lose significant control over fifth round oil.
      If one loses the 51 per cent. equity interest, which was the basis of participation oil under the fifth round licences, and signs a 51 per cent. participation agreement with Britoil, the State will have control of only 25 per cent. of the oil that comes from those licences. We therefore need something in addition.
      Up to a point, the Secretary of State has accepted that proposition. On more than one occasion he has said—it was repeated in another place—that something is probably needed. What will be the top-up? Rumour has it that the Government will ask Britoil to sign a 51 per cent. arrangement with BNOC. In addition, there will be a special option on the remaining 49 per cent. If that is so, what are the qualifications or conditions by which that option will be exercised? If there is to be an optional right by the Secretary of State to make a claim on the remaining 49 per cent. of the oil transferred to Britoil through transfer of the equity, what conditions will be attached to those rights? Considerable significance will then attach to the whole question of flotation. Every valuation that I have seen is based upon how much oil there will be. If there is to be an option on top of the 51 per cent., one will never quite know how much oil Britoil is entitled to have at any time.
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      The House has a right to know. It is not a question of placing something in the Library in six months' time. The participation agreement between Britoil and BNOC is of far greater significance than the average type of participation agreement which historically has been signed. A major division of the spoils is envisaged in clause 2.
      A simple 51 per cent. participation agreement between Britoil and BNOC under the fifth round licences will simply give the nation a right to control 25 per cent. of the oil coming from those licences. The right hon. Gentleman has on a number of occasions hinted that there should be something in addition. What will it be? Will it be a 49 per cent. option? If so, what conditions will be attached to such an option? What are the circumstances in which the Secretary of State will have the right to exercise such an option? Will the circumstances be unconditional or will specific conditions apply?
      Although I raised some of the issues concerning the sixth round licences, I have thought about them since we debated the matter in Committee. I now wish that I had dealt with the arguments in much greater detail. In Committee, I lumped the fifth and sixth round licences together. That was a mistake, because the sixth round presents another set of arguments about participation arrangements, the division of the spoils and matters arising out of the transfer that is an integral part of the amendment.
      Sixth round licences produce a host of new ideas and arguments. The fifth round licences were concerned simply with the 51 per cent. figure. In this case, a series of other things were added. I refer to licence block No. P297 as a typical example, because it is illustrative of the issues that arise in respect of the sixth round licences. This was an agreement between Occidental, Allied Chemical, BNOC, Getty and Thomson Scottish. The interest in that licence was 16·4 per cent. Occidental, 9 per cent. Allied Chemical, 55 per cent. BNOC, 10·5 per cent. Getty and 9 per cent. Thomson Scottish. But that tells only part of the story.
      If the line were drawn there, BNOC would have a 55 per cent. right to all the oil under that licence. That 55 per cent. will now be transferred to a private concern. In addition, the Government of the day invited companies to offer other incentives to join the licence. Under this licence, Occidental offered BNOC 100 per cent. of all its oil, as did Allied Chemical, Getty and Thomson Scottish. Therefore, BNOC—the nation—had an automatic right to 55 per cent. of the oil from that licence as a result of its equity holding, but as a result of the option offered by the other companies BNOC was offered 100 per cent. control over the oil from that licence. Until the Bill was introduced, the nation had a right to 100 per cent. of the oil arising from the licence that I have just quoted.
      What will be the participation agreement in the sixth round licences? BNOC will lose its automatic 55 per cent. right because Britoil will get the 55 per cent. equity interest. The other 45 per cent. was offered to the nation, the State, BNOC, voluntarily by the other parties to the licence. What will happen to those rights? I could quote the other licences to demonstrate that this licence is not unusual. What will be the participation agreement between BNOC and Britoil in the sixth round licences? First, the Government intend to weaken the 55 per cent. right because they transfer the equity from which that right

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      derives to a private outlet. Lord Mansfield said that there would be a 51 per cent. right in the licences. That is a grave dilution of existing rights.
      The nation has a right to 100 per cent. of the oil in the mixture of equity and other options that were agreed by the private companies when they took out the licence that I quoted. The 100 per cent. right exists in many of the sixth round licences. If the Government are trying to secure only a 51 per cent. on the participation agreement they are giving up the right to control the other 49 per cent. It may be suggested that one way to solve the problem is to persuade Occidental, Allied Chemical, Thomson Scottish and Getty to sign an agreement, as was the case in the licence I quoted, to get all their oil, which amounts to 45 per cent. One would therefore need only 6 per cent. from Britoil. The right hon. Gentleman has yet to deny that he entertains the idea of a participation agreement on the sixth round licences whereby if the other licencees add up to 45 per cent. he will try to secure a 6 per cent. participation arrangement with Britoil. The issues are serious. They are rights that the nation have, through BNOC, to control future oil supplies.
      I thought that the right hon. Gentleman had agreed under pressure that he would passionately maintain the participation rights. The right hon. Gentleman shakes his head. Perhaps he would like me to go through block 301 in which Gulf gives BNOC 100 per cent. I could go through all the licences. One or two give the nation slightly less than 100 per cent. The majority, however, give the nation a 100 per cent. right. They are financially valuable rights. They are important as they control our future oil. Their importance is highlighted when one realises that the oil coming from the fifth and sixth round licences will come into effect in the late 1980s and 1990s when the country could return to deficit and existing oil fields are in decline.
      Will the right hon. Gentleman assure us that he will not dilute the nation's right to determine future oil supplies? We know that 51 per cent. rights are secured in the seventh round licences. We have no argument with that. We seek an assurance with regard to the fifth and sixth round licences. Until we get it we shall not know whether the Bill will weaken and undermine participation agreements, as we fear that it will. With that comes a weakening and undermining of the nation's control over its own oil supply.
      5.15 pm
      Dr. J. Dickson Mabon: On a point of order, Mr. Deputy Speaker. I do not understand how it is possible to take the two groups separately. I understand that we may only speak once, unless we are given permission to speak a second time. It is difficult to debate this group with the subsequent group unless we all get permission to speak twice.
      Mr. Deputy Speaker: I am trying to help the House. My first inclination was to call the two Front Bench spokesmen, but time is limited. The right hon. Gentleman is right. No Member may speak twice. We shall proceed, and the right hon. Gentleman must make his judgment about what to say.
      Mr. Gordon Wilson: I shall deal only with amendments Nos. 5 and 7. I shall pass over
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      amendment No. 6, which is complicated. The Minister endeavoured to explain it, but he left me and other hon. Members straggling behind.
      Amendment No. 7 is one of the most remarkable to come from the other place. Notwithstanding the rule of law or the provisions of any enactment, it will cause parliamentary eyebrows to rise. Indeed, it may spell the death knell of the other place. That phrase may be used by future parliamentary revolutionaries if they survive in any political party. Do the official Opposition intend to press the matter to a Division, or do they regard it as a Trojan horse, which should be left on the statute book for use in more exciting times, along the lines perhaps of the Iranian regime? I shall vote against amendment No. 7 on principle. It is highly dangerous, and I am surprised that this Government of all Governments have advanced it.
      I shall now deal with amendment No. 5. I accept much of what the hon. Member for Merthyr Tydfil (Mr. Rowlands) said. Participation rights are extremly important. It is interesting that the Government have admitted that they have had to change their arrangements. One change deals with the integration of participation agreements within the overall scheme. Another would prevent the incurring of some tax. That two important changes have been made at this stage does not inspire confidence that there will be no harmful provisions elswhere in the Bill that will affect participation oil and the rights that are now vested in BNOC.
      I have heard on several occasions that the separation of BNOC into a participation trading group and equity oil interests could lead to an overall loss of commercially valid rights. The hon. Member for Merthyr Tydfil rightly sought further information about the fifth and sixth rounds and the full right to participation oil.
      I wrote to the Minister of State, the right hon. Member for Ross and Cromarty (Mr. Gray), who I understand cannot be with us as he is fulfilling ministerial duties abroad, thus preventing us from offering our congratulations to him on his promotion to the Privy Council—together with the usual barbed remarks with which such compliments are generally accompanied. I took the opportunity yesterday to telephone his office when I realised that some of the points regarding commercial rights were likely to arise today in relation to the Lords amendments. Although the Minister will have a copy of the letter, for the sake of those who have not seen it I shall briefly restate the points on which I seek information from the Government.
      First, will meetings of BNOC and Britoil, in their capacity as operators in relation to participation oil, continue in Glasgow, or will they be dropped in the light of hostility from some oil companies disinclined to make the journey?
      Secondly, what additional information will have to be provided by BNOC or Britoil to private operators as a result of the change in character of the organisation? That is a specific item, although the House will have noted that the hon. Member for Merthyr Tydfil raised the subject of the provision of information in relation to participation agreements.
      Thirdly, what changes in voting now open to BNOC in relation to offtake of participation crude, as an operator in equity oil development and a participant in equity oil consortia, will take place? Who will cast the votes? If the votes are intended to lapse, what other area of control will take their place? This is a matter of general principle, but

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      it has a bearing on the specific point rasied by the hon. Member for Merthyr Tydfil about the quantity of participation crude that would be available.
      My final three questions are brief, but important. Fourthly, what will happen to farmed-in interests? Fifthly, what will happen to carried interests arising out of the sixth round? Sixthly, what will happen to pre-emption rights?
      These questions will come up at a fairly late stage. One of the problems which faced us in relation to this legislation was that, although we knew that we were dealing with the creation of an equity oil subsidiary, which would be called Britoil, there was no reference anywhere in the legislation to that arrangement. Effectively, it was all done behind the scenes with vague references to "schemes", "orders" and "directions". That problem faced the Standing Committee and, as the hon. Member for Merthyr Tydfil rightly said, today is our last opportunity to look into this kind of deal, because, once the Bill leaves the House of Commons, BNOC will be split up and the operation will be carried out in a way which will allow virtually no further parliamentary scrutiny or questioning.
      It is therefore important that we take the opportunity today to obtain more information from the Government as to what will happen to the commercial rights that I have mentioned. Will they go to Britoil or BNOC, or will some fall out of sight in the creation of this organisation? We need that information so that we may have a more round appreciation of the Government's intentions. It is all the more important now, because we understand that the Government intend to rush precipitately into disposal of the Britoil shares in the late autumn, whether or not oil prices have recovered to a level which would give an adequate return to the country.
      Mr. Douglas: I shall pay much more attention to amendment No. 6 than to amendment No. 5. I begin, however, with a brief word about amendment No. 5 on the subject of participation. My hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) covered this extensively, but there are certain points on which I must press for further information. The Earl of Mansfield, leading for the Government on this in another place, was very circumspect, but he stated plainly that
      "The amendment is designed to make clear that the participation agreement … can be put in place as part of the scheme."—[Official Report, House of Lords, 8 June 1982; Vol. 431, c. 131.]
      I assume, therefore, that the participation agreement—or argreements, as there may be more than one—would be part of the prospectus. I see the Secretary of State shake his head, so I assume that there will be one participation agreement between the newly formed Britoil and BNOC.
      As my hon. Friend the Member for Merthyr Tydfil indicated, there are difficulties with the licence terms of the fifth and sixth rounds. It is to the nation's advantage to keep all these participation agreements in hand. Paragraph (a) of amendment No. 5 seeks to insert the following words:
      "provide that any prescribed rights or liabilities on the transferor shall be enforceable either by or against either party or by or against both".
      I take that to mean that the participation agreement, which will be the "State's" right against Britoil, ought to envisage all the rights that BNOC now has. Otherwise, certain things follow in relation to amendment No. 6. If the State in one way or another is to give up some of those
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      rights, that will affect the valuation of Britoil in terms of the market. Indeed, there was an extensive discussion about this in another place.
      The hon. Member for Dundee, East (Mr. Wilson) referred to amendment No. 7, which is one of the strangest amendments ever to be seen in this place. It seeks to insert the words:
      "notwithstanding any rule of law and the provisions of any enactment".
      As Lord Wilberforce said—I think that he was somewhat misquoted by the Secretary of State—there are fears that this may not just be a precedent in one sense but that it may pop up in other statutes. Which other statutes have used this? Given the provisions dealing with this in the Companies Act 1981, especially sections 36 to 40, why do the Government feel the need to write amendment No. 7 into the Bill? What is so unique about this that the Secretary of State must create a situation in which, in terms of Britoil accounts, what might be tantamount to a share premium account should be available for disposal to the recipients of the holding in the new company?
      I am especially concerned about this because in its accountancy policy BNOC has paid particular attention to retaining profits. The balance sheet at 31 December 1981 shows that retained profits that year were £165·3 million. If an ordinary private company, which this will not be, went to the Stock Exchange and was getting a premium for the shares, these would come into a share premium account which under the Companies Act 1948 and even in certain circumstances, I assume, under the 1981 Act would not be disposable in terms of dividends. There would be great restrictions on that share premium in terms of disposal.
      5.30 pm
      The Secretary of State takes the view that because of accountancy practices this is a useful device to put the books in order. I do not necessarily quarrel with him because it would have to be done if one took the Government's view that what is in public ownership must be transferred to the private sector. He takes the view that it is a pure accountancy device. But, taken one stage further, the valuation is being made on the basis of a national asset which has been built up by the retained profits of the national corporation. The retained profits have been based on certain provisions in relation to access to the national oil account. Many Tories complained about that. It could be argued that those profits had been earned partly because of the softness of Government fiscal methods. I see that the Secretary of State is smiling and I would not quarrel with him if he said that that was the case.
      If the profits should accrue to anyone they should accrue to the nation. The Secretary of State might counter my argument by saying "If they are sold at a particular level in the market place the profits, in terms of market evaluation, will be examined by the market and therefore, at one stage removed, will accrue to the nation". However, that presupposes that we do not have an Amersham International. The assumption is that we do not undervalue the shares. If the Secretary of State behaves in the manner that he has behaved in previous instances, the market will examine the prospectus and see in it profits in terms of share premium that ought to have accrued to the nation, but can accrue to the market. They will accrue to the nation only if we have a proper evaluation of the assets.

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      I have argued all along that we should not do this at all, but in order to do it statutes which severely control private enterprise are being swept aside by amendment No. 7, including the rule of law in Shearer v. Bercain and in Companies Acts from 1948 to 1981. The Secretary of State cannot justify that unless he gives us a copper-bottomed undertaking that the prospectus of the organisation will be debated on the Floor of the House. That is the only undertaking that will suffice.
      The Secretary of State is sweeping aside statutes and the rule of law. We should not allow him to sell a public corporation down the river. Therefore, I ask the Secretary of State to give an assurance that when the participation agreements that be part of the prospectus of the corporation will come before the House to be debated we can be assured that there will not be another selling down the river, to follow the examples of Cable and Wireless, British Aerospace and Amersham International. I trust that the Secretary of State will be able to give a better explanation of the chicanery that has occurred in the other place than has been given so far.
      Dr. J. Dickson Mabon: I find it astonishing that we should be spending less than two hours debating this group of amendments. There are at least two substantial intrinsic problems in the various groupings and a massive constitutional point in amendment No. 7, which was barely touched on in the other place. Lord Elwyn-Jones described it as dealing with the Bill in a lazy way. That has been the character of the Bill all through the proceedings.
      The Government have inherited all these participation agreements which impinge on the earlier rounds up to the fourth round. There are also the other matters touched on by the hon. Member for Merthyr Tydfil (Mr. Rowlands) in rounds five and six. I am sorry that the Secretary of State has not chosen to intervene because he might have been able to give answers to the questions raised by the hon. Gentleman. It would be remarkable and alarming if only half of what the hon. Gentleman says is true. I have no reason to doubt that most if not all of what he has said is true.
      We are being invited—the Secretary of State thought that we were going to thank him for it—in amendment No. 5 to say how grateful we are that a copy of the agreement between Britoil and BNOC will be put in the Library before the disposal of BNOC's assets to Britoil is taken to the market place. That is an interesting point. When will the document be put in the Library, given that there will be a race to the market early in the autumn? The House will probably rise at the end of July and will not reconvene until October. Will we be able to debate the participation agreement before then?
      Mr. T. H. H. Skeet: As I understand it, the participation agreements will not be put in the Library in their full form. They will be simply a precis.
      Dr. Mabon: I know that. I used to pledge to the hon. Gentleman and to other hon. Members that each participation agreement—there must be 60 or more—would be placed in the Library not in absolute form but in a heads of agreement form. I do not object to that. But if it has been promised in another place that the
      466
      document will be placed in the Library—I assume the Secretary of State will endorse it—I hope it will be in sufficient detail for us to have an intelligent debate.
      This is a massive agreement. It covers all the rounds up to the sixth round and will cover a large number of companies. I take exception to the view that none of the companies involved will not seek some form of litigation. I say that with regret but I know how devious and difficult some of the legal advisers to the companies are. There has been reference to a grouping of four or five companies—it is a respectable grouping and I do not suggest that those companies would ever litigate against the Government—but only one party, however small its percentage holding might be, could question the validity of the Britoil—BNOC agreement. The Secretary of State is sweeping that away by amendment No. 7. In an astonishing debate in the other place the former Lord Chancellor, Lord Elwyn-Jones, made a plea to the Minister to think about the amendment and to seek in some other way to put in overriding provisions in each of the paragraphs of clause 2(4). In response to the plea the Earl of Mansfield said the he would think about it but said that:
      "I do so without any firm commitment."—[Official Report, House of Lords, 8 June 1982, Vol. 431, c. 141]
      There has been no undertaking.
      Mr. Gordon Wilson: Would the right hon. Gentleman accept that if we lived in a country where the courts exercise a constitutional oversight of legislation the type of prescription contained in the amendment would be struck out as unconstitutional?
      Dr. Mabon: I agree. May I say, as a fellow Scot, that in the ancient traditions of the Scottish Parliament we would not have allowed this type of amendment to stand, but in the English Parliament, whose rules and traditions we have inherited, omnicompetence is allowed. That being the case, the Secretary of State, in a slipshod way, is putting in a provision of a monstrous constitutional nature to set aside all law, all contract and every legal protection open to either a company or an individual if the intention of the participation agreement between Britoil and BNOC is offended.
      I do not know on what amendments we shall be voting but I think that we must vote on Lords amendment No. 7. Their Lordships and the country generally will expect us to do so. It draws our attention to a monstrous way of making law. I do not blame the Department of Energy but I blame its Ministers, who should have thought through the Bill more carefully, taken more time in so doing and properly prepared the early stages as well as this final stage.
      What can we do but agree or disagree with the amendments? If we disagree with them, in what state will we leave the Bill? It would have to be returned to another place and then returned to this place. That is our ping-pong arrangement. Under the guillotine we have only a short time to go into the substance of these issues.
      Opposition Members have made many excellent points about the participation agreements and I shall listen carefully to the Minister's reply. I do not understand entirely the argument of the hon. Member for Merthyr Tydfil that there is a transference from the BNOC to Britoil and thereby a diminution in the rights of the corporation as a trading organisation over the disposition of 51 per cent. of the oil. Whatever the arguments about the possession or saleability of the oil, I hope that the

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      Secretary of State will give us the assurance, which I thought was intrinsic in the Bill, that at least 51 per cent. of the oil taken from the North Sea under the licences will be at the trading disposition of the BNOC and, therefore, at the Government's disposition. It should be remembered that the corporation has 7 per cent. of the oil. The hon. Member for Merthyr Tydfil referred to the dispositions in the sixth round and the voluntary surrenders. He referred also to the fifth round in his examples.
      I look forward to hearing the Minister's answers to the detailed questions asked by the hon. Member for Merthyr Tydfil about all the contracts. The hon. Gentleman is seeking specific undertakings. I cannot understand how it is possible to subsume every participation agreement in one great compendium of an agreement between one of the parties and a fresh party.
      The agreement was signed by the Government, by the Secretary of State or myself for and on behalf of Her Majesty's Government, and by the chairman of BNOC, who is now one of the two contracting parties. It was signed not by the consortium, whatever that may have been at any given moment, but by each individual member, however minor, of the consortium. I am extremely concerned that the Government are prepared blithely to say that they can make an agreement with Britoil and the corporation that can supersede and override all interests. I am not against the intention but I am worried about the security and safety of this way of proceeding.
      At the end of the day the Government will claim that everything turned out well. They will say "Everything ran smoothly and what we did in Parliament was perfectly all right. We did not need Parliament's advice at any stage and everything has been done successfully." What will happen if one, two or a dozen of these serious matters legally blow up in the face of the Government and Britoil finds itself in difficulties, or even the BNOC, over the legal disposition of these assets, understandings and agreements? I believe that we are entering a thicket of legal difficulties that have been spawned by an inadequate preparation of the Bill and an inadequate thinking through of the transference of these assets, rights and legal understandings. It is too late to turn back now. I believe that the Secretary of State has taken the wrong path and that he will regret it.
      5.45 pm
      Mr. Peter Hardy: I hope that the Secretary of State will respond favourably, if that is possible, to the argument of my hon. Friend the Member for Dunfermline (Mr. Douglas). The right hon. Gentleman suggested that security of supply will probably be enhanced by the amendments. It may be that the character of the arrangement that will apply as a consequence of the amendments will be superior to the weaker level of security of supply envisaged originally by the Government. As my hon. Friend said, that security may be more in peril in future if the amendments are made than if the existing arrangements continue. On the other hand, some of us might believe that the existing arrangements are inadequate. The Secretary of State seems to be approaching this issue on the basis of current consideration.
      The participation agreements, to which my hon. Friends cling, and security of supply do not adequately provide—nor does this group of amendments—a proper degree of wisdom for dealing with the pace, quality and
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      exploitation of our offshore oil. Yesterday I studied the international oil production figures for 1981. One stark fact should not be ignored. In 1981, only seven or eight countries produced more oil than the United Kingdom. Even some Conservative Members will acknowledge that more than 20 countries have larger crude oil reserves than we have.
      It seems that the Government are obsessed with the idea of privatising our oil and are giving no proper consideration to the need for a sensible depletion policy. If we continue to exploit North Sea Oil at the 1981 rate, we may be providing adequately for next year's balance sheet of Britoil's profits, but we shall not be serving the country's interests. The Secretary of State is concentrating on security of supply, and that suggests that he is being remarkably short-sighted.
      Over the past three years the Government have been preaching to local authorities and trade unions. I hope that local government, regardless of the nature of its political control, and the trade unions will read Lords amendment No. 7 and note how easily a Conservative Government can use phrases such as
      "notwithstanding any rule of law".
      At this time of instability, and with many people gravely anxious, the Government display utter disregard for wisdom and balance in the British way of life. I hope that they will regret using phrases such as the one to which I have referred.
      There is nothing within the amendments to relieve one anxiety which was expressed clearly in Committee and on Report about the level of extraction. The participation agreements that were drawn up in the 1970s and those that have been drawn up subsequently do not adequately take account of this factor. In Committee, evidence was provided that companies have reduced the level of take in particular oil fields and intend to leave millions of barrels of oil under the sea bed because they wish to reduce the level of capital investment that a larger take would require. The Government have failed to give the slightest consideration to that serious danger.
      The national interest requires not merely that these pathetic and inadequate amendments should be reconsidered quickly, but that the Government should come clean, present the proper prospectus for Britoil, provide Parliament with time to consider it, and review the grossly unsatisfactory nature of their North Sea policy.
      Mr. Merlyn Rees: I am conscious of the fact that because of the way the guillotine is operated, if we are not careful, we shall not be able to vote on the most important amendment, amendment No. 7, to which precious little time has been given. However, we can express our feeling against the amendment very briefly by saying that it is in the East German tradition of many parts of the Bill. For that reason, we shall vote against it and I shall not develop my reasons further.
      Important as they are, I shall not dwell on paragraphs (b), (c), (d) and (e) of amendment No. 6 for the same reason—lack of time. As the Secretary of State said, those provisions are extremely complicated, but they are also extremely important in relation to the basic issue of the commencing debt, with which I am most concerned.
      Using, for obvious reasons, much the same words that were used in the other place, the Secretary of State told us what had been done in conjunction with amendment No. 57 to clause 35. But all he said was that the

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      Government had taken account of a point that had been raised in the other place about the possibility of transferring any commencing debt under clause 4 to Britoil. The Earl of Mansfield said:
      "No decision on this has been taken but we are making sure that the flexibility is there".—[Official Report, House of Lords, 8 June 1982; Vol. 431, c. 131.]
      We are not sure in what way the Government intend to be flexible. In Committee, I gathered that we were talking of a commencing debt of about £150 million. It was one of those moments of light humour, but later I was not sure in what sense that figure was being bandied about. However, that figure is on record and it is the one that I use. We need to know what the Government have in mind, because we are discussing the entire role of this rump, BNOC.
      It is a trading arm. How is it to be treated? Is it to have an external financing limit? There will still be a corporation after the split that is planned, I think, for 1 August. The potential losses are vast. With the oil price fluctuating rapidly it is inconceivable that losses will not be sustained by a trading company. Many publicly owned utilities make losses because of inflation and the nature of the job that they have to do, but we are setting up a trading company which will almost certainly make losses straight away. One cargo of oil of ¼ million tonnes would sustain a loss of about $2 million on the movement of just $1 in the price per barrel.
      How is the corporation to be set up and what commencing debt will it have? How are we to judge whether the corporation is efficient? The media will immediately take the short announcement of the losses made as a sign of inefficiency, but the losses are built into the company's structure. In Committee, to his credit, the hon. Member for Bedford (Mr. Skeet) saw, as did the directors of BNOC at one stage, that the company should not have been split. However, the Government are taking the liability. The commencing debt is the most important part of the company's structure but we do not know enough about it. What options do the Government have in mind?
      Mr. Lawson: Several complex points have been raised and I shall do my best to answer them. If there are any that I am unable to answer in the time available, I shall be happy to write to the hon. Members concerned.
      Much of the early part of the debate revolved round the participation agreements and amendment No. 5. The hon. Member for Merthyr Tydfil (Mr. Rowlands), in particular, asked several complex questions about participation and the agreement—it is one agreement—to be concluded between BNOC and Britoil. In Committee, he warned me that he would watch with considerable interest to see how well I championed the State trading arm's rights and responsibilities. The amendment should reassure him that I am fulfilling that job diligently and in a manner that is fully consistent with what he conceives, and I agree, to be the national interest in the participation agreement system.
      I shall try to deal with as many points as possible, but it might be helpful to begin with a summary of the policy approach that we set out in Committee. It is easy for misunderstandings and confusion to arise. Indeed, there may have been one or two misunderstandings during this brief debate. I should make clear the distinction between the corporation's existing participation rights against third
      470
      parties and the new rights that will be created against Britoil under the participation agreement that it will conclude with BNOC. The distinction is important to any understanding of amendment No. 5.
      The House will appreciate that no participation agreement between Britoil and BNOC has yet been concluded. There are discussions in hand about the form that it should take, but I cannot give any details of any final agreement, because no final agreement exists. The same applies to the scheme that will transfer BNOC's oil-producing business to Britoil. I make no secret of the fact that work is in hand—a point raised by the hon. Member for Dunfermline (Mr. Douglas)—and we are anxious to start formal consultations with the corporation about a direction on the scheme as soon as possible. However, nothing is final and several important issues are still outstanding.
      I turn to the corporation's existing rights against third parties. For the moment, I shall put on one side the participation agreement that is to be concluded between Britoil and BNOC. I shall require the corporation to submit to me a scheme that transfers its oil-producing business to a subsidiary, Britoil, but retains the participation trading role for the corporation and ensures that it has the necessary powers to carry out that role effectively.
      Subsection (2) creates the power to make the scheme and states the purpose for which the power is to be exercised. Subsection (3)(a), as amended, states that the scheme may provide that prescribed rights and liabilities shall be enforceable by or against both or either of BNOC and Britoil. In practical terms, the rights and liabilities mentioned in those subsections are at present to be found in licences and agreements to which BNOC is a party.
      The hon. Member for Merthyr Tydfil separated the first to fourth rounds and then the fifth and sixth rounds. It might be helpful to do the same. First, I shall deal with the licences and agreements that arise under the first to fourth rounds of licensing. We have made abundantly clear our intention that the existing participation agreements should be fully retained by BNOC. I shall want to be fully satisfied that the scheme achieves that before I approve it. I hope that that is the assurance that the hon. Gentleman sought.
      Where rights and liabilities are to be transferred to Britoil, it will be necessary for the scheme to provide for the relevant licences and agreements to be read as if Britoil were party to them, not BNOC. In more difficult cases—and there are some—only one licence or agreement contains rights and liabilities that relate both to equity interests, which are to be transferred to Britoil, and to participation interests, which will be retained by BNOC. In those cases, it will be necessary to identify the rights and liabilities that are needed for equity or participation purposes under the scheme to provide, under subsection (3)(a), for them to be enforceable by or against BNOC or Britoil, or both.
      Under the scheme, BNOC will retain the rights that it currently holds for access to information and attendance at operating and management committees related to licences, pipelines and terminals. We were all delighted at the appointment of my right hon. Friend the Minister of State, Department of Energy to the Privy Council. He explained the position on access to information in Committee on 23 February.

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      6 pm
      The hon. Member for Dundee, East (Mr. Wilson) asked what would happen to the interests that BNOC has farmed in. They will be treated like the corporation's other equity interests and pass to Britoil under the scheme.
      Mr. Rowlands: I referred to information rights. What will happen to the Statfjord field—a cross-border field with the Norwegians—where BNOC derives its rights on the committees from its equity interest which will pass to a private concern? Will it maintain an important participation oil right from oil in an important field? Will that position be covered?
      Mr. Lawson: I have a number of points to cover and little time in which to do so. If new points are raised, it will make matters difficult. The Statfjord field is subject to a number of agreements between the United Kingdom and Norwegian Governments and between the partners to the United Kingdom and Norwegian licence interest because it straddles the median line. There will have to be talks between the Governments and partners to perfect Britoil's title to the equity interest and ensure that BNOC can possess its participation share of Britoil's oil. We shall want to ensure that BNOC continues to have all the information that it requires.
      I turn to the fifth and sixth licensing rounds. There are no producing fields there and there are no participation agreements, but BNOC owns an equity interest in each licence. In the fifth round the interest is generally 51 per cent. In the sixth round the interest is 51 per cent. or more. The corporation owns certain important additional rights. We shall ensure that the scheme reflects the same policy towards the interests in those licensing rounds as towards interests in earlier licensing rounds. Equity interests go to Britoil and BNOC retains the benefit of those interests which are more akin to participation.
      The corporation holds special rights under the sixth round. Those interests which are clearly equity-related will be transferred to Britoil. That includes the right to be carried for all or part of its exploration costs up to the development stage. In some cases the corporation has the right to increase its equity share. It is common for licensees to have the right of first refusal if a partner wishes to divest himself of a licence interest. Accordingly, we regard analogous rights held by the corporation as complementary to its interests, and those, too, will be transferred to Britoil.
      We consider that the right to call for oil from the share of certain of its partners is related to BNOC's role as a trader in participation oil. We shall want the benefit of those rights to remain with the corporation. That is the point that the hon. Member for Merthyr Tydfil raised in Committee. He gave the impression, as he has done today, that there were 100 per cent. call options in all sixth round licences. That is not the case. We considered carefully what he said in Committee in developing our policy.
      On the point raised by the hon. Member for Dundee, East, I cannot think of any additional information that BNOC will have to give to private licensees. I have made clear that it is our intention to avoid any loss of information to BNOC which is essential to its participation trading business. The hon. Member for Dundee, East spoke about the question of BNOC's vote on licences when the corporation is split. We shall apply the same general
      472
      guidelines as apply to other interests. Votes stemming from participation will remain with the corporation; votes stemming from equity will be transferred to Britoil.
      The operating agreements between licensees in which those rights are incorporated differ in detail, and it will clearly be necessary to examine carefully each individual agreement where the corporation currently has both a participation and equity role to see how the two components of the vote can best be separated. We shall expect the corporation to deploy its residual voting powers in as neutral a way as possible. Control over matters relating to each participation agreement has been and will continue to be obtained not through its vote but through its participation agreements with other licensees. We shall consider carefully the practical operation by the corporation of its rights, but that is a separate matter from the question of what rights it should retain under the scheme.
      Finally, let me come to the participation agreement that is to be concluded between Britoil and BNOC. The Opposition have expressed a clear interest in that. On Second Reading, I explained that in general I shall seek public sector access to about half the production from each licence. I shall not seek access to more than 51 per cent. of Britoil's oil from licences awarded in the first four rounds, but in the fifth and sixth rounds, depending on the detailed provisions applying to each separate licence, that policy may require BNOC to have options on more than 51 per cent. of Britoil's oil.
      In answer to the hon. Member for Merthyr Tydfil, I confirm that the scheme and participation agreement between BNOC and Britoil will cover Britoil's equity oil interest in the first to fourth round licences and will create participation rights against Britoil across all those interests.
      On the fifth round, the hon. Member for Merthyr Tydfil pointed out that 51 per cent. of 51 per cent. is 25 per cent. Leaving aside the decimal point, he is quite right. I have already referred to my statement on Second Reading that, in general, I shall seek public sector access to about half the production from each licence. That clearly implies more than 51 per cent. of Britoil's oil in fifth round licences. I cannot give greater detail, because no final decision or agreement has been reached. The idea put forward by the hon. Member for Merthyr Tydfil is a possibility. At no time under the previous Government did either Ministers or BNOC define the precise circumstances in which they would or would not exercise options to participation oil.
      On the sixth round interests, we intend BNOC to retain the benefit of the call options to which the hon. Member for Merthyr Tydfil referred. The hon. Gentleman somewhat exaggerated the extent of the rights across the licensing round. About one-third of the licences gave no substantial, special rights to BNOC. The basic point is that those call options will not be available to Britoil. They will go to BNOC. I cannot say any more on that at present as no final agreement exists. When an agreement has been concluded, a summary—that point was made by my hon. Friend the Member for Bedford, (Mr. Skeet}—will be placed in the Library in the normal way in accordance with the Participation Agreements Act 1978. If it is the wish of the House, I shall do my best to ensure that that is done before the House rises for the Summer Recess.
      There are three further points that I should make. First, we now consider that, with the revised wording in

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      amendment No. 5, the scheme can be used to put the participation agreement between Britoil and BNOC in place. I regard that as a significant improvement to the scheme. It will still not be possible to use the scheme-making powers to impose new obligations of substance on third parties. I think that this answers the point made by the right hon. Member for Greenock and Port Glasgow (Dr. Mabon). My right hon. Friend the Minister of State explained this more fully in Committee and I refer hon. Members to the debate on 23 February. As he said on that occasion, some important aspects of the BNOC-Britoil agreement already form part of the corporation's rights. In particular, secure access to petroleum requires BNOC to hold an interest in the relevant licences. BNOC is already on the licences either as an equity partner or through other participation agreements. We begin with an important step already established.
      We attach major importance to this participation agreement between BNOC and Britoil. It is of the first importance. I agree with all hon. Members who have spoken to this effect. We shall not allow discussions to drift or to drag on interminably. By the time that I come to approve the scheme I shall want to be satisfied that the participation agreement is in its final form, is ready to be put in place without delay and conforms fully with Government policy.
      Before leaving the issue of participation agreements arising from amendment No. 5, I should like to make one final point. Opposition Members have been inclined to suggest that my right hon. and hon. Friends and myself, and the Government generally, are not sufficiently concerned about participation and the participation agreement system. Nothing could be further from the truth. Indeed, had that been true, we would certainly not have been going to all this trouble—it has been immense trouble to devise a means of cutting this great Gordian knot—to split the corporation and to keep the trading arm in the public sector. It is an enormousely complex exercise. Our plans for privatisation would have been very much easier if we had simply decided to sell shares and to float off the corporation as a whole. It was because of the importance that we attached to the participation agreements that we decided to preserve the trading arm in the public sector as 100 per cent. State-owned and to secure, in this manner, participation policy.
      I should like now to turn to other matters that were raised, especially amendments Nos. 6 and 7. I think, if I understood him correctly, that the right hon. Member for Leeds, South (Mr. Rees) was a little confused over amendment No. 6 which is concerned basically with the commencing debt of Britoil and the financial structure of the trading arm which will remain. We discussed fairly fully in Committee the nature of the arrangements that we would be making to ensure that the trading arm could fulfil its functions adequately and fully. There is, of course, a risk of loss with large amounts of oil being traded. But it is no greater than the risk inherent in the existing arrangements. BNOC is 100 per cent. owned by the Government. It is made slightly more visible. Arrangements have to be made for coping with that. There is, however, no reason to believe, taking one year with another, that there should be such losses.
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      A great deal of excitement appeared to be raised by amendment No. 7. I understand that the Opposition wish to vote on the amendment. I should like to make clear at the outset that the words
      "notwithstanding any rule of law and the provisions of any enactment".
      are nowhere near as wide-ranging as they might appear at first sight. Not only does the amendment have two clearly defined objectives but its effect is also strictly limited to those provisions in the scheme by virtue of subsections (3) and (4) of this clause. The reference to "any rule of law" addresses a well-known principle established in the case of Head v. Ropner Holdings, Ltd., recently confirmed, I understand, in the case of Shearer v. Bercain. The principle is that where shares are issued in acquisition for an asset, the true value of the asset must be brought into the books of the company issuing the shares. Such a principle, if applied to Britoil, would be contrary to maintaining continuity in the treatment of the assets transferred between BNOC's and Britoil's accounts. This continuity has always been one of the objectives of clause 2 and accepted by the Opposition.
      6.15 pm
      Secondly, the words
      "the provisions of any enactment"
      refer mainly to the provisions of the Companies Acts. In particular, section 56 of the Companies Act 1948 requires that
      "Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to on account, to be called 'the share premium account.'"
      There are a number of restrictions on a share premium account, notably that it should not be available for distribution. I have already explained in introducing the amendment to clause 2(4) that we wish to establish Britoil with a fairly conventional capital structure including provision for both distributable and undistributable reserves. These words enable this to be done. Hon Member will appreciate that the examples I have given of the effect of amendment No. 7 are highly technical and consistent with the objective of establishing continuity of accounts. Equally, the effect is specific in support of the provisions set out in subsections (3) and (4).
      I have mentioned, like other Members, the discussions that took place in another place where Lord Wilberforce, a most eminent legal luminary, said:
      "Speaking entirely for myself, I find his"
      that was a reference to my noble Friend the Earl of Mansfield—
      "explanation in relation to the case of Shearer v. Bercain totally satisfactory".
      He went on to say
      "Summing up, I do not personally regard this clause in its context as having any very dire effect."—[Official Report, House of Lords, 21 June 1982; Vol. 431, c. 805–806.]
      The plain fact of the matter—
      Dr. J. Dickson Mabon: Will the Secretary of State read out the next sentence?
      Mr. Lawson: The hon. Member for Merthyr Tydfil has read out the next sentence so there is no reason for me to repeat it.
      I realise that a number of hon. Members, including the hon. Member for Dunfermline who always takes a keen and well-informed interest in our proceedings—this is deeply appreciated on the Government Benches—were

      475
      concerned to know why it was necessary to include in the Bill provisions to override the decision in the case of Shearer v. Bercain when sections 36 to 41 of the Companies Act were enacted to give relief from the effects of that decision. The short answer—I am sure the House will be glad that it is short—is that the reliefs contained in those sections do not extend to embrace a situation that is addressed in the Bill. That is the situation of a corporation created by statute, which is quite different from a company incorporated under the provisions of the Companies Act. It is a corporation created by statute transferring a part of its business to a subsidiary company in consideration of the issue of certain securities in that subsidiary. Sections 36 to 41 deal with certain transactions between companies in this context. The word "company" has the meaning given to it in the Companies Act 1948 which is that of
      "a company formed and registered under this Act or an existing company"
      That definition does not and could not include BNOC. Therefore, the provisions of sections 36 to 41 of the Companies Act 1981 do not cover the proposed transaction between BNOC and Britoil.
      As I said earlier, it is not very surprising, and it should not surprise Opposition Members, that as what we propose in subsection (2) is not a normal occurrence in the normal course of business, provision needs to be made to overcome the unusual problems created by statutory vesting. It would do no one any good to leave those problems. That would do no good to Britoil or to BNOC, as I am sure Opposition Members would agree.
      I shall sum up briefly by saying that I hope that, on reflection, Opposition Members will see that we have gone a long way to meet the worries that they expressed in earlier proceedings on the Bill, and in particular their concern to have a fully satisfactory and watertight system of participation agreements in place before the flotation of Britoil. That is what the amendment would achieve, and it is the Government's firm intention to do that.
      Question put and agreed to.
      Lords amendments Nos. 2 to 6 agreed to.
      Lords amendment: No. 7, in page 4, line 7, at end insert
      "notwithstanding any rule of law and the provisions of any enactment".—[Mr. Lawson]
      Question put, That this House doth agree with the Lords in the said amendment:—
      The House divided: Ayes 148, Noes 92.

      Division No. 243]

      [6.21 pm

      AYES

      Arnold, Tom

      Carlisle, John (Luton West)

      Aspinwall, Jack

      Carlisle, Kenneth (Lincoln)

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

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

      Bendall, Vivian

      Chapman, Sydney

      Benyon, Thomas (A'don)

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

      Berry, Hon Anthony

      Cope, John

      Bevan, David Gilroy

      Costain, Sir Albert

      Biggs-Davison, Sir John

      Cranborne, Viscount

      Blackburn, John

      Crouch, David

      Blaker, Peter

      Dorrell, Stephen

      Body, Richard

      Dover, Denshore

      Boscawen, Hon Robert

      du Cann, Rt Hon Edward

      Braine, Sir Bernard

      Dunn, Robert (Dartford)

      Bright, Graham

      Dykes, Hugh

      Brinton, Tim

      Eggar, Tim

      Brittan, Rt. Hon. Leon

      Elliott, Sir William

      Brooke, Hon Peter

      Faith, Mrs Sheila

      Brown, Michael(Brigg & Sc'n)

      Fisher, Sir Nigel

      Bruce-Gardyne, John

      Fletcher-Cooke, Sir Charles

      Bryan, Sir Paul

      Goodhew, Sir Victor

      Cadbury, Jocelyn

      Goodlad, Alastair

      476

      Gow, Ian

      Onslow, Cranley

      Greenway, Harry

      Osborn, John

      Griffiths, Peter Portsm'th N)

      Page, John (Harrow, West)

      Gummer, John Selwyn

      Page, Richard (SW Herts)

      Hamilton, Hon A.

      Percival, Sir Ian

      Hamilton, Michael (Salisbury)

      Pollock, Alexander

      Hampson, Dr Keith

      Prentice, Rt Hon Reg

      Haselhurst, Alan

      Proctor, K. Harvey

      Havers, Rt Hon Sir Michael

      Raison, Rt Hon Timothy

      Hawkins, Sir Paul

      Renton, Tim

      Hawksley, Warren

      Rhodes James, Robert

      Heddle, John

      Rhys Williams, Sir Brandon

      Henderson, Barry

      Ridley, Hon Nicholas

      Hogg, Hon Douglas (Gr'th'm)

      Ridsdale, Sir Julian

      Holland, Philip (Carlton)

      Rossi, Hugh

      Howell, Rt Hon D. (G'ldfd)

      Rost, Peter

      Howell, Ralph (N Norfolk)

      Royle, Sir Anthony

      Hunt, David (Wirral)

      Rumbold, Mrs A. C. R.

      Hunt, John (Ravensbourne)

      Sainsbury, Hon Timothy

      Jessel, Toby

      Shaw, Sir Michael (Scarb')

      Jopling, Rt Hon Michael

      Shelton, William (Streatham)

      Kilfedder, James A.

      Shepherd, Colin (Hereford)

      Knight, Mrs Jill

      Silvester, Fred

      Lang, Ian

      Smith, Tim (Beaconsfield)

      Latham, Michael

      Speed, Keith

      Lawson, Rt Hon Nigel

      Speller, Tony

      Lester, Jim (Beeston)

      Stainton, Keith

      Lewis, Kenneth (Rutland)

      Stanbrook, Ivor

      Lloyd, Peter (Fareham)

      Stanley, John

      Luce, Richard

      Steen, Anthony

      Lyell, Nicholas

      Stevens, Martin

      Macfarlane, Neil

      Stradling Thomas, J.

      MacGregor, John

      Taylor, Teddy (S'end E)

      MacKay, John (Argyll)

      Thomas, Rt Hon Peter

      Macmillan, Rt Hon M.

      Thorne, Neil (Ilford South)

      Major, John

      Thornton, Malcolm

      Marland, Paul

      Townend, John (Bridlington)

      Marlow, Antony

      Trippier, David

      Marshall, Michael (Arundel)

      van Straubenzee, Sir W.

      Mather, Carol

      Viggers, Peter

      Maude, Rt Hon Sir Angus

      Waller, Gary

      Mellor, David

      Warren, Kenneth

      Meyer, Sir Anthony

      Watson, John

      Mills, Iain (Meriden)

      Wells, Bowen

      Mills, Sir Peter (West Devon)

      Wells, John (Maidstone)

      Moate, Roger

      Wheeler, John

      Montgomery, Fergus

      Whitney, Raymond

      Moore, John

      Wickenden, Keith

      Morris, M. (N'hampton S)

      Williams, D.(Montgomery)

      Mudd, David

      Winterton, Nicholas

      Murphy, Christopher

      Wolfson, Mark

      Myles, David

      Needham, Richard

      Tellers for the Ayes:

      Nelson, Anthony

      Mr. Donald Thompson and

      Newton, Tony

      Mr. Tristan Garel-Jones.

      NOES

      Alton, David

      Dubs, Alfred

      Anderson, Donald

      Dunwoody, Hon Mrs G.

      Archer, Rt Hon Peter

      Evans, loan (Aberdare)

      Beith, A. J.

      Faulds, Andrew

      Benn, Rt Hon Tony

      Field, Frank

      Booth, Rt Hon Albert

      Foot, Rt Hon Michael

      Bradley, Tom

      Garrett, W. E. (Wallsend)

      Brocklebank-Fowler, C.

      George, Bruce

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

      Graham, Ted

      Buchan, Norman

      Grimond, Rt Hon J.

      Concannon, Rt Hon J. D.

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

      Cook, Robin F.

      Hardy, Peter

      Crowther, Stan

      Harrison, Rt Hon Walter

      Cryer, Bob

      Haynes, Frank

      Cunningham, G. (Islington S)

      Hooley, Frank

      Davidson, Arthur

      Horam, John

      Davis, Terry (B'ham, Stechf'd)

      Howells, Geraint

      Deakins, Eric

      Hoyle, Douglas

      Dean, Joseph (Leeds West)

      Janner, Hon Greville

      Dewar, Donald

      Jay, Rt Hon Douglas

      Dixon, Donald

      Kaufman, Rt Hon Gerald

      Dormand, Jack

      Kerr, Russell

      Douglas, Dick

      Kilroy-Silk, Robert

      477

      Lamond, James

      Rooker, J. W.

      Leighton, Ronald

      Rowlands, Ted

      Lyons, Edward (Bradf'd W)

      Sandelson, Neville

      Mabon, Rt Hon Dr J. Dickson

      Sheldon, Rt Hon R.

      McCartney, Hugh

      Silverman, Julius

      McDonald, Dr Oonagh

      Skinner, Dennis

      McKay, Allen (Penistone)

      Snape, Peter

      Maclennan, Robert

      Soley, Clive

      Marshall, Dr Edmund (Goole)

      Spearing, Nigel

      Mitchell, R. C. (Soton Itchen)

      Stallard, A. W.

      Morris, Rt Hon A. (W'shawe)

      Summerskill, Hon Dr Shirley

      Morris, Rt Hon C. (O'shaw)

      Wainwright, E.(Dearne V)

      Morris, Rt Hon J. (Aberavon)

      Wainwright, R.(Colne V)

      Newens, Stanley

      Wellbeloved, James

      Orme, Rt Hon Stanley

      Welsh, Michael

      Owen, Rt Hon Dr David

      White, Frank R.

      Penhaligon, David

      Whitehead, Phillip

      Pitt, William Henry

      Williams.Rt Hon Mrs (Crosby)

      Powell, Raymond (Ogmore)

      Wilson, Gordon (Dundee E)

      Prescott, John

      Winnick, David

      Race, Reg

      Woolmer, Kenneth

      Rees, Rt Hon M (Leeds S)

      Richardson, Jo

      Tellers for the Noes:

      Roberts, Ernest (Hackney N)

      Mr. George Morton and

      Robinson, G. (Coventry NW)

      Mr. Lawrence Cunliffe.

      Question accordingly agreed to.
      It being after half-past Six o'clock, MR. SPEAKER proceeded, pursuant to Order this day, to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.
      Lords amendments Nos. 8 and 9 agreed to.

    Clause 10

      PROVISIONS SUPPLEMENTARY TO SECTION 9
      Lords amendment: No. 10, in page 10, line 33, at end insert
      ", to secure increases in the capital of subsidiaries"
      The Under-Secretary of State for Energy (Mr. David Mellor): I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Speaker: With this it will be convenient to take Lords amendments Nos. 11 to 17.
      Mr. Mellor: These amendments are virtually identical to those that we have already discussed and approved in respect of clause 2. Therefore, I do not wish to take up the time of the House by repeating the arguments in any detail. Essentially, the amendments fall into the same three categories outlined by my right hon. Friend the Secretary of State in respect of clause 2. It may be best for me to move the amendment fairly formally. I can then reply to the points that are made in the debate.
      Mr. Merlyn Rees: I want to raise three points. First, the Minister has said that this amendment simply repeats for British Gas what we have been debating for Britoil. It was explained that the change in clause 2 would enable BNOC to increase the share capital of Britoil, which had been established as a £100 company. Does the inclusion of the same words in clause 10 mean that the Government have taken some decisions about the means of disposal of BGC's assets?
      In Committee the noble Lord said that they had not made any final decisions about privatisation of the Gas Corporation's oil assets and still less about the methods that would be adopted to do that. The amendments suggest that some preliminary decisions have been taken.
      Secondly, the Secretary of State explained that we should not get so hot under the collar because the clause
      478
      dealt with a particular case. Our feeling is that if there is a particular aspect of company law to be dealt with, why not have the statute law to deal with it rather than take overweaning general powers? The same powers are now being taken—which are unusual—to deal with a form of disposal that we know not of. All we know from the Government is that they will dispose of the oil assets and the gas showrooms. In fact, the powers taken by the Government in the measure enable them to dispose of the lot.
      On top of that, we now have this general power. In terms of what I have heard tonight it may not be strictly relevant, but I note that the Secretary of State already has powers to override under the Gas Act 1972. He can direct the BGC to do whatever he wishes. I grant that is not in the context of a Companies Act, but I am not enamoured of the explanation that I have read in another place and on the oil part of the Bill. The same provision should be in clause 10 unless the Government are clearer in their mind as to what the nature of the privatisation will be. It has been put there in case there is a problem.
      Thirdly, I should like to return to clause 10(3) and relate it to amendment No. 14. Much rewriting has taken place. The substance of the discussion that we have had so far has been that in the case of oil it was rewritten because the Government had not taken into account the need for a participation agreement. That is the whole point of the discussion so far between Britoil and BNOC. That is why clause 2 was amended. Now we have the same amendment in clause 10. Does it mean that a participation agreement can be put in between a hived-off subsidiary of BGC and BNOC? Of all my points, I regard that as by far the most important. Therefore, may I repeat it for just 30 seconds?
      The first part of the Bill is rewritten to enable a participation agreement to be entered into between the rump of BNOC and Britoil. What is the purpose of it here? Will there be a participation agreement between a subsidiary of BGC on the oil side and BNOC? If there is not, what is the purpose of it when its whole purpose in the first part of the Bill was to deal with a participation agreement on the oil side of the Bill?
      I understand why the Minister did not go into the matter at length. We have gone into it before. However, in our view those three points are relevant. We shall not be voting on the amendment or any others to the Bill this evening and I shall explain why on the most important amendment in a moment.
      Dr. J. Dickson Mabon: When the Minister replies, will he be kind enough to say what is implied by amendment 14(c)? When the transferor—I presume BGC—passes over the assets, whatever they may be, will the borrowing limit then go down because the transferee acquires it, not being another corporation?
      Mr. Mellor: The issue involved in these amendments is essentially the same as in clause 2—the transfer of upstream assets in a public corporation into the private sector. That is why, except for the necessary differences between the BNOC and BGC in legal essentials, the arguments that apply to the relevance of the amendments to clause 2 apply equally to clause 10. I do not need to go further on that.
      I shall respond to the questions asked by the right hon. Member for Leeds, South (Mr. Rees). No decisions have been taken on the precise method of the privatisation of

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      BGC's offshore oil assets. A number of options are being examined in detail. Until that work has been completed, it would be premature to speculate on which route is likely to be preferable. That is why the amendments take their present form.
      We have always made this point clear. At this stage we are not able to give the House as much information about the disposal of BGC's assets as about the Britoil disposal. That is why the Bill provides that any direction under clause 11(1) requiring the corporation to provide for a disposal will be subject to parliamentary scrutiny in the form of the negative resolution procedure. Therefore, as soon as there is flesh to put on the bones of the scheme, the matter will come back before the House.
      The right hon. Gentleman appreciates that the recent example of the proposed Wytch Farm disposal means there is considerable opportunity for the House to consider the matter. There was a debate on it on 27 July last year, following an Opposition prayer against the order. There was also an Adjournment debate on 8 July. Therefore, there have been two debates on that issue. There is no reason why there should not be similar procedures for the BGC disposal.
      Mr. Merlyn Rees: I understand the Minister's argument. If we are to follow the same lines as in the first part of the Bill, we are doing that for setting up Britoil with 49 per cent. of the shares held by the State. Will we have lots of little Britoils or will they be sold completely to private enterprise? If they are sold to the private sector, surely we do not need the provisions in the Bill. We can draw the conclusion that the Government will set up a number of little Britoils in the gas sector, otherwise this provision would not be needed.
      Mr. Mellor: I understand that the right hon. Gentleman is seeking to probe exactly what the Government's intentions are. He should not read anything into this beyond what I have already said. This is a complex issue. Once one removes the argument about whether the provision should be made and looks at the ways of implementing it, there are technical difficulties to be overcome. No final decision has been taken. I repeat that we are conscious of our duties to the House. That is why, when the decisions are taken, there will be ample opportunity, when the House is in full possession of the relevant facts, for the matter to come back before the House, if the Opposition wish, under the negative resolution procedure. There is no such provision in part I of the Bill because the situation is different.
      The right hon. Gentleman referred to the repeat of amendment No. 7 and the legal point. It is extremely narrow, as my right hon. Friend has already made clear. It relates only to matters elsewhere in the clause. It is by no means as broadly based as might be assumed when one looks at the words by themselves.
      I respectfully suggest that when the other place went over that ground, assisted by Lord Wilberforce, nothing emerged to suggest that there was any reason to fear that some undesirable phraseology had been introduced into the law. It is no more sinister in part II than in part I. I take the right hon. Gentleman's point. The amendment is narrow in its ambit, relating only to technical matters on which my right hon. Friend the Secretary of State has already commented. Knowing the important debates to
      480
      follow, unless the right hon. Gentleman wants me to continue, I shall not go further down that road in this discussion.
      The right hon. Gentleman raised an important point about participation arrangements. Once again, I must say that I cannot give hard and fast information about that. We are presently considering what arrangements would be most appropriate for the assets involved. Our aim will be to strike a fair balance between the interests of the future owners of the assets and the objectives of the participation policy to which the Government are committed.
      If the disposal involved the making of a scheme as provided in the Bill, the arrangements could be established under the scheme. However, there are other ways of achieving our objectives. We shall choose the option that is best suited to the requirements. I appreciate that I am not giving the right hon. Gentleman concrete information—I do not seek to deny that—but I am adhering to the position that we have made abundantly clear already, which is that no final decisions on this complex matter have been reached. However, I shall rely on the fact that the House will have the opportunity to consider the proposed arrangements when they are brought forward.
      6.45 pm
      Mr. Merlyn Rees: I take that point. We shall have the chance to consider the options. BNOC trades all BGC oil at the moment. It looks as if that will not last, and we shall have to see what the proportion is. I have figures that show that in sixth round licence 303 the BGC has 100 per cent. interest, in 304 it has 100 per cent. interest and in 302 it has 73·3 per cent. interest, Amerada has 16·6 per cent. and Texas Eastern 10 per cent. The BGC is a substantial owner of oil. The procedures in this part of the Bill are the same as in part I. We shall look carefully at the information that one day we shall receive on the Floor of the House.
      Mr. Mellor: I assure the right hon. Gentleman that as soon as the decisions are taken they will be made known. That debate will take place when the Opposition require it.
      The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) asked me a question. If there is any borrowing in relation to the assets, it is right for it to be deducted from BGC's borrowing limit when the disposal is carried out. That is what the words to which he referred will achieve.
      Question put and agreed to.
      Lords amendments Nos. 11 to 17 agreed to.

    Clause 11

      POWERS OF SECRETARY OF STATE AS RESPECTS DISPOSALS BY GAS CORPORATION
      Lords amendment: No. 18, in page 12, line 6, at end insert—
      "(1A) The matters to which the Secretary of State shall have regard in exercising his powers under subsection (1) above shall include, in particular, the need to secure that the public is so far as practicable protected from any personal injury, fire, explosion or other dangers arising from the transmission or distribution of gas through pipes, or from the use of gas supplied through pipes."
      Read a Second time.
      Mr. Merlyn Rees: I beg to move, as an amendment to the Lords amendment, at end add

      481
      "and that satisfactory standards of service and supply to consumers are maintained".
      We have been over part of the ground many times in the past year in relation to the sale of the gas showrooms. That was a major element in the debate in another place. I advise my right hon. and hon. Friends not to vote, because I believe that we shall obtain more information out of the Government this year or next year. That weakens my argument, but there is to be no vote. We shall save our ammunition until we find out what the Government are going to do rather than allow them to say that it has been put to the House and the House has decided on it. We shall not decide until we know more about it.
      A little recent history puts the discussion in perspective. Within the last two years we have had the report of the Monopolies and Mergers Commission, which made certain recommendations. As a result, the Government, through the Department of Trade, announced that the gas showrooms were to be sold off. There seemed to be disagreement between the Department of Energy and the Department of Trade, at least from a distance, but one of the protagonists has disappeared from the Front Bench and the whole thing has been put on the long finger. The Government should not move on the sale of the showrooms until safety arrangements have been brought before the House.
      There is more to it than the sale of the showrooms, as I have learned to my surprise during the last two years. The amount of service provided by the showrooms is remarkable. A showroom is not just a place where one buys appliances. Only 50 per cent. of the work in showrooms involves the sale of appliances. Advice is given on a variety of matters, including gas supply. Apart from the sale of appliances, 50 million customer service jobs are dealt with in the showrooms.
      Can the Minister give us a time scale for the sale of the showrooms and the safety legislation, if that is what it is to be? The Government were defeated in another place on an amendment which would rule out the sale of any part of the transmission and distribution system. We are told that the Government intend to sell only the oil assets, but many people feel that they might sell the lot before the day is out. Therefore, the amendment which was passed in another place called in question the disposal of the showrooms. The amendment was concerned not just with the sale of the showrooms in the widest sense of the term, but with the wider consumer interest. We are right to question this because of the powers that the Government have taken in the Bill.
      Given the all-embracing powers taken now, there must be some provision in the Bill for proper protection for consumers. The Government have taken powers in the Bill to sell anything they like. This may be an easy way of dealing with the showrooms and then the oil assets, but, whatever happens about disposal, there will still be a strong and inevitable monopoly element in the provision of supplies. A vast majority of consumers will get supplies from one source. Therefore, in our view, as in the view of another place, protection by statute is needed.
      The House should note that clause 9, not the Secretary of State, sets out the powers of the corporation. The Secretary of State can direct the corporation to exercise its
      482
      powers under clauses 9 and 10. If the powers are constrained, as proposed by our amendment, he could not in his direction disregard that constraint.
      In another place, a wide cross-section of speakers praised the British Gas Corporation and its concern for the interests of consumers. We are concerned with the British Gas Corporation of the future. During the past few days we have heard how board members in the Health Service are removed when their views do not accord with those of the Government. That could happen with the British Gas Corporation. Even though it has been praised for its interest in consumer affairs, that may not be so for all time.
      Amendment No. 18 deals only with safety. We suggest the addition of service and supply, as in the original amendment in another place. If the Minister does the same as was done in another place, he will claim that the words "service and supply" are too vague, but they are often used without definition in the Gas Act 1972. Already, the Minister is operating, apparently happily, on those vague words. It is only because of their inclusion in the 1972 Act that we put them in the amendment.
      The Government may not understand, but consumers do. Throughout the country the safety arrangements apply on a 24 hours a day basis. As I found out for myself not long ago, there is swift action.
      On the supply side, we have heard about the problems of a little village in Leicestershire which has no gas. Apparently before the general election a private supply of gas is to be rushed up the M1. My heart bleeds for the people in that village. It bleeds for them even more, because they will not get the supply.
      In general, the supply side is satisfactory. The Government could easily accept the amendment. The wording is impeccable. It has been taken from the 1972 Act. One day we will amend the Government's privatisation measures. The Government went half way in another place. They could show sweetness and reasonableness by accepting the amendment, which would be a change.
      Mr. Skeet: May I have your guidance, Mr. Deputy Speaker? Are we dealing with amendment No. 18, plus the amendment which has been moved by the right hon. Gentleman? It would be convenient to deal with both together. Or is my right hon. Friend the Secretary of State going to move Lords amendment No. 18?
      Mr. Lawson: On a point of order, Mr. Deputy Speaker. I believe it is customary, after the amendment to the amendment has been moved, for the amendment to be moved.
      Mr. Deputy Speaker (Mr. Paul Dean): The amendment to the amendment has to be disposed of in due course, but it is for the convenience of the House that we discuss the two together.
      Mr. Skeet: Would it not be convenient, therefore, Mr. Deputy Speaker, for my right hon. Friend to move the amendment now so that we can deal with the amendment moved by the right hon. Member for Leeds, South (Mr. Rees) and the Government's case?
      Mr. Deputy Speaker: The procedure may be a little confusing. The right hon. Member for Leeds, South (Mr. Rees) has moved the amendment to the Lords amendment. That has to be decided first. I am saying that the House can discuss at the same time the amendment to the amendment and the Lords amendment.
      Mr. Skeet: I looked at the amendment with interest.
      Mr. Merlyn Rees: Or the amendment to the amendment.
      Mr. Skeet: And the amendment to the amendment. I came to the conclusion that safety is paramount in everyone's mind. When I examined the Bill, I noticed that safety was dealt with not merely in the subsection which is to he inserted in clause 11, but in clause 14. The wording of the Lords amendment is roughly on the same lines as clause 14. It seems that we are putting too much stress on this matter. In the case of disposals, we have the amendment before us, and in the case of safety regulations to protect the public against explosions, and so on, we have clause 14. We have standards that come under clause 13 being authoritatively established.
      Reference was made to an interesting Monopolies and Mergers Commission report on domestic gas appliances—Parliamentary Paper 703. In its early pages it talks about the Confederation for the Registration of Gas Installers being established. That came into being after a number of accidents in the United Kingdom. Its object was to provide for the safe installation and use of gas pipelines, fittings and appliances.
      7 pm
      I accept that the gas showrooms cannot go straight over to the private sector until regulations are formulated, which is probably the Government's intention. However, the Government face the additional problem that there is a monopoly here that has to be dealt with. This question is dealt with in paragraph 13.7 on page 86 of the report. It states that the corporation's
      "share of appliances so supplied was 97 per cent. of the total number of cookers, 92 per cent. of the number of space heaters and 97 per cent. of the … water heaters."
      The report made the point even more broadly when it said:
      "we are left in no doubt that these monopoly situations have largely contributed to the manufacturers' lack of investment, inadequate commitment to technical or market research and development and failure to promote exports. The manufacturers accepted a position of subservience to their chief customer save to the extent that they combined in ways which were restrictive of competition".
      I mention that to explain one important point in the report dealing with monopolies. The right hon. Member for Leeds, South said that he was concerned about the safety arrangements that could be made under the safety regulations or, as he said, by the amendment that he has tabled. For a different reason, it is necessary that gas appliances and the gas showrooms should be transferred to the private sector over a number of years so that adequate standards may be maintained. That naturally assumes that the British Gas Corporation had high standards in the past years and that it is the only body that has maintained those standards, but that is not the case.
      In appendix E to the report of the inquiry into serious gas explosions in June 1977, known as the King report, there is an interesting table on page 19 about the cause of deaths. The figures for deaths caused by gas distribution by pipeline were 55 in the United Kingdom, 77 in France, 72 in West Germany, 16 in Holland and 27 in Belgium.
      That only goes to show that wherever one is in Western Europe, whether in the United Kingdom where there is a national corporation doing this sort of thing or elsewhere where there is a strong private sector, safety standards are always of the highest consideration. Those standards must be maintained. My general conclusion is that both the
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      private and public sectors have high standards where the safety of the public is involved. Therefore, it is no prerogative of the State that only it can do this sort of thing.
      It is right that the sale of the showrooms should eventually go ahead when safety standards are prescribed by regulation. In the interests of moderation, will my right hon. Friend ensure that the showrooms are handed over to the private sector gradually over the years, and that British Gas maintains a presence?
      The CORGI standards could be extended to all those who carry out work in private homes to ensure that the highest standards are maintained. If we go by stages in this way, the public will be secure and the ideas that the Government intend to carry out will be amply fortified.
      Dr. Mabon: I agree with the hon. Member for Bedford (Mr. Skeet) that if there is to be any disposition it should be gradual and handled with great caution and reason. The Scots would use the phrase "ca' canny" with regard to this, and it has been the essence of the argument in the other place and in Standing Committee for the disposition of the showrooms.
      I hope that the Secretary of State will think seriously about the amendment of the right hon. Member for Leeds, South (Mr. Rees) and will incorporate it in the Bill. I am glad that, if he denies the amendment, we shall not vote on it because we shall have other opportunities for debating this matter to see whether the Government have exercised caution, in this regard if in no other.
      Through all the stages of the Bill there has been genuine concern that the Government may be in error in disposing of the gas showrooms promptly and without due consideration to what the Minister has called the "paramount interest" of the consumer. He may reaffirm all that tonight, but many of us hope that there will be great thought and deliberation before the Government even contemplate moving in this direction. Perhaps they will never do so.
      Mr. Lawson: I shall deal later with the amendment tabled by the right hon. Member for Leeds, South (Mr. Rees), but I begin by discussing amendment No. 18 which is a constructive addition to the Bill that arose out of the discussion in the other place to which the right hon. Gentleman alluded.
      Amendment No. 18 places a specific obligation on me as Secretary of State to have particular regard to the safety of the public in giving any direction to the British Gas Corporation requiring it to exercise its powers of disposal under clauses 9 and 10. It might help the House if I were to give a brief history of the amendment.
      In Committee in the other place, an amendment was inserted in clause 9 prohibiting the corporation from exercising its disposal powers if such a disposal would impair essential services or supplies to or the safety of consumers. The Government were opposed to these words, and made their reasons clear. First, they believed that such concerns were better addressed in the context of clause 11, which deals with the Secretary of State's powers of direction over the corporation, and, secondly, the words as they stood were too vague in their drafting. It would, for example, have been impossible to say where the dividing line between essential and other services should be drawn. This would have introduced considerable uncertainties into the British Gas Corporation's powers of

      485
      disposal, even in areas which on a common sense basis would not appear to have any link with the matters mentioned in the amendment, or of concern to hon. Members. This uncertainty was clearly unacceptable in legislation that has been designed to clarify both BGC's and the Secretary of State's powers of disposal and indeed might have been a hindrance to the corporation itself in carrying out its business.
      At all stages of the Bill, I personally and the Government in general have taken the question of safety seriously and we therefore gave careful consideration to the concern that had been expressed and to representations received on the matter from my noble Friend Baroness Macleod. As a result of that consideration, while remaining opposed to the original amendment in clause 9, the Government agreed to accept in its place this amendment which was tabled by Lady Macleod on Report. The Government also recognised, bearing in mind the concerns expressed about consumers, that there was a feeling that it would at least be premature at this stage to contemplate a reduction in the remit of the gas consumers councils, and agreed to another amendment moved by Lady Macleod which deleted the powers to restrict the remit of the councils that was contained in paragraphs 11 to 13 of schedule 3. The House will have an opportunity to discuss this amendment in due course. The amendment to clause 11 avoids the earlier problems of vagueness of drafting and inappropriate positioning within the Bill while giving proper recognition to the particular concern that has been expressed in each House about safety in relation to disposals under clauses 9 to 11. I commend it to the House.
      It is interesting to note that the National Gas Consumers Council takes a similar view. That independent body wrote a letter dated 4 June which was circulated to a number of peers in which, after referring to its earlier letter of 25 May which sought support for the original amendment passed in Committee in another place, it said:
      "Uppermost in our minds when recommending this amendment was the need to ensure that the safety of gas consumers be taken fully into account when disposal of parts of the British Gas Corporation is being considered. Although we feel that amendment 18 (a)"—
      the number it then had—
      "was a step in the right direction, we were concerned that it placed the responsibility for assessing the safety implications of such disposals entirely on British Gas itself. Could I therefore draw your attention to an amendment tabled by Baroness Macleod to section 2(1) page 12 of the Bill which will be considered by the House on 8 June. This new amendment"—
      the amendment now before us—
      "places responsibility for the assurance of safety more properly, in our opinion, on the Secretary of State".
      I now turn to the Government's views on the Opposition amendment to amendment No. 18. It is clear—I hope that the right hon. Gentleman will, on reflection, see this—that for reasons similar to those I have already outlined this will result in many of the same difficulties of interpretation that would have followed from the original Lords amendments to clause 9. The vagueness of concepts such as the maintenance of satisfactory services would make it impossible to say whether the necessary standards had been met. The hon. Gentleman may say that "services" and "supply" are vague and that they are in the 1972 Act,
      486
      but what is not in the 1972 Act is any such phrase as "satisfactory standards". That is where the vagueness is imported.
      The problem is that all parties would be uncertain as to the powers of direction of the Secretary of State. Even after a direction had been issued, it would be open to challenge in the courts on all sorts of relatively minor technical matters that the corporation might claim would lead to a lowering of standards for the consumer. Even the disposal of the corporation's offshore oil interests, which the Government have made clear is the initial reason for taking these powers, might be put at risk if these words were accepted, since the Government's proposals could become bogged down in interminable legal dispute. That is no way to legislate.
      While I do not wish at any time to suggest that the corporation would seek to mount a challenge in this way, it is essential that legislation should be worded in a clear and precise manner. For these reasons, I cannot agree to the amendment to amendment No. 18 and I hope that the right hon. Gentleman will seek leave to withdraw it.
      I make one further point about safety because it is a matter of first importance. My right hon. Friend the Member for Gloucester (Mrs. Oppenheim), who was then Minister for Consumer Affairs, made it clear as far back as July 1981, when announcing the Government's decision on the Monopolies and Mergers Commission report, that the Government would not take any action on appliance retailing which would not allow safety standards to be maintained at least at present levels. I can tell the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) that the Government intend seriously and carefully to examine any constructive proposals that are offered provided they meet the Government's objective, which is to break the corporation's monopoly in gas appliance retailing and to ensure effective competition.
      However that is achieved, the ending of the corporation's dominance in appliance retailing will inevitably bring about a reduction in the corporation's share of the appliance servicing market. The consumers will, therefore, have a greater degree of choice on whether to deal with the corporation or private installers.
      It is important to realise—my hon. Friend the Member for Bedford (Mr. Skeet) rightly referred to this—that the safety record of the reputable private sector is fully on a par with that of the corporation. However, in order to ensure satisfactory safety standards on work undertaken by anyone, whether in the reputable private sector or not, the Government intend to introduce, by statute, a rigorous system of licensing for gas installers aimed at ensuring that the undertakings, and the people they employ, are required to meet safety standards comparable to those currently being met by the corporation and the reputable private sector. I do not intend to weary the House with the details now, but we shall also ensure that appliance standards—not just the installation—are properly safeguarded.
      Dr. Mabon: That is an important announcement. Does it mean that the Minister will not do anything about these matters until the Bill is on the statute book?
      7.15 pm
      Mr. Lawson: I have already given that undertaking. The various measures that the Government will be

      487
      bringing forward cover not merely the licensing of the installers—the companies and the individuals they employ—but the standards of the appliances.
      I hope that with those assurances the Opposition will seek leave to withdraw the amendment to the amendment and accept that amendment No. 18 is a proper way of meeting the anxiety about safety that all of us properly have.
      Mr. Merlyn Rees: Without accepting the Minister's arguments, the day to dispute this is when we see the Government's money. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Lords amendment No. 18 agreed to.

    Clause 12

      SUPPLY OF GAS BY OTHER PERSONS
      Lords amendment: No. 19, in page 14, line 4, leave out "use by" and insert "the use of".
      Mr. Mellor: I beg to move, That this House doth agree with the Lords in the said amendment.
      This is a drafting amendment. The intention in subsection (6) of the new section 29 of the Gas Act 1972, set out in clause 12, is merely to repeat the provisions in subsection (9) of section 29 of the 1972 Act. The amendment achieves that by adjusting an error that unfortunately arose in transferring the provisions of the present section to the new one.
      I take this opportunity of correcting an infelicitous phrase in my previous intervention that I know the right hon. Member for Leeds, South (Mr. Rees), who has forgotten more about procedure in the House than I shall ever know, will not have missed. I suggested that on the negative resolution procedure the matter could be debated when the Opposition wished. I now know that it is not for me to pre-empt the decisions of my right hon. Friend the Leader of the House. I was intending to convey—and I shall now have a second stab at it—that if the negative resolution procedure is invoked I feel sure that my right hon. Friend will provide a time that is reasonable to himself and not inconvenient to the Opposition. I apologise for my earlier statement.
      Question put and agreed to.

    Clause 15

      CONSTRUCTION OF PIPE-LINES BY GAS CORPORATION
      Lords amendment: No. 20, in page 20, line 42, leave out from beginning to end of line 2 in page 21 and insert
      "then, subject to subsection (5) and section 17(4) below, the Secretary of State may give directions to the Corporation in accordance with subsection (4A) below.
      (4A) Directions under subsection (4) above may—

      (a) require the Gas Corporation to secure that the pipeline, or any length of it specified in the direction, shall be so constructed as to be capable of conveying quantities so specified of gas of, or of a kind similar to, the kind specified in the notice under subsection (1) above;

      (b) specify the sums or the method of determining the sums which the Secretary of State considers should be paid to the Corporation by such of the persons who made representations to the Secretary of State as are specified in the directions for the purpose of defraying so much of the cost of constructing the pipe-line as is attributable to that requirement;

      488

      (c)specify the arrangements which the Secretary of State considers should be made by each of those persons, within a period specified in that behalf in the directions, for the purpose of securing that those sums will be paid to the Corporation if it constructs the pipeline in accordance with that requirement;

      (d)provide that the Corporation may, if such arrangements are not made by any of those persons within the period aforesaid, elect in the manner specified in the directions that the requirement shall have effect with such modifications as are so specified with aview to eliminating the consequences of the representations made by that person."

      Mr. Mellor: I beg to move, That this House doth agree with the Lords in the said amendment.
      I hope that the amendment will be welcomed in all parts of the House. It represents a considerable move by the Government in response to anxieties expressed here and in another place. The amendments introduce into clause 15 provisions permitting the Secretary of State, when he gives a direction under the clause, to provide that BGC shall be appropriately reimbursed by the person whose representations have given rise to the requirement to build the proposed new pipeline with increased capacity. These amendments thus incorporate the essence of what the right hon. Member for Leeds, South (Mr. Rees) was seeking and which we discussed in considerable detail in Committee and on which we have now had second thoughts.
      Mr. Rowlands: One gets vicarious pleasures from the Bill, and the chance of having almost the last word from the Opposition Benches is a particular pleasure.
      The Opposition accept the spirit of the amendment. It goes a long way towards answering some of the points that we raised. However, in one way it does not. Neither the clause nor the amendment provides for payment to the corporation for costs incurred in increasing the capacity of its pipeline against its own judgment and needs. When this matter was debated in Committee and in another place, the Government's answer was that the corporation would recover these costs by the charges it makes, either charges for the gas or the tariff arrangements that would arise from any such deal as a result of the increased capacity. What will happen if BGC increases its capacity, but not because of its own needs or wishes, the contractor concerned does not use the facility and the corporation cannot recover its costs through charges?
      That is a fundamental point that we repeatedly made in Committee. As a result of a decision by the Government, BGC could do things that were against its judgment or its needs. If the capacity of the pipeline is increased, the extra costs will initially fall on BGC, but if the contractor concerned does not put the gas through that increased pipeline capacity BGC has no redress for its costs. We believe that if the Government direct the BGC, someone other than the corporation must pick up the tab. If the Government direct, and things go wrong, we believe that the Government should pick up the tab. That is the one thing that is missing from the amendment. We accept that the Government have gone a long way to meeting many of our points. We should therefore like some explanation of what will happen if BGC is unable to recover its costs because the private contractor does not put the gas through the pipeline and pay the charges that are necessary.
      I notice that two other hon. Members want to get in on the last act of this Bill. The Minister will therefore have time to find an answer to the point that I have raised.
      Mr. Michael Morris: The original Bill was open and flexible. The amendments from the other place attempt to make it more specific. In doing so, they raise certain other questions. The questions that I shall raise should be viewed against a background of BGC's existing pipelaying policy.
      As I understand current policy, 75 per cent. of work is done by direct labour and only 25 per cent. by the private sector and open tendering. It is important to take that point on board when considering the various elements of the amendment.
      First, what safeguards exist for the private sector companies so that, whatever the basis of charging, they will not be charged direct labour rates? In other words, there could well be inflated construction costs and the private sector company could be told that it can just take it or leave it. Will there be a requirement that the construction of a larger capacity pipe will be put out to competitive tendering?
      Secondly, what safeguards are there that the private sector companies will not be charged twice—once for the extra capital costs of the enhanced pipeline and twice through the carriage or transmission of gas?
      Thirdly, if a capital payment is made, is it envisaged that the company and its successors in title shall have the automatic right to the use of the pipeline in perpetuity? If the company has not contributed to the capital costs, presumably it is open to BGC to agree to a contract for a specific period of time. If, on the other hand, the private sector company contributes to the capital costs, presumably the contract will ensure that the company and its successor in title will have the right ad infinitum to use the pipeline. What happens if another company wants to use the pipeline in the future? Will the second company pay a higher tariff for the use of transmission than the first company which contributed to the capital costs?
      Fourthly, what recompense will there be to the private company that has paid for larger diameter piping and extra equipment for boosting the gas on the transmission side if it transpires that BGC has miscalculated its own demand requirements? It is not inconceivable that a private sector company could estimate that its requirements would need an X diameter pipeline, and BGC could say that its requirements needed another X inches. It could be that BGC's requirements—it would not be the first nationalised industry to have got its estimates wrong—were far less than its original forecast. In that case, a private company would have been forced to provide a pipeline larger than was necessary and the fault would lie with BGC. In that case, will there be some recompense to the private company?
      I raise these questions not because I necessarily violently disagree with the Lords amendments. I do not think that they help an awful lot. To my mind, they raise just as many questions as the original flexible approach. I hope that the Minister will answer the points that I have raised. If he cannot do so tonight, perhaps he will write to me in due course. I believe that in practice it would be better if the capital costs were carried by BGC and that the recompense to BGC came through the tariff for the carriage of gas.
      Mr. Skeet: The Government have put the record straight by making clause 15 similar to the requirement in clause 16.
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      We must again consider the basic situation. This high pressure main is the property of BGC. The clause is not likely to be used very much. It will be possible for someone to say that he wants to use the capacity of the pipeline at some future time to convey his gas from one point on the map to another. I should have thought that the BGC would be better placed if there were an impartial gas transmission company to which both private enterprise and the corporation could apply. The present legislation has ruled that out. The possibility may return.
      7.30 pm
      The hon. Member for Merthyr Tydfil (Mr. Rowlands) raised an important point that has now been aired—whether the person who uses part of the line must pay some of the cost. Such a person may have to pay when the tariff is established but not initially since he has reasonable time to make up his mind. It is one thing participating in a line; it is another at a later date providing for severance or discontinuance. What will happen if a person who has utilised a line for several years decides, because his business has altered course, to stop using that line? There will be additional capacity on a main trunk line that the BGC does not require, but, since it is its property, the corporation must meet the expense of that line. Of course, the corporation may be able to go to the market and find someone else to take over a share. Nevertheless, I see no provision in this clause for severance, although I dare say that the Department has thought about it carefully.
      The House should understand that the Bill is a natural sequence in the evolution of the common carrier system in the United Kingdom. It has worked well in the United States of America where it is common practice. We have had relatively little experience of it here. There are a couple of examples. Section 9(3) of the Pipe-lines Act 1962 deals with cross-country pipelines. It is established there that there is a wish to avoid superfluous pipelines. There was some sharing of pipelines on land. Following that, there was an extension of the practice to the Continental Shelf in section 21(5)(b) of the Petroleum Submarine Pipe-lines Act 1975 which sought to avoid unnecessary pipelines in the North Sea by enabling several participants to join together and pool their resources. Such provision has been made in the current legislation. The amendment amply covers that point by providing for those participating to defray part of the costs.
      That is similar to clause 16(2)(b), which provides for increased capacity of the pipeline. The participants are entitled to consider their circumstances early when they tell the Minister that they may use the pipeline and receive more details of its direction. They must be given ample opportunity to make up their minds. After they have been given a reasonable time, their opinion becomes irrevocable and they may reasonably be expected to share liability. The Minister would then be quite right to send them a bill of charges. The right of the BGC to charge for gas conveyed, taking into account capital cost in the tariff charged, is perfectly reasonable. That practice is current in the United States and is likely to be assumed here.
      I have already pointed out that the right of severance and discontinuance should be provided for. It must always be assumed that if the private sector does not like sharing with the BGC the use of one of the corporation's pipelines it can build its own facilities under the Pipe-lines Act 1962. I support the amendment.
      Mr. Mellor: The amendment attempts to do what the Government have been striving for in clauses 15, 16 and 17. It attempts to strike a balance between the legitimate interests of the British Gas Corporation, on the one hand, and the Government's desire to encourage private sector suppliers to become involved in the distribution and sale of gas, on the other. I welcome the opportunity to comment on what the hon. Member for Merthyr Tydfil (Mr. Rowlands) said. I also welcome the considerations that will weigh with the private sector being brought to the attention of the House by my hon. Friend for Northampton, South (Mr. Morris). I shall deal with the points of the hon. Member for Merthyr Tydfil first.
      The amendment fits into what we spent much time on in Committee—the Government's clear intention that there should be bilateral negotiations between the parties. One of the matters that could be discussed is the terms on which BGC would wish to modify its pipelines. In the event of a failure to agree, it would be a matter for the Secretary of State whether to exercise the additional powers he, if the House agrees, will now be given to require reimbursement under clause 15. The Government accept that in the majority of cases reimbursement is likely to be provided for. That procedure covers the point that the hon. Member for Merthyr Tydfil made.
      If the Secretary of State directs, as he will in normal cases, that a fair sum of money should be paid by the applicant, BGC will be under no obligation to put itself to expense to carry out the modification until that direction is complied with. Amendment No. 23 protects the interests of the private sector supplier as he is able to get his clause 17 application to use the capacity before the Secretary of State at the same time as a direction would be in contemplation under clause 15. He need not therefore take any action that is to his financial disadvantage until it is clear that as a consequence of his paying money he will be able to make use of the capacity.
      I hope that I have made it clear that we do not foresee any possibility of BGC finding itself in any unreasonable difficulties because of the arrangements. I hope that when the Bill becomes law there will be bilateral negotiations and common sense arrangements and no recourse to the Secretary of State such as we have witnessed so often with regard to the Continental Shelf.
      I shall take up the offer of my hon. Friend the Member for Northampton, South to write to him on one or two detailed matters. Much of what he raised would be a matter for contractual negotiations. If the supplier decided that BGC was asking thoroughly unreasonable terms of him, it would be for the Secretary of State to decide whether he wished to make directions. I am sure that no Secretary of State would make directions to pay a sum of money based on an inflated contractual price as the Secretary of State must decide what it is fair and reasonable for a private sector supplier to pay. It would clearly be unreasonable for him to pay an inflated price as a result of a failure to get the cheapest available pipeline construction terms.
      Many of the matters will be a question for good sense on the part of both parties. If either party feels that unreasonable requirements are being made, the Secretary of State is given ample powers in the three clauses that must be read together to sort that out by his own decision which then becomes part of the contractual arrangements between them. My hon. Friend raised some interesting detailed points. In the circumstances, perhaps I may write to him and he may then keep the dialogue going.
      Mr. Rowlands: The hon. Member for Northampton, South (Mr. Morris) raised a matter of some significance. He suggested that it would not necessarily be up to the BGC to decide how the increased capacity pipeline should be built. Is the Minister saying that it could be a part of the Secretary of State's direction to direct that the BGC should construct it or that somebody else should construct it? Or does the pipeline, because it belongs to the BGC, remain the total responsibility of the corporation as to the method of construction, by direct or any other form of labour, to provide the increased capacity?
      Mr. Mellor: If I did not make this as clear as I had hoped, I am glad to have the opportunity to do so now. I was speaking of the financial arrangements. The direction under clause 15 relates only to the sum of money in payment that the Secretary of State thinks right—if indeed he thinks it right, as it is permissive and not mandatory—to impose on the potential private supplier.
      Nothing in the Bill affects the entitlement of the BGC to build its pipelines as it chooses. Clearly, as a public corporation, it is answerable to the community at large and I have no doubt that the corporation would not wish it to be thought that it in any way pursued construction policies which would eventually result in a bad deal for the gas consumer as such inflated costs could only carry through in inflated prices. Nevertheless, nothing in the Bill affects that.
      My point was rather different. It is that if that was the reason why the parties could not reach agreement, and if the Secretary of State accepted the contention of the applicant company that it was being asked to pay an unreasonable sum because of the inflated prices, it would be a matter for the Secretary of State to direct that the modification be made but that the sum of money to be paid by the private sector company was not the full amount that BGC thought that it would cost to lay the pipeline in the manner in which it had decided to build it—the latter being a matter which, as the hon. Gentleman rightly said, lies within the BGC's sole discretion.
      I hope that that makes the situation clear and shows that, as we have always said, the Secretary of State, if he thinks it right, will have power to make the applicant company pay a sum of money as a condition precedent to the alteration in the pipeline being made.
      7.45 pm
      My hon. Friend the Member for Bedford (Mr. Skeet) raised the question of severance and discontinuation. As in any normal commercial agreement, this would have to be arranged between the parties to the contract. I should be surprised if my right hon. Friend the Secretary of State would need to concern himself with such matters. They would be embraced, as the wide range of commercial arrangements must inevitably contain provisions allowing for an equitable termination of the arrangements if that were the will of the parties.
      Question put and agreed to.
      Lords Amendments Nos. 21 to 23 agreed to.

    New Clause

      AMENDMENT OF ENABLING POWERS ETC.
      Lords amendment: No. 24, before clause 18 to insert:
      " .—(1) The Petroleum (Production) Act 1934 (in this Act referred to as "the 1934 Act") shall have effect, and be deemed always to have had effect, as if subsection (2) of section 1

      493
      (vesting of property in petroleum) were renumbered as subsection (4) of that section and for subsection (1) of that section there were substituted the following subsections—

      "(1) The property in petroleum to which subsection (2) of this section applies at the commencement of this Act, so far as it is not already so vested, is hereby vested in His Majesty; and His Majesty shall at any time have the exclusive right of searching and boring for and getting petroleum to which that subsection applies at that time.

      (2) Subject to subsection (3) of this section, this subsection applies at any time to petroleum which at that time exists in its natural condition in strata in Great Britain or beneath the territorial waters of the United Kingdom adjacent to Great Britain; and it so applies notwithstanding that the land in which any such petroleum so exists belongs to His Majesty or the Duchy of Cornwall, belongs to a government department or is held in trust for His Majesty for the purposes of a government department.

      (3) Subsection (2) of this section does not apply to petroleum which at the commencement of this Act may be lawfully gotten under a licence in force under the Petroleum (Production) Act 1918, being a licence specified in the Schedule to this Act, so long as that licence remains in force."

      (2) The 1934 Act shall also have effect, and be deemed always to have had effect, as if in subsection (1) of section 2 (power to grant licences) after the word "shall" there were inserted the words "at any time" and at the end of that subsection there were added the words "to which subsection (2) of section 1 of this Act applies at that time"."
      Motion made, and Question proposed, That this House doth agree with the Lords in the said amendment.—[Mr. Lawson.]—Queen' s consent and Prince of Wales' consent signified.
      Question put and agreed to.—[Special Entry.]
      Lords amendment No. 25 agreed to.

    Clause 20

      SAFETY ZONES AROUND INSTALLATIONS
      Lords amendment: No. 26, in page 25, line 33, leave out subsection (6) and insert
      "(6) Where the commission by any person of an offence under this section is due to the act or default of some other person, that other person, as well as the first-mentioned person, shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly."
      Mr. Mellor: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this, we may take Lords amendments Nos. 27 and 28.
      7.45 pm
      The Under-Secretary of State for Energy (Mr. John Moore): We come now to the important third part of the Bill, relating to safety.
      The main amendment renders persons additional to the owner and master of an offending vessel liable to prosecution for infringements of safety zones. The amendments were put forward following a successful prosecution under section 2 of the 1964 Act, in which penalties were imposed on the owner and on the master, although at the time of the infringement the master was below decks. The mate in charge of the wheel had been given clear instructions as to his course, which would have taken the vessel well clear of the safety zone in question. The conviction of the master, therefore, was due to the act or default of the mate, against whom it was not possible to mount a prosecution.
      494
      These amendments widen the scope of the application of the offence so that, if the infringement of the safety zone is caused by someone other than the owner or master, that other person would be liable to prosecution also. It would then be a matter for the prosecuting authority, on the merits of individual cases, to decide which of the defendants should be prosecuted.
      Mr. Merlyn Rees: The safety aspect is extremely important and we were critical about this at various stages of the Bill. We welcome Lords amendment No. 26. The fact that we say nothing further about it merely means that the Minister has explained it clearly and succinctly.
      Question put and agreed to.
      Lords amendments Nos. 27 to 29 agreed to.

    Clause 22

      APPLICATION OF CIVIL LAW
      Lords amendment: No. 30, in page 27, line 32, leave out from "activity" to "shall" in line 34 and insert
      "mentioned in subsection (2) below"
      Mr. John Moore: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this, we are to take Lords amendments Nos. 31 to 38, 41, and 51 to 54.
      Mr. Moore: Lords amendments Nos. 30 and 31 are closely linked, and both serve to widen the scope of clause 22.
      This clause is designed to replace section 3(2) of the Continental Shelf Act 1964, to ensure that the remedies of civil law can be made available in relation to a wide range of offshore activitiies, including specifically accommodation and gas storage, and in particular to ensure that the remedies of civil law are available to those who work in the foreign sectors of cross-boundary fields.
      Although clause 22 as previously drafted included some specific activities, it was not the Government's intention to reduce in practice the scope of the power to apply civil law offshore contained in section 3(2) of the 1964 Act. A critical reappraisal of the draft, in the light of the amendments concerning social security, employment and patents legislation which were inserted in schedule 3 during the Committee stage in this House and which refer to clause 22, has resulted in these drafting amendments. The reappraisal centred on the scope of the clause, and also on particular doubts about whether people such as divers who are doing work connected with an installation would have the remedies of civil law available to them. The new drafting does away with these doubts, while maintaining all the essential elements of section 3(2) of the 1964 Act.
      The remaining amendments in this group, Nos. 32 to 38, 41 and 51 to 54, are all either directly consequential upon these main amendments or are minor drafting improvements in consequence.
      Question put and agreed to.
      Lords amendments Nos. 31 to 43 agreed to.

    New Clause

      APPLICATION OF TRUSTEE INVESTMENTS ACT I96I
      Lords amendment: No. 44, to insert
      " .—(1) For the purpose of applying paragraph 3(b) of Part IV of Schedule 1 to the Trustee Investments Act 1961 (which provides that shares and debentures of a company shall not count

      495
      as wider-range and narrower-range investments respectively within the meaning of that Act unless the company has paid dividends in each of the five years immediately preceding that in which the investment is made) in relation to investment in shares or debentures of a company to which this section applies during the first investment year or during any year following that yesr, the company shall be deemed to have paid a dividend as there mentioned—

      (a) in any year preceding the first investment year which is included in the relevant five years; and

      (b) in the first investment year, if that year is included in the relevant five years and the company does not in fact pay such a dividend in that year.

      (2) This section applies to any company of which shares have been transferred to the Secretary of State or a nominee of his by an order under section 3(4) or 11(4) above.
      (3) In this section—
      "the first investment year", in relation to a company to which this section applies, means the calendar year in which the relevant order or, as the case may be, the first such order was made; and
      "the relevant five years" means the five years immediately preceding the calendar year in which the investment in question is made or is proposed to be made."
      Mr. John Moore: I beg to move, That this House doth agree with the Lords in the said amendment.
      The purpose of this amendment is to enable certain trusts to invest in the shares of Britoil or any new company to which it may be decided to transfer the Gas Corporation's offshore oil assets. The new clause, the wording of which closely follows precedents that were set in the Civil Aviation Act 1980 and the British Aerospace Act 1980, will have the effect of deeming, for instance, Britoil to have paid dividends for a five-year period. This will enable it to qualify, under the investment guidelines laid clown by the Trustee Investments Act 1961, for equity investment by a number of trusts to which the guidelines apply.
      Investment trusts to which the Trustee Investments Act applies do not represent a large part of the equity market. Nevertheless, if this new clause is accepted, they will provide one of the channels through which members of the public can acquire an interest in Britoil.
      Question put and agreed to.
      Lords amendments Nos. 45 to 49 agreed to.
      Mr. Deputy Speaker: I wish to draw to the attention of the House that Lords amendments Nos. 50, 57, 58 and 60 involve privilege.

    Schedule 3
      MINOR AND CONSEQUENTIAL AMENDMENTS
      Lords amendment: No. 50, in page 52, line 46, at end insert—
      MINOR AND CONSEQUENTIAL AMENDMENTS

        The General Rate Act 1967
        4A.—(1) In subsection (3) of section 33 of the General Rate Act 1967 (British Gas Corporation) for the words from "the Corporation", in the first place where they occur, to the end of paragraph (c) there shall be substituted the following paragraphs—

        "(a) the Corporation—

        (i)supplied gas to consumers in that area; or

        (ii)manufactured gas in that area; or

        (iii)produced gas in that area by the application to gas purchased by them of any process not consisting only of purification, or of blending with other gases, or of both purification and such blending; or

        (b) private suppliers (within the meaning of section 33A of this Act) supplied to consumers in that area gas which had been conveyed (whether within or outside that area) by pipe-lines belonging to the Corporation.".

        (2) In subsection (7) of that section for the words "includes gas in a liquid state" there shall be substituted the words "has the same meaning as in Part I of the Gas Act 1972".
        4B. After that section there shall be inserted the following section—

      OTHER SUPPLIERS OF GAS
      33A.—(1) The Secretary of State may by order provide that, in such cases and subject to such exceptions and modifications as may be prescribed by the order, section 33 of and Part II of Schedule 6 to this Act shall apply to premises occupied by private suppliers for or in connection with the supply of gas through pipes to consumers' premises.
      (2) In this section—
      'gas' has the same meaning as in Part III of the Gas Act 1972;
      'private supplier' means a person authorised by a consent given under section 29 of that Act, or by section 29A of that Act, to supply gas through pipes to consumers' premises.
      (3) Any statutory instrument containing an order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament."."
      Mr. John Moore: I beg to move, That this House cloth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this we may take Lords amendments Nos. 57 and 58.
      Mr. Moore: Amendments Nos. 50, 57 and 58 confer enabling powers to amend rating law in so far as it relates to property occupied in connection with the supply of gas. The Bill creates a new position in the supply of gas, in which private suppliers may compete with the BGC and may gain access to BGC pipelines. In the new situation it is possible to conceive of circumstances in which the application of existing rating principles might disadvantage BGC, or private suppliers, or, indeed, individual local authorities. The purpose of the amendments is therefore to ensure that powers are available to correct any such anomalies that may arise and permit equal competition between BGC and private suppliers.
      Mr. Merlyn Rees: We are endeavouring to achieve swift progress. We are intrigued to know why privilege is involved. Amendment No. 58 was a clever move. Had we been in Committee we would have taken three days to discuss it.
      Mr. Moore: I am sure that the House would not like me to try to respond to the last point. The other point with regard to privilege relates to the degree to which the Lords might have had a presumption relating to money and the extent that that presumption has to be overridden by the House's powers. We have to draw attention to the privilege point.
      Question put and agreed to.—[Special Entry.]
      Lords amendments Nos. 51 to 54 agreed to.
      Lords amendment: No. 55 in page 54, line 28, leave out paragraphs 11 to 13.
      Mr. Moore: I beg to move, That this House doth agree with the Lords in the said amendment.
      The amendment deletes the provisions in schedule 3 that would have enabled the remit of the gas consumers' councils to be restricted in areas where competition in the supply of gas is allowed by the Bill. The Government originally proposed these provisions because the origins of the councils lay in the need for a body to represent the interests of consumers faced with a monopoly, whereas, for the future, the Bill allows competition. Similar

      497
      provisions were included in the British Telecommunications Act 1981. The Government made it clear that they would have exercised these powers only in cases where they were satisfied that the consumers concerned had alternative choices of gas supply, and then only after consulting the National Gas Consumers Council and BGC.
      However, following the Committee stage of the Bill in the other place, the Government reconsidered these paragraphs and recognised that in the particular case of the gas industry there was a feeling that at this particular stage it would be at least premature to contemplate a reduction in the remit of the gas consumers' councils. As a result, the Government accepted this amendment removing these provisions from the Bill.
      Question put and agreed to.
      Lords amendments Nos. 56 to 59 and 61 to 65 agreed to.

    Schedule 4

      REPEALS
      Lords amendment: No. 66, in page 61, column 3, leave out lines 11 to 15 and insert "Section 8".
      Mr. Lawson: I beg to move, That this House doth agree with the Lords in the said amendment.
      It is fair to say that no new points of principle arise from the amendment. The House will be aware that this is the last of the many debates that we have had during the long passage of this historic Bill. We have had a full discussion of all the important issues and I am grateful to all those who have assisted the Bill's successful journey on to the statute book.
      Mr. Merlyn Rees: I wish to reciprocate. The Secretary of State said "no new points of principle arise". If everyone has learnt and forgotten as much as I have in the past six weeks, we have all done a good job. It has been a happy Bill. The Government have achieved their aims. We have not, but that is the nature of things. The Bill is a better Bill at the end of the day for technical reasons and because the Government have generously realised that they had missed a few points. I wished that I had picked on some of the points in Committee but I shall live with that for the rest of my life.
      Mr. Gordon Wilson: Since the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) asked me to watch his back in the event of his absence this evening and as he did the same for me when I was occasionally absent from Committee, it would be appropriate for those representing the smaller parties to accept the plaudits of the Secretary of State. In so doing we would have to make it clear that in no way would we have wished to facilitate the passage of the Bill which we consider to be utterly diabolical rather than historic.
      Question put and agreed to.
      Lords amendment No. 67 agreed to.

  Building (Prescribed Fees)
  8 pm
  Mr. Ted Graham: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Building (Prescribed Fees) Regulations 1982 (S.I., 1982, No. 577), dated 21st April 1982, a copy of which was laid before this House on 12th May, be annulled.
  The House needs to be reminded that building control services, which have hitherto formed part of the services that a council has made available to ensure a proper environment, fell under the Government's hammer when they decided to give local government more freedom. That was the freedom to be told by Marsham Street what services to provide and what level of grant aid those services would attract. Even the building control services that a council must provide would be paid for not by the community which benefited from them, but by the user. From the outset it was made clear that under the scheme that was instituted in 1980 the full cost of building control would be transferred from ratepayers and taxpayers generally to the users of the system.
  We are now faced with devastation. It is not so much the principle of charging for services, which is one of the cornerstones of the Government's philosophy and of this measure, but the ham-handed and incompetent way in which that philosophy has been put into practice that has enraged local government, the professions and ratepayers. Even judged by the crude yardstick of who benefits from the changes and the charges, the Government have it wrong. There will be higher costs for those who wish to improve their property and lower charges to large developers.
  There may be some who will wish to examine the numerous changes, but to me they are cosmetic and designed as a feeble attempt to make sense of a blunt instrument, the purpose of which is to clobber the house builder or improver while seeking to relieve central Government of costs that they have always borne. Robbing Peter to pay Paul is nothing new to the Secretary of State.
  The Minister has made much of consultation with interested parties, of reviewing experience and of learning from it. I shall quote what the Royal Institute of Chartered Surveyors has told Members in a letter dated 10 June about the changes proposed in the regulations. It states:
  "The RICS is particularly disappointed that the Government appear to have disregarded the main body of advice given by the relevant professions at the consultation stage. Their main concern, and ours, has been that the problems experienced between developers and owners, on the one hand, and local authorities, on the other, in reaching agreement on the estimated costs of proposed work have not been eliminated."
  After cataloguing a long list of criticisms of the proposals before the House, the RICS concludes:
  "We believe that most of the advice given to the Department was that the present proposals are unsuitable and would not result in any material advantage over the present unsatisfactory regulations. The present proposals should be abandoned and a more rational system should be drafted, perhaps based on new enabling legislation."
  If the Minister wants good advice for nothing, why does he not accept the RICS's suggestion, avoid a Division tonight and allow us all to go home? Alas, we live in the real world, which is where I get my next piece of evidence from. It has been supplied by the borough engineers and building inspectors of the London boroughs. Their feeling about the value of consultation is well known to the

  499
  Department in respect of the present proposals. They consider it to be unnecessary, complicated and diverse. They state:
  "A movement away from the original simple arrangement to a mixture of a sliding scale, flat rate and unit cost would make the collection of fees more complex and unpopular."
  The association is on record as saying in April:
  "Despite our representations and those of other local authority associations, the Department has now decided to re-lay draft regulations before Parliament."
  Let us have no false assertions that the views of those concerned have been taken fully into account. The Minister may be very good at listening, but he learns very little from what he hears.
  The Minister should be influenced by the financial effects of his proposals on council budgets. He knows that he has made a hash of estimating the income from his fees in the past. His confident prediction that incomes would rise by 10 per cent. has been found to be ludicrous nonsense by those at the sharp end. The press announcement of 20 March 1980 stated:
  "A scheme under which the full cost of building control will be transferred from rates and taxpayers generally to those who actually use the system is absolute poppycock."
  When the system was introduced in 1980–81, the Minister told authorities that he was assuming—that means that he was guessing—that the first system would bring in a total of £38 million. In reality, it brought in £19·5 million. The Minister was only 100 per cent. out. That knowledge did not stop him blundering on. The estimate of £38 million which produced £19·5 million was upped to £62 million for 1981–82. That turned out to be even more wrong. Instead of an estimated income of £62 million, actual income was £34 million. There was a deficit of £28 million, making a total deficit of £42 million in two years. What possible faith can there be in a system which can be so far out of touch with the real world and which makes such monumental estimating errors?
  The deadly serious matter is that these arrogant and erroneous assumptions have left councils with a cut in their rate support grant. To the £42 million in two years has been added an estimated shortfall in the current year, 1982–83, of a further £25 million—£67 million in all. When we add to that the known shortfall in planning application fees, we find that local government has had filched from it £100 million by gross Government ineptitude.
  Will the Minister confirm that he is giving serious thought to finding a way to give back to councils the known losses that they have sustained under this system? Will he announce that in future any shortfall in the estimates in one year will be added to any rate support grant settlement in the next year?
  If the Minister considers that I speak without evidence or authority, I shall quote an extract from a letter that I received from Mr. Day, the chief executive and town clerk of the London borough of Enfield. I am delighted to see that another recipient of the letter, the hon. Member for Enfield, North (Mr. Eggar), is in his place. The words that I am about to quote will be familiar to him. Mr. Day wrote:
  "Should these new regulations come into force on 1st July as currently proposed, the Council's fee income will be substantially reduced. Under the present fee regulations which have operated successfully in Enfield since 1st April 1980 the Council collected just under £150,000 in the last financial year.
  The Council's expected income under the proposed regulations in this year will be reduced by approximately £30,000, assuming the number of applications deposited under
  500
  the Building Regulations 1976 remains comparable with last year's intake. The income to the Council derived from the present fees only just covers the administrative costs of collection. The effect of such a reduction would be an increase in the Council's net expenditure of £30,000 which, in turn, would result in a reduced grant entitlement of a further £30,000. The total effect, therefore, on the Council's finances would be in the region of a £60,000 loss which would need to be borne by the ratepayers. Against this the plan and inspection fee for applicants will only be reduced from approximately £42 to £24 for extensions up to 20 sq. metres and from £68 to £48 for extensions up to 40 sq. metres.
  The main reason for this reduction is the flat rate fee that will be introduced for extensions under 20 and 40 square metres floor area is far too low when compared with the fee received at the moment which is based on the estimated cost of the works."
  Mr. Tim Eggar (Enfield, North): Like me, I am sure that the hon. Gentleman has received many representations from constituents who have wished to build extensions to their houses. Under the old scheme, there was a dispute about the cost of the extensions. Does the hon. Gentleman agree that the introduction of a flat fee for extensions up to a certain specified square footage will be welcomed just as much by his constituents as by mine?
  Mr. Graham: Much of the package has rightly been criticised by local authorities. However, such a fee will be beneficial and will help to standardise the system. Nevertheless, if we are to tell Enfield's ratepayers that a comparatively small number of general ratepayers will benefit, the council will not think much of that argument.
  The Minister must be aware that the outer London boroughs are dismayed about the proposals, not least because the cost of enforcement is very high. Enfield is not the only London borough to be rightly upset by the changes. The system last year left virtually every authority with a deficit. I am told by the Association of Metropolitan Authorities and the Association of District Councils that, in addition to those deficits, the new system is estimated to produce large decreases in income next year. It is estimated that Hounslow will have an estimated decrease in income of 41 per cent.; Worthing, 16 per cent.; Lewes, 26 per cent.; Hillingdon, 17 per cent.; and Gillingham, 7 per cent. Of course, some authorities will have an increased income, but the global shortfall will not be affected.
  The Government have a way out. This is not the place to argue the principles of charges. Primary legislation gives the Government those powers. In the light of the constant clobbering that councils have had to take from the Government, this is no time to add to the burdens. Why not make the process of consultation a purposeful exercise? I suggest that the Government should go back to those at the sharp end—the building inspectors, the professions and the councils—and speak to them, and then come back with more sensible proposals which will relieve councils of these hidden penalties. The Opposition may then view the exercise differently.
  8.12 pm
  The Minister for Housing and Construction (Mr. John Stanley): The hon. Member for Edmonton (Mr. Graham) said that charging is one of the cornerstones of this Government's policy, but he omitted to say that powers to prescribe fees for building control in England and Wales were taken by the Labour Government in the Health and Safety at Work etc. Act 1974. This order has been brought forward under primary legislation that was

  501
  introduced by the previous Government which no doubt the hon. Member supported. It is true that the implementation of those 1974 Act powers was promulgated by the present Government and the first fees regulations came into effect in April 1980. The hon. Member will also be aware that in other parts of the country, in inner London and Scotland, fees have been charged for many years under different legislation. I assume that the Opposition's prayer against these regulations is not against the principle of building control fees as this order is being brought forward under primary legislation enacted by the previous Government.
  In devising a building control fees scheme I considered three possible bases for the fees. Those were a scheme that was based on unit fees—that is, a fixed sum per building—fees based on the area of construction, and fees based on the cost of the work that was subject to building control.
  We decided initially that we should introduce building control fees on the basis of cost. The concept of cost has obvious attractions. It is a factor that is common to all types of work subject to building control. It has a close relationship with the amount of work for a local authority in dealing with a given application and a closer one than relating the fee to area. Cost also has a closer relationship than area with the value of the development for the applicant. Cost has worked in inner London and Scotland without great difficulty for some 17 or 18 years. That is why we adopted a cost basis for the first building control fees regulations made in 1980. I acknowledge that in practice the 1980 fees scheme has not proved entirely satisfactory and has created difficulties for the house building industry in particular.
  If a cost scheme is to work well, it requires builders to submit realistic estimates of cost and local authorities to accept those estimates without unreasonable delay or argument. Too often that has failed to happen, and the problems have been particularly serious in two very important areas—new house building and home improvement. To help the house building and the home improvement industries we concluded that it was essential to alter the basis of fees for those two areas of building control, and that is the primary objective of the regulations.
  The hon. Member for Edmonton said that the changes were cosmetic, but they are far from being so. They represent a shift in the basis of charging fees for two important parts of the construction industry—new house building and home improvement. The new scheme has been designed to cut through the difficulties of the 1980 scheme, by replacing, where possible, cost-based fees by unit fees—that is, a fixed sum per new dwelling or per item of improvement work such as an extension. Of course that will immediately eradicate time-wasting disputes about the reasonableness of the cost estimates. The new regulations therefore specify unit fees for new houses and flats up to three storeys; small domestic extensions and alterations; and small garages.
  Taken together, these developments probably account for some 80 per cent. of all applications for building control consent, so this should represent a very substantial measure of simplification for the fee system. For all other types of development we have retained the cost basis for fees and I should like briefly to explain why we have done
  502
  so instead of moving to an area basis, such as the Royal Institute of Chartered Surveyors favours. On the best analysis that we can make at present, an area-based scheme would not be of any advantage. Indeed, compared with a cost-based scheme there might be some material disadvantages.
  An area-based scheme would require many different rates of fee for different types of development. It would certainly not be equitable to apply the same rate of fee for a complex multi-storeyed commercial development as for a straightforward agricultural building or warehouse. That makes for considerable complexities, particularly in mixed-use developments.
  Again, area-based fees can take no account of the wide variations in the amount of work required from building control authorities in dealing with buildings of the same use and size—such as offices—but of widely differing sophistication and complexity. It is simply impossible to apply area-based fee systems to those developments such as alterations and refurbishments that involve no change in floor area at all. Yet that is one of the largest single categories of building control applications that local authorities have to deal with.
  It is significant that Greater London, after initially trying to use a volume-based system, has—since 1965—moved to a cost-based system, and I am not aware of any professional body that has managed to produce an area-based scheme that has generally been accepted by the industry as practicable.
  I do not exclude the possibility of an area-based system, and am ready to consider any further proposals put to me, but for the moment at least I see no practical alternative to maintaining the present cost-based system for all those developments to which our new unit fees will not apply. The new fees, therefore, are in part fixed-unit fees and in part cost-based. Most developments will fall into the categories covered by fixed-unit fees—new house building, domestic extensions and garages.
  For everything else, authorities will be using the present cost-based system with one important simplification. Previously, it was for the applicant to indicate what proportion of the total costs of his development he considered "relevant" for fee purposes. In future, again to try to avoid disputes and delay, a fixed 70 per cent. of costs will be assumed to be relevant.
  We have also taken great care to try to assist both those in the building industry and those in local authority building control departments in the operation of the new fees scheme. On 12 May, we issued a circular letter containing detailed guidance including a number of worked examples of fee calculations. This has been acknowledged both by the local authorities and by the construction industry to have been very helpful.
  I turn to the financial effects of the new fees. The house building industry estimates that on average it will be paying somewhat higher fees, but it believes that the simplicity and certainty of fixed fees is worth paying for. The Association of District Councils believes that some of its members will stand to lose some fee revenue, but certain metropolitan authorities consider that they may gain.
  The hon. Member for Edmonton quoted entirely selectively from a sheet that was distributed by the Association of Metropolitan Authorities. He carefully quoted all those authorities which estimated that their fee income would be reduced. He ignored entirely all those authorities shown on the same sheet of paper which estimated that their fee income

  503
  might well rise. He referred to outer London, and I noted that the sheet from which he quoted refers to Enfield and the estimated large drop in their fee income. The sheet also shows that Merton, Kingston, Haringey and Waltham Forest estimate an increase in their income.
  Mr. Graham: The Minister is perfectly fair to point out that fact. It should go on the record. In making my case I used the illustrations that supported it. Equally, he is entitled to use the illustrations that support his case. To be fair, I pointed out that there would be authorities that would benefit. I gave figures for the estimated global loss. Whether there are winners or losers, overall the Association of Municipal Authorities and the Association of District Councils told me—as I assume they told the Minister—that between them local authorities are likely to be net losers under the new system.
  Mr. Stanley: That is not a view that we share. Recipients of fees that will be taken into account for rate support grant purposes will possibly tend to be rather modest in terms of their assumptions as to how much income they will generate. No doubt the house building industry will be alive to how much it will pay. The house building industry believes that it will have to pay more. Some local authorities believe that they will receive more and others less. The Association of District Councils has said that there would be a small loss of income overall, but the Department for the Environment believes that the new scheme will be broadly neutral in financial terms compared to the original one.
  I should like to refer to a point that the hon. Gentleman raised on the assumption of yields made for rate support grant purposes. I do not deny that there has been a shortfall over the past two years or that there will be a shortfall this year. We had to make assumptions of fee income for 1982–83 while the fee scheme was still in the process of consultation. By the time that the consultations were concluded, if we were to have increased building regulation fees to the level assumed for rate support grant purposes, it would have been necessary almost to double the fees stipulated in this order. When we are trying to hold down the cost of new house building and home improvements to help first time buyers we felt that an increase of fees of that magnitude was out of the question. We recognise that we have a problem with the rate support grant settlement for 1983–84. I can confirm, as my hon. Friend the Under-Secretary said in the debate on planning application fees on 11 May, that we will discuss with local authority associations the matching of the likely income from planning and building regulation fees with the assumptions used for rate support grant purposes.
  The hon. Gentleman made considerable play of the shortfall on RSG assumptions so far as income is concerned. I should place on record the fact that, against a shortfall on building regulation fee income in the course of the current year, we estimate that Labour-controlled local authorities that are building control authorities will be overspending on their expenditure targets by about £300 million, which puts in some perspective the hon. Gentleman's remarks about looking after the ratepayers.
  I should like, finally, to remind the House of the building control policy context in which these regulations appear. We are engaged in the most fundamental improvement of the building control system overall for 20 years. We are pressing on with preparations to implement
  504
  the proposals in Command Paper 8179 including our proposals for optional private certification. We have already in this Session brought in legislation, in the Local Government (Miscellaneous Provisions) Bill, for simplified building control procedures in the form of both stage and provisional approval of plans. Last month, I issued for consultation our major proposals for recasting and simplifying the building regulations. The favourable initial response to those proposals has been very encouraging.
  Mr. Douglas Hogg: I apologise for the fact that I was not here to hear my hon. Friend's opening speech. There is one point that troubles me. If one looks at inspection fees for small garages and car parks, one finds that one is dealing with a very modest fee. My concern is that, as there is no obvious sanction for the payment of this fee and as the amount is so small that it would not justify recovery procedure, many people will not pay. That leaves perhaps two choices—to load it on to the plan fee or to get rid of it altogether. My hon. Friend may be able to comment on this.
  Mr. Stanley: My hon. Friend is right. In the area of small home improvements, the statutory level of fee is very small. One of the proposals put to us is that there should be a higher minimum level of fee. We have, however, been conscious of the needs of those who are seeking to improve their homes. We are not in the business of putting more statutory costs on to the home improvement industry and those whom we are trying to encourage to expand home improvement work. We have felt all along that we should try strictly to apply the levels of fees closely to the scale of work involved for a local authority.
  When a local authority, under the highly simplified system that now exists, has simply to look at a plan to see if, for instance, a garage is within the square metreage threshold to qualify for a unit fee, it is such a simple piece of work that we did not feel it was justifiable to pursue what would amount to front-end loading of the fee system against the small individual householder carrying out a small home improvement.
  The new fee regulations before the House represent a great improvement both for the house building and for the home improvement industries. The president of the House Builders Federation has made it clear that the passage of these regulations tonight is of the utmost importance to the house building industry. In a letter that he has recently written to me, he says:
  "I know that I have the unanimous support of all house builders in hoping that the regulations will be approved thereby enabling the introduction of the new scheme on 1 July. We have provided your Department with a great deal of evidence of disputes and overcharging caused by the current regulations. We are therefore extremely pleased to see a scheme proposed involving a flat rate fee giving both certainty as to the quantum of the fee and some remission for repetition housing. This will eliminate most of the disputes once and for all, and will greatly improve relations between local authorities and housebuilders as a result."
  The effect of the Opposition's prayer would be to deny house builders and all individuals and firms engaged in home improvements of the benefit of a much simpler and less contentious basis of calculating building control fees. I therefore ask the House to reject the Opposition's prayer against these regulations.
  Mr. Graham: I am grateful to the Minister for the good news that in future, in the shortfall between reality and the assumptions or estimates of councils' income from the charging of fees, an attempt will be made to match the assumption and the income.
  However, I am extremely disappointed with the rest of the Minister's speech. At least, he made it very clear whose side he and the regulations are on. He does not deny that the regulations are not wanted by local authorities, the professions, building inspectors or ratepayers, but he says that they are wanted by the house building industry. That is fair enough. The benefits will go to the house building industry, which is the prime progenitor of the changes. The changes have been criticised by all the bodies that I mentioned. Moreover, the Minister has failed to say what consultation means in the Department of the Environment. I could have quoted letters, minutes and reports of meetings about so-called consultations at which the bodies consulted made it very clear that they strongly resisted the regulations.
  The Minister has failed to satisfy me that there is any point in withdrawing our prayer. In our view, local councils deserve an opportunity to protest about the cavalier manner in which the Government, the Department and the Minister have treated them on consultation. I therefore ask my right hon. and hon. Friends to support me in the Lobby.
  Mr. Douglas Hogg: I shall be brief. I have only three points to make.
  First, I wish to apologise to both Front Bench spokesmen for not having heard their speeches, because the debate started sooner than I expected.
  Secondly, I welcome the drafting of regulation 14. It is vitally important to link the fees with the actual costs incurred by the person carrying out the work, because that ensures that the do-it-yourself person does not have to pay on an assessed fee, based on what contractors might be assessed if they were doing the job. The problem has arisen in the past, under the predecessor of these building regulations, and I am glad that the present formulation is such that the do-it-yourself worker does not have to pay more than otherwise would be the case. I find it extraordinarily offputting to have the Patronage Secretary glaring at me in his customary friendly manner. I shall, therefore, come to my last point, which relates to the issue that I raised a moment ago about inspection fees. There is a serious issue here in relation to small garages and carports, because there are two sets of fees—the plan fee and the inspection fee. With the plan fee, the process of making the application implies sanctions. The fee has to be paid when the application is made. If the application is not granted, the work cannot go ahead. So there is an inherent sanction in the fee.
  The inspection fee is payable only at the end of a transaction. As it is such a small sum it is not worth instituting recovery. No offence is committed under the 1961 Public Health Act. I can foresee many circumstances when the person making the application refuses to pay the inspection fee and because it is so small nobody will institute any enforcement procedure.
  That leaves one with three choices. One can either do what is being done. If that is what the Miniter wants, so be it. Equally, the inspection fee can be added to the plan
  506
  fee, which has the inherent sanction to which I have referred. On the other hand, the requirement for an inspection fee can simply be waived.
  The Patronage Secretary will be pleased to know that I am now going to sit down.
  Question put:—
  The House divided: Ayes 28, Noes 93.

  Division No. 244]

  [8.35 pm

  AYES

  Beith, A.J.

  McDonald, Dr Oonagh

  Booth, Rt Hon Albert

  Morton, George

  Cook, Robin F.

  Moyle, Rt Hon Roland

  Deakins, Eric

  Prescott, John

  Dean, Joseph (Leeds West)

  Race, Reg

  Dewar, Donald

  Robinson, G. (Coventry NW)

  Dormand, Jack

  Sheldon, Rt Hon R.

  Graham, Ted

  Skinner, Dennis

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

  Snape, Peter

  Harrison, Rt Hon Walter

  Spearing, Nigel

  Haynes, Frank

  Wainwright, E. (Dearne V)

  Kaufman, Rt Hon Gerald

  Wainwright, R.(Colne V)

  Kerr, Russell

  Lamond, James

  Tellers for the Ayes:

  Lyons, Edward (Bradf'd W)

  Mr. Lawrence Cunliffe and

  McCartney, Hugh

  Mr. Allen McKay.

  NOES

  Arnold, Tom

  Mills, Iain (Meriden)

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

  Mills, Sir Peter (West Devon)

  Beaumont-Dark, Anthony

  Moate, Roger

  Bendall, Vivian

  Montgomery, Fergus

  Berry, Hon Anthony

  Moore, John

  Bevan, David Gilroy

  Morris, M. (N'hampton S)

  Blackburn, John

  Murphy, Christopher

  Body, Richard

  Myles, David

  Bright, Graham

  Needham, Richard

  Brinton, Tim

  Nelson, Anthony

  Brooke, Hon Peter

  Newton, Tony

  Bruce-Gardyne, John

  Onslow, Cranley

  Cadbury, Jocelyn

  Osborn, John

  Carlisle, John (Luton West)

  Page, Richard (SW Herts)

  Carlisle, Kenneth (Lincoln)

  Percival, Sir Ian

  Chapman, Sydney

  Pollock, Alexander

  Cope, John

  Prentice, Rt Hon Reg

  Cranborne, Viscount

  Proctor, K. Harvey

  Dorrell, Stephen

  Renton, Tim

  du Cann, Rt Hon Edward

  Rhys Williams, Sir Brandon

  Dunn, Robert (Dartford)

  Ridley, Hon Nicholas

  Eggar, Tim

  Rumbold, Mrs A. C. R.

  Faith, Mrs Sheila

  Sainsbury, Hon Timothy

  Fletcher-Cooke, SirCharles

  Shaw, Sir Michael (Scarb')

  Garel-Jones, Tristan

  Shepherd, Colin (Hereford)

  Goodlad, Alastair

  Smith, Tim (Beaconsfield)

  Griffiths, Peter Portsm'th N)

  Speller, Tony

  Haselhurst, Alan

  Stainton, Keith

  Hawkins, Sir Paul

  Stanley, John

  Hawksley, Warren

  Stevens, Martin

  Heddle, John

  Stradling Thomas, J.

  Hogg, Hon Douglas (Gr'th'm)

  Taylor, Teddy (S'end E)

  Howell, Ralph (N Norfolk)

  Thompson, Donald

  Hunt, David (Wirral)

  Trippier, David

  Jopling, Rt Hon Michael

  Viggers, Peter

  Kilfedder, James A.

  Waller, Gary

  Lang, Ian

  Ward, John

  Lawson, Rt Hon Nigel

  Warren, Kenneth

  Lester, Jim (Beeston)

  Watson, John

  Lloyd, Peter (Fareham)

  Wells, Bowen

  MacKay, John (Argyll)

  Wheeler, John

  Major, John

  Wickenden, Keith

  Marland, Paul

  Winterton, Nicholas

  Marlow, Antony

  Wolfson, Mark

  Marshall, Michael (Arundel)

  Mather, Carol

  Tellers for the Noes:

  Maude, Rt Hon Sir Angus

  Mr. Selwyn Gummer and

  Mellor, David

  Mr. Archie Hamilton.

  Meyer, Sir Anthony

  Question accordingly negatived.

  Fishery Marketing Regime
  8.45 pm
  Mr. Nigel Spearing: On a point of order, Mr. Deputy Speaker. The motion on the fishery marketing scheme has been brought before the House under Standing Order No. 73B, whereby the Select Committee on European Legislation &c, has suggested that these matters be debated by the House. It has been referred to a Standing Committee on European Community documents. That Committee met on Tuesday morning last, 22 June, when there were transport difficulties amd fewer hon. Members attended the Committee than usual. However, none of those present required the Minister to explain the motion which he there moved and which is now before us. The result is that no one knows how the Government intend to improve the functioning of the fishery marketing regime, because the Minister made no speech.
  I hope, Mr. Deputy Speaker, that you can confirm that this is in order. While it may be understandable in regard to domestic legislation, when Her Majesty's Government are making a proposal on a matter relating to legislation made outside the United Kingdom by another legislative body there is an obligation on the Minister to make some explanation to the House as a whole. Can you tell me whether the lack of such an explanation invalidates the motion before us, or whether it is strictly in order in a narrow sense?
  Mr. Deputy Speaker (Mr. Bernard Weatherill): I thank the hon. Gentleman for having given me prior warning that he would raise a point of order on this. As the hon. Gentleman knows, the Standing Committee has reported and I have no jurisdiction over what goes on in Standing Committees. I have to confirm that the motion is in order. No doubt what he has said will have been noted by those who are responsible for these matters.
  Motion made, and Question put forthwith pursuant to Standing Order No. 73B(5) (Standing Committees on European Documents).

  Fishery Marketing Regime

    FISHERY MARKETING REGIME
    That this House takes note of European Community Document No. 6326/82 concerning proposals to implement the common market in fishery products contained in Council Regulation 3796/81 and welcomes the Government's intention to improve the functioning of the fishery marketing regime.—[Mr. David Hunt.]
    Question agreed to.

  Heavy Lorries
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. David Hunt.]
  8.50 pm
  Sir Anthony Royle: I am grateful to Mr. Speaker for having chosen this somewhat controversial subject for debate tonight. It seems that I have timed the debate with great skill, in that we can start debating at 8.50 pm and go on until half-past eleven.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The hon. Gentleman must not get too excited. He may talk only until half-past ten.
  Sir Anthony Royle: I am grateful to you, Mr. Deputy Speaker, for your guidance. I certainly do not wish to get too excited, and I assure you that I do not intend to speak until half-past ten.
  However, we have an opportunity tonight to question my hon. Friend the Minister on a subject that causes deep concern throughout the country—namely, the havoc that is caused to the environment by juggernaut lorries. Such vehicles cause concern and worry to villages, towns and suburbs of major cities. I recognise that I am not the only hon. Member with this grave problem in his constituency. I do not wish to cover—I am sure my hon. Friend will be pleased that I am saying this—the question of the size or weight of heavy lorries, on which important aspect we are awaiting the Minister's decision. It has a major effect on the nuisance that is caused by vehicles.
  Tonight, I hope to talk about my constituency of Richmond on the outskirts of London and the problems that face Richmond, Kew, Petersham, Ham, Sheen and Barnes. These are beautiful areas, many of which are unspoilt, save by the problems of the massive lorries that thunder through them. The South Circular Road goes right through the middle of my constituency. The very name "South Circular" makes one think of dual carriageways, speeding vehicles and modern roads. This may apply to the North Circular Road, but it does not apply to the South Circular. It winds its way through south London, starting at Kew Bridge, and continues through the narrow streets of my constituency.
  The South Circular Road has various feeder roads that also pass through the constituency, roads such as Barnes High Street and Petersham Road. There are parts of Petersham Road that are only 4·7 metres wide, whereas the average recommended width of a major road, such as Petersham Road, is 7·3 metres. Major problems are faced when negotiating heavy vehicles along it. These problems were highlighted three years ago when the entire sewerage system, which was built in the eighteenth century, collapsed. A hole developed, which meant that the road was closed for 18 months, and that created much havoc locally.
  That is not an issue into which I wish to go in great detail tonight. It is the South Circular Road that I wish to discuss with my hon. Friend the Under-Secretary of State for Transport. My hon. Friend has already taken a great deal of interest in the problems that face Richmond, Kew and Barnes. She has spared time to visit my constituency. A few weeks ago, she travelled along the South Circular Road with many of my constituents and myself. She became even more aware of the difficulties than she was before she visited Richmond and Kew.

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  I stood with her on a major corner of the South Circular Road, the name of which is "Chalker's Corner", which has nothing to do with her. We saw vast juggernaut lorries trying to manoeuvre on roads that were unsuitable and originally built to take horses and carriages.
  The South Circular Road and its problems have been aggravated by the irresponsibility of the Greater London Council, which is responsible for large sections of the road where it goes through the area. To that extent, I relieve my hon. Friend of blame because her Department does not have the immediate responsibility for a large section of the South Circular Road where it traverses Richmond, Sheen and Barnes. It is the attitude, manner and way in which the Greater London Council carries out its responsibilities to which I shall refer later in my speech.
  The South Circular Road commences in my constituency where it crosses Kew Bridge. It moves on to the Lower Mortlake Road, which is extremely narrow. Two normal size lorries can only just squeeze past each other at the same time. If two juggernaut lorries arrive at the same place on the road at the same time, one must stop to let the other pass. On the other side of the road are many small houses, in front of which are pavements sometimes only a metre wide.
  The road then follows Clifford Avenue into Sheen and thence to Putney and round south London. Where this narrow road traverses the Richmond constituency it is almost a country lane throughout its length. The scale of the problem is illustrated by figures which, although out of date, are the latest I can get. In 1972, there were 210,000 weekly movements of vehicles across Kew Bridge, 700 of which were heavy lorries. In 1978, there were 390,000 weekly movements, of which 35,000 were heavy lorries. I have already mentioned the collapsed sewers in Petersham Road, which is not part of the South Circular, but a similar disaster has occurred recently on the Lower Mortlake Road. For some months the collapsed drains meant that the South Circular Road was unusable and the traffic had to be diverted elsewhere.
  There are appalling traffic jams that make the problems of central London during this week of tube strikes seem small. These hold-ups occur every day and all day, not just at rush hour in the mornings and evenings. I was returning from my constituency last Tuesday at 8·15 in the evening and sat in a traffic jam for 15 to 20 minutes in Clifford Avenue, which forms part of the South Circular Road.
  There is the further problem of the danger that is caused to children and residents. Mothers are constantly worried about their children running into the road, and old people are fearful of walking along the narrow pavements with these huge lorries passing them. Apart from the possibility of being knocked down, the heavy lorries often pass so fast that the rush of air is a danger to old people.
  Damage is caused to the environment generally. There is noise, fumes and damage to property. Many of the houses in the Kew area date from the eighteenth century. They are in a conservation area. Their foundations are shaken, their roofs rocked and living conditions are made intolerable for all those who live in them.
  I do not want to make a long emotional speech about the miseries of heavy lorries. We all know how bad they are and the problems they cause. I want to put forward some constructive suggestions and to ask what can be done to ease the situation. I and my constituents are well aware
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  that, however much my hon. Friend is anxious to find a solution, she is unable to wave a magic wand and solve the problem tomorrow.
  There are some measures that can be taken. There should be much better enforcement of weight and safety regulations, with more staff and weighbridges, especially close to ports. Powers should be taken to stop lorries being overloaded and to prevent them from proceeding until their weight has been reduced to the proper limit.
  Secondly, there should be a definite commitment to the introduction of regulations requiring heavy lorries to have sideguards, rear underrun guards, spray suppression, better braking and noise reduction. Thirdly, more help and advice should be given to local authorities on their powers to establish lorry cordons and lorry routes. Perhaps my hon. Friend will outline the work that is proceeding with local authorities on lorry action areas.
  Fourthly, on the wider scene, we could give encouragement to rail freight. Maximum rates of grants for freight facilities should perhaps be increased, and grants should be extended to include Freightliner and Sealink. Any action in those areas will help tremendously to ease the burden throughout my constituency.
  Fifthly, the taxation of heavy lorries should relate directly to the road damage they cause. Heavy lorries should pay their full track costs from the outset of any increase in weights. I do not see why the ratepayers of Richmond and Greater London—indeed, the taxpayers—should carry a heavy burden for the repair of roads, much of the damage to which is caused by heavy lorries and the big companies that run those lorries. Many of those lorries travel long distances from Europe making deliveries to Britain.
  I hope that my hon. Friend will take some action to tackle the problem of the GLC. She should give careful thought to the possibility of taking traffic responsibilities away from the GLC. Frankly, the GLC has failed London. That is nothing new. It has failed London for some years, but now it is failing London in a major way.
  In reply to a question from my hon. Friend the Member for Harrow, East (Mr. Dykes) the Under-Secretary of State, my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre), said:
  "My right hon. Friend has recently issued a circular to local authorities telling them that we will pay particular regard to the use they are making of their lorry control powers when we decide how much expenditure to accept for transport supplementary grant. We are now awaiting their responses in this year's transport policies and programmes."
  In reply to a supplementary question, he added:
  "My hon. Friend appreciates that local authorities have wide powers with regard to the control of the routeing of lorries. We shall soon be asking them for details of the amenity controls that they have introduced."—[Official Report, 16 June 1982; Vol. 25, c. 942–43.]
  The GLC has produced no amenity controls whatever for my constituency. It has made no effort to assist with the situation in the Lower Mortlake Road, Clifford Avenue, Sheen and other parts of the area that are so badly affected along the South Circular Road.
  My antipathy towards the attitude of the GLC is not new. In 1977–78, I gave evidence to the Marshall committee, set up by the Conservatives when the party won control of the GLC in that year. At that time, I told the inquiry that I saw no reason why the GLC should continue. Following the arrival of the Conservative-controlled council at that time, considerable powers were removed from it. However, the GLC is still left with

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  certain residual powers that should have been extracted in 1977, 1978 and 1979. They should now be taken away in view of the way in which the GLC has recently been run.
  I see no point in the GLC having any further responsibility for the running of London's transport. I do not expect my hon. Friend to comment on that. It does not come specifically within the terms of the debate. Developments in the running of transport in Greater London in the past six months lead me to believe that the decision to grant the GLC control of London Transport many years ago was a gross mistake and that it should now be taken away.
  I see no reason why the GLC should retain responsibility for its two other areas of control. One is the fire brigade. That can be dealt with easily. A committee or a commission could be set up to run it. The other, which is vital, is the control of many major roads in Greater London. The GLC is the traffic authority for most of the South Circular Road where it crosses my constituency. I cannot see my hon. Friend the Minister and talk sensibly about the problems affecting that road without her saying "It is the responsibility of the GLC. You must see the GLC about it." The GLC does nothing about it. If she and her Department assumed responsibility as traffic authority for the Greater London area, the organisation of traffic and routes would be run much more efficiently. Moreover, the role of democracy would be much more profound. Members of Parliament who represent London constituencies would be able to raise matters affecting roads in Greater London with Ministers in the House. Ministers would be able to make sensible and proper replies as the responsible authority.
  Will my hon. Friend the Minister talk to the Secretary of State to see whether there can be a rapid move in that direction? Most of the major roads in London are fed with traffic from roads that are the responsibility of the Department. The traffic that filters on to the South Circular Road emanates from the M4, the M3 and, in the future, it may come from the M25. These are major national roads that are looked after by the Department. It is absurd that large numbers of vehicles pour into the capital city off roads that are controlled and made by my hon. Friend's Department and emerge on roads that are the responsibility of that sad body of people, the Greater London Council, which is quite incapable of looking after them properly.The Greater London Council should withdraw from the area. The Department of Transport should be responsible for roads in London. The local boroughs—Richmondupon-Thames in my area which covers both Twickenham and Richmond—might run minor roads, perhaps under licence, on a day-to-day basis; and responsibility for major roads should remain with the Department. Most of our electors would welcome that proposal.
  It is easy for those of us who are worried about roads to suggest that we transfer the burden elsewhere. It is easy to do that within our own areas by transferring the problem to our colleagues in neighbouring constituencies. Having represented Richmond for more than 23 years I am well aware of the temptation to do that. I have fallen for that action in the past and have come across some unpleasant scenes with my colleagues upon whom I was trying to pass heavy lorries without being aware of the dangers and difficulties that they faced. I do not wish to transfer the burden, but I should like all areas to bear a fair share of it.
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  I know that my hon. Friend the Minister will agree, having visited Richmond, that we have more than our fair share of the burden of heavy lorries in Richmond on the South Circular Road today. Some restriction could be put on the weights of lorries using Kew Bridge today.
  There are purpose-built roads such as the A4 and the A316. The opinion of the Richmond council was
  "That the principle of designating heavy lorry routes is accepted provided that roads so designated are suitable in environmental as well as capacity terms for such vehicles. That in the opinion of the council there is only one suitable route in the Borough, viz A316."
  That is clear to anybody who has a look at our road system. The A4 is also a custom-built road, although it is outside my borough. A further look should be given at the greater use of those two major roads to see whether the traffic on the South Circular could be eased.
  In addition, some action should be taken on better signposting. Signposting in the London area has grown like Topsy over the years. The decision to make Kew Bridge a primary destination was taken in 1963. It is still there, and it attracts heavier vehicles than is really necessary on to Kew Bridge today.
  Will my hon. Friend consider a major inquiry into her signposting policy to see whether some easement of the burden suffered by Richmond, Kew and Sheen can be achieved by its reorganisation?
  I know that my hon. Friend and my right hon. Friend the Secretary of State are anxious to speed the completion of the M25. It is an important road which will cut down the number of vehicles coming into London from all directions. It will bypass London well outside the built-up area.
  I am well aware that the M25 is not the final answer to Richmond's problems. Many heavy vehicles using the South Circular Road are bound for destinations in Central London and along its route. Those are not vehicles that are likely to use the M25. But heavy vehicles coming from and going to Europe and those going round the North Circular Road to the South coast ports will be able to avoid using the South Circular Road when the M25 is completed. I hope that Ministers will ensure that that major new road is completed as soon as possible.
  As my hon. Friend knows, the Richmond area is being strangled and its environment destroyed by a combination of heavy lorries, history—history is involved in the roads of today—and, frankly, bureaucratic buck-passing—a phrase that I do not like—led mainly by the GLC.
  I apologise for dragging my hon. Friend here tonight. However, I am certain that she approves of the fact that I can organise Adjournment debates at a civilised hour. I hope that she will take account not only of my comments on the problems that Richmond faces but also of the problems that she saw on the ground during her visit. If she can give me some encouragement to take back to my constituents, that would please me, but it would please my constituents to an even greater extent to know that there is a sympathetic and interested person who knows the problems and is trying to do something about them.
  9.15 pm
  The Under-Secretary of State for Transport (Mrs. Lynda Chalker): It was about half an hour ago that I breathed a heavy sigh of relief when it became clear that I did not have to speak about fisheries. However, my hon. Friend the Member for Richmond, Surrey (Sir A. Royle)

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  has gone rather wide in introducing his Adjournment debate, and at the outset of my reply I shall talk briefly about organisation in local government. My hon. Friend told the House that he had given evidence to the Marshall committee in 1977–78.
  I am sure that my hon. Friend is aware that the wider issue that he raised of the powers of the Greater London Council is a matter for my right hon. Friend the Secretary of State for the Environment. However, I assure him that I shall draw his remarks to the attention of my right hon. Friend, including those about fire brigades.
  My hon. Friend was right when he said that in one sense road control is a matter for the Department of Transport. However, it still comes within local government powers, which give the responsibility to the GLC as a highway authority for the maintenance and planning of roads within the GLC area, except for trunk roads, which are the responsibility of my Department. My hon. Friend knows that there are no trunk roads or motorways within the London borough of Richmond upon Thames. Therefore, as he rightly says, I have no direct responsibility whatsoever for them.
  My hon. Friend has asked for a major change in local government and, as he knows, I cannot take that up in this debate. However, his remarks about the traffic that uses the roads within his constituency form part of an important subject. I cannot take up his comments on organisation but I shall comment upon the problems that his constituents face daily and the challenges that they have to meet from the heavy lorry.
  I congratulate my hon. Friend on initiating the debate because he has drawn attention to a problem that affects the entire population throughout their daily lives. Parts of my hon. Friend's constituency and other areas are plagued by extremely heavy traffic. The lorry problem can rightly be described as a series of so many local problems that it amounts to a major national problem. I have known the area of which my hon. Friend has spoken all my adult life. I share with him his great concern for the intrusion into people's lives of our changing demands for goods which have to travel by road. However, we must be careful when considering the problem of lorries and the economy not to shift the problem down the road, as it were.
  It is important that we consider the two sides of the heavy lorry problem. I am sure that he realises that I must do so in view of the Department's economic interest to ensure the most efficient movement of goods. Lorries are vital to the economy and our standard of living. Most of the growth in lorry traffic has occurred since the Second World War. Immediately before the war it is estimated that road transport accounted for about only 35 per cent. of total inland tonne mileage. By 1980 the figure had risen to 78 per cent.
  The reasons for this dramatic change are complex. The prices that have been charged will have played some part in the growth of lorry traffic, but that is by no means the only factor. There are other much more deeply rooted factors at work that arise from fundamental structural changes in our economy. For example, there has been a long-term decline in the demand for heavy bulk goods, such as coal, which are particularly suited to rail shipment. The growth areas in our economy have generally been in the lighter industries, in the commercial and retail sectors as well as in warehousing. Thus, in any discussion of
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  heavy lorry traffic we need to acknowledge the interdependence between our present-day industrial, commercial and trading activities—on which the wealth of our nation is founded—and our efficient, competitive road freight industry.
  My hon. Friend the Member for Richmond stressed that we should also be keenly aware of the other side of the lorry transport phenomenon. No one in the past three and a half months has been more aware than I of the changes that have been taking place, and their effect on people, society and the environment. The tremendous growth in goods shipment by roads, which has nearly quadrupled in the past 30 years, has not been achieved without cost to society, and to our environment.
  Unfortunately, although the benefits of efficient freight transport are spread across the whole of society, the costs are less evenly distributed. The situation in my hon. Friend's constituency provides ample proof of that. Some people and places are much more affected by heavy lorry traffic. Those communities that are adjacent to the South Circular are especially affected, but most affected of all is the London borough of Richmond. The Armitage report, commissioned by this Government, was asked to
  "consider the causes and consequences of the growth in the movement of freight by road and, in particular, of the impact of the lorry on people and their environment; and to report on how best to ensure that future development serves the public interest".
  "Serves the public interest" are the crucial words, not only for that report but for the Government, in weighing the balance of benefits to our economy and standard of living against the price being paid by the community in
  their homes.
  I shall deal first with the controversial question of increased weights. Sir Arthur Armitage concluded that, subject to certain limitations and safeguards, the balance of advantage lay in higher weights. The consignors of goods are in no doubt about the potential savings in lorry journeys and hence in the size of lorry fleets. That is why they want a higher payload. I have said that the volume of goods shipped by road, measured in freight-tonne miles, nearly quadrupled between 1950 and 1980. Over about the same period, the total number of lorries over 1½ tonnes unladen weight increased by just 13 per cent., whilst lorry traffic in vehicle miles fell from 27 per cent. to 8 per cent. as a proportion of all motor traffic. That was made possible only by the move to larger lorries with bigger payloads.
  We might consider what conditions on our roads would be like had we kept to the weight limit before 1955 of 24½ tonnes instead of moving to the current limit of 32½ tonnes. There would be many more lorries on our roads.
  Against that background, my colleagues and I have to find the balance that best serves that public interest. That is why we have to bring forward a whole package of measures for heavy lorry traffic. We shall improve and enforce higher safety standards for lorries. We shall reduce the noise and disturbance and wherever possible take lorry traffic away from densely populated areas. An increase in lorry weights is only part of this far wider package. The dimensions of lorries are not to be further increased, but we must have strict limits on axle loadings and configurations to avoid further road damage. That is part of the package. In making our lorries safer, we shall require the fitment of sideguards—which my hon. Friend mentioned—to protect pedestrians and cyclists. We shall

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  also require the fitment of rear under-run protection to reduce the severity of accidents involving rear-end collisions.
  Those of us who travel on motorways and on fast roads that have heavy lorries know of the public concern about the hazards caused by heavy spray from lorry tyres on wet roads. However, we are developing a British standard for effective spray suppression equipment to be fitted to lorries. From October, we shall ensure that lorries have to meet the higher braking standards that we have announced. I hope that my hon. Friend will realise that we are determined to enforce those measures as well as the weight and loading standards.
  My hon. Friend spoke of the need to weigh lorries on entry, into Britain and after they have picked up their payloads. This year, we are spending nearly double last year's expenditure on installing the new, dynamic weighbridges. Lorries drive slowly on to the bridges so that not only the total payload, but the weight per axle will be measured. By the use of computers, we can judge not only whether the lorry as a whole is overloaded, but whether—even if the whole lorry is not overloaded—that lorry is breaking the law by having a badly distributed load across its axles. Bad distribution causes more damage to our roads than heavier lorries correctly loaded.
  To enforce the weight and loading standards, we are recruiting more traffic examiners. That is the right way to proceed. Although it means more staff, we can only hope to make lorries easier to live with by enforcing the standards. A prime source of public complaint is noise. We accept that that problem must be solved. From April 1983 the heaviest lorries will have to meet a limit of 88 decibels, which is three decibels lower than the present limit. That is only the beginning.
  We shall reduce the perceived noise from new heavy lorries to less than half of its 1981 level, so that by about 1990 new heavy lorries need be no noisier than most new 1981 model cars. That is an important advance for all those who have to have traffic passing their doors. To improve conditions in areas such as that of my hon. Friend, which are especially badly affected by lorry traffic, we are developing the concept of lorry action areas that my hon. Friend asked about. Indeed, that was 'proposed in the Armitage report. In those areas, measures such as double glazing and road resurfacing would be available to reduce the environmental impact of heavy traffic. That would help some of the residents that my hon. Friend mentioned.
  The best solution of all would be to take lorry traffic away from the unsuitable routes that pass through densely populated areas. However, I think that my hon. Friend knows that we are using our transport supplementary grant settlements to give a higher priority to trunk and local road bypass schemes. We are encouraging local authorities to bring forward such schemes. I have with me the explanatory note that was sent to all local authorities, about bids in respect of measures to provide relief in areas of severe lorry nuisance. It mentions not only the lorry action areas and the acceptance of that recommendation by the Secretary of State, but, in paragraph 3, advises councils that wish to make a bid in respect of remedial work to complete the form sent to them and to return it to the Department. It stresses that assistance will be confined to those areas where lorry nuisance is most severe and where there is no likelihood of other forms of relief in the foreseeable future. I mention that, because not all the measures about which I have spoken will be appropriate
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  for every part of the country, although those measures connected with weights, design and the construction of lorries will benefit everyone.
  I went with my hon. Friend to his constituency to see the problems a couple of months ago. I have always accepted that there is an intense problem. I go to his borough on private journeys and I am well aware of the position that he describes. It is because of such problems that we are determined to make the opportunity for the relevant highway authority—I shall return to the Greater London Council in a moment—to put in bids within its transport policies and programmes for action to help people who live in those areas.
  I want to turn to what is happening in Greater London. There is a danger that we might believe that we can relieve the problem altogether. Certainly that is not my experience of my hon. Friend's area of the South Circular Road. About 90 per cent. of all freight in London goes by road. Only 6 per cent. of freight in London is through traffic which has an origin and destination outside the Greater London area.
  My hon. Friend asked about the completion of the M25. We are looking forward to the completion of that road some four years from now. That is the complete orbital route around Greater London, which has the highest priority of all construction work in my Department. That road will provide an alternative route for traffic that does not need to go through Greater London. I stress those relative figures because the majority of lorries in Richmond go about their London business and few are capable of being diverted elsewhere. I am well aware that my hon. Friend would love us to take the pressure off not only Mortlake Road but Clifford Avenue and the bridge in Clifford Avenue. We cannot do all that he would like at present. Most of the lorry traffic on roads such as Barnes High Street, Petersham Road through Richmond itself, is engaged on everyday urban business, although there is a higher proportion of through traffic using the South Circular Road and Kew bridge.
  Three measures are being taken to ease the lorry problem in the Kew area of Richmond. The first is signposting, about which my hon. Friend asked. The second is the M25 and the third is the new lorry policy, which I have explained. With regard to signposting, in recent years the Department has meticulously examined primary route signposting between the M3 Thorpe interchange and the end of the North Circular Road at Chiswick and made changes. The aim has been to encourage the greatest possible use of the trunk roads A4, A30 and M25 in order to lessen the volume of longer distance traffic on Kew bridge, Kew Road and Great Chertsey Road. There is no practical alternative to Kew bridge for South Circular Road traffic, and the signs on that route must inevitably refer to more distant trunk roads such as the A40, M1, A3 and M23 so that continuous guidance is given to motorists seeking those roads.
  I noted what my hon. Friend said about the restriction of lorry weights on Kew bridge. I can make no promise about that. We are investigating some of the problems in different parts of cities where there is no obvious bypass possibility. I cannot give him a promise, but I shall investigate the matter.
  I mentioned a moment ago the M25, which will relieve the South Circular Road and Kew Road, perhaps by up to 5 per cent. of the present traffic flows and possibly by as much as 10 per cent. on Kew bridge, which I am sure my

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  hon. Friend will be glad to know because it will make an appreciable difference. We are pushing ahead with the completion of the M25 as fast as statutory procedures permit. The completion of the M25 in the south, which will help my hon. Friend's area perhaps even more, is probably about three years off, all being well.
  My hon. Friend asked about lorry routes. In describing our proposals for civilising the heavy lorry, I mentioned lorry routeing as part of the package. The Greater London Council has the power to impose lorry bans on certain roads and within defined areas. It has not been slow to make use of this power where it considered that this would help. However, I would be misleading the House if I was to suggest that the GLC is likely to try to downgrade the status of some of the main traffic routes in Richmond in order that lorry bans might be imposed.
  It has to be accepted that lorry restrictions on roads in the Kew area will simply throw the problem on to the adjacent areas of Twickenham and Barnes where the roads, in some cases, are even less suitable than those in Kew. It is inevitably the problem of a built-up area. Even to follow some of the suggestions that I know my hon. Friend has made and to make greater use of the A4 and the A316 presents major problems at the Hogarth roundabout, where traffic from the North Circular Road would have to make a difficult right turn and then use Burlington Lane in the approach to Chiswick bridge. The fact that much of that traffic would then need to turn left on to the South Circular Road at the monumental stonemason's at Chalker's Corner would create a further problem. I hasten to add that I have no interest in this matter. It has nothing to do with my family.
  The GLC has made some changes in the past to try to deal with the problems. Seven years ago, the council removed the primary route signs from Petersham Road and from all the A307 route between Richmond and Esher. This was done following a major improvement of the Great Chertsey Road, the A316, built some 50 years ago as a bypass to Richmond town. My hon. Friend thinks probably that it does not now bypass many of the houses in that area. This is what happens when a town was originally bypassed but development grows from the old town centre out to meet the bypass and beyond. At least, however, the A316 in the area about which I am speaking can take the sort of traffic that exists although the build-up is heavy from time to time.
  If the GLC were to follow up the improvement that it made with a lorry ban on the A307, there is a grave danger of severe adverse commercial effects on Richmond town, which it meets first, and then on Kingston for which some of the traffic is undoubtedly destined. We have a problem within a tight bend of the River Thames, where roads are taking traffic for which they were not designed. Any movement to ban heavy traffic from one of those roads results in the overloading to a considerable degree of neighbouring roads.
  The GLC, in considering the problems of Greater London as a whole, together with the City and many boroughs, has a great deal to do to control lorries. It has begun. The Government are giving it a financial incentive by encouraging the application for transport supplementary grant to try to bring about a better relationship and a better balance between heavy goods vehicles and the environment through which they have to go. In recent
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  months, a number of interesting and radical solutions have been proposed regarding transport and traffic arrangements in London. The Government are considering them. We shall also want to take stock of the report of the Select Committee on Transport, which should soon be available.
  My hon. Friend mentioned the possibility of a blanket ban by the GLC on lorries above the present maximum weight. The point of raising payloads is to ensure that the numbers of lorries on our roads is kept as low as possible. My hon. Friend will know that a sizeable number of lorries on our roads are between one-fifth and one-third full of air. That benefits no one, because the lorries travel in greater numbers than is necessary. By raising payloads, Londoners will benefit as well as people in other parts of the country, and the economy as well as businesses in the area will benefit.
  My hon. Friend raised a number of other matters. There is not the pressure of time tonight that we usually have in Adjournment debates, but I shall not test the patience of the House too far. I shall therefore bring my remarks to a close. We have already taken steps on signposting, but I accept that there may well be more that we can do. In my view, signposting is influential, particularly when drivers know that some routes are easier to traverse than others.
  I am aware that my hon. Friend feels that steps would be better taken by my Department. At least he would then have only one place to come to and complain about the problems. We shall give every encouragement to local authorities to use existing powers to protect residential and other areas from heavy traffic. We shall work out the way in which lorry action areas can bring relief to people living along roads which, because there is nowhere else for traffic to go, take a high proportion of the inter-urban and inner-urban lorry traffic.
  My hon. Friend asked me about lorry taxation based on gross weight and axle numbers. That will, I hope, be introduced from October, and I understand that heavier lorries to cover allocated road track costs will be integrated with the taxation system.
  My hon. Friend asked about safety. I hope that I have reassured him that we are fully aware of what needs to be done and what can be done, and we are getting on with it as quickly as possible.
  We have discussed many of the other improvements with the industry which runs the lorries. We have discussed them also with the people who manufacture the lorries. We are not simply waiting for the Greater London Council to make a decision, although we hope that it will respond to the invitations that it has been given. We are working with the industry and, I hope, with hon. Members to try to achieve a balance in this difficult conflict between road traffic and the environment. I assure my hon. Friend that there is no lack of understanding or sympathy on my part or on the part of my fellow Ministers at the Department. Nevertheless, we have to strike a balance between the economic demands that people in his constituency and throughout the country make on our economy, and what we can achieve, both quickly and in the longer term.
  I pledge myself to do all that I can to relieve the problems of those who live adjacent to the South Circular Road and who bear the day-to-day and night-time displeasure and inconvenience of heavy goods traffic that has nowhere else to go.
  Question put and agreed to.
  Adjourned accordingly at seventeen minutes to Ten o'clock.