Commons Sitting of 14 December 1983

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

    GINNS AND GUTTERIDGE, LEICESTER (CREMATORIUM) BILL
    Order for consideration, as amended, read.
    To be considered upon Tuesday 20 December.

Oral Answers to Questions
  TRADE AND INDUSTRY

    King's Lynn (Enterprise Agency)
    Mr. Bellinghamasked the Secretary of State for Trade and Industry whether he will assist in the establishment of a local enterprise agency in King's Lynn.
    The Under-Secretary of State for Trade and Industry (Mr. David Trippier): Yes, Sir, but the main support for the establishment of an LEA must come from private sector businesses.
    Mr. Bellingham: I thank my hon. Friend for that encouraging reply. I shall work hard with my local authority and my local chambers of trade and commerce to ensure that the project gets off the ground. It should play an important part in reducing unemployment in north-west Norfolk. Does my hon. Friend believe that local enterprise agencies have a role to play in setting up management funds under the business expansion scheme?
    Mr. Trippier: I am grateful to my hon. Friend for his kind remarks about local enterprise agencies and what he intends to do in King's Lynn. We launched the first community-based investment fund last Monday and, as I said in the debate on small firms on Friday 4 November, I am anxious that local enterprise agencies should not confine their activities purely to counselling small firms, important though that is. I should like them to act as marriage bureaux, drawing together investors within the community and attracting them to local firms under the business expansion scheme, as well as forging close links with local education colleges, to improve industry education.

    Manufacturing Industry
    Mr. Altonasked the Secretary of State for Trade and Industry if he will make a statement on the latest figures for manufacturing trade.
    Mr. Canavanasked the Secretary of State for Trade and Industry what is the United Kingdom's current balance of trade in manufactured goods; and if he will make a statement.
    Mr. Ray Powellasked the Secretary of State for Trade and Industry what estimate he now makes of the likely deficit in the United Kingdom trade in manufactures for 1983.
    The Secretary of State for Trade and Industry (Mr. Norman Tebbit): In the three months ended in October, exports of manufactures were valued at £10·2 billion and imports at £10·8 billion and the balance therefore was in deficit by £0·6 billion. Large surpluses on trade in oil and invisibles offset this, however, so that the current account as a whole was in surplus by £0·4 billion.
    Mr. Alton: Is there room for complacency on the part of the Government, bearing in mind that since 1979 there has been a reduction of 20 per cent. in the number of employees in manufacturing industry, a reduction of 14 per cent. in industrial output, and that manufacturing industry is probably in a worse state, relatively speaking, than at any time since the industrial revolution?
    Mr. Tebbit: I agree that complacency is not what we need. However, the hon. Gentleman might have made the point that the Vauxhall plant at Ellesmere Port, for example, close to his constituency, is becoming extremely successful. It is putting on a second night shift, and the chairman of the company said:
    "By the end of 1984, 65 per cent. of all Vauxhalls sold in Britain would be British built, compared with 50 per cent. at present."
    We do not want to be complacent, but if the hon. Gentleman and others would do all that they could to encourage such trends instead of, as some right hon. and hon. Gentlemen do, doing all that they can to impede them, we would make more progress.
    Mr. Canavan: Is the Secretary of State not ashamed of the fact that, according lo figures from his Department, he is heading for a record deficit of over £2,000 million in trade in manufactured goods by the end of the year, compared with surpluses of over £5,000 million in 1977 and 1978 when the Labour party was in power? The latest figures out today show a further drop in industrial production. Does industry have any future at all now that the former Secretary of State for unemployment has reappeared as the Secretary of State for de-industrialisation?
    Mr. Tebbit: The hon. Gentleman misses some of the points. We have a substantial surplus on invisibles and oils, and unless we are to have an extremely large trade surplus, which would bring its own problems, we must have deficits on some classes of goods. The hon. Gentleman does not read his Scottish newspapers. If he had read the Glasgow Herald on Monday — [Interruption.] The hon. Member for Falkirk, West (Mr. Canavan) asked the question, and if he would shut up for a moment he might hear the answer. The paper said:
    "Scottish firms making good progress in exports field. Scotland's exporters are in buoyant mood, recording the highest degree of optimism for export orders since 1979. The optimism is borne out by the Scottish Council whose first quarter trade mission next year is already almost full."
    Mr. Powell: I read the Welsh newspapers and sometimes the Scottish and English ones. I also obtain

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    facts and figures from the Library. The Library has given the information that there is a £1,220 million deficit this year. In addition, it says that 109,000 people who were in Welsh manufacturing industry have been unemployed since 1979. What will the Government do about that?
    Mr. Tebbit: The hon. Gentleman should understand that we could not conceivably remain in surplus on each category of our trade without substantial capital outflows to balance our surplus or a steadily appreciating currency. As I understand it, his party's policy is to control capital outflows and devalue the pound.
    Mr. Pawsey: Is my right hon. Friend aware that about 11 per cent. of manufacturing output goes into the motor car industry? Will he therefore take steps to improve the competitiveness of the motor car industry by reducing the car tax?
    Mr. Tebbit: I am not sure that that would be the best thing for the motor industry while still over half the buoyant demand for motor cars is satisfied by imports. When we obtain a much higher share of the home market, my hon. Friend will have a better case for saying that the tax should be cut.
    Mr. Beaumont-Dark: Does my right hon. Friend agree that manufacturing industry has gone through a difficult time, largely due to over-weak management and over-militant unions, but now that unions and management are more realistic, industry, though from a lower base, is growing on a proper tack and will continue to do so while that co-operation exists?
    Mr. Tebbit: I am sure that is so. I heard an Opposition Member ask "Where?" I have just told the House about the success of Vauxhalls. That could be put alongside the greater success of Jaguar, BL and many other companies. The trouble is that the Opposition are professionals at dragging up all the bad news and ignoring the good.
    Mr. Shore: I wish that the Secretary of State would address his mind to what is, after all, one of the most serious matters that falls within his responsibility. Does he deny that last year we had a surplus of about £2·5 billion, while this year, on current trends, it looks as though there will be a deficit of £2 billion. Can he recall any year in which a more massive adverse movement in our balance of trade has taken place? It is the first year in our history that we have had a deficit on manufactured goods. How is that adverse trend reconciled with all that the right hon. Gentleman has said about improving the competitiveness of British industry? If that is clear evidence that British industry is ceasing to be competitive in a major way, what on earth does he intend to do about it?
    Mr. Tebbit: I am afraid that the right hon. Gentleman does not listen to what is said and does not apply his mind to the basic arithmetic. Is he seriously suggesting that we could run a huge surplus on manufacturing goods—
    Mr. Shore: The Japanese do.
    Mr. Tebbit: The right hon. Gentleman must sit down and listen — on oil and invisibles and preserve our currency? The right hon. Gentleman says that the Japanese do. Is he suggesting that we adopt Japanese trading practices and wreck the world's trade structure?

    Exports
    Mr. Dubsasked the Secretary of State for Trade and Industry whether his policy of encouraging exports is limited by any non-commercial criteria.
    Mr. Tebbit: Yes, Sir.
    Mr. Dubs: Is the Minister aware that there is a firm in the midlands which manufactures and exports gang chains, leg shackles, and other such items, which are sold to countries where there are known violations of human rights and where they can be used only for the purposes of coercion, degradation and torture? Will the Minister look into this matter and see whether he can take the necessary powers to stop the export of such items?
    Mr. Tebbit: I note what the hon. Gentleman says, but I understand that the truth of the matter is not entirely established. Of course, we have to understand that while there are no international understandings on the export of such items, if this country did not export them someone else would. [Interruption.] Oh yes, indeed. If that happened, the right hon. Member for Bethnal Green and Stepney (Mr. Shore) would grumble further about our trade position.
    Mr. Hardy: Does the Secretary of State accept that a little while ago hon. Members on both sides supported my request that there should be a restraint on exporting instruments designed to confer electric shocks on people in penal institutions? Would it not therefore be consistent for the Secretary of State to take action similar to that taken by others of his colleagues in the Government?
    Mr. Tebbit: The hon. Gentleman raises a fair point. I have not excluded the possibility of taking action. I am explaining some of the problems that would arise in trying to make any action effective. We have a general block on the export of items which could be used, for example, for repression. As the hon. Gentleman knows, we take action in some cases, but sometimes it is not easy to conclude the purpose for which some items are designed.

    Telephones (Type Approval)
    Mr. Parkasked the Secretary of State for Trade and Industry how many types of telephones submitted for approval under the procedure laid down in the 1981 Act were made in the United Kingdom.
    The Under-Secretary of State for Trade and Industry (Mr. John Butcher): One hundred and twelve types of telephone have been submitted for approval under the British Telecommunications Act. These include 18 telephones supplied exclusively by British Telecom before the Act came into force. Of these 112, 56 were wholly made in the United Kingdom and 31 have more than 50 per cent. United Kingdom added value.
    Mr. Park: Will the Minister accept that the bulk of simple telephone extensions installed since liberalisation are imported models? Has he had a look—it would be particularly appropriate in the Minister's case—at the possible impact that that is having on companies such as GEC in Coventry?
    Mr. Butcher: I, too, have constituents who work for GEC in Coventry, and I am as concerned as the hon. Gentleman to see that the fortunes of that company continue to improve. There is a new dynanism in the

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    overall market for telephones. New models are coming forward and the liberalisation programme will help our manufacturers to address international markets as well. It is a matter of congratulation to GEC that it has produced the world's first single chip telephone, the IXT, which is already selling in large numbers to British Telecom.
    Mr. Robert Banks: Will my hon. Friend see what arrangements can be made to install some of these new telephones in the House? I am sure that they would be an improvement on the existing ones.
    Mr. Butcher: That is probably a matter for the Services Committee and the appropriate Select Committee. However, I share my hon. Friend's concern about the matter and I shall, indeed, look into it.
    Mr. Stott: In spite of the Under-Secretary's interesting answer to my hon. Friend the Member for Coventry, North-East (Mr. Park), can he confirm that at an early stage of the pre-liberalisation process the Government invited applications for potential suppliers of simple telephone extensions and that, of the 96 eligible applications, no fewer than 94 of the products orginated from abroad, with only two being manufactured in Britain? Is it not true that, as a consequence of liberalisation and of the privatisation that is provided for in the Bill that we shall consider later this evening the British information technology industry will suffer? The importation of telecommunications equipment is going on apace and British manufacturing industry is bound to suffer.
    Mr. Butcher: No, Sir. I cannot agree with that assertion. It is worth reporting, for example, that of the 300 liberalised items there is an average United Kingdom content of about 70 per cent. Indeed, the telephone market itself is expanding, and we take into account the United Kingdom content of those items submitted for approval to our approvals procedure.

    Industry and Education (Links)
    Mr. Burtasked the Secretary of State for Trade and Industry if he will take measures to improve links between industry and education.
    Mr. Tebbit: My Department already promotes such links, through, for example, the Schools Council industry project, the service and technology regional organisations, the British schools technology programme and other initiatives.
    Mr. Burt: My right hon. Friend will be aware that the shift in emphasis from traditional manufacturing industries to service industries has fallen particularly hard on areas such as mine, which have been centres of excellence for traditional manufacturing industry. Will he assure the House that he will bear the problems of such areas in mind when he is considering the links between industry and education? Will he pay particular attention to those important initiatives of local authorities and to the partnerships between local authorities and the Government in promoting such schemes to assist those links for industry as it is now and for the new industries of the future?
    Mr. Tebbit: I am pleased to know that there is a proposal for an ITEC in my hon. Friend's constituency. He will be aware of the new technical and vocational
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    education initiative to re-establish high standards of technical education for youngsters between 14 and 18 and of other initiatives taken by my right hon. Friends the Secretaries of State for Education and Science, and for Employment and, indeed, by the MSC. We are aware of the problems of reorientating education in our schools to ensure that youngsters receive an education suitable for the different job opportunities in the future.
    Mr. Jim Callaghan: In his endeavours to improve the links between industry and education, will the Secretary of State put pressure on his colleague the Secretary of State for Education and Science to restore the UGC cuts to Salford university, which is closely linked with and allied to industry, so that it can continue its excellent work?
    Mr. Tebbit: I am aware of the good work that has been carried out at Salford, but the hon. Gentleman will be aware that the distribution of funds is primarily a matter for the UGC and not for my right hon. Friend the Secretary of State for Education and Science. If the UGC has picked Salford to take an unfair share of the burden, that is a bone that the hon. Gentleman should pick with the UGC. I have no doubt that many right hon. and hon. Members might differ at times from the UGC about the direction in which it allocates funds. I hope that the UGC will be conscious of the need to support the universities which have had outstanding successes in the new technologies and in technical and vocational education.
    Mr. Batiste: Is my right hon. Friend aware that one of the principal difficulties in developing the links between education—particularly institutes of higher education—and industry is a lack of awareness in industry and in small businesses of precisely what is available in the universities and the institutes of higher education? Will he consider, perhaps through the medium of the British technology group, making available to the universities a small promotional budget to advertise what they can offer to industry?
    Mr. Tebbit: I take note of what my hon. Friend says. I agree that there is a need to educate business men in these matters. I should have thought that the universities would see that it is strongly in their interests to accomplish that education and would go out and get working on it themselves as part of the activities for which they are normally paid, rather than expect extra money to do what really is part of the job of every member of the staff of a university.
    Mr. Geoffrey Robinson: Is the Secretary of State aware of the excellent research programmes undertaken by the Science and Engineering Research Council? Will he have a word with the chairman of the SERC to see whether the programmes can be more closely monitored with a view to seeing how many of them—for example, those on second generation robotics — lead to industrial applications in manufacturing in the United Kingdom?
    Mr. Tebbit: Yes, the hon. Gentleman makes a good point. We try to monitor how effective research and development programmes are in getting new products on to the shelves, which is what matters. We shall not let up on that. The one point that should be made above all is that links are a two-way process. I hope that those in business, in commerce and industry, will make sure that they devote

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    some of their time to developing these things as well as expecting that schools, universities and other institutes of education and learning will do their part.

    Origin Marking
    Mr. Phillip Oppenheimasked the Secretary of State for Trade and Industry if he intends to make any additions to the list of goods which must bear a country of origin marking when displayed by a retailer.
    Mr. Trippier: I have no plans to extend the origin marking order to new products, pending a ruling from the European Court of Justice on the compatibility of the order as it stands with Community law.
    Mr. Oppenheim: I appreciate the Government's efforts to defend our origin marking regulations against the European Community, but does my hon. Friend agree that even these regulations are inadequate and exclude many household items such as crockery and almost all items of electronic business equipment, including telecommunications equipment and computers? Should not provision be made for the inclusion of these items in the regulations? Should not additional action be taken over goods assembled in this country from predominantly imported components, which are often misleadingly labelled "Made in Britain"?
    Mr. Trippier: I am grateful for my hon. Friend's early remarks. We believe that the origin marking order is compatible with our Community obligations and we shall put forward a vigorous defence in Europe. We shall have to study in some detail the case that my hon. Friend put on the other goods and products.
    Mr. Ashdown: In a previous answer the Secretary of State said that he wished to see the share of the British home market increase. Is the Minister aware that the latest figures show that the average British family spends £100 a week on consumer items and that the foreign share of that has risen under his Government to £25 a week and continues to rise? It has been calculated that if the average British family were to spend £3 a week more on British manufactured goods that would create 350,000 jobs and improve the balance of payments by £900 million. In the light of those figures, will the hon. Gentleman take this opportunity specifically to endorse the "Think British" campaign?
    Mr. Trippier: I am surprised that the hon. Gentleman did not take the time to congratulate the Government on introducing origin marking in the first place, and also that as he is the spokesman for the Liberal party he did not support the vigorous defence that we are putting up in Europe. It is because of our introduction of the origin marking order that we are encouraging people to buy British, and we shall continue to do so.
    Mr. Speaker: Order. I ask hon. Members for much shorter supplementary questions.

    Price Discounting
    Mr. Hardyasked the Secretary of State for Trade and Industry if he will refer to the Director General of Fair Trading the question of unfair price discounting to large multiple retailers.
    Mr. Trippier: It is for the Director General of Fair Trading to decide whether to initiate an investigation.
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    Since the Monopolies and Mergers Commission report was published in 1981 he has looked closely at all cases of discounting brought to his attention but so far has found no evidence to justify either a formal investigation by his office or a reference to the commission. The Director General of Fair Trading continues to keep market conditions under review.
    Mr. Hardy: Will the Minister accept that the position has deteriorated since the 1981 report, and will he consider the implications not merely for the retention of adequate retail arrangements but for the maintenance of adequate consumer choice and the long-term viability of the food processing and producing industries? Will he therefore consider whether the voluntary code of practice should be reconsidered?
    Mr. Trippier: Existing discretionary legislation offers an effective means of investigating individual cases, taking action where appropriate. The MMC's investigation took four years and was published only three years ago and I am at this stage satisfied with the present arrangements.
    Mr. Grylls: Will my hon. Friend think again and recognise that it is dangerous to shrug off the rather undesirable concentration of economic power held by the very large retailers? Will he look at this matter again, because it is difficult for the smaller retailers to compete if they pay much higher prices? How can they compete?
    Mr. Trippier: It is clear that independent retailers are at a price disadvantage when providing many goods, but they have a marked competitive advantage in a number of ways, including personal service, direct contact with customers and flexibility.
    Mr. Gould: Is it not time that the Government took some action on this important issue? Are we to assume that the Government's so-called competition policy is nothing more than an ad hoc series of decisions whose main purpose is to allow the Government's friends to pursue and exploit a market advantage to the maximum degree, irrespective of public or any other interest?
    Mr. Trippier: The Director General has considered the possibility of a code of practice for industry, as I said in answer to the hon. Member for Wentworth (Mr. Hardy), but he has doubts about its effectiveness and is concerned that such a code might lead to collective price-fixing arrangements.

    Design Training
    Mr. Woodasked the Secretary of State for Trade and Industry if he will establish closer links with educational bodies to formulate clear policy guidelines on all aspects of design training.
    Mr. Butcher: Yes, Sir. In the course of our campaign to stress the importance of design in national economic performance we have had many constructive discussions and suggestions about design education and training. We are considering these with DES, MSC and SERC.
    Mr. Wood: Is my hon. Friend satisfied that British designers' talents are being properly utilised? Does he believe that our designers are of the highest calibre?
    Mr. Butcher: I am not satisfied that British design talent is being properly utilised. Britain has a massive

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    design talent. Unfortunately, British designers are being used by foreign manufacturers. They subsequently produce excellent products, which British consumers buy. I am determined to redress that problem. I have had many representations through our "Design for Profit Campaign" and will shortly be discussing the educational aspects of that campaign with the DES.
    Mr. Eastham: Does the hon. Gentleman believe that one way to formulate clear policy would be to encourage industry to make up its mind about measurements? There is great confusion about using metric or imperial measurements. This is causing much confusion to education authorities in deciding what measurement industry leaders want provided to children. Should not industrialists say clearly to what type of measurements they will work?
    Mr. Butcher: This can be a cause for confusion, not least in our schools, but also among our employers. I share the hon. Gentleman's anxiety about the dual nature of our measurement system. This is not a question addressed specifically to designers. To a certain extent they can lead opinion about the type of measurements that they require. We have spent much time talking to industrialists and major employers of designers, not so much about this problem but about giving designers a much better role in society and about their being able to lead opinion in this matter.
    Mr. Warren: Has my hon. Friend's attention been drawn to the way in which a major British electronics company has had to go abroad to recruit qualified scientists and engineers because it cannot obtain them in this country? Does not this show the need for educational authorities in this country to be much more aware of the role that designers can play in promoting the construction and export of manufactured goods?
    Mr. Butcher: On a previous occasion I said that, to a certain extent, we operate a mismatched economy with large sections of our domestic demand satisfied by imports and not enough of our domestic manufacturing capability committed to goods for which demand is high and growing. Engineering designers, product designers and designers generally are a major weapon that can be used to address the problem of a mismatched economy.
    Mr. Williams: Is it a major blow to the Minister's objectives that United States car manufacturers operating in this country have transferred their design capability to the continent? What representations have the Government made to them to ensure that this design capability is returned to Britain?
    Mr. Butcher: Our representations on the design front are wide ranging. It is true that a number of foreign cars, including German cars, which have a high import penetration into our market, are designed by British people. We must create the opportunities for those people to come home and to get back to work again. I take the hon. Gentleman's point. In 1984, we are determined to enhance the status and the role of designers in the economic fight back.

    European Community (Import-Export)
    Dr. Roger Thomasasked the Secretary of State for Trade and Industry what percentage of the United
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    Kingdom's imports of manufactures from the European Economic Community is now covered by its exports to European Economic Community.
    Mr. Trippier: In the third quarter of this year the coverage was 66 per cent. measured on a balance of payments basis.
    Dr. Thomas: As the figures confirm our continuing deficit, does the Minister believe that we have benefited at all from a free, unprotected market for our manufacturing industry?
    Mr. Trippier: Yes, I believe that we have benefited from membership of the European Economic Community. Other EEC countries are an increasingly important market for our exporters and now take 38 per cent. of United Kingdom manufacturing exports compared with 29 per cent. in 1970.
    Mr. Dorrell: As the EEC is the largest single market in the world for manufactures, does my hon. Friend agree that it is essential to concentrate, not on cutting ourselves off from that market, but on making ourselves competitive so that we can win orders within it in open competition with the best in the world?
    Mr. Trippier: I agree with my hon. Friend. In addition, we are attracting foreign investment, especially by American and Japanese companies. They are gaining access to the European market by building factories here, bringing jobs to industry which would go elsewhere if we were not in the EEC.
    Mr. Nellist: Does the Minister agree that his figures, and the replies of the Secretary of State, show that the Government have changed Britain from the workshop of the world into the warehouse of the world? Instead of blaming the workers and low productivity, will he consider the fact that Germany, for example, invests £2·31 in manufacturing industry for every £1 that Britain invests? Does he appreciate that investment is the motive force for the production of jobs and goods?
    Mr. Trippier: I do not recall blaming the workers in any of my answers. A major plank of the hon. Gentleman's party at the general election was that Britain should withdraw from the EEC, which turned out to be Labour's biggest own goal in June. Moreover, a recent House of Lords Select Committee report shows that the vast majority of industrialists favour staying in the EEC.
    Sir Anthony Meyer: Does my hon. Friend agree that the United Kingdom traditionally has an adverse balance of trade with other advanced industrialised countries and that the coverage of imports by exports is far worse in the United States and Japan, which are the other two principal outlets?
    Mr. Trippier: That is indeed so. Imports of manufactures have been growing faster than exports for some years, not only in the EEC but throughout the world. The way to reverse that trend is to improve British industrial competitiveness both at home and overseas.
    Mr. Shore: Perhaps the Minister will stop emoting for a moment and think instead. Is he aware that his figure of 66 per cent. for the coverage by exports of British imports of manufactures from the EEC compares with 89 per cent. four years ago and 130 per cent. before Britain joined the EEC? In view of those two very different and far more

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    favourable figures, how does he reconcile the claim that Britain's industry has become ever more competitive under the Conservatives with the fact that our export-import ratio in manufacturing trade with Europe has declined so seriously and has indeed halved since we joined the Community?
    Mr. Trippier: As the right hon. Gentleman well knows, it is wrong to concentrate on one section of the current account. Oil and services must also be included. Increased exports of oil and services are inevitably accompanied by higher imports of manufactures. Despite that, however, there was a current account surplus of £1·2 billion in the first nine months of 1983.

    Regional Policy
    Mr. Marlowasked the Secretary of State for Trade and Industry when he expects to publish the White Paper on regional policy.
    Mr. Tebbit: As my hon. Friend will know, the White Paper on regional industrial development was published yesterday.
    Mr. Marlow: In as much as the taxpayer is going to be asked to provide money for industrial support, and in as much as my right hon. Friend's White Paper said that there could well be some savings under the new system, will it be possible to support industries as well as just moving jobs from region to region?
    Mr. Tebbit: As my hon. Friend knows, part of the impact of the changes that I announced yesterday will be to reduce what I call mere job shuffling. The whole strategy was designed to support industries in the past, and is now designed to support some aspects of service occupations in the future. That will make the impact more effective, especially as it is more job-related and less capital-intensive than before.
    Mr. Barron: Paragraph 9 of the White Paper published yesterday on regional policy is headed "The Government's Approach", and makes great play of the adjustment of employment opportunities by limiting wage and unit costs and labour mobility. Paragraph 12 says that labour mobility and wage costs do not interfere greatly with employment opportunities in those areas. Will the Minister accept that the free market philosophy pursued by the Government is failing? We informed the right hon. Gentleman about that and he told himself that in yesterday's White Paper. When will he do something about the criminal unemployment levels in Britain?
    Mr. Tebbit: Of course I do not accept that. The hon. Gentleman has difficulty in understanding even what is written in simple language. Perhaps I could repeat it to the hon. Gentleman and try to make the position clearer. If he will be so kind as to listen for a moment, he might just begin to understand. I said in the White Paper that, of course, labour rates and the greater mobility of labour had a part to play, but we could not expect that those two factors by themselves would answer all the problems.
    Mr. Favell: Will the Secretary of State take this opportunity to say a word about those areas, many of which are industrial and north of Watford, which are ineligible for regional aid because they have diversified, modernised and enjoy good labour relations, as did my constituency, until the National Graphical Association
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    arrived? When areas such as Stockport look a little way down the Mersey and examine the activities of other local authorities, it seems as though the prodigal son is being rewarded with a fatted calf.
    Mr. Tebbit: I entirely understand my hon. Friend's strong feelings. The costs of regional policy fall not least upon those who are not in the assisted areas, and in many cases that means those who, by their own efforts, have improved the condition of their local economies. Equally, in some cases, substantial funds are made available in areas where some of the people concerned have done their best to wreck the local economies. It is regrettable that that should happen in those areas. None the less, we have a responsibility towards the vast mass of decent people in those areas who are trying to improve the economy, are pulling their weight, and are not part of Militant Tendency operations or other such operations.
    Mr. Ryman: Will the Minister refrain from acting as a benevolent nanny to British industry and address his thinking, if thinking he does, to the real hardship being caused in the north-east of England as a result of his asinine announcement of 13 December? The substantial cutback in regional aid will inevitably lead to a foreseeable and huge increase in local unemployment. Is the Secretary of State not interested in the future of the shipbuilding and coal mining industries?
    Mr. Tebbit: Of course I am interested in the future of those industries. For example, we have put more than £140 million into subsidising the losses made at Scott Lithgow recently, and we still seem to find great difficulty in persuading the work force to get an oil rig out on time. That is the fault not of regional policy, but of both the management and men at Scott Lithgow. I do not know about benevolent nannies, but when I listen to the hon. Gentleman I sometimes think that we have a problem with malevolent ninnies.
    Mr. Bowen Wells: Does my right hon. Friend agree that he has presented to the House a typically balanced and sensitive regional policy? He recognises regional policy for what it is—a social service. Does he also agree that reorganisation of depressed areas very much depends on the co-ordination of industrial and social policy in those areas, and is the responsibility of those who live there?
    Mr. Tebbit: My hon. Friend is absolutely right. I am the first to own up to being a very balanced and sensitive chap, who has a very balanced and sensitive policy.
    Mr. Shore: According to the right hon. Gentleman, there are only two reasons for the major industrial decline that has taken place in the past four years. The first is that we apparently produce oil and export it — and on the right hon. Gentleman's logic that inevitably leads to the decline of British industry—and the second reason is the irresponsibility of British workers. Has it occurred to the right hon. Gentleman for one moment that the appalling decline in British industry coincided with the arrival of the Conservative party in power, and with the implementation of its absurd monetarist policies?
    Mr. Tebbit: Earlier I was a little puzzled when the right hon. Gentleman produced a new verb, to emote. Having listened to him, I understand what it means. I have told him what he knows to be true, but dare not admit in front of his right hon. and hon. Friends.

    Computer Industry (Support)
    Mr. Greenwayasked the Secretary of State for Trade and Industry what has been the level of Government financial support to the computer industry over each of the past five years.
    Mr. Butcher: Over the past five years £83 million of selective assistance has been provided to the information technology industry rising from £5 million in 1979–80 to £26 million in 1982–83. I have arranged for detailed figures for each of these years to be placed in the Official Report.
    Since 1981 the Government have also provided a loan guarantee for ICL. In 1981 and 1982 this stood at £200 million; it now stands at £150 million and will taper away completely by 1 April 1986.
    Mr. Greenway: Is my hon. Friend aware of the great success of the Department's computer programme in schools? One computer provided by his Department has led to 20 or 30 computers in many primary, secondary and special schools that I have visited, and to excellent programmes for pupils. However, what is the Department doing to ensure that there are job opportunities for school leavers in the industry, thus making use of the excellent added resources going into the industry, including the help given to ICL?
    Mr. Butcher: The schools programme at secondary and primary level has been a great success and I am delighted to report that the three items of equipment in the "micros in schools" programme are of British manufacture. It is also interesting to note that there has been an increase in jobs in the information technology industries. The United Kingdom is now the largest consumer of the industrial and commercial applications of integrated circuits. Those two factors together point the way to a new and burgeoning industry that is aimed at wealth creation for the United Kingdom as a whole.
    Mr. Stott: The Minister in answer to his hon. Friend mentioned the loan guarantee to ICL. I wonder whether the Minister saw The Sunday Times
    Business News of 4 December this year, in which Mr. Richard Brooks indicates that secret documents have been revealed about the fears of ICL. He goes on to say that they also warn that IBM, the world's largest computer firm, is intent on strangling ICL. Given the fact that his Government, rightly, have put a great deal of public money into ICL, it is very important that Britain continues to maintain the capacity to he able to build computers in the United Kingdom. Is his Department, therefore, monitoring the situation in ICL and will he be prepared to come to the House and make a statement if further developments take place?
    Mr. Butcher: In answer to the hon. Gentlman's first question, I should point out that ICL's future is much better than it was some two or three years ago. ICL's borrowing was 1000 per cent. of funds employed in 1981. It is now 27 per cent., and its recovery in that regard is continuing.
    On the second aspect of the hon. Gentleman's question, again this is a sensitive and relevant point. He will know that under my chairmanship a committee called Focus is anxious to produce objective standards against which no dominant supplier should be able to set de facto standards that could drive others out of business. We are anxious to
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    see that there remains a free and open market in software and hardware and we are also anxious to see, for example, that our public purchasing initiative gives genuine opportunities to ICL.
    following are the figures:

    Year

    £ million

    1978–79

    5·3

    1979–80

    9·2

    1980–81

    14·8

    1981–82

    15·6

    1982–83

    25·9

    1983–84 to date

    12·3

    Tourism
    Mr. Adleyasked the Secretary of State for Trade and Industry what responses he has received to his proposals for reorganising tourism infrastructure; and if he will make a statement.
    Mr. Butcher: The response so far to the conclusions of the tourism review has been favourable. The chairmen of the BTA and the ETB have already taken steps towards the implementation of those proposals that affect the two boards.
    Mr. Adley: I thank my hon. Friend for that reply and share the general welcome that has been given to the statement by my hon. Friend the Minister of State. Is it not a fact, however, that the full objectives that my hon. Friend and the Government presumably seek to achieve cannot really be achieved without legislation? In view of the unease felt, in Scotland particularly, about the Minister's proposals, will my hon. Friend confirm that it is not the intention, by appointing a single chairman from the BTA and ETB, in any way to reduce the role or the effectiveness of the Wales or Scottish tourist boards?
    Mr. Butcher: The House is often reluctant to bring in legislation too frequently. However, I can tell my hon. Friend that, as far as Scotland is concerned, the Tourism (Overseas Promotion) (Scotland) Bill received its Second Reading in another place on 29 November. This is intended to fulfil the Scottish manifesto commitment to extend the powers of the STB to enable it to carry out promotion overseas. The new powers are intended to supplement rather than replace the promotion of Scotland overseas by the BTA and there will be no cut in BT A's budget on that account.
    Mr. Janner: When considering proposals for the revamping of our tourist industry, will the Minister consult the Home Secretary regarding ways in which we may achieve the courteous and decent reception of visitors at ports of entry, particularly those from the Indian subcontinent? Does he accept that the present humiliation and harassment of so many visitors by so many immigration officers is bringing us into disrepute?
    Mr. Butcher: I hope that those who run our airports will ensure that there is not a shoddy reception for visitors, from whatever part of the world they come.

    Steel Industry (Privatisation))
    Mr. Flanneryasked the Secretary of State for Trade and Industry if the privatisation of the British Steel

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    Corporation under the Phoenix 2 plans is arranged so as to prevent any private monopolies in the British steel industry; and if he will make a statement.
    Mr. Butcher: It is for the companies concerned to propose a structure for Phoenix 2. If and when definite plans are drawn up, the competition implications will be considered by the Director General of Fair Trading, who will give advice to my right hon. Friend under the Fair Trading Act. Approval by the European Commission will also be required. The effects of such a merger would need to be considered in relation to the international market, where major competitors are comparable in size to the combined engineering steels operations of BSC and GKN. Subject to these considerations, the Government would welcome a proposal of this type as a means of bringing about rationalisation of capacity and privatising an area of BSC's activity which overlaps with the private sector.
    Mr. Flannery: I thank the Minister for that long and confusing answer. Will he undertake to visit what used to be the great industrial area of the east end of Sheffield and see what a desert he and his colleagues have created there, as they are doing throughout the whole of BSC? Will he note that the best parts of those industries—paid for by public money, sometimes known by Conservative Members as taxpayers' money — are being sold off at knock-down prices under Phoenix 2, so creating the ashes from which Phoenix 2 must arise? Will he look, for example, at Guest, Keen and Nettlefold and the plan in which it is engaging to become a major monopoly — [HON. MEMBERS: "Too long."]—by taking over the best parts of our industry?
    Mr. Butcher: The Phoenix 2 proposal is not yet with us. We shall examine it to see that it complies with our usual policy requirements for competition within the EC. We are anxious to see the new company, if and when it is proposed to us, attack that part of the market that is at present taken up by imports—about 15 per cent. of the market for engineering steels. We believe that a new company, if formed along the lines proposed, would be in far better shape to meet international competition, particularly that coming from the EC. As for the impact of politics on Sheffield, politicians may propose but the consumer will always dispose.

    Small Businesses
    Mr. Kirkwoodasked the Secretary of State for Trade and Industry what steps he is taking to improve Government measures to assist small businesses.
    Mr. Trippier: We are committed to building on the progress aleady made, in particular by improving and simplifying existing schemes, promoting awareness and lifting burdens.
    Mr. Kirkwood: Is the Minister aware that we have reached the point when there are now more than 100 Government devices and 160 assistance agencies for small firms? Is it not time that we returned to the more sensible proposals in the Bolton committee report, instead of tinkering with this morass of remedial measures?
    Mr. Trippier: The hon. Gentleman should not be so scathing about Conservative achievements in the small firms sphere in the past four and a half years. We will be impressed to hear that I have taken the trouble to read the Liberal SDP manifesto published prior to the general
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    election, and in it I found only five suggestions relating to small firms. Whereas some people greeted the various proposals in that manifesto with overwhelming and enthusiastic indifference, I thought that the five compared badly with the 108 measures, most of them tax measures, that have been introduced by the Conservatives in the past four and a half years. That is a record of which we are extremely proud.
    Mr. Richard Page: Does my hon. Friend agree that it is important to find out what other countries are doing to help their small businesses? If his Department is not already doing that, will it do so and publish the results? If it is doing so, will it equally publish the results so that we may see the comparison between ourselves and other countries, particularly those in the EC?
    Mr. Trippier: The conclusions made in the report to which my hon. Friend refers are nonsense. The research for the survey was conducted by the Economist Intelligence Unit, which is owned by the Economist magazine. Yet in an article in that magazine on 19 November the Economist made it clear that the data were collected by the EIU but that the conclusions were not its conclusions. It could hardly have made its views on those conclusions much clearer, as the article was headlined, "Pull the other one." I agreed with that view.
    Mr. Campbell-Savours: If small firms are to be exempt from the cost per job ceilings, as recommended in the statement yesterday, how do the Government intend to differentiate between small and large firms?
    Mr. Trippier: The definition is drawn from the Bolton committee's recommendations of 1971. It is a company that employs 200 people or fewer.
    Mr. Tracey: I congratulate the Government on the measures that they have taken to help small businesses, measures that have greatly exceeded any of the wind from the Opposition Benches. Will my hon. Friend take early steps to brief accountants, solicitors and bank managers on how to lead small business men safely to port?
    Mr. Trippier: I am grateful to my hon. Friend for bringing that matter up. As I said in the debate on small firms on Friday 4 November, there is a requirement for us to improve the quality of advice that is provided to small firms by intermediaries, particularly chartered accountants and bank managers. To facilitate what my hon. Friend is suggesting, I intend to publish a sophisticated version of the Government publication "How to make your Business Grow". It will be provided for the intermediaries. We shall make it so thick that it cannot be thrown in the waste paper basket. It should be available for small firms seeking advice. [Interruption.] I do not see why the Labour party should be laughing about what the Government have done for small firms.
    Mr. Alan Williams: Is the Minister aware that some local authorities have joined many large firms in the bad practice of not making payments on time to small businesses, thus adding to their cash flow problem. Far from feeling proud of their record, are the Government aware that they are encouraging this abuse and exacerbating the harmful effects on the small business man by maintaining exorbitantly high interest rates, double the rate prevailing in West Germany, which has the same rate of inflation as ourselves?
    Mr. Trippier: Clearly I do not agree with the last statement. The right hon. Gentleman is being unfair. In the debate on 4 November, already referred to, I made a special plea, directed at large companies, that they should pay the bills of small firms on time. It can make all the difference between survival and failure for those firms.
    Mr. Campbell-Savours: On a point of order, Mr. Speaker. In view of the objections raised last week to long replies by Ministers and your experience in the Chamber today, do you intend to intervene to protect the interests of Back Benchers?
    Mr. Speaker: I hope that the hon. Member noticed me intervening from a sedentary position.

Rate Support Grant (England)
3.31 pm
The Secretary of State for the Environment (Mr. Patrick Jenkin): With permission, Mr. Speaker, I should like to make a statement on the rate support grant settlement in England for 1984–85. The necessary order is being laid today and there will be a debate early in the new year. My right hon. Friend the Secretary of State for Wales intends to make an oral statement next week on the Welsh rate support grant settlement.
Local authority current spending forms part of the total of public expenditure. For next year, the House endorsed that total at the end of the debate following the publication of the autumn statement by my right hon. Friend the Chancellor of the Exchequer. The rate support grant report which is published today, copies of which will be in the Library, deals with three elements which bear on the level of local authority current spending. These are, first, the targets for individual authorities which, in aggregate, relate to the total figure in the autumn statement; second, the amount of and method of distributing rate support grant to local authorities; and, third, the arrangements for grant holdback for authorites which spend above target. There is, of course, a fourth element, the level of rates and precepts; these are fixed by each local authority in the light of its own spending decisions and of the impact of the other three elements.
In each of the last four years, local authority current spending has far exceeded the provision made in the public expenditure White Papers. In each RSG settlement, therefore, my predecessors have had to take account of this by increasing the provision for the following year. For instance, for the current year, 1983–84, the provision was increased this time last year by about £1·1 billion or around 6 per cent. Despite that, local authorities have still budgeted to overspend by a further £770 million, or 3·8 per cent. In the context of our policy of holding public spending in check—a policy repeatedly endorsed by this House — such substantial overspending cannot be ignored. In order to keep total public spending under control, other spending programmes have to be cut, including local authorities' own capital spending. Those who complain loudest about restrictions on capital spending are often those who have forced them on us by excessive current spending.
Of course, not all local authorities are equally to blame. On the contrary, about 80 per cent. of all authorities are budgeting this year to spend at or within 2 per cent. above target. The great bulk of the overspend arises from the decisions of the remaining 20 per cent. of authorities to spend above those levels—some of them by tens of millions of pounds. Indeed, no more than 16 authorities are responsible for about three quarters of the total overspend. As the House knows, the Government intend to deal directly with that problem of the highest overspenders in a Bill which I hope to introduce before Christmas — but that must be for another day. This statement relates to 1984–85, which of course cannot be affected by the proposed legislation.
For next year, therefore, we must sustain pressure for real reductions in local authority current spending across the board. At the same time, we must make a greater
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distinction between the majority of local authorities which have made efforts to find economies and the minority of high spenders which have not.
Since August, I have been consulting local authorities on the main proposals for next year's settlement. There have been two meetings of the Consultative Council on Local Government Finance, my hon. Friends and I have met a great many deputations from individual councils and we have received written representations from many more. As the House will see, we have taken account of some of the points raised with us in the settlement which I am announcing today. The main features are as follows.
Provision for local authority current spending for 1984–85 is £20·4 billion — an increase of over £0·5 billion on the provision made in last February's public expenditure White Paper. The aggregate of targets comes to just over that figure—£20·5 billion. This is about 3 per cent. higher than the total of targets for the current year. The basis of fixing targets remains broadly as I proposed in August. The distinction between low-spending and high-spending authorities will be much more marked next year than hitherto. The targets for most low-spending authorities represent a cash increase of 3 per cent. over their budget this year. The targets for most high spenders represent a cash cut of up to 6 per cent.
In the light of the representations since August, however, I am proposing three minor changes which will increase targets for 107 authorities. The three changes, which all operate to raise the budget base line and so increase the head room for next year, cover budgeted transfers from housing revenue account, budgeted interest receipts representing more than 10 per cent. of expenditure and expenditure more than 2 per cent. below target for 1983–84. The third change will give authorities such as Birmingham, which budget well below target, an incentive to continue to do so. Even with those changes the targets are tough for everyone but they are much tougher on the minority of high-spending authorities, where the biggest scope for economy lies.
I shall now deal with grant. Aggregate Exchequer grant for next year will be £11·9 billion—£90 million more than in the current year. It is 51·9 per cent. of total relevant expenditure as compared with 52·8 per cent. for this year. Although there are a number of technical changes in the method of distributing the grant to local authorities, they should have only a limited effect on the individual ratepayer.
The third element in the settlement is the grant holdback. As the House knows, the system is intended to reinforce the pressure of block grant by making sure that the impact of overspending falls on ratepayers to whom local authorities are accountable and not on the general body of taxpayers. For authorities which exceed their target, I confirm the pattern of holdback proposed in October. At ratepayer level, holdback will be at the rate of 2p in rate poundage terms for the first one percentage point of overspend, 4p for the second, 8p for the third and 9p for each percentage point above that.
Certain spending is disregarded—that is, it does not count against an authority's spending for the purposes of the target and holdback regime. As in this year, we shall disregard increased urban programme expenditure by partnership and programme authorities and increased expenditure on civil defence. For next year, there will be an additional disregard. I propose to disregard increased

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expenditure on those community care schemes which are jointly financed with health authorities. I hope that this relaxation will be widely welcomed by local authorities.
The House will wish to know the impact of all this on the level of rates. If local authorities budget to spend in line with the targets I have set, the average increases facing ratepayers next year should be very low. For some ratepayers, there could be rate reductions. High rates are unfair to ratepayers, damaging to industry's competitiveness and destructive of jobs. It is now up to each local authority to take its spending decisions in the light of the announcements I have made and with a clear view of the impact of those decisions upon their ratepayers.
Dr. John Cunningham: The House has just listened to a long statement that was replete with attacks upon people, their services and communities and the freedom of local government to exercise democratic choices. A number of important questions arise from it.
How will the Secretary of State explain to local authorities that the block grant for next year represents a cut in real terms of £619 million, compared with the figure for 1983–84. without acknowledging a resulting major increase in rates that will be well above the rate of inflation?
Will the Secretary of State confirm that the total of targets for 1984–85 that he has just announced will be more than £400 million below local authorities' budgets in the current year and, therefore, far below their budgets for next year?
Is it not true that, after provision for inflation, the Government are asking local authorities to cut back by £1,450 million, or almost 7 per cent. in real terms? What will the Secretary of State say to the Conservative leader of the Association of County Councils, who described those ceilings as "unachievable" and entailing
"severe cuts in budgets and services"?
Do the Government take pride in the prospect facing communities up and down the country of massive cuts in services that will affect those sections of the community least able to defend themselves—the elderly, children and young people, the disabled, the unemployed and those requiring council houses? The cuts will also affect house improvements in the public and private sectors, and provision for students in schools and colleges.
Does the Secretary of State refute the report of the expenditure groups, which predicted— I am using his figures — about 12,000 fewer teachers, 11,000 fewer residential places for the elderly and mentally handicapped, about 46,000 fewer home help visits, and 7,000 fewer police, reductions in concessionary fare schemes and fare rises above the rate of inflation?
Why has not the Secretary of State announced a supplementary report for 1982–83? What has he been doing with the local authority returns that have been held by his Department for many months? Does he admit that many local authorities were wrongfully penalised last year, and that he should hand over the money being withheld? For example, is it not the case that he owes the GLC and London's ratepayers about £100 million in grant for 1982–83? That money rightfully belongs to the people of London. Millions of pounds are owed to other councils up and down the country.
Does not the statement entail a reduction in support for areas such as south Tyneside, Hackney and Merseyside, where people are already carrying huge burdens as a result
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of the Government's policy? Is it not also true that every English county will be seriously affected by the Government's penalty system? That is what the Tory chairman of the ACC has said. As is made clear by the Secretary of State's letter of 8 December to the Prime Minister and his Cabinet colleagues, with briefing notes attached, of which I have a copy, the Secretary of State is now admitting that in real terms reductions are required from all local authorities, including those which have tried to meet targets in the past. Is not the most sinister prospect of all the anti-democratic nature of the Government's present policies and proposals for local government, which deny councillors and communities their right to choose? The stranglehold that successive Tory Ministers have placed on local authorities is to be further tightened to the point where budgets and rates will be dictated from Whitehall.
Not only do we reject and oppose today's statement, but we shall oppose the policy implications of central dictatorship that lie behind it and take the first opportunity, when in government, to free local authorities from these iniquitous restrictions and restore their constitutional freedom and rights.
Mr. Jenkin: As I have said, we shall have an opportunity to debate these matters when we discuss the rate support grant order in the new year. I shall do my best to answer the hon. Gentleman's questions. The House is entitled to know whether the hon. Gentleman supports the principle that the total of public spending is for the House to approve and for no other body—
Dr. Cunningham: The targets are impossible to achieve. Will not they mean the slashing of essential services?
Mr. Jenkin: No. The targets for next year are about 3 per cent. more than the targets for this year. That is not unreasonable in the present circumstances. Moreover, the targets are framed to put the most pressure on the highest spenders, many of which are authorities that have made no effort to reduce their spending levels. We know that there is substantial scope for making economies in such authorities without jeopardising reasonable service levels.
The hon. Gentleman asked me whether the targets represent a real terms cut. Neither the hon. Gentleman nor I can put a figure on that because it depends——
Dr. Cunningham: Why not? The right hon. Gentleman is a member of the Government.
Mr. Jenkin: The hon. Gentleman should know better. It all depends on how fast the costs of local government go up next year. Some 70 per cent. of local authorities' costs are for wages. If local government achieves low wage settlements this year, a 3 per cent. cash increase will mean only a small real terms cut. However, I do not disguise the fact that we are having to ask for economies across the board in local government and in the rest of the public sector.
The hon. Gentleman mentioned Hackney. Its problems are recognised by the Government. It is one of only three partnership authorities in London under the urban programme, which we are maintaining next year. Hackney has the highest GRE per head of any local authority in the country for social services, but one has to ask whether that justifies an increase in local authority manpower of 12·5 per cent. since 1979 compared with an average reduction

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in England of 4·3 per cent. Last year Hackney indulged in what is euphemistically called creative accounting, and in that way disguised its expenditure and minimised its holdback. Next year, Hackney's problems may well come home to roost.
The hon. Gentleman asked me about the 1982·83 supplementary report. Because the GLC hopelessly over-budgeted, there will probably be a substantial gap between its budgeting for that year and its outturn—[Interruption.] A margin of nearly £200 million between the GLC' s budget and what it spent is gross incompetence. [Interruption.] That will have to await the supplementary report for 1982–83.
There is shortly to be a timetabled debate and I think that some of the other questions of the hon. Member could be answered in the debate on the order.
Dr. Cunningham: May I remind—
Mr. Speaker: Order. Before I allow the hon. Gentleman to do so, may I remind the House that I have a duty to protect the following business, which inludes a ten-minute Bill which is to be opposed and a Bill under the timetable.
Dr. Cunningham: Will the right hon. Gentleman——
Sir William Clark: On a point of order, Mr. Speaker. I ask for your guidance. We have heard a Second Reading speech——
Mr. Speaker: Order. I fear that this will take up more time. I called the hon. Member for Copeland (Dr. Cunningham) to make a brief point.
Dr. Cunningham: As the Secretary of State's memory seems to be failing him, may I ask him to explain the words towards the end of his statement that he proposed
"to disregard increased expenditure on those community care schemes which are jointly financed".
Does that not mean that existing expenditure will not be disregarded? What will happen to authorities where time-expired schemes come up in 1984–85? Will he fund them without penalising them?
Mr. Jenkin: I meant precisely what I said. I am sorry that the hon. Gentleman should be so churlish about a concession which will be welcomed by social service authorities. Where there is local authority spending on schemes that are jointly funded by the personal social services, or local authorities, and the National Health Service, any increase—
Dr. Cunningham: Just the increase?
Mr. Jenkin: Of course, that is what I said, as with the increase in spending on urban policy and civil defence. We have added a new category of disregard, and I had hoped that the hon. Gentleman would welcome it
Several hon. Members rose—
Mr. Speaker: Order. In the light of what I have just said, and in the interests of Back Benchers and the business to follow, I propose to allow questions to run for half an hour from now.
Sir Bernard Braine: I fully sympathise with the objectives of my right hon. Friend, but I wonder why a low-spending, well-administered county such as
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Essex, which for years has kept its expenditure under control, should be penalised because of the irresponsible behaviour of high-spending local authorities.
Mr. Jenkin: Like my predecessors, I have had to make it clear that when local authority current spending is so far in excess of the provision approved by the House we have to seek savings from all authorities. I accept that that is not always wholly fair, and I look forward to my hon. Friend's support for the Bill to cap the rates of the greatest overspenders. That may enable us to deal in a rather more relaxed way with those who have been budgeting responsibly.
Mr. Brian Sedgemore: The cynical, contemptuous, inhuman and barbarous response of the Secretary of State to the problems facing the people of Hackney, which the Minister himself recognises as being the poorest borough in the kingdom, will be greeted with dismay in the local community. Is the Secretary of State aware that his statement may well ignite a fuse which will lead to disorder and the complete breakdown of local government?
Mr. Jenkin: The hon. Gentleman's extravagant language is unworthy of him. Since 1978–79 Hackney has increased its expenditure by no less than 154 per cent. That is substantially in excess of the class average for inner London authorities. As I said earlier, Hackney's problems are beginning to come home to roost. We have already recognised the conditions in Hackney through the urban programme and the highest GRE for personal services in the country.
Mr. Sedgemore: Go and live there and see what it is like. It is a disgrace.
Mr. Jenkin: The people of Hackney will object to the appallingly high rates which will be charged as a result of the council's profligacy.
Mr. Charles Morrison: Is my right hon. Friend aware that because of the demographic changes the shire counties will require an increase of 1 per cent. in expenditure to maintain services in 1984·85? If that and inflation are taken into account, a 3 per cent. increase in target expenditure must mean a cut in services, above all in the 14 most responsible counties out of 39 that are keeping to their target this year. Do the Government want a cut in services? We should be clear about that. If they do, will they give those local authorities more discretion about how to make the cuts?
Mr. Jenkin: It is Government policy to give expenditure guidance through the targets and support through the rate support grant for the totality of public spending. For the most part, we leave it entirely to local authorities to determine how they spend their money and where they make any savings necessary to keep within their public spending totals. I entirely understand the shire counties' problems, as I said to my hon. Friend the Member for Castle Point (Sir B. Braine) earlier. The Government must seek savings from all local authorities when the excess over the provision approved by the House has been so great. Again, I look forward to receiving my hon. Friend's support for the Bill designed to limit the rates of the highest spenders and so enable us to have a fairer system which will pay due regard to the needs of low-spending authorities which budget responsibly.
Mr. Simon Hughes: Does the Secretary of State accept that all authorities will have real cuts and that during the past four years there has been a 9 per cent. cut in Government grant? The effect will be to place the burden on the ratepayers. The Government have no rate reform policy. Instead of bringing two nations together, which has been the duty of the Government over the years, the Government are driving the poorer places into greater poverty with greater rates while allowing other places to become relatively more affluent. The Government are bankrupt of policy and ideas. This is a dishonest way to mislead the House, local government officers and those people who are trying to do a good job in difficult circumstances.
Mr. Jenkin: The hon. Gentleman is correct. The Government have reduced the percentage of expenditure met by rate support grant over the period, because that will increase local government's accountability to local ratepayers and maintain the pressure on local government across the board to find the necessary economies. The grant rate for the current year was reduced by over 3 per cent., but the average rate increase was the lowest for five years. There is not necessarily a correlation between the one and the other.
Mr. Robin Maxwell-Hyslop: Is my right hon. Friend aware that those of his right hon. and hon. Friends who regard the present rating system as an unjust form of taxation will be bound to vote against an order which increases the proportion of local government expenditure funded by inherently unjust taxation?
Mr. Jenkin: I am well aware of my hon. Friend's views on the subject of local authority finance, and he is, of course, entitled to his views. No Government have sought harder or more thoroughly than this Government to find an alternative system of local authority finance. As the Select Committee said, having examined the Green Paper and heard evidence about alternative forms of taxation, there is no alternative that appears to command any consensus. The Government, therefore, decided to stick to the rate system but to relieve the main problem, which is the sheer size of rates.
Mr. William O'Brien: Will the Secretary of State accept the general view of the House that this is a further attack on local government? Will he accept that what he has said today means further hardship for local government? If it is right to disregard expenditure on joint services with the health authorities, does he not accept that other services — caring services — have a similar background that should also be disregarded? Does he accept that what he has said today is a further admission that the Government have failed in their philosophy and in their promise to abolish domestic rates?
Mr. Jenkin: We recognise, of course, that the targets are tough, but, as I said several times already, the budgeted spending of local authorities is running far ahead of the amounts that have been approved by the House. In those circumstances, we must ask local authorities to make economies so as to keep the total spending in line with the total that this House approved as recently as last month. Many local authorities have shown that they can make savings by increasing efficiency, and without cutting services, and it is time that other local authorities did so.
Mr. Chris Smith: Will the Secretary of State admit that his statement that the targets will be particularly tough on high-spending authorities reveals that the targets will be set purely on political grounds and will be totally unrelated to the genuine needs of people in those communities — the elderly, children, the disabled, and those who receive local authority services? Does he admit that he will not set targets in relation to those needs but rather according to his own arbitrary criteria?
Mr. Jenkin: On the contrary, the targets reflect the needs of high-spending authorities. The target methodology is based on the GRE, and many of those authorities have assessed needs under the GRE system which reflect the real social deprivation in their areas. I have already mentioned Hackney, and it applies to a number of other authorities. However, that does not justify those authorities spending in a prolfigate way, increasing their manpower, putting huge extra burdens on the ratepayers and then claiming that it is all necessary to relieve the social problems in their areas. It is not.
Mr. Fred Silvester: Does my right hon. Friend accept that he may have made great efforts to reform the rates but that he has failed to do so? It is surely wholly illogical to argue that a tax which we argued was thoroughly unsatisfactory and unfair should now carry a higher proportion of the burden. Does he accept that that is a totally unsatisfactory response?
Mr. Jenkin: I hope that my hon. Friend took comfort from the fact that the reduction in the proportion of expenditure met by grant is significantly smaller than the reductions that took place in recent years—indeed, it is less than 1 per cent. My hon. Friend will, I think., know that when that figure was put forward for consultation, it was greeted with some satisfaction by authorities which had been expecting a significantly bigger reduction in the proportion met by grant.
Mr. Barry Sheerman: On a point of order, Mr. Speaker.
Mr. Speaker: Well, points of order take time out of the question period. May we take it at the end?
Mr. Sheerman: In the interests of balance, Mr. Speaker, could you find someone on either side of the House to support the Minister?
Mr. Speaker: That is exactly what I feared.
Mr. John Evans: Will the Secretary of State confirm that, as a direct result of his statement, the people of St. Helens can look forward, in 1984, to substantially increased rates, substantially reduced services and substantially increased unemployment?
Mr. Jenkin: These are decisions that the local authority in St. Helens, which I know faces formidable problems because it is part of my Merseyside responsibilities, must face. It now has the facts on the basis on which it can draw up its budget and make its decisions for next year.
Sir Anthony Grant: Is my right hon. Friend aware that councils such as Cambridgeshire, which over the years have exercised prudent financial control and have directly suffered in the

1003
RSG award as a result, nevertheless wholly agree with the need to curb the loony councils? Can my right hon. Friend, therefore, give a clear assurance that his rate-capping legislation will be directed to that end, and that as a result it will benefit responsible councils such as Cambridgeshire?
Mr. Jenkin: I am well aware of the problems of Cambridgeshire. The county is one of those whose target is on the maximum of budget plus 3 per cent. Moreover, its target is based on its GRE. For that reason, despite the fact that in the current year it had budgeted 2 per cent. over target, it still gets the maximum for next year of the 3 per cent. uplift on this year's budget. I am aware of the problems, and I can assure my hon. Friend that Cambridgeshire is exactly the kind of low-spending, economical and efficient authority that stands to gain once we have it in our power to curb the spending of what he referred to as the loony authorities.
Mr. John Mc William: Will the Minister tell the House what advice he will give it when he hears from his right hon. Friend the Secretary of State for Education and Science that his inspectors are finding that local authorities are unable to provide under the Act because of the cuts that are being imposed in the order? Will he explain what will happen in Gateshead, an authority that was threatened in such a way just two years ago and which, as a result of the order, will have to cut by at least 4p in the pound to meet his requirements, but will not be able to meet the requirements of the Secretary of State for Education and Science?
Mr. Jenkin: As I think the hon. Gentleman knows, many authorities have found effective ways to cope with cuts in education without restricting services. Perhaps I might quote what the Audit Commission said recently, in its handbook "Economy, Efficiency and Effectiveness", on the subject of further education. It said:
"Many previous studies have shown that there are often significant opportunities to increase the number of students and reduce costs without adverse effects on the quality of education"
It went on:
"The studies have shown wide and inexplicable differences in the ratios of non-teaching staff to students and there is repeated evidence of opportunities to reduce other overhead costs".
I hope that authorities will take those opportunities.
Mrs. Angela Rumbold: Although I understand my right hon. Friend's need to contain local authority expenditure within the public expenditure limits, may I ask him to say whether, if the 16 profligate authorities had not been so profligate, the remaining 140 or so authorities might have had a more flexible rate support settlement this year?
Mr. Jenkin: My hon. Friend is quite right. If we did not face the massive overspend by the 20 per cent. of authorities which are spending miles above their targets, we would not have had to seek the savings that we do across the board. I look forward to my hon. Friend's support for our legislation to cap the spending of the highest spending authorities.
Mr. Allan Roberts: Will the Minister finally admit that this rate support grant settlement is not an attack on overspending authorities but an attack on those in need of the services provided by local authorities throughout the
1004
country, and that it is a worthy Christmas present from this Government to those in need? Does he accept that if Charles Dickens were alive today, he would say that Tory fact is stranger than even his fiction? What advice would he give to those authorities that will go bankrupt as a result of the Government's cuts in rate support grant?
Mr. Jenkin: I hope that no authority will be so silly as to do that. There are plenty of authorities, with majority parties of all political persuasions, which have responsibly and effectively faced the task of living within their targets. Such authorities form 80 per cent. of the whole, and they include Labour-controlled authorities, many of which have the problems to which the hon. Gentleman referred. They have budgeted responsibly and kept their spending within the targets. They will not lose rate support grant as a result. I hope that more will follow their example.
Mr. Peter Thurnham: Will my right hon. Friend confirm that the purpose of his measures is to control a small number of high-spending Labour authorities and that the majority of responsible and moderate authorities should welcome the forthcoming Bill for that very reason?
Mr. Jenkin: I am grateful to my hon. Friend for his remarks. It is a case that I have been trying to make to the local authority associations.
Mr. Ron Leighton: Is it not true to say that rates as a percentage of national income have fallen while Government expenditure has increased? As the Government are cutting the rate support grant, does that not really mean that they are financing Government expenditure by rates rather than by taxes?
Mr. Jenkin: The hon. Gentleman has got it all wrong. Those comparisons are hardly relevant. The Government have had to finance through the social security budget an increasing number of elderly people while local government is now having to educate substantially fewer children because of falling school rolls. In those circumstances, one might reasonably have expected to see local authority current spending falling instead of rising. It is in order to bring pressure on authorities to keep their spending under control that my predecessors devised the system of target and holdback.
Mr. Tim Rathbone: Does my right hon. Friend accept that on the Conservative Benches and in the country there will be a general welcome for the increased disregard for jointly financed schemes, which are important to many groups of people who need most help from local authorities? Has he had any conversations with the Opposition spokesman as to what limit he would have set on local authority spending, as he said, when interviewed on radio earlier this week, he would have set a limit?
Mr. Jenkin: Perhaps the Opposition spokesman will tell us in the debate next January whether he still subscribes to the view expressed in a circular of the last Labour Government that
"local authorities will know that the present economic situation makes it imperative that the Government's plans for public expenditure are not exceeded."
That is what the Labour Government said when they were in office.
I am grateful for my hon. Friend's welcome for the disregard for increases in joint-funded expenditure.
Mr. Robert Parry: The Secretary of State will be aware of the massive support given last year to the Liverpool Labour party in the local elections. The Labour council is now trying to sort out the shocking mess that was left by the Tory-Liberal coalition. If the city council does not keep within the Government's targets and the Minister sends in commissioners, he will be acting like a gauleiter or a commissar.
Mr. Jenkin: As I have said many times, I have no power to send in commissioners. Perhaps the hon. Gentleman could convey to his friends in the majority group on the Liverpool city council that I hope that they are taking the most careful legal advice before they go down the path on which they appear to have embarked.
Mr. Nicholas Winterton: Does my right hon. Friend accept that his announcement this afternoon completely ignores the sacrifice and responsibility of those many local authorities, such as the Macclesfield borough council, which have met the requests of successive Governments, have dipped into balances and have kept their rates low? In the debate which is to be held in January next year, will he introduce some flexibility so that the points made by Conservative Members will be met and that those authorities that have been responsible will not be further penalised in the future?
Mr. Jenkin: I must point out to my hon. Friend that the differentiation between the targets we are setting for high-spending authorities and those which have budgeted responsibly is wider in this rate support settlement than ever before.
Mr. Maxwell-Hyslop: It still penalises low spenders.
Mr. Jenkin: That is because we must ask for savings from all authorities in view of the massive excess of current spending over the sums approved by the House. That is the reason, and I hope that my hon. Friend the Member for Macclesfield (Mr. Winterton) will recognise that we have made an effort to be fairer, as many of my hon. Friends have sought, in widening this differentiation.
Mr. D. N. Campbell-Savours: Is the Secretary of State aware that when Labour took control of Cumbria county council in 1980 we inherited £1 million in balances from the Tories which we have converted into £10 million today as a result of prudent housekeeping? If it were not for those balances, in order to meet the Government's targets we would have to sack 1,000 people. Is that really the Government's intention? Should not the Secretary of State congratulate the Labour-controlled Cumbria county council on good housekeeping and on avoiding the Government's ravages.
Mr. Jenkin: I had the pleasure of visiting Cumbria with the hon. Gentleman only last week. I saw something of what the county council is doing in the reclamation of west Cumbria. I expressed my praise for that. We did not get involved in the subject of the county council's spending. Cumbria is now one of the highest-spending shire counties and it is not unreasonable that it should be asked to make economies which will keep its spending within the reasonable target which we have set.
Mr. Peter Bottomley: Does my right hon. Friend accept that a number of ratepayers in my
1006
constituency suffer under at least three of the high-spending Labour councils — the GLC, ILEA and Greenwich — and that they look forward to getting effective control over the high rates, which have more than trebled in the last four increases, and to great support for the rate-capping proposals so that jobs can be created outside the county councils and ratepayers can afford to live within their areas?
Mr. Jenkin: Greenwich has a bad record, with a 113·6 per cent. increase in expenditure since 1978–79 against an increase in local authority costs of less than 80 per cent. Its rates have increased in the past three years by no less than 77 per cent. There must be businesses in my lion. Friend's constituency which have gone bust as a result of that. I am grateful for my hon. Friend's support for our legislation.
Dr. Oonagh McDonald: Is the right hon. Gentleman aware that, even on current levels of spending, Essex is spending far too little on education and that the Secretary of State for Education and Science has advised Essex to spend more? Why has the right hon. Gentleman ignored the advice of his Cabinet colleague and the pleas of all his right hon. and hon. Friends representing Essex for more money to be made available for the county?
Mr. Jenkin: Education in Essex is a matter for my right hon. Friend the Secretary of State for Education and Science. The Essex authority has made its view clear to the Government. We have taken account in the statement of the representations made to us. The authority in Essex has a number of problems, but it also has a great deal going for it. I think it will find on reflection, particularly with the modifications I have announced in the settlement, that it is really quite a fair settlement.
Mr. Anthony Beaumont-Dark: Does my right hon. Friend still think that there is a need to make councils into elected quangos? We now have the bludgeon of the rate settlements, which work out to be tremendously unfair. Does he really think that making councils elected quangos is not telling people that rates will be able to fall more than they really are? Is he not making a rod for his own back as well as taking away democracy from people who have elected to serve?
Mr. Jenkin: Perhaps the arguments on the merits of the proposed legislation are for another occasion. I think that my hon. Friend is using, if I may say so, extravagant language in suggesting that a local authority whose expenditure will be subject to a cash limit is being turned into a quango. It will remain elected and it will have a wide measure of discretion about how it spends the money available to it. Those who argue that this is the end of local government are taking it too far.
Mr. Derek Foster: Is the Secretary of State aware that, by his hysterical attempts to control the expenditure of a few local authorities, he has brought us to the threshold of constitutional crisis, which is deeply worrying to many hon. Members on his own side? In a country that is already over-centralised, is he not in danger of sweeping away the last vestige of local democracy? In an area such as Durham, which has high unemployment and increasing poverty, he will be cutting back services for those who can afford it least.
Mr. Jenkin: The argument about a constitutional crisis is absurd because for years all authorities have followed

1007
the convention that spending should remain within the total approved by the House. We are now faced with a minority of local authorities that have cast that convention to the winds, and in these circumstances the Government have a duty to legislate.
Mr. John Maples: Does my right hon. Friend agree that many local authorities could make substantial savings without affecting services by a combination of better management and the elimination of frivolous political expenditure? Is he aware that in my authority, one of the bad 16, we not only employ a borough artist but we spend £130,000 a year on sexism awareness training?
Mr. Jenkin: My hon. Friend has given examples of the kind of spending by some high-spending authorities that has brought local government into disrepute and has been widely condemned by many, even by those who call themselves Labour supporters. It is possible to make efficiency savings and I commend to the House the Audit Commission's handbook, which points to a whole range of measures available to local authorities to save costs.
Mr. David Penhaligon: Will the Minister confirm his view that the GRE represents the real social needs of a local authority? If that is so, why was Cornwall fined £800,000 last year when it is the second lowest-spending county authority in the United Kingdom and way below the GRE? Why is he looking for further cuts this year despite Cornwall's clear underspending record?
Mr. Jenkin: GREs have never been seen as targets. They are a notional assessment of the cost of providing common standards of service, which is made for the purpose of distributing the block grant.
Mr. Penhaligon: Cornwall is 6 per cent. below that.
Mr. Jenkin: The basic methodology for fixing the targets starts with the higher of the GRE and the target for this year so that the comparison is based on the GRE for this purpose. [Interruption.] The hon. Member for Truro (Mr. Penhaligon) keeps waving his hands while I am seeking to answer his question. The fact is that the aggregate of the targets has to add up roughly to the figure for total current expenditure in the autumn statement. Cornwall is in the same position as many other authorities which, although low spending, have been asked to make savings so that we can hope to claw back the figures nearer to what the House has approved.
Mr. Andrew Rowe: Does my right hon. Friend agree that the only sensible alternative to controlling the high-spending authorities is to reduce the number of functions over which local government has
1008
direct control? Does he accept that on that premise he will receive the reluctant support of a number of his anxious hon. Friends, provided that he will also assure us that frugal authorities will have to tighten their belts for only a comparatively short time?
Mr. Jenkin: I hope that I can give my hon. Friend that assurance.
Mr. Eric S. Heifer: The right hon. Gentleman has responsibility for Merseyside, as he is supposedly the Merseyside Minister. How can he honestly say that the Merseyside local authorities, and Liverpool in particular, are overspending local authorities when there is great social need in that area because of the high levels of unemployment, the poverty and deprivation, and the terrible conditions that masses of our people live in? How can the right hon. Gentleman say that an area such as Merseyside has overspent? Is it not clear that once again, according to the figures in the document issued through the Vote Office, that area is being hammered? It cannot possibly reach the suggested targets, and whether the right hon. Gentleman likes it or not he is storing up a great deal of trouble that could be avoided and that he should go out of his way to avoid in order to deal with the social needs of the area.
Mr. Jenkin: The hon. Gentleman may be aware that I answered a parliamentary question the other day about the substantial—running into hundreds of millions of pounds — Government aid that has been given to Merseyside in the past two or three years, far more than has been given to any other part of the country. That is as a result of the Government's recognition of the problems of Merseyside. That does not absolve the local authorities on Merseyside from seeking to budget sensibly, economically and efficiently to try to live within the targets, which take account of the social needs of the area.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 20 JANUARY
Members successful in the ballot were:

Mr. Christopher Hawkins

Mr. Derek Fatchett

Mr. Cyril D. Townsend

BILL PRESENTED
  FREE NEWSPAPERS (RESTRICTION OF DELIVERY)
  Mr. Andrew F. Bennett presented a Bill to enable persons who do not want them to be relieved of deliveries of free newspapers: And the same was read the First time; and ordered to be read a Second time upon Friday 16 March and to be printed. [Bill 75.]

Scottish Parliament
4.26 pm
Mr Archy Kirkwood: I beg to move,
That leave be given to bring in a Bill to set up a Scottish Parliament; and for connected purposes.
The provisions of the measure would establish a devolved system of government effected by a Parliament based in Edinburgh within the context of a federal system in the United Kingdom as a whole. Governance of Britain would benefit by the setting up of political, legislative and administrative machinery north of the border more in line with the needs and aspirations of the Scottish people, and at the same time, retaining bonds and ties that have been built up between Scotland and the other constituent parts of the United Kingdom over the centuries of social and commercial intercourse.
To succeed, a Scottish Parliament would need to be real, fair and efficient, and to be seen to be so. To be real, the Parliament would need to be able to raise taxes and to disburse expenditure. Political authority would be impossible if no such financial provision were granted. To be fair, the Parliament would require to be elected by some system of proportional representation. The present mismatch between votes and seats in this place is indefensible and would be seen to be so in any body set up. To be efficient, the new Parliament would need to preside over a much slimmer local authority bureaucracy. The 1973 reform has been found wanting in many respects. It has not been a success and the relationship between the new Parliament, the Scottish Office and regional and district councils would be recast to make the system financially tighter and more accountable to the electorate.
To provide for future development, the new Parliament should be given residual legislative competence. For those who do not understand English, that means that it should have the power to legislate in some matters that, prima facie, have not been devolved. A system of judicial review would be required to decide any question of vires in the event of any dispute, but, to enable that devolution to take place as smoothly as possible, the Bill would restrict the powers of competence in the federal Parliament to matters relating to the Crown, defence of the realm, crimes of treason, treaties with foreign states, and nationality. The devolved powers could then emerge with no other reservations. Any other system would create extremely serious problems for the coherence of the Parliament's legislative programme.
Drawn in these terms, the Bill could possibly be described as maximalist. It seeks to achieve the greatest degree of decentralisation of political and administrative power consistent with the integrity of the United Kingdom. I accept that hon. Members in other parties may have difficulty in accepting the Bill in those terms, especially details such as proportional representation.
The Bill provides an opportunity to test the opinion of the new Parliament on the principle of home rule. The details of the scheme are open to negotiation and discussion across party lines. My hon. Friend the Member for Gordon (Mr. Bruce) has taken the initiative of contacting the chairmen of all recognised parties north of the border. Political parties will sell the principle of home
1010
rule short if they seek to monopolise the issue. We should meet to seek all-party agreement in whatever areas we can. That would be a positive way in which to proceed.
The dust and the heat of the June election have subsided. Now is the time to start laying solid foundations for much-needed and thoroughgoing reforms. Even if it takes 10 years to achieve those reforms they will still have been worth waiting for if we have made use of the time now available to work out the details properly.
The legislative system in the House does not allow Back Benchers to discharge their duties effectively. It is not possible to scrutinise the Government's legislative programme to any significant extent. That is due in pan to the volume of business visited on Members of both Houses, in part to the way that central Government have assumed and arrogated to themselves powers that they had no right to assume, and in part to the piecemeal way in which we have allowed the constitution to be reformed without any long-term or deep thought being given to the process.
Imaginative and radical reforms are required to make the system more responsive, accountable and efficient. Transacting Scottish business four or five times a year in the Scottish Grand Committee in Edinburgh is a futile and empty gesture of little substance. We must push real power and responsibility away from the House to the lowest level consistent with efficient administration, giving ordinary people a greater stake in determining the decisions that affect their lives.
I seek to introduce the Bill as a positive contribution to the debate on home rule. I do so not for any party political, nationalist or chauvinistic reasons, but because we need to stimulate the democratic process and overhaul of the entire system of government. This is an important measure for the Scottish people and it is also in the long-term interests of the United Kingdom.
4.33 pm
Mr. Gerald Malone: If the Bill has the misfortune to be accepted, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) is likely to find out that 10 years is a long time in politics. I oppose this measure for a number of reasons. The hon. Gentleman suggests that it will introduce a parliament that will be "real, fair and efficient" and that the Bill could be described as "maximalist". Judging by his proposals, this will be a complicated measure and will do much to complicate the procedure of government in Scotland and nothing to simplify and streamline it.
The hon. Member for Roxburgh and Berwickshire failed to make the case to prove that the measure is necessary. I suggest that it certainly is not necessary. Over the years, the issue of devolution, home rule or whatever it is called has been debated long and hard in Scotland and it has been emphatically rejected by the Scottish people. In 1979 it was rejected in the Scottish referendum when 36 per cent. of Scottish people did not bother to vote and 31 per cent. voted against devolution. As the Labour party said then, a vote at home was a vote against. Therefore, in 1979, 67 per cent. of Scottish people were against devolution. The Scottish National party argument shows the extent to which home rule is not wanted in Scotland because that party's share of the vote in Scotland declined between 1974 and June 1983 from 30 per cent. to 11 per cent. The measure proposed by the hon. Member for Roxburgh and Berwickshire in his ten-minute Bill is

1011
almost exactly the type of independence that the Scottish National party has been advocating for years in elections in Scotland.
Behind this measure is the lie that Scotland is not well served by the present system. It is worth pointing out that Scotland does better than most other areas of the United Kingdom, as shown by any indicator of Government expenditure in Scotland. Scotland has a Secretary of State in the Cabinet, and I believe that we would give up that advantage if a Scottish Parliament were implemented in any shape or form. Scotland does better on health expenditure, education and regional aid than any other area of the United Kingdom. To suggest that Scotland is not doing well is nonsense, so why do we need a Scottish Parliament? All those advantages contribute to the welfare of Scotland, and a Scottish parliament would do away with many of those advantages.
Part of the strength of the United Kingdom is that it is represented in the House and its power is not derogated by any other Parliament. I am afraid that the hon. Gentleman proposes a Parliament that will be a focal point in Scotland for an interest that will be against the Union, and I cannot support that. I believe that such a Parliament would mean the eventual breakup of the United Kingdom and the power of the House would be reduced. For those reasons I oppose the Bill.
Question put, pursuant to Standing Order No. 15 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—
The House proceeded to a Division—
Mr. Gordon Wilson: On a point of order, Mr. Speaker. With the temporary headcover of an Order Paper, may I ask you to make a ruling about the method by which the vote will be taken? [Interruption.] Now that a top hat has been provided, the hon. Member for Falkirk, West (Mr. Canavan) is right to say that I look like an English toff, but without it I cannot proceed with my point of order.
The Bill relates to the constitution of a Scottish Parliament. I therefore put it to you, Mr. Speaker, that the vote should be restricted to Scottish Members in view of the democratic mandate that they received in the general election and the fact that 72 per cent. of the Scottish electorate voted for parties which included in their policies a parliament of some sort for Scotland. Against that background, I ask you to make a ruling to show that this Parliament is not the English Parliament continuing, as one of your predecessors said, after the Union.
Mr. Speaker: I must tell the hon. Gentleman that I have no power to direct or guide the vote of any Member in the House.
Mr. Andrew Faulds: On a point of order, Mr. Speaker. You have greatly disappointed me, Sir. I had hoped that you would allow Members of Scottish descent to vote on this issue and exclude the Sassenachs.
Mr. Speaker: I cannot give the hon. Gentleman that assurance.
The House having divided: Ayes 111, Noes 244.

Division No. 97]

[4.36 pm

AYES

Adams, Allen (Paisley N)

Lloyd, Tony (Stretford)

Alton, David

Lofthouse, Geoffrey

Archer, Rt Hon Peter

Loyden, Edward

Atkinson, N. (Tottenham)

McCartney, Hugh

Banks, Tony (Newham NW)

McKelvey, William

Barron, Kevin

Maclennan, Robert

Bennett, A. (Dent'n & Red'sh)

McNamara, Kevin

Bidwell, Sydney

McTaggart, Robert

Boothroyd, Miss Betty

Marek, Dr John

Boyes, Roland

Martin, Michael

Brown, Gordon (D'f'mline E)

Maxton, John

Brown, Hugh D. (Provan)

Meacher, Michael

Brown, Ron (E'burgh, Leith)

Meadowcroft, Michael

Bruce, Malcolm

Mikardo, Ian

Callaghan, Jim (Heyw'd & M)

Millan, Rt Hon Bruce

Campbell-Savours, Dale

Miller, Dr M. S. (E Kilbride)

Canavan, Dennis

Morris, Rt Hon A. (W'shawe)

Clark, Dr David (S Shields)

Morris, Rt Hon J. (Aberavon)

Clarke, Thomas

Neliist, David

Cocks, Rt Hon M. (Bristol S.)

Neill, Martin

Concannon, Rt Hon J. D.

Owen, Rt Hon Dr David

Cook, Frank (Stockton North)

Parry, Robert

Cook, Robin F. (Livingston)

Pavitt, Laurie

Craigen, J. M.

Penhaligon, David

Cunliffe, Lawrence

Pike, Peter

Davies, Rt Hon Denzil (L'lli)

Powell, Raymond (Ogmore)

Davies, Ronald (Caerphilly)

Prescott, John

Deakins, Eric

Radice, Giles

Dewar, Donald

Randall, Stuart

Douglas, Dick

Richardson, Ms Jo

Eadie, Alex

Roberts, Ernest (Hackney N)

Eastham, Ken

Robertson, George

Edwards, R. (W'hampt'n SE)

Ross, Ernest (Dundee W)

Faulds, Andrew

Ross, Stephen (Isle of Wight)

Fields, T. (L'pool Broad Gn)

Sedgemore, Brian

Fisher, Mark

Sheerman, Barry

Flannery, Martin

Shore, Rt Hon Peter

Foot, Rt Hon Michael

Skinner, Dennis

Foulkes, George

Smith, C.(Isl'ton S & F'bury)

Godman, Dr Norman

Snape, Peter

Golding, John

Steel, Rt Hon David

Hardy, Peter

Stewart, Rt Hon D. (W Isles)

Harrison, Rt Hon Walter

Strang, Gavin

Hart, Rt Hon Dame Judith

Thomas, Dafydd (Merioneth)

Hattersley, Rt Hon Roy

Thorne, Stan (Preston)

Hogg, N. (C'nauld & Kilsyth)

Torney, Tom

Home Robertson, John

Wallace, James

Howells, Geraint

Wardell, Gareth (Gower)

Hughes, Sean (Knowsley S)

Wareing, Robert

Hughes, Simon (Southwark)

Welsh, Michael

Johnston, Russell

Wigley, Dafydd

Kilroy-Silk, Robert

Wilson, Gordon

Kirkwood, Archibald

Winnick, David

Lamond, James

Leighton, Ronald

Tellers for the Ayes:

Lewis, Ron (Carlisle)

Mr. A. J. Beith and Mr. Charles Kennedy.

Lewis, Terence (Worsley)

Litherland, Robert

NOES

Aitken, Jonathan

Biggs-Davison, Sir John

Alexander, Richard

Blaker, Rt Hon Sir Peter

Ancram, Michael

Body, Richard

Arnold, Tom

Bonsor, Sir Nicholas

Ashby, David

Boscawen, Hon Robert

Aspinwall, Jack

Bottomley, Peter

Atkins, Rt Hon Sir H.

Bowden, Gerald (Dulwich)

Atkins, Robert (South Ribble)

Boyson, Dr Rhodes

Baker, Kenneth (Mole Valley)

Brandon-Bravo, Martin

Baker, Nicholas (N Dorset)

Bright, Graham

Banks, Robert (Harrogate)

Brinton, Tim

Batiste, Spencer

Brittan, Rt Hon Leon

Beaumont-Dark, Anthony

Brown, M. (Brigg & Cl'thpes)

Bellingham, Henry

Browne, John

Berry, Sir Anthony

Buchanan-Smith, Rt Hon A.

Best, Keith

Burt, Alistair

Biffen, Rt Hon John

Butcher, John

1013

Butler, Hon Adam

Hawkins, C. (High Peak)

Butterfill, John

Hawksley, Warren

Carlisle, John (N Luton)

Hayhoe, Barney

Carttiss, Michael

Heathcoat-Amory, David

Chapman, Sydney

Henderson, Barry

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

Heseltine, Rt Hon Michael

Clark, Dr Michael (Rochford)

Hogg, Hon Douglas (Gr'th'm)

Clark, Sir W. (Croydon S)

Holland, Sir Philip (Gedling)

Clarke Kenneth (Rushcliffe)

Hooson, Tom

Cockeram, Eric

Howarth, Alan (Stratf'd-on-A)

Colvin, Michael

Howarth, Gerald (Cannock)

Conway, Derek

Howell, Ralph (N Norfolk)

Coombs, Simon

Hubbard-Miles, Peter

Cope, John

Hunt, David (Wirral)

Cormack, Patrick

Hunter, Andrew

Corrie, John

Hurd, Rt Hon Douglas

Couchman, James

Jessel, Toby

Crouch, David

Jones, Gwilym (Cardiff N)

Currie, Mrs Edwina

Jones, Robert (W Herts)

Dickens, Geoffrey

King, Roger (B'ham N'field)

Douglas-Hamilton, Lord J.

King, Rt Hon Tom

du Cann, Rt Hon Edward

Knight, Gregory (Derby N)

Dunn, Robert

Knight, Mrs Jill (Edgbaston)

Edwards, Rt Hon N. (P'broke)

Knowles, Michael

Eggar, Tim

Lang, Ian

Evennett, David

Latham, Michael

Farr, John

Lawler, Geoffrey

Favell, Anthony

Lawrence, Ivan

Fenner, Mrs Peggy

Lawson, Rt Hon Nigel

Fletcher, Alexander

Lee, Jonn (Pendle)

Fookes, Miss Janet

Leigh, Edward (Gainsbor'gh)

Forsyth, Michael (Stirling)

Lennox-Boyd, Hon Mark

Fowler, Rt Hon Norman

Lightbown, David

Fox, Marcus

Lilley, Peter

Fraser, Peter (Angus East)

Lord, Michael

Freeman, Roger

McCurley, Mrs Anna

Fry, Peter

Macfarlane, Neil

Gale, Roger

MacKay, Andrew (Berkshire)

Galley, Roy

MacKay, John (Argyll & Bute)

Garel-Jones, Tristan

Maclean, David John.

Goodlad, Alastair

McQuarrie, Albert

Gow, Ian

Major, John

Grant, Sir Anthony

Malins, Humfrey

Greenway, Harry

Malone, Gerald

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

Maples, John

Griffiths, Peter (Portsm'th N)

Mates, Michael

Grist, Ian

Mather, Carol

Grylls, Michael

Mawhinney, Dr Brian

Gummer, John Selwyn

Maxwell-Hyslop, Robin

Hamilton, Hon A. (Epsom)

Mellor, David

Hamilton, Neil (Tatton)

Merchant, Piers

Hanley, Jeremy

Meyer, Sir Anthony

Hargreaves, Kenneth

Mills, lain (Meriden)

Harvey, Robert

Mills, Sir Peter (West Devon)

Haselhurst, Alan

Miscampbell, Norman

1014

Mitchell, David (NW Hants)

Soames, Hon Nicholas

Monro, Sir Hector

Speed, Keith

Montgomery, Fergus

Speller, Tony

Moore, John

Spence, John

Morris, M. (N'hampton, S)

Spencer, D.

Moynihan, Hon C.

Spicer, Michael (S Worcs)

Mudd, David

Stanbrook, Ivor

Neubert, Michael

Stanley, John

Nicholls, Patrick

Stern, Michael

Norris, Steven

Stevens, Lewis (Nuneaton)

Oppenheim, Philip

Stewart, Allan (Eastwood)

Ottaway, Richard

Stewart, Andrew (Sherwood)

Page, Richard (Herts SW)

Stokes, John

Parkinson, Rt Hon Cecil

Sumberg, David

Parris, Matthew

Terlezki, Stefan

Pawsey, James

Thomas, Rt Hon Peter

Peacock, Mrs Elizabeth

Thompson, Patrick (N'ich N)

Pollock, Alexander

Thorne, Neil (Ilford S)

Porter, Barry

Thornton, Malcolm

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

Thurnham, Peter

Powell, William (Corby)

Tracey, Richard

Powley, John

Trippier, David

Prentice, Rt Hon Reg

Twinn, Dr Ian

Price, Sir David

Vaughan, Dr Gerard

Prior, Rt Hon James

Viggers, Peter

Proctor, K. Harvey

Waddington, David

Raison, Rt Hon Timothy

Wakeham, Rt Hon John

Rathbone, Tim

Walden, George

Ridley, Rt Hon Nicholas

Walker, Bill (T'side N)

Ridsdale, Sir Julian

Walker, Rt Hon P. (W'cester)

Rifkind, Malcolm

Waller, Gary

Roberts, Wyn (Conwy)

Wardle, C. (Bexhill)

Robinson, Mark (N'port W)

Warren, Kenneth

Roe, Mrs Marion

Watson, John

Rossi, Sir Hugh

Watts, John

Rost, Peter

Wells, Bowen (Hertford)

Rowe, Andrew

Wells, John (Maidstone)

Rumbold, Mrs Angela

Whitfield, John

Ryder, Richard

Whitney, Raymond

Sackville, Hon Thomas

Wiggin, Jerry

Sainsbury, Hon Timothy

Wilkinson, John

Sayeed, Jonathan

Winterton, Mrs Ann

Scott, Nicholas

Winterton, Nicholas

Shaw, Giles (Pudsey)

Wolfson, Mark

Shaw, Sir Michael (Scarb')

Wood, Timothy

Shelton, William (Streatham)

Woodcock, Michael

Shepherd, Colin (Hereford)

Yeo, Tim

Shersby, Michael

Younger, Rt Hon George

Silvester, Fred

Sims, Roger

Tellers for the Noes:

Smith, Sir Dudley (Warwick)

Mr. Michael Hirst and Mr. Rob Hayward.

Smith, Tim (Beaconsfield)

Question accordingly negatived.]

TELECOMMUNICATIONS BILL (ALLOCATION OF TIME)
Ordered,
That the Report [7th December] of the Business Committee be now considered.—[Mr. Douglas Hogg.]
Report considered accordingly.
Question, That this House doth agree with the Committee in their resolution, put forthwith, pursuant to Standing Order No. 45 (Business Committee) and agreed to.
Following is the report of the Business Committee:
That the allotted days which under the Order [21st November] are given to proceedings on Consideration and Third Reading shall be allotted in the manner shown in the Table set out below and, subject to the provisions of that Order, be brought to a conclusion at the time specified in the third column of that Table.

Table

Allotted day

Timefor conclusion of proceedings

First day

New Clauses

8.00 p.m.

Amendments to Clauses 1 to 55

11.00 p.m.

Amendments to Clauses 56 to 80

—

Second day

Amendments to Clauses 56 to 80 so far as not disposed of

6.00 p.m.

Remaining Proceedings on Consideration

7.00 p.m.

Third Reading

10.00 p.m.

Orders of the Day

  Telecommunications Bill
  [1ST ALLOTTED DAY]
  As amended (in the Standing Committee), considered.
  Mr. Speaker: Before we begin the debate I draw attention to the table on page 157 of the amendment paper showing the times at which the guillotine will fall today and tomorrow. Owing to printing errors all the times listed have been misplaced and are therefore wrong. The correct version has been placed in the Vote Office. The list showing my provisional selection also shows the correct times.

  Telecommunications Bill
    New Clause 5

      ORDERS AND SCHEMES
      '(1) Any power of the Secretary of State to make an order or a scheme under this Act shall be exercisable by statutory instrument subject, except in the case of an order under section 2, 56(1) or (2), 65(2) or 94(5), to annulment in pursuance of a resolution of either House of Parliament.
      (2) Any order or scheme under this Act may make different provision with respect to different cases or descriptions of case.
      (3) This section does not apply to the power of the Secretary of State to make vesting orders under section 34 above.'.—[Mr. Butcher.]
      Brought up, read the First and Second Time, and added to the Bill.

    New Clause 6

      GRANTS AND LOANS TO PERSONS EXERCISING CERTAIN FUNCTIONS
      '(1) The Secretary of State may, with the approval of the Treasury, make grants or loans—

      (a) to persons by whom any matter falls to be determined for the purposes of any requirement imposed in pursuance of subsection (2) or (4) of section 19, 21 or 23 above; or

      (b) to persons appointed under section 24 above.

      (2) Any loans under this section shall be repaid to the Secretary of State at such times and by such methods and interest thereon shall be paid to him at such rates and at such times as he may, with the approval of the Treasury, from time to time direct.
      (3) There shall be paid out of money provided by Parliament any sums required by the Secretary of State for making grants or loans under this section.
      (4) Any sums received by the Secretary of State under subsection (3) above shall be paid into the Consolidation Fund.'.—[Mr. Butcher.]
      Brought up, read the First and Second Time, and added to the Bill.]

    New Clause 7

      SECURING COMPLIANCE WITH LICENCE CONDITIONS
      '(1) Subject to subsections (3) and (5) and section (Procedural requirements) below, where the Director is satisfied that an operator is not complying with any of the conditions of his licence, the Director shall—

      (a) by a final order make such provision as is requisite for the purpose of securing compliance with that condition; or

      (b) by a provisional order make such provision as appears to him so requisite.

      (2) Subject to subsection (3) below, where it appears to the Director that an operator is not complying with any of the

      1017
      conditions of his licence, he may by a provisional order make such provision as appears to him requisite for the purpose of securing compliance with that condition.
      (3) The Director shall not make a provisional order unless it appears to him requisite to do so.
      (4) Subject to subsection (5) and section (Procedural requiremnts) below, the Director shall confirm a provisional order with or without modifications where he is satisfied that, at the time the order was made, the provision made by the order (with any modifications) was requisite for the purpose of securing compliance with the relevant condition.
      (5) The duty imposed by subsection (1) or (4) above shall not apply where the Director gives notice that he is satisfied—

      (a) that the duties imposed on him by section 3 above preclude the making of a final or provisional order or, as the case may be, the confirmation of the provisional order; or

      (b) that the failure to comply with the relevant condition is of a trivial nature;

      and a notice under this subsection shall be given by publication in such manner as the Director considers appropriate and by sending a copy of the notice to the operator.
      (6) A final or provisional order—

      (a) shall require the operator (according to the circumstances of the case) to do, or not to do, a particular thing specified in the order;

      (b) shall take effect at the end of such period as is reasonable in all circumstances and is determined by or under the order; and

      (c) may be revoked at any time by the Director.

      (7) In this section and sections (Procedural requirements), 17 and 18 below—

      "final order" means an order under this section other than a provisional order;

      "operator" means a person who is authorised by a licence granted under section 7 above to run a telecommunication system;

      "provisional order" means an order under this section which, if not previously confirmed under subsection (4) above, will cease to have effect at the end of such period (not exceeding three months) as is determined by or under the order.'—[Mr. Butcher.]

      Brought up, read the First and Second time, and added to the Bill.]

    New Clause 8

      PROCEDURAL REQUIREMENTS
      (1) Before making a final order or confirming a provisional order, the Director shall give notice—

      (a) stating that he proposes to make or confirm the order and setting out its effect;

      (b) stating the relevant condition of the licence and the acts or omissions which, in his opinion, constitute a failure to comply with it; and

      (c) specifying the time (not being less than 28 days from the date of publication of the notice) within which representations or objections to the proposed order or confirmation of the order may be made,

      and shall consider any representations or objections which are duly made and not withdrawn.
      (2) The Director shall not make a final order, or confirm a provisional order, with modifications except with the consent of the operator or after complying with the requirements of subsection (3) below.
      (3) The said requirements are that the Director shall—

      (a)give to the operator such notice as appears to him requisite of his proposal to make or confirm the order with modifications;

      (b) specify the time (not being less than 28 days from the date of the service of the notice) within which representations or objections to the proposed modifications may be made; and

      (c)consider any representations or objections which are duly made and not withdrawn.

      (4) Before revoking a final order or a provisional order which has been confirmed, the Director shall give notice—

      (a) stating that he proposes to revoke the order and setting out its effect; and

      1018

      (b) specifying the time (not being less than 28 days) from the date of publication of the notice within which representations or objections to the proposed revocation may be made,

      and shall consider any representations or objections which are duly made and not withdrawn.
      (5) A notice under subsection (1) or (4) above shall he given by publication in such manner as the Director considers appropriate and by sending a copy of the notice to the operator.
      (6) As soon as practicable after a final order is made or a provisional order is made or confirmed, the Director shall—

      (a) publish the order in such manner as he considers appropriate for the purpose of bringing the order to the attention of any persons who may have the right to bring civil proceedings in respect of any contravention or apprehended contravention of the order; and

      (b) serve a copy of the order on the operator.'. —[Mr. Butcher.]

      Brought up, read the First and Second time, and added to the Bill.

    New Clause 1

      INDUSTRIAL ACTION
      'Nothing in this Act shall lead to employees of public telecommunications operators having less right to take industrial action than the generality of workers in other industries.'. —[Mr. Stott.]
      Brought up, and read the First time.]
      Mr. Roger Stott: I beg to move, That the clause be read a Second time.
      I wish to make it clear to the House that I have an interest in the debate, which I declare freely, in that I am sponsored as a Member of Parliament by the Post Office Engineering Union which has a more than passing interest in the Bill.
      I tender the apologies of my hon. Friend the Member for Falkirk, East (Mr. Ewing), whose absence is recognised by the Ministers.
      We have sought in the past two years to correct what is generally known and understood to be an anomaly relating to those employed by British Telecom and the Post Office as to their right to take industrial action. Regrettably, so far, throughout the long proceedings of the previous and present Bills. we have not secured a satisfactory answer from the Government or the Government's Law Officers. That was why we tabled in Committee an extensive amendment which was debated fully by my hon. Friend the Member for Falkirk. East. Regrettably, the Government saw fit not to support our efforts on that occasion. I hope, bearing in mind what I will say, that they will consider accepting the new clause.
      I shall try briefly to set out the historical background to the new clause. In November 1976 my sister union, the Union of Post Office Workers, boycotted mail to Grunwick. Doubts arose as to whether post office workers could withdraw their labour legally. The issue was not put to the test until January 1977 when the National Association for Freedom asked the Attorney-General to institute an injunction against the union about plans to boycott post and telecommunications to South Africa. The Attorney-General refused to grant the injunction, but the National Association for Freedom obtained the support of the Appeal Court, presided over by Lord Denning. The court decided that the unions were violating the Telegraph Act 1863 and issued an injunction.
      Lord Denning said that it was clearly an offence to "wilfully delay" or to interfere with telephone calls or to procure others to do so.

      1019
      However, the House of Lords decided in July 1977 that the Appeal Court had acted wrongly in granting the injunction, but the Law Lords endorsed Lord Denning's view that to black telephone calls was a criminal offence. The union's victory in the House of Lords only shielded telecommunications workers from civil injunctions. They remain just as vulnerable to criminal prosecution if they decide to withdraw their labour.
      Lord Diplock said:
      "That such conduct … would constitute a criminal offence punishable upon indictment by imprisonment or a fine is plainly beyond argument."
      Section 45 of the Telegraph Act 1863, which is the relevant section, states:
      "If any Person in the Employment of the Company — Wilfully or negligently omits or delays to transmit or deliver any Message; Or by any wilful or negligent Act or Omission prevents or delays the Transmission or Delivery of any Message".
      It is quite clear that it is an offence to interfere with telecommunications. It is equally clear that section 45 of the Telegraph Act was directed primarily to what might be termed "criminal" rather than "trade union" disruption. Only by the judicial extension of the law in 1976 and 1977 were workers challenged on taking industrial action.
      At the conclusion of the first day's hearing in the Appeal Court on the South Africa action in 1977, Lord Denning, when referring to section 45 of the Telegraph Act, noted that anyone who solicits or procures the prevention or delay of any telegraphic message is guilty at common law as an aider and abettor.
      He concluded his observations on the statutory provisions by saying:
      "Many statutes are not at all clear but those are clear beyond doubt."
      Lord Justice Lawton regarded the legal position as plain. Lord Justice Ormrod said:
      "We are dealing in this case with the plainest breach of the criminal law which it is possible to imagine and equally clearly with explicit threatened future breaches."
      The case then had a full hearing, after which further judgments were given. Lord Denning refuted the suggestion that the statutory provisions were outdated and should be regarded differently in a modern industrial context. That would be his view, given his reputation. He said:
      "Those enactments are so clear that I see no reason for anyone to require the position to be tested in the courts. If the trade union, or its officers, asked for the advice of any lawyer, the answer must have been: You cannot do it. It is contrary to the law."
      In general terms, those interpretations were endorsed by the House of Lords judgment in July 1977.
      As a result, British Telecom workers, with their colleagues in the Post Office, are in a unique position which is, above all, an anomaly—as a comparison with other public service industries shows.
      5 pm
      Under section 4 of the Conspiracy, and Protection of Property Act 1875, gas and water workers were on the same footing as telecommunications workers. They were considered guilty of a criminal offence if they did anything wilfully to deprive people of their gas or water supplies. The same applied to electricity workers under section 31 of the Electricity (Supply) Act 1919. However, those provisions relating to gas, water and electricity workers
      1020
      were repealed under schedule 9 of the Industrial Relations Act 1971. For some reason, similar provisions for telecommunications workers were not repealed then.
      Indeed, the peculiarity of the position of BT employees was even acknowledged by official industry spokesmen for the Conservative party when it was in opposition. On 17 February 1978, the hon. Member for Kingston upon Thames (Mr. Lamont), now the Minister of State, Department of Trade and Industry, said that he supported the restricted right of industrial action against the employer. He made a telling point when he said:
      "We recognise Post Office workers feel that they are in a unique position. They feel that whilst others, such as electricity workers, have the right … the Post Office workers are in an anomalous position, and I should find it difficult to argue that the Post Office workers are more like policemen than like power workers."—[Official Report, 17 February 1978; Vol. 944, c. 885.]
      In Committee, one of his colleagues, the hon. Member for Surrey, North-West (Mr. Grylls) unequivocally said:
      "we believe that it is proper for postal workers to have the right to strike against their employer."—[Official Report, Standing Committee C, 21 June 1978; c. 8.]
      I assume that the hon. Gentleman included in that not only postal workers but those employed by British Telecommunications. It is all one family.
      The question therefore arises whether British Telecom workers can take industrial action when engaged in a trade dispute with their employer. There is no doubt that BT's employees are legally prevented from indulging in "sympathy" or "secondary" action. We do not seek to challenge that. We are here concerned only with action against the employer. As we shall show, "lesser" forms of industrial action than an all-out strike are ruled out by section 45 of the 1863 Act. But what would happen if BT's employees were to institute an all-out stoppage?
      In his 1977 judgement Lord Denning suggested that industrial action against the employer by the Post Office workers might not fall foul of the law. However, he was far from categoric. He said:
      "In 1971 there was a strike in which the postal workers stopped work for several weeks. I would not be prepared to assert that this was a breach of the criminal law. It could be said that, by stopping work, they did not wilfully detain or delay the mail. It was, moreover, a trade dispute for which the union was not liable in the Civil Courts. Howsoever that may be, no action was taken in the Courts at that time to test the legality of the action."
      That phrase, "to test the legality", is important.
      During the passage through Parliament of the British Telecommunication Bill in 1981, the Government appeared to argue that the rather tentative view expressed by Lord Denning should allay the union's fears. On 30 January 1981, the Minister for Information Technology wrote to us. I think that he is familiar with the contents of his letter. He said that Lord Denning's judgment
      "points clearly to the view that the right to strike is unaffected. The law therefore, seems to be as you wish it to be."
      Similarly, on 3 March, the Attorney-General attended Standing Committee B and agreed that there was no fetter under the Telegraph Act 1863 to Post Office workers withdrawing their labour as such.
      It should be noted that the views of both Ministers were expressed in very qualified terms. Consequently, the union obtained legal advice that does not support the contention that BT workers have a clear right to withdraw their labour. The Union of Communication Workers obtained counsel's opinion in 1977 and again in 1981, which stated

      1021
      that in the event of an all-out strike, the position was, at best, too uncertain for comfort and, at worst, made it illegal for BT to contemplate such action.
      We urge the Government to reconsider the issue, because we have two conflicting legal opinions on a very serious matter. I see the Solicitor-General listening to me. I was interested to note that he indicated to the Committee that the unions had a legal right to take industrial action. However, we contend that there is some doubt about that. The last thing that we want to do is to have to test that doubt in a court of law. Thus, the position is unsatisfactory.
      We are dealing with two unions, the Union of Communication Workers and the Post Office Engineering Union, and they have a history in industrial relations that is second to none. I believe that until recently my union had had, in 90 years, only one official stoppage for one day. However, as the Minister knows, there have been one or two difficulties over Mercury. That is the sort of union that we are talking about. I am talking not about individuals who run to the barricades at the drop of a hat, but about responsible individuals who are employed by BT, and whose record in industrial relations is second to none.
      Similarly, colleagues in the Union of Communication Workers have an exemplary record. The only incident that I can recall occurred some years ago when they took official action. I think that that was in 1977, when the Government of the right hon. Member for Old Bexley and Sidcup (Mr. Heath) were in power. Thus we are dealing with responsible trade unions, and it is essential that the House should get this legislation right.
      The position as enunciated by the Attorney-General during the Committee stage of the 1981 Bill, and by the Solicitor-General in Committee this year, is that BT workers would not be acting illegally if they undertook an all-out strike in a trade dispute with their employer. I have already said that there is some dubiety about that, and that there is conflicting legal opinion. However, the important point is that BT workers are still left in a unique position compared with almost every other worker in the land. It means that British telephone operators are expected to be more akin to members of the police and armed forces than to people who work on the railways or in the electricity industry. But that indefensible anomaly is compounded by an absurdity under which BT workers are forced under the legislation to take the most extreme form of industrial action available to them, as the Attorney-General interprets the law. We have presumably to move towards taking the most extreme action. It may be legal to close down the service completelyl—"That's legal, lads, close it down"—but any lesser forms of industrial action, any peripheral industrial action that could be engendered at local level and resolved fairly quickly over a period of a few days, is illegal.
      If the union has a grievance, it cannot ban overtime, it cannot work to rule, it cannot mount short-term stoppages or withdraw co-operation in certain aspects of the service. In short, the work force cannot take selective or, some might argue, reasonable industrial action. All that is left to the union is to go for an all-out strike to escape the penalties of the court.
      Either the Governmen are being dishonest and devious in placing British Telecom workers in this unique position, thereby feeding on their sense of duty and loyalty to stop all industrial action, since they will be reluctant to go for
      1022
      an all-out strike, in which case why do the Government riot simply ban the workers from doing that; or the Government have been completely irresponsible by forcing BT workers to go on strike in order to indulge in those lesser forms of industrial action that are illegal, according to the Attorney-General. It is nothing less than an incitement to maximum disruption and to bad industrial relations.
      It is an absurdity if Ministers and the Law Officers are telling the House that it is perfectly permissible for the POEU or the UCW to indulge in an all-out stoppage, but that it is illegal for it to indulge in peripheral industrial action.
      We are asking the Government whether they want to enshrine that nonsense in legislation or support us in our attempts to clarify what everybody understands to be art anomaly. Even Ministers agree that it is an anomaly. We have only to consider what is happening on the current industrial relations scene with the National Graphical Association following the enactment of bad industrial relations laws to see the force of the law in industrial relations.
      Does the Minister want to go down in history as the man who refused to acknowledge this anomaly? Does he want to go down in history as the man who perpetuated the situation in which the BT unions who take industrial action —not on an all-out scale, but regionally or occupationally — and are subsequently taken to court for illegal action? I do not want that to happen, and nor, I suspect, does the Minister. I therefore hope that after this long, hard and bitter struggle we can at least write some sense into the Bill before we progress further.
      5.15 pm
      The Minister for Information Technology (Mr. Kenneth Baker): First, I apologise for the fact that I shall be giving a rather croaking reply to the debate, but I was not going to let a mere cold stop me from speaking after sitting through over 300 hours of debate on the Bill. The new clause deals with the interruption of messages and, if human frailty interrupts my message, I am sure that my hon. Friend the Under-Secretary will be able to take over.
      The subject matter of the new clause that the hon. Gentleman moved has been debated five times already, during the proceedings on the previous Bill and the proceedings on this Bill. During the course of those debates the House has had the advice of three separate Law Officers. Their advice has been very clear, as I shall point out.
      The new clause attempts to qualify the operation of clause 43 in relation to the previous Bill and in relation to this Bill. The matter has therefore had a very thorough airing.
      Let us be clear what the advice of the Law Officers is. It has been given by the present Attorney-Genera: when he was Solicitor-General, the former Solicitor-General and my hon. and learned Friend the present Solicitor-General.
      The Attorney-General's advice in 1981 was that section 45 of the Telegraph Act 1863, which clause 43 in part replaces, was directed at dereliction of duty concerning one or more messages and that a complete withdrawal of labour could not have those characteristics. It followed that, in his opinion, it was inconceivable that a prosecution in respect of the offences in question would succeed in the event of a strike that involved a total withdrawal of labour. I confirm that again because I was asked about the position

      1023
      in the case of a total withdrawal of labour. When there is a total withdrawal of labour the present Attorney-General, the former Solicitor-General and the present Solicitor-General have made it clear that there is no suspension of the right to strike.
      The then Solicitor-General confirmed this advice in relation to what was then clause 38 of the Telecommunications Bill in March this year. He was at pains to emphasise three points. The first point was that because clause 43 creates a criminal offence if a person deliberately interrupts a message it will always be interpreted in favour of the liberty of the subject. Secondly, he emphasised that intention is the essential ingredient and thirdly, that the offence is one that is committed by an individual so that the individual charged would have had to have done the act of preventing or delaying the transmission or reception of a message, and to have done it with the intention of preventing it before he could be convicted. My hon. and learned Friend the Solicitor-General told the Standing Committee only a matter of weeks ago that, as regards an all-out strike, the employees of a public telecommunications operator are in a position no different from the generality of employees. I emphasise that again because the hon. Gentleman the Member for Wigan (Mr. Stott) said there was some doubt. There is no doubt on that score.
      It is clear that the criminal offence in clause 43 could have an impact in the case of industrial action falling short of a strike. I think that is probably agreed between us. I am not quoting my right hon. Friend's exact words, but he told the Committee in this regard that not all industrial action falling short of a strike will be criminal. He dealt with this in column 896 of the Standing Committee proceedings on 24 November.
      The question of a criminal offence having been committed in a particular case will arise only if the action has the intention—I emphasise intention—of preventing the transmission or reception of a message. As a first step towards demonstrating intention, the prosecution would have to show that what occurred was in breach of the terms of the individual's contract of employment. Intention would be present if, for example, the action was targeted discriminatingly against one particular customer rather than having the general purpose of disrupting all telecommunications—in other words, if the individual charged had gone for one particular customer or operator.
      That is the legal position according to the advice that has been given. I hope the hon. Members will not think I have detained them unnecessarily in repeating it. It is only against that background that we can judge whether the new clause would be a suitable addition to the Bill. In the Government's view, and against that background, it would not be.
      This is a difficult area, by which I mean that the legal and policy issues are complex. I do not wish to refer to the recent industrial action that has taken place concerning the POEU because it is still before the courts. But, up to that action, I agree that the POEU and the UCW behaved responsibly in conducting industrial relations. They broke down in recent events, but I do not want to comment further because the case will be heard after Christmas.
      It is a difficult area and, because of that, we think that clause 43 is about right. Despite the arguments put forward by the Opposition in Committee and on the Floor of the
      1024
      House, I am prepared to defend the practical implications of that legal advice. We have heard it claimed that clause 43 puts the employees of public telecommunications operators in a peculiarly unfavourable position in terms of their right to take industrial action as compared with employees generally.
      It is not just the employees of BT, but the employees of all public telecommunications operators who are defined in the Bill; all those persons—companies, they will be, in effect—who have the right to be public telecommunications operators and the advantages of being public telecommunications operators because clause 43 applies to them just as it does to BT. Therefore it is not just a matter for BT, the POEU and the UCW.
      The question that we must ask ourselves is not whether clause 43 is unjustified in the absence of a similar provision, for example, in gas and electricity legislation, but whether it is right in the context of telecommunications. In that context it is possible, because of the nature of the industry and the technology of telecommunications systems, for a few employees to take action that falls well short of an all-out strike and that is aimed deliberately at disrupting the transmission of messages to and from a particular customer. Whether the action is taken because of a grudge against a selected customer or whether the aim is to put pressure on the operator in question—whether it be BT, Mercury or one of the cellular radio networks, or whether the aim is to identify a particularly important customer and put pressure on the operator—it seems to me right that we should inhibit that in clause 43.
      While it would be wrong to stop those involved in providing such services from engaging in genuine industrial action—either by striking or, as the term is sometimes used, by working to the terms of their contracts of employment—it would be equally wrong now, in an era when the vital importance of telecommunications is increasing, to remove the safeguards against the interruption and delay of messages that have existed in our legislation since 1863. I do not believe that this is the time to lower the defences of the customer, of the public telecommunications operators and of the public, and I therefore ask the House to reject the new clause.
      Mr. John Golding: The Minister of State spoke with laryngitis. I did not sympathise with him over his croaky voice because he speaks too much. Having insisted on keeping us up night after night in Committee, he should have been able to put his case more strongly than he did today. We can only hope, therefore, that he will remain more silent in the future.
      The Minister has blown the gaff. He has decided to stay in the 19th century in terms of labour legislation. All other workers in other industries have at least taken two steps forward and one backwards during this century, but telecommunications workers are to remain in the days of Disraeli. Perhaps the hon. Gentleman admires Disraeli more than he does the Prime Minister, but that is no excuse for keeping telecommunications workers operating under outdated legislation.
      We are not only leaving an anomalous situation for BT employees, we are extending it to Hull; it is being extended beyond the UCW and POEU to the General Municipal, Boilermakers and Allied Trades Union in Hull

      1025
      and to those who organise in Mercury and in cellular radio. In other words, the Minister is extending the area of restriction, and that we oppose very strongly indeed.
      The Minister said that we had had the advice of three Law Officers. I agree, and I listened to each of them. They were worth 6s 8d each; I got it wrong in Committee when I said that they cost seven and a tanner. Either way, we got three for a quid. We explained our fear about the clause denying the lads the right to strike, and we got conflicting advice. One lawyer said that it did not and another said that it did. If the majority view is as explained by the Minister, we ask him to resolve the problem by putting the legal advice in writing and including it in the Bill.
      If we are told that that is the situation, what harm can there be in putting it in writing? If the Law Officers say, "Do not worry, you have the right to strike," why not get the draftsman to express that in legal language in the Bill so as to remove all doubt? That is a common enough parliamentary usage of language. I am sure that the Law Officers are sincere in giving their judgment, so let us avoid any dubiety by writing it into the Bill. We do not want one set of lawyers saying one thing and another set saying something else, and then the lawyer who has been given a soft job as a judge having to decide. We want certainty, so let us have it in writing. The Minister has given no good reason why the doubts that exist should not be removed in that way.
      5.30 pm
      The position is daft. The Law Officers said in Committee, "You have the right to strike so long as you make a proper job of it." In other words, if a man has a condition of employment requiring him to work for 39 hours a week and he refuses to work for any of those hours, he is in the clear. In that situation he has the right to strike and to stay off work for 39 hours. But there cannot be an overtime ban if it is scheduled overtime. That is what we were told by the Law Officers.
      In other words, it is one thing to strike for 41 hours in a week, but if a man strikes for two hours and works 39, he can be put in clink for two years. What an absurdity. That is the advice that we have had and the situation that the Minister is defending tonight. Union members can be penalised and given two years in clink for banning overtime. If they say that they will not do anything at all they are in the clear. It is an incitement to full industrial action.
      Mr. Kenneth Baker: No, it is not.
      Mr. Golding: One of the things I have had to suffer in recent months has been sendentary interventions. My patience has been tried. The hon. Gentleman says, "No, it is not," but of course it is an incitement to all-out action. If the Minister were to come with me to a branch meeting and address the members he might say, "You have a choice, lads. If you stop work for two hours next week, ban overtime and work for 39 hours you can be put in clink for two years. If you do nowt, if you stay away entirely and frustrate telecommunications completely, nobody can put a finger on you." That is an incitement to an all-out strike. It is intolerable.
      What the Law Officers say about working to rule is daft. I did not think anyone could ever be clobbered for working to rule. Sometimes in Committee we get close to it. At least in the House when it is found that rules are daft, as we found in Committee in regard to moving
      1026
      amendments, very quickly the gaffers change the rules. They cannot clobber people for sticking to the rules but they can make a new set.
      The Law Officer said, "If the lads do not work at all and say, 'Stick your job, we are not coming to work,' nobody can touch them." On this subject, Mr. Deputy Speaker, I find it hard not to descend to the vernacular. If they obey the instructions of the manager they can be put in prison for two years. That is what the Law Officer told us the law was. Is that not bringing the law into disrepute? The Law Officer would say.. "It has nowt to do with me. I am just advising you what the law is." That was his defence in Committee. When one of my hon. Friends attacked him because of the nonsense he said. "It has nothing to do with me. I am just telling you what the law is."
      I am glad the Minister has not repeated the advice this afternoon because we could not afford another 6s 8d. The Minister of State has responsibility because it is his law. It is not good enough for him to say that we will stay in the 19th century and that we will perpetuate a system under which there will be uncertainty as to the right of workers to take industrial action. He should not say to the workers, "You can take certain action, we believe, but lesser action you cannot take. If you take it, you will be liable to severe penalties of imprisonment."
      I hope that the Government have second thoughts. My advice to my hon. Friends is to vote for the new clause because it is rational and in the interests of the freedom of British Telecommunications., Hull and Mercury engineers. They should vote for the new clause because it will take us out of the 19th century into the 20th century in regard to industrial relations.
      Mr. Stott: I listened with interest to what the Minister of State said in response to the arguments I put forward in defence of the new clause. I must confess that I am singularly unconvinced by what he said. It is always difficult to follow my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), who spoke in his own inimitable style, but he drew the attention of the House once again to the anomolous position that members of the Post Office Engineering Union would probably be in if they were to take action other than an all-out strike. I indicated that we have sought counsel's opinion.
      Mr. David Penhaligon: Did it cost more than 6s 8d?
      Mr. Stott: Yes, indeed, it cost us considerably more than 6s 8d. We took advice, as any sensible trade union would. The advice is contrary to that given by another lawyer, the Solicitor-General. At the end of the day, if the POEU were to initiate action other than an all-out stoppage, the final adjudication would probably be in a court of law. We do not want that to happen. It might make lawyers rich and it might enhance the reputation of the judiciary but it is not good industrial relations practice.
      I want to quote counsel's opinion:
      "What is in my opinion clear is that neither the union nor its members ought to feel confident that all-out strike action would not be regarded as constituting a contravention of section 45, notwithstanding the observations of Lord Denning and that in the long-term the only satisfactory solution is for the union to seek amending legislation to enable its members to participate in strikes and other forms of industrial action without fear of prosecution."
      That is the advice for which we paid a lot of money to a learned QC.

      1027
      The House of Commons writes the law. We do it badly at our peril. We have an opportunity to ensure that at least this part of this lousy Bill is written properly. I ask my hon. Friends to join me in the Lobby in attempting to do it.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 195, Noes 305.

      Division No. 98]

      [5.38 pm

      AYES

      Adams, Allen (Paisley N)

      Fraser, J. (Norwood)

      Archer, Rt Hon Peter

      Freeson, Rt Hon Reginald

      Atkinson, N. (Tottenham)

      Freud, Clement

      Bagier, Gordon A. T.

      Garrett, W. E.

      Barron, Kevin

      George, Bruce

      Beggs, Roy

      Gilbert, Rt Hon Dr John

      Beith, A. J.

      Godman, Dr Norman

      Bell, Stuart

      Golding, John

      Bennett, A. (Dent'n & Red'sh)

      Gould, Bryan

      Bidwell, Sydney

      Hamilton, W. W. (Central Fife)

      Blair, Anthony

      Hardy, Peter

      Bray, Dr Jeremy

      Harman, Ms Harriet

      Brown, Gordon (D'f'mline E)

      Harrison, Rt Hon Walter

      Brown, Hugh D. (Provan)

      Hart, Rt Hon Dame Judith

      Brown, N. (N'c'tle-u-Tyne E)

      Hattersley, Rt Hon Roy

      Brown, R. (N'c'tle-u-Tyne N)

      Haynes, Frank

      Brown, Ron (E'burgh, Leith)

      Heffer, Eric S.

      Bruce, Malcolm

      Hogg, N. (C'nauld & Kilsyth)

      Callaghan, Rt Hon J.

      Home Robertson, John

      Callaghan, Jim (Heyw'd & M)

      Howell, Rt Hon D. (S'heath)

      Campbell, Ian

      Howells, Geraint

      Campbell-Savours, Dale

      Hughes, Mark (Durham)

      Canavan, Dennis

      Hughes, Robert (Aberdeen N)

      Carter-Jones, Lewis

      Hughes, Roy (Newport East)

      Clark, Dr David (S Shields)

      Hughes, Sean (Knowsley S)

      Clarke, Thomas

      Hughes, Simon (Southwark)

      Clay, Robert

      Janner, Hon Greville

      Cocks, Rt Hon M. (Bristol S.)

      John, Brynmor

      Cohen, Harry

      Johnston, Russell

      Coleman, Donald

      Jones, Barry (Alyn & Deeside)

      Concannon, Rt Hon J. D.

      Kaufman, Rt Hon Gerald

      Conlan, Bernard

      Kennedy, Charles

      Cook, Frank (Stockton North)

      Kilroy-Silk, Robert

      Cook, Robin F. (Livingston)

      Kirkwood, Archibald

      Corbett, Robin

      Lamond, James

      Cowans, Harry

      Leighton, Ronald

      Cox, Thomas (Tooting)

      Lewis, Ron (Carlisle)

      Craigen, J. M.

      Lewis, Terence (Worsley)

      Crowther, Stan

      Litherland, Robert

      Cunliffe, Lawrence

      Lloyd, Tony (Stretford)

      Cunningham, Dr John

      Lofthouse, Geoffrey

      Dalyell, Tam

      Loyden, Edward

      Davies, Rt Hon Denzil (L'lli)

      McCartney, Hugh

      Davies, Ronald (Caerphilly)

      McCusker, Harold

      Davis, Terry (B'ham, H'ge H'l)

      McDonald, Dr Oonagh

      Deakins, Eric

      McKelvey, William

      Dewar, Donald

      Mackenzie, Rt Hon Gregor

      Dixon, Donald

      Maclennan, Robert

      Douglas, Dick

      McNamara, Kevin

      Dubs, Alfred

      McTaggart, Robert

      Duffy, A. E. P.

      McWilliam, John

      Dunwoody, Hon Mrs G.

      Madden, Max

      Eadie, Alex

      Maginnis, Ken

      Eastham, Ken

      Marek, Dr John

      Edwards, R. (W'hampt'n SE)

      Martin, Michael

      Evans, loan (Cynon Valley)

      Mason, Rt Hon Roy

      Evans, John (St. Helens N)

      Maxton, John

      Fatchett, Derek

      Maynard, Miss Joan

      Faulds, Andrew

      Meacher, Michael

      Field, Frank (Birkenhead)

      Mikardo, Ian

      Fields, T. (L'pool Broad Gn)

      Millan, Rt Hon Bruce

      Fisher, Mark

      Miller, Dr M. S. (E Kilbride)

      Flannery, Martin

      Molyneaux, Rt Hon James

      Foot, Rt Hon Michael

      Morris, Rt Hon A. (W'shawe)

      Forrester, John

      Morris, Rt Hon J. (Aberavon)

      Forsythe, Clifford (S Antrim)

      Nellist, David

      Foulkes, George

      O'Brien, William

      1028

      O'Neill, Martin

      Skinner, Dennis

      Orme, Rt Hon Stanley

      Smith, C.(Isl'ton S & F'bury)

      Owen, Rt Hon Dr David

      Smith, Rt Hon J. (M'kl'ds E)

      Park, George

      Snape, Peter

      Parry, Robert

      Soley, Clive

      Patchett, Terry

      Spearing, Nigel

      Pavitt, Laurie

      Steel, Rt Hon David

      Penhaligon, David

      Stewart, Rt Hon D. (W Isles)

      Pike, Peter

      Stott, Roger

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

      Strang, Gavin

      Powell, Raymond (Ogmore)

      Straw, Jack

      Prescott, John

      Thomas, Dafydd (Merioneth)

      Radice, Giles

      Thomas, Dr R. (Carmarthen)

      Randall, Stuart

      Thompson, J. (Wansbeck)

      Redmond, M.

      Thorne, Stan (Preston)

      Rees, Rt Hon M. (Leeds S)

      Tinn, James

      Richardson, Ms Jo

      Torney, Tom

      Roberts, Allan (Bootle)

      Wallace, James

      Roberts, Ernest (Hackney N)

      Wardell, Gareth (Gower)

      Robertson, George

      Wareing, Robert

      Robinson, G. (Coventry NW)

      Welsh, Michael

      Rooker, J. W.

      White, James

      Ross, Ernest (Dundee W)

      Wigley, Dafydd

      Ross, Stephen (Isle of Wight)

      Williams, Rt Hon A.

      Ross, Wm. (Londonderry)

      Wilson, Gordon

      Rowlands, Ted

      Winnick, David

      Ryman, John

      Woodall, Alec

      Sedgemore, Brian

      Young, David (Bolton SE)

      Sheerman, Barry

      Sheldon, Rt Hon R.

      Tellers for the Ayes:

      Shore, Rt Hon Peter

      Mr. Allen McKay and Mr. James Hamilton.

      Short, Ms Clare (Ladywood)

      Silkin, Rt Hon J.

      NOES

      Aitken, Jonathan

      Clarke Kenneth (Rushcliffe)

      Alexander, Richard

      Clegg, Sir Walter

      Amess, David

      Cockeram, Eric

      Ancram, Michael

      Colvin, Michael

      Arnold, Tom

      Conway, Derek

      Ashby, David

      Coombs, Simon

      Aspinwall, Jack

      Cope, John

      Atkins, Rt Hon Sir H.

      Corrie, John

      Atkins, Robert (South Ribble)

      Couchman, James

      Atkinson, David (B'm'th E)

      Crouch, David

      Baker, Kenneth (Mole Valley)

      Currie, Mrs Edwina

      Baker, Nicholas (N Dorset)

      Dickens, Geoffrey

      Banks, Robert (Harrogate)

      Dorrell, Stephen

      Batiste, Spencer

      Douglas-Hamilton, Lord J.

      Beaumont-Dark, Anthony

      Dover, Denshore

      Bendall, Vivian

      du Cann, Rt Hon Edward

      Benyon, William

      Dunn, Robert

      Berry, Sir Anthony

      Durant, Tony

      Best, Keith

      Dykes, Hugh

      Biffen, Rt Hon John

      Edwards, Rt Hon N. (P'broke)

      Biggs-Davison, Sir John

      Eggar, Tim

      Body, Richard

      Emery, Sir Peter

      Bonsor, Sir Nicholas

      Evennett, David

      Bottomley, Peter

      Fallon, Michael

      Bowden, A. (Brighton K'to'n)

      Favell, Anthony

      Boyson, Dr Rhodes

      Fenner, Mrs Peggy

      Brandon-Bravo, Martin

      Finsberg, Geoffrey

      Bright, Graham

      Fookes, Miss Janet

      Brinton, Tim

      Forman, Nigel

      Brittan, Rt Hon Leon

      Forsyth, Michael (Stirling)

      Browne, John

      Fowler, Rt Hon Norman

      Bryan, Sir Paul

      Fox, Marcus

      Buchanan-Smith, Rt Hon A.

      Fraser, Rt Hon Sir Hugh

      Buck, Sir Antony

      Fraser, Peter (Angus East)

      Burt, Alistair

      Freeman, Roger

      Butcher, John

      Fry, Peter

      Butterfill, John

      Gale, Roger

      Carlisle, John (N Luton)

      Galley, Roy

      Carttiss, Michael

      Gardner, Sir Edward (Fylde)

      Chalker, Mrs Lynda

      Garel-Jones, Tristan

      Chapman, Sydney

      Gilmour, Rt Hon Sir Ian

      Churchill, W. S.

      Glyn, Dr Alan

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

      Goodlad, Alastair

      Clark, Dr Michael (Rochford)

      Gorst, John

      Clark, Sir W. (Croydon S)

      Gow, Ian

      1029

      Gower, Sir Raymond

      Marshall, Michael (Arundel)

      Grant, Sir Anthony

      Mates, Michael

      Greenway, Harry

      Mawhinney, Dr Brian

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

      Maxwell-Hyslop, Robin

      Griffiths, Peter (Portsm'th N)

      Mayhew, Sir Patrick

      Grist, Ian

      Mellor, David

      Grylls, Michael

      Merchant, Piers

      Gummer, John Selwyn

      Meyer, Sir Anthony

      Hamilton, Hon A. (Epsom)

      Miller, Hal (B'grove)

      Hamilton, Neil (Tatton)

      Mills, Iain (Meriden)

      Hampson, Dr Keith

      Mills, Sir Peter (West Devon)

      Hanley, Jeremy

      Miscampbell, Norman

      Hannam, John

      Mitchell, David (NW Hants)

      Hargreaves, Kenneth

      Moate, Roger

      Harvey, Robert

      Monro, Sir Hector

      Haselhurst, Alan

      Montgomery, Fergus

      Hawkins, C. (High Peak)

      Morris, M. (N'hampton, S)

      Hawkins, Sir Paul (SW N'folk)

      Morrison, Hon C. (Devizes)

      Hawksley, Warren

      Moynihan, Hon C.

      Hayhoe, Barney

      Mudd, David

      Hayward, Robert

      Neale, Gerrard

      Heathcoat-Amory, David

      Nelson, Anthony

      Henderson, Barry

      Neubert, Michael

      Heseltine, Rt Hon Michael

      Nicholls, Patrick

      Hickmet, Richard

      Norris, Steven

      Hicks, Robert

      Oppenheim, Philip

      Higgins, Rt Hon Terence L.

      Osborn, Sir John

      Hill, James

      Ottaway, Richard

      Hirst, Michael

      Page, Richard (Herts SW)

      Hogg, Hon Douglas (Gr'th'm)

      Parkinson, Rt Hon Cecil

      Holland, Sir Philip (Gedling)

      Parris, Matthew

      Hooson, Tom

      Patten, John (Oxford)

      Hordern, Peter

      Pattie, Geoffrey

      Howarth, Alan (Stratf'd-on-A)

      Pawsey, James

      Howarth, Gerald (Cannock)

      Peacock, Mrs Elizabeth

      Howe, Rt Hon Sir Geoffrey

      Pollock, Alexander

      Howell, Rt Hon D. (G'ldford)

      Porter, Barry

      Howell, Ralph (N Norfolk)

      Powell, William (Corby)

      Hubbard-Miles, Peter

      Powley, John

      Hunt, David (Wirral)

      Prentice, Rt Hon Reg

      Hunter, Andrew

      Price, Sir David

      Hurd, Rt Hon Douglas

      Proctor, K. Harvey

      Irving, Charles

      Pym, Rt Hon Francis

      Johnson Smith, Sir Geoffrey

      Raison, Rt Hon Timothy

      Jones, Gwilym (Cardiff N)

      Rathbone, Tim

      Jones, Robert (W Herts)

      Renton, Tim

      Joseph, Rt Hon Sir Keith

      Ridley, Rt Hon Nicholas

      Kershaw, Sir Anthony

      Ridsdale, Sir Julian

      King, Roger (B'ham N'field)

      Rifkind, Malcolm

      King, Rt Hon Tom

      Rippon, Rt Hon Geoffrey

      Knight, Gregory (Derby N)

      Roberts, Wyn (Conwy)

      Knight, Mrs Jill (Edgbaston)

      Robinson, Mark (N'port W)

      Knowles, Michael

      Roe, Mrs Marion

      Knox, David

      Rossi, Sir Hugh

      Lang, Ian

      Rost, Peter

      Latham, Michael

      Rowe, Andrew

      Lawler, Geoffrey

      Rumbold, Mrs Angela

      Lawrence, Ivan

      Ryder, Richard

      Lee, John (Pendle)

      Sackville, Hon Thomas

      Leigh, Edward (Gainsbor'gh)

      Sainsbury, Hon Timothy

      Lightbown, David

      St. John-Stevas, Rt Hon N.

      Lilley, Peter

      Sayeed, Jonathan

      Lloyd, Ian (Havant)

      Scott, Nicholas

      Lord, Michael

      Shaw, Giles (Pudsey)

      Lyell, Nicholas

      Shaw, Sir Michael (Scarb')

      McCrindle, Robert

      Shelton, William (Streatham)

      McCurley, Mrs Anna

      Shepherd, Colin (Hereford)

      Macfarlane, Neil

      Shersby, Michael

      MacKay, Andrew (Berkshire)

      Silvester, Fred

      MacKay, John (Argyll & Bute)

      Sims, Roger

      Maclean, David John.

      Skeet, T. H. H.

      McNair-Wilson, M. (N'bury)

      Smith, Sir Dudley (Warwick)

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

      Smith, Tim (Beaconsfield)

      McQuarrie, Albert

      Soames, Hon Nicholas

      Madel, David

      Speed, Keith

      Major, John

      Speller, Tony

      Malins, Humfrey

      Spence, John

      Malone, Gerald

      Spencer, D.

      Maples, John

      Spicer, Michael (S Worcs)

      Marland, Paul

      Squire, Robin

      1030

      Stanbrook, Ivor

      Walden, George

      Stanley, John

      Walker, Bill (T'side N)

      Steen, Anthony

      Wall, Sir Patrick

      Stern, Michael

      Waller, Gary

      Stevens, Lewis (Nuneaton)

      Walters, Dennis

      Stevens, Martin (Fulham)

      Ward, John

      Stewart, Allan (Eastwood)

      Wardle, C. (Bexhill)

      Stewart, Andrew (Sherwood)

      Warren, Kenneth

      Stokes, John

      Watson, John

      Sumberg, David

      Watts, John

      Tapsell, Peter

      Wells, Bowen (Hertford)

      Temple-Morris, Peter

      Wells, John (Maidstone)

      Terlezki, Stefan

      Wheeler, John

      Thomas, Rt Hon Peter

      Whitfield, John

      Thompson, Donald (Calder V)

      Whitney, Raymond

      Thompson, Patrick (N'ich N)

      Wiggin, Jerry

      Thorne, Neil (Ilford S)

      Wilkinson, John

      Thornton, Malcolm

      Winterton, Mrs Ann

      Thurnham, Peter

      Winterton, Nicholas

      Townend, John (Bridlington)

      Wolfson, Mark

      Townsend, Cyril D. (B'heath)

      Wood, Timothy

      Tracey, Richard

      Woodcock, Michael

      Trippier, David

      Yeo, Tim

      Twinn, Dr Ian

      Young, Sir George (Acton)

      van Straubenzee, Sir W.

      Younger, Rt Hon George

      Vaughan, Dr Gerard

      Viggers, Peter

      Tellers for the Noes:

      Waddington, David

      Mr. Carol Mather and Mr. Robert Boscawen.

      Wakeham, Rt Hon John

      Waldegrave, Hon William

      Question accordingly negatived.

    New Clause 2

      PENSIONS OF BRITISH TELECOMMUNICATIONS EMPLOYEES
      'Nothing in this Act shall prejudice the pensions of British Telecommunications employees past, present and future.'.—[Mr. Mark Fisher.]
      Brought up, and read the First time.
      Mr. Mark Fisher: I beg to move, That the clause be read a Second time.
      My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), my Staffordshire neighbour, was less than charitable in the festive season to the Minister of State, who has problems with his voice. Indeed, my hon. Friend was less than accurate because, although the Minister spoke a great deal in Committee, he told us very little. Conservative Back Benchers, too, have been noticeable for their trappisi-like silence in our deliberations in Committee. Now the Minister seeks to give us his impersonation of that well-known talk-singer, Miss Eartha Kitt, in a husky voice that would do her credit. Her famous song was "Love for sale". The Minister seeks to blandish Opposition Members with his song "British Telecom for sale". We were not impressed by that in Committee, nor are we impressed today.
      New clause 2 refers to the problem of pensions, which will have great financial implications for British Telecom if it is privatised. The clause has even greater personal and immediate significance for the thousands of beneficiaries of the pension fund and for those paying into it. Moreover, unlike new clause 1, the matter has not been debated adequately in Committee. Indeed, it was the subject of only a few minutes passing debate and comment.
      I hope that hon. Members on both sides of the House will agree that the Government have a clear responsibility to past and present BT employees. They must honour that responsibility. The Opposition will ensure, to the best of

      1031
      our ability, not only that those obligations are honoured but that future employees will receive pension arrangements that are at least as good as those currently available. New clause 2 seeks a fair deal for BT employees, and a fair pension for all those who have worked for the company.
      The Minister of State gave assurances in Committee, which I shall quote. He said:
      "The Government have given a clear assurance that existing pension obligations will be honoured fully … In the improbable event that BT plc goes out of business, that liability will be transferred to the Secretary of State under clause 64 … The trust deed prohibits changes to its rules which would reduce the benefits of any person already entitled to a pension. So it would not be open to the successor company, even if it wished, to reduce this entitlement … All the trustees are required by law to act in the best interests of the trust's beneficiaries".
      On the question of the pension fund deficiency, the Minister said that BT was underwritten by the Government in clause 64
      "If it could not meet its obligations". — [Official Report, Standing Committee A, 29 November 1983; c. 1013–15.]
      On the face of it, the Minister's assurances are substantive. So why are we worried? More pertinently, why is the Post Office Veterans and Pensioners Association worried at the lack of assurances in the Bill about pension arrangements? First, we are worried because of the qualification in one of the Minister of State's remarks that I read out —the word "existing". The Minister referred to "existing pension obligations". Nothing at all was said about the protection of future employees. Second, we are worried because of the difficulty for the Government to ensure watertight guarantees for the future conduct of the fund. Most significantly, we are worried because of the long and sorry history of pension problems which arise every time the Government seek to privatise a public asset.
      Mr. Rob Hayward: The hon. Gentleman referred to the concern apparently expressed by the Post Office Veterans and Pensioners Association since the Minister's reply to the Committee. Will the hon. Gentleman identify where that concern is set out, because I am not aware of it?
      Mr. Fisher: I am talking about the areas of concern. I shall answer the hon. Gentleman in referring to the problems about pensions.
      Problems arose when the National Freight Corporation was privatised. On that occasion the Government received £53·5 million from the sale, but they had to pay back £47 million to make good the deficit in the pension fund. After the sorry saga and privatisation shambles of Amersham International, that company has to run different pension funds with different benefits for the beneficiaries—one fund for existing employees and one for new employees who come to work for the company after privatisation. That is not a recipe for good industrial relations. Every time, the position of the pension fund, as part of the capital structure of a company in the public sector that is to be privatised, presents problems for the potential purchasers of shares. Even if the pension fund is not prejudiced, it is crucial to the sale of those shares and the real, rather than the book, financial benefit to the Government and the taxpayer.
      There is another problem. This week it was announced that British Airways was yet another target for the
      1032
      Government's obsession with privatisation. Some 20,000 employees in British Airways have been made redundant in the past four years which will have a significant effect on the pension obligations of the corporation. That pinpoints a major dilemma that BT is likely to face after it is privatised.
      One of the prime motives of the Government's obsession with privatisation is, as they always say, to increase productivity and efficiency. To the Opposition, those expressions seem to be a polite way of saying that employees will be sacked, made redundant and given their cards, which has a desperate impact on people's lives and is traumatic. The impact on the pension fund can be dramatic.
      It is widely rumoured that BT will lose 45,000 employees as a result of privatisation and new technology. That figure was mentioned several times in Committee, and the Government never denied it. What effect will that have on the pension fund? Why has not the Minister of State made a full statement? Has he done his sums? Does he have projected figures for the effect on contributions to the fund? Extra responsibility will be placed on BT because of the increasing number of beneficiaries. If the Minister has those figures, why has he not published them? If he does not have them, why on earth does he not have them? He should have them.
      6 pm
      It is difficult to piece together a coherent picture of what the fund will be like after BT is privatised. Until 31 March this year the pension fund was combined with that of the Post Office, in POSSFUND. The split is expected to be approximately 45 per cent. to the Post Office and 55 per cent. to BT. When we see the scale of the pension fund, we begin to realise the scale of the problem which the new clause addresses. The assets of the Consolidated Fund account are £4,574·8 million, of which BT's share will be approximately £2,400 million. The income to that fund in contributions and investment is £839·4 million. Those are enormous sums, and they sound very solid. However, when one sees the impact of 45,000 sudden new redundancies on the financial demands on the consolidated assets one begins to realise the scale of the problem.
      The Minister may say that there will not be 45,000 redundancies. He may say that we are being unduly pessimistic. Let us say optimistically—optimistically? —that there will be only 30,000 redundancies.
      Let us consider a technical officer aged 50 earning £10,000 a year. He would be a typical employee in British Telecom, which employs 33,000 similar people. That man, or woman, is particularly vulnerable to redundancy and is very likely to be made redundant. On the first day of his redundancy, he receives one and a half times his annual pay in a lump sum—approximately £15,000. He also has an enhanced pension that will last for an extra 10 years, and that, at 50 per cent. of his earnings or £5,000 a year, will constitute an extra demand on the assets of the pension fund of £50,000. To that £50,000 one must add the loss of interest on the £15,000 that he is receiving 10 years before he normally would have done. The total loss of an early redundancy to the pension fund will be apparently £60,000.
      Let us assume that there are only 30,000 redundancies as a result of privatisation — I use the word "only" advisedly and with some irony—and that only half the redundant employees are on the somewhat elevated scale

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      that I have just mentioned and the rest will only benefit by half that amount, if that is possible. Even if we minimise the figures in that way and run down the potential threat to the fund, as the Government may seek to do, 30,000 redundancies affecting such a range of employees will mean a total extra demand on the pension fund of £1,350 million, which is more than half the total fixed assets of the fund. To put it at its most polite, the Government do not seem to have faced the scale of the problem.
      The deficit is in two halves. The pre-1969 deficit stands at about £1,700 million. The post-1969 deficit is running at about £800 million. As the Minister of State has said, the deficits are part of the capital structure of BT. He further said:
      "No decisions have yet been taken on the shape of that capital structure." — [Official Report, Standing Committee A; 29 November 1983, c. 1015.]
      The Minister of State has been considering the Bill for 18 months. He must have reached decisions on the capital structure of the company that he will offer to the public. It is hard for Opposition Members to believe that no decisions have been taken. It is true that no decisions have been announced, although they should have been, but I cannot believe that the Minister of State and the Under-Secretary have not seriously considered how to approach the capital structure. Why will the Minister of State not tell the House what that structure will be and what role the pension fund will play in it? What does he have to hide?
      Will the substantial potential liabilities against the total fixed assets of the pension fund be explained in the offer documents, or will they, by that stage, have been discounted, massaged away or paid off by the Government in advance? Perhaps, as in the case of the National Freight Corporation, some of the proceeds of the sale will be used after the event to pay off the deficit. None of those options will be acceptable to the taxpayer, who will be giving approximately £2,500 million to the purchasers of British Telecom, some of whom, as the Minister of State has recognised, are likely to he foreign corporations. That is no way to treat taxpayers' money. The House rightly expects a detailed answer about such problems.
      If it is not massaged in the capital reconstruction, how will British Telecom PLC finance the enormous deficits? What about the reality of the commitment to sustain inflation-proof index-linking for pensions? The fund is fully financed—it is paid out of income and guaranteed by the Government. It is protected by the BT trustees and ultimately underwritten by the Government under clause 64, in the Minister's own words, if it cannot meet its liabilities.
      We all accept that in what the Minister called the implausible scenario of BT going into liquidation the Government, under clause 64, will act as underwriters and guarantors. That is the fall-back position. But what will happen in an interim stage if, without going into liquidation, BT tells the trustees of the pension fund that its present financial condition does not allow it to meet the demands of the deficit that year and that it will have to lower its contributions, or ask employees to raise their contributions, in order to sustain the integrity of the fund? If BT could not or would not pay, what should the trustees do? Should they ask the employees to raise their contribution, thus reducing the value of their pensions, or in what way should they interpret the expression
      "The best interests of the … beneficiaries."— [Official Report, Standing Committee A; 29 November 1983, c. 1014.]
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      The trustees and the Government could be faced with that problem, and, in the interests of the employees, the Government should face it now. If they do not do so, they are saying, in effect, that they will honour their obligations only if BT goes bankrupt. That is unsatisfactory, because the creation of competition may mean that temporarily, or for a sustained period, BT's trading position cannot sustain its onerous and substantial pension fund. When the Minister of State refers to BT being unable to meet its liabilities, what does he mean? Could that mean that it will not meet them, or is not keen to do so? Can the Government force BT to meet its liabilities if it has not gone bankrupt, or will it accept BT's judgment, pay up and shut up, protecting the pension interests even though BT has not gone into liquidation? The Minister of State should set out in cold cash terms what the pension liabilities and obligations will be and exactly how the Government see their role as an underwriter in the stage before BT went into liquidation. I fear that he will not do so, because the facts are inconvenient for the Government. They might frighten potential purchasers of the shares.
      The Minister of State made some fine, generalised statements in Committee. Those statements testified to his good intentions; but good intentions are not sufficient. On behalf of the employees of BT, we need facts. Are there to be two schemes? If so, will the benefits differ, and in what way? How can any difference in pension schemes or benefits within one company be justified? That is a recipe for bad industrial relations and it is totally unfair to future employees who are not protected by the Minister of State's statement.
      What capital reconstruction will take place, and how will it affect the pension fund? What impact will the rationalisation of staff—as it is called—have upon the income and expenditure of the fund? We are not merely juggling with figures in balance sheets. We are talking about men's lives and incomes. We are talking about the ability to look after their families and lead a dignified and decent life of men and women who have worked loyally. hard and long in the public service. Even though the company is now to be taken out of the public service and run for private profit, the men and women who are the potential beneficiaries of the pension fund have given much, during their working lives, to the benefit not only of BT but of the customers, the country and the Governments whom they have served. They did so confident that their futures were agreed and assured by BT trust fund. Past, present and future employees demand answers to those questions. They are right to do so. The Opposition join them in that demand. We expect clear, detailed answers.
      Mr. Hayward: I want to comment on the speech of the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) because he has, like a number of hon. Gentlemen in Committee—no doubt they will do so this evening and tomorrow—persistently raised suspicions and rumours. They have attempted to induce unnecessary fears in people and have failed to consider the answers that have been given.
      The hon. Gentleman said that the issue had been subject to limited debate. I suggest that was because of the extensive filibuster that occurred on clauses debated before the general election.
      Mr. John Mc William: On a point of order, Mr. Deputy Speaker. Is it in order for an hon. Member to accuse a Chairman of a Committee of allowing a filibuster, which is a breach of the rules of the House?
      Mr. Deputy Speaker (Mr. Ernest Armstrong): I do not think that it is a matter about which we need become excited.
      Mr. Hayward: The hon. Member for Stoke-on-Trent, Central also used phrases such as "it is rumoured". Rumoured by whom? He was again attempting to make people suspicious. He cited massive figures in relation to redundancy, but he did not say where they had come from. He did not say that telecommunications is one of the fastest growing industries.
      Mr. Patrick Thompson: Does my hon. Friend agree that the Opposition's campaign has been based entirely upon rumour rather than fact?
      Mr. Hayward: I agree with my hon. Friend. The speech made by the hon. Member for Stoke-on-Trent, Central illustrated the suspicion and rumours upon which the Opposition have attempted to build their case. They have failed to consider the direct and specific answers given in Committee by my hon. Friend the Minister.
      The hon. Gentleman mentioned the Post Office Veterans and Pensioners Association. As the hon. Gentleman is aware, the secretary of that association is a constituent of mine. I received a letter from him this morning about the debate in Committee. He did not ask one question about the answers given by the Minister in Committee. That may be because the association has not had a chance to discuss the matter fully, but the hon. Gentleman should not presume what such people might be worried about when he has had no correspondence with a representative of the association.
      Mr. Fisher: If the hon. Gentleman had attended meetings of the Post Office Engineering Union throughout the country as I have and had met BT's past and present employees, he would have found that they are worried about pensions. The fact that he has not attended, been invited to, or sought to attend those meetings disqualifies him from making such wild generalisations. Employees are deeply worried about their pensions.
      6.15 pm
      Mr. Hayward: I am not surprised that employees are deeply worried about their pensions in the light of the rumours and misinformation included in speeches such as those made by the hon. Gentleman. He said that he was citing the pensioners association, and he referred to the association, not to pensioners generally and to current employees. I and my hon. Friends met representatives of the association two days before the clause was debated in Committee. I had an interesting discussion, as did a number of my hon. Friends, about the issues that worried the association, which will be directly affected by the privatisation of BT. I sought to obtain the association's views and they have been put fairly and clearly to most of the hon. Members who are present this evening.
      The hon. Gentleman also mentioned the problems of individual employees who will be under two different pension schemes. It is common in industry for people to have pensions covered by as many as four pension schemes. That is due to the way that companies develop. There may have been takeovers and reorganisations. It
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      happens in large organisations, and British Telecom plc will be one of the largest companies. The hon. Gentleman has been attempting to raise doubts in people's minds. A current BT employee will not appreciate the problems that must be faced when transferring from one organisation to another, but they can be and are regularly overcome by private industry.
      I have been a pension trustee in a company, and I have been responsible for employees who have been covered by five different funds. Problems can be easily overcome in the vast majority of cases if one seeks the advice of the trustees covering each of the different pension schemes, and the actuaries.
      The hon. Gentleman asked for a full statement. He said that the Minister's reply in Committee had been less than specific. In Committee the hon. Member for Newcastle-under-Lyme (Mr. Golding) made great play of words such as "satisfactory," "reasonable" and "consider". If one studies the statement made by the Minister in columns 1013, 1014 and 1015 one will be hard put to find any of those words.
      On the subject of pension obligations the Minister said:
      "The Government have given a clear assurance that existing pension obligations will be honoured fully. … In the improbable event that BT plc goes out of business, that liability will be transferred to the Secretary of State under clause 64."
      That statement is clear and precise. It is not vague, as the hon. Gentleman attempted to imply. The Minister continued:
      "The trustees of the pension fund have the duty of providing pensions and holding in trust the contributions paid by BT and the Post Office to past and present employees."
      That is a clear statement of pension trust law and of the obligations of pension trustees. The Minister further said that
      "BT's pensioners are entitled to periodic increases in their pensions, in line with the increases enjoyed by most civil servants. The trust deed prohibits changes to its rules which would reduce the benefits of any person already entitled to a pension."
      The answer specifically says, "prohibits." The Minister continued:
      "So it would not be open to the successor company, even if it wished, to reduce the entitlement."
      There could be no more clear response about the position of existing pensioners. I do not see what the hon. Gentleman is trying to do other than to put further rumours and anxieties in people's minds. The Minister spoke about current employees and said:
      "Any change to the rules in relation to employees retiring in future would require the agreement of all trustees, including those representing BT's trade unions. All trustees are required by law to act in the best interests of the trust's beneficiaries."—[Official Report, Standing Committee A, 29 November 1983; c. 1013–14.]
      I suggest that the potential pensioners, the current employees of BT, have doubts in their minds, because it has not been made clear to them that all the pension trustees have to agree to changes. I have a feeling that in a number of cases misinformation has been given to individuals, and that that information naturally raised those doubts.
      Mr. Golding: May I put a question to the hon. Gentleman? Could there be no possibility of the ending of index-linked pensions for present employees — no possibility of the worsening of the pension in any way, whatever BT's future financial position is?
      Mr. Hayward: I was not saying that. I said that any changes had to be made with the agreement of all the

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      trustees, including the trade union representatives. That is what I said, and I did not attempt to interpret it in any way. That is very clear.
      Mr. Golding: Does the hon. Gentleman appreciate that the staff want a categoric assurance that there will be no worsening of conditions, whoever is led to agree to them?
      Mr. Hayward: We would all like categoric assurances for every term and condition of employment that we have, whether as employees of BT, as Members of Parliament, or as employees in any other part of British industry or service company. No management can reasonably be expected to give categoric assurances about the future. The law on pension trusts says that there has to be agreement by all the trustees, in the case of BT, including the trade union representatives.
      Mr. Fisher: So the hon. Gentleman is saying that although there are categoric assurances now, because BT is a public corporation and the Government underwrite the pensions, there will not be categoric assurances in the future, when it is a private company. That seems to be the burden of what the hon. Gentleman is saying.
      Mr. Hayward: That is not what I said, and the hon. Gentleman knows it. I was referring to the pension trust deed, which remains unaltered. I was referring to pension law, which covers not only this pension fund, but many others that operate throughout British industry. I do not accept the deliberate misinterpretation, again, of what is being said.
      Mr. Stott rose—
      Mr. Hayward: I have given way many times, but I shall do so again.
      Mr. Stott: I wish to intervene before the hon. Gentleman leaves that important point. My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) said that at present the guarantees are given to the employees because BT is a public corporation. There are no ifs, buts or maybes. There is a cast-iron guarantee that the pension provisions will continue to prevail as long as BT remains in the public sector, but the Bill and the move to privatisation will alter that fundamental fact.
      Mr. Hayward: The hon. Member for Wigan (Mr. Stott) is incorrect. One cannot set a pension scheme in tablets of stone. There may be a future change in the pension scheme, whether the employees remain in BT as a nationalised company or as a denationalised company. The responsibility to change the pension schemes rests with the trustees. There is no guarantee now. There is the current practice as outlined, but in future pension trustees may choose to change the pension fund. It is not in tablets of stone. No one—including hon. Gentlemen—who has been involved in negotiations on pension funds, pay and conditions, would expect a guarantee that a fund would remain in one form ad infinitum, because that would remove the opportunity to improve the terms and conditions.
      I come now to the question of future employees. The answer that was given in Committee about future employees was, in my view, clear:
      "Neither I nor anybody else can bind the future pensions policy of BT when it is a public limited company. The pensions policy of BT plc in relation to new recruits after it becomes a public limited company must be a matter for it to determine in consultation with its work force".
      Mr. Golding: Was not that a most surprising statement by the Minister, since BT is bound in every possible way in both the licence and the legislation? Every restriction is put on it—from the points of view of the customer, of purchasing, and of commercial operation and prices. The only thing that the Minister cannot find it in his heart to do is something for the staff and their pensions.
      Mr. Hayward: We may debate some of those issues on a new clause that Labour Members have tabled later. However I want to draw attention to the Minister's words
      "to determine in consultation with its work force".—[Official Report, Standing Committee A, 29 November 1983; c. 1014.]
      In other words, yet again there is a responsibility to discuss the matter with the employees of BT plc.
      The hon. Member for Stoke-on-Trent, Central asked a lot of questions about the complex difficulties in connection with pension fund liabilities. I accept that the problems facing the pension fund both before and after 1969 are complicated. However, the answer given at the time was:
      "No decisions have yet been taken on the shape of that capital structure. In the discussions in progress—"
      from which the hon. Gentleman quoted—
      "we are considering in particular the deed of covenant obligation. If there is any change of treatment of that liability, I shall report it to the House".
      There is a clear undertaking that when it has been resolved, and when the Minister is in a position to do so, he will bring the matter to the House. It was a clear undertaking by the Minister. He went on:
      "However, I make it clear that in future that obligation will be met. I should not wish anyone to think that the trust fund will be short of that money. It will not." —[Official Report, Standing Committee A, 20 November 1983; c. 1015.]
      That is firm and clear, and should put aside to some extent the worries of pensioners, although I accept that the liabilities are a complex issue.
      Mr. Fisher: The Minister of State made it clear that the pension fund is part of the BT's capital structure. Therefore, it is ridiculous for us to have to make decisions on the pension fund in advance of knowing what that capital structure or capital reconstruction will be. Surely. anyone can see that we are approaching the problem in the wrong way. Only after we know what the capital structure is to be can we make an intelligent judgment about the position of the pension fund
      Mr. Hayward: I do not agree. The position, both before and after 1969, is extremely complex. It is made even more complex by hon. Members arousing suspicions and creating rumours.
      The most surprising aspect of this debate is that the wording of the new clause was debated previously in Committee. Having given an answer, and considered at length—
      Mr. Golding rose—
      Mr. Hayward: I stand corrected if the wording is not identical.
      Mr. Golding: Has the hon. Gentleman checked his facts? Was he present when the matter was last debated? Has the whole of his speech this afternoon been as erroneous as his last statement?
      Mr. Hayward: For once, the hon. Gentleman's memory fails him. I quoted at length from columns 1013, 1014 and 1015. The hon. Member whose speech fills the

      1039
      rest of column 1013, and who spoke about pensions, was me. The hon. Gentleman cannot have been present if he fails to remember that. He has a very good memory.
      Mr. Golding: What was the wording of the amendment? I have not missed a Division or a debate since last January.
      6.30 pm
      Mr. Hayward: I thank the hon. Gentleman for that correction. I have just checked the wording and he is right. The wording is substantially different.
      Mr. Golding: Will the hon. Gentleman withdraw his devastating statement that I was once wrong, before my reputation is destroyed forever?
      Mr. Hayward: I will not withdraw my statement about the hon. Gentleman being inaccurate because he questioned whether I was present.
      Mr. Golding: No.
      Mr. Hayward: My response was that I was present and that I had spoken. I have checked the wording and it is different so I withdraw that, but I still stick to my statement that I was present and spoke and that therefore the hon. Gentleman is inaccurate.
      Mr. Golding: May we take it that the hon. Gentleman has been learning from the Minister of State? He is now creating straw men and knocking them down. When he reads Hansard he will see that at no point did we challenge the fact that the hon. Gentleman was present. He was so inconspicuous, even when speaking in our debate, that none of us would remember whether he was present or not.
      Mr. Deputy Speaker (Mr. Paul Dean): Order. I hope that we can return to the issue of pensions.
      Mr. Hayward: I thank you, Mr. Deputy Speaker, for bringing us back to the issue of pensions.
      While I accept the point that the wording of the amendment is somewhat different from that of the previous amendment I find it surprising that the speeches and the points raised are similar to those made in Committee. Yet, at the time, having received the answer from my hon. Friend the Minister of State, the hon. Member for Newcastle-under-Lyme chose not to press the matter to a Division. Therefore, I find it somewhat surprising that this proposal and these issues should be raised again in this form.
      Mr. Penhaligon rose—
      Mr. McWilliam: I am sorry if I appear to have upset the hon. Member for Truro (Mr. Penhaligon), who is leaving the Chamber.
      I should like to begin by declaring an interest. I am sponsored by the Post Office Engineering Union. In fact, I am on leave from BT without pay. That will be cleared up on 2 May 1984, when I must resign.
      This is an important subject for those who still work for BT, who could be in the position I was before I became a Member of the House in 1979. I became an established civil servant in the Post Office in 1959. Therefore, in the period between 1959 and 1969, I qualified for a Civil Service pension. In the normal course of events I would
      1040
      not retire from the Post Office—from BT—until the year 2001. That 10 years of service will still have to be reckoned for pension purposes.
      I read the Minister's speech in Committee about pensions with care. I could not see that if I stayed with BT my pension expectations would necessarily be fully protected under the Bill as it now stands. If, however, our amendment is incorporated into the Bill, I can see that my pension would be so protected. As my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) rightly pointed out, this Bill prescribes everything with regard to the future activities of BT except the well-being and the future of the staff.
      I should like to address myself to the interesting speech of the hon. Member for Kingswood (Mr. Hayward). It seemed to depend much more on misinformation than anything we have said—in fact, the hon. Gentleman had to withdraw some misinformation at the end of his speech. He accused us of spreading rumour rather than fact. If we have to construe things from the evidence put before us instead of being told the facts, that is not our fault. This is not our Bill. We do not like it and we do not want it. The facts of the matter must come from the Minister and they have not so far been available.
      The hon. Gentleman pooh-poohed the idea that the capital structure of BT was neutral with regard to the future pension scheme. He appeared to find it acceptable that, at the Report stage of an important Bill, we still do not know what the capital structure will be. It would not be so bad if we had not been here before, but we have been all the way through it before. If the Government did not know last time what the capital structure was going to be, surely they should have spent 10 minutes working it out before they deigned to reintroduce the Bill. I believe that the Minister knows very well what he thinks the capital structure should be. His right hon. and hon. Friends have probably been told what it should be but, because he wants to get the Bill through the House with the fewest possible problems, he has chosen not to bother to tell us until such time as the Bill has passed through the House, when he will announce it in a way that suits him. That is not good enough. The capital structure has a significant effect on the expectations of present employees of BT, in particular those like me, who were previously employed by the Post Office before they became employees of BT.
      I am glad that the hon. Member for Kingswood met the pensioners. It is interesting that he managed to speak for some considerable time, having told us that he had received a letter just the other day from the secretary of the pensioners association, without actually telling us what fears the secretary had raised with him in the letter. The hon. Gentleman merely reiterated the points that the Minister had made. I found that most surprising. If the Secretary of the pensioners raised a specific point with him, I would have thought it his duty to stand up and raise that point with the Minister.
      Mr. Hayward: I thank the hon. Gentleman for giving way. I hope, Mr. Deputy Speaker, that you will correct me if I am in breach of procedure in quoting from a letter. The secretary of the pensioners association asked for copies of the Minister's speech in today's and tomorrow's debate.
      Mr. McWilliam: I am grateful to the hon. Gentleman for that information. I just hope that the secretary of the

      1041
      Post Office Veterans and Pensioners Association will be wiser when he receives those copies than he is at the moment. Frankly, I doubt it.
      Mr. Hayward: Modesty and accuracy will not allow me to leave unmentioned the other section of the letter in which the secretary thanked the Ministers and me for our help and assistance in Committee.
      Mr. McWilliam: I am again grateful to the hon. Gentleman for that information. Courtesy was something with which we were imbued when we were civil servants and were employed by the Post Office. It went out of the window when we started to change our ways. I would expect such a courteous letter from anyone in that position.
      The hon. Member for Kingswood talked about employees being covered by more than one pension scheme and said that it was not unusual. He is right. In the Post Office, we had employees covered by more than one pension scheme. There were the Cable and Wireless A-optants and there were the rest of us. There was continual warfare and scrapping between the two groups, one of which got more money and one of which got more pension, about who should be in what position at any particular time because of the next wage claim. That was a continual thorn in the flesh in pay negotiations and industrial relations in the telephone exchange and the planning office, where there were two people doing the same job with different conditions of service.
      Hon. Members will not be surprised to learn that there was continual friction and that productivity and work suffered. The Minister should not be surprised, therefore, that we are opposed to having two classes of employees doing the same job in BT. That does not seem sensible, just or reasonable and it will not help in the future of BT, as it goes ahead into the next century, where it will be such an important part of the developing information technology infrastructure.
      I take issue with the Minister because he attempted to imply that we had pretty well a categoric assurance, but then, when pressed on the matter, admitted that no categoric assurance had been given and none was possible. I do not take too much issue with him about that. Anybody who reads the Minister's words or who stays to listen to them tonight will eventually have to admit the same thing. There is no categoric assurance.
      My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) raised a fundamental point when he talked about the projected 45,000 redundancies when BT becomes a public limited company. That may be an underestimate. What is certain is that if the statements of the chairman of BT, Sir George Jefferson, together with some of the other statements and articles written in the gazettes and the technical press are to be believed, that 45,000 is a conservative estimate.
      When we went into the pension scheme on a contributory basis, we contributed 6·383 per cent. of our salary. That 6·383 per cent. of the salary of 45,000 BT employees, particularly the workers likely to be at risk, is a considerable sum of money each year. The demands on the pension fund will not come down — they will increase because Post Office pensioners are beginning to live a little longer.
      It used to be customary for BT and Post Office pensioners not to live for long after their retirement age of 60. My father retired from BT at 60 and died when he was
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      64. On another occasion, I went into work in the morning on an early shift. The night shift man was due to retire the next day, and I found him dead at his test-desk console, so he did not get any pension at all. The widows and orphans benefits were available—although there were no orphans—but the pension fund did not have to pay out much.
      The calls on the scheme were not as great as they are now. Despite having this Government in power, it will be reasonable to expect that, as time goes on, the improvements in health care and services and in medical science will accelerate the process of people living longer. There is another point. There are an increasing number of women BT employees, and women live longer and receive the same salary. The more women employees that we have, the greater the call will be on the scheme. BT has been employing a number of able young women graduates as engineers and when they come to retirement age, if they carry on as women do now, they will live to a ripe old age and take large chunks out of the pension scheme, and good luck to them. That means that the pension scheme must be adequately funded, and if we lost that 6·383 per cent. of the salaries of 45,000 employees, I doubt whether the scheme will be able to afford that if it goes ahead on the basis of the Bill as it stands. We seek to so amend the scheme so that it will be capable of supporting that additional load.
      6.45 pm
      There is yet another problem. The Minister told the Committee that he accepted that £1,250 million would be due to be paid under the trust by 1992—in other words, in eight years' time. What is to happen if the capital reconstruction means that that is ridiculous and the money should be got out of the sale of assets? What sort of arguments will the Minister have for his right and hon. Friends in the Treasury who will want to get their hands on that money? What guarantees can there be to make sure that that sum is adequate, because I am not sure that it is? It was materially right at the time that it was determined, but that was a long time ago. It could easily be wrong, and if it is, something will have to be done about it.
      The Minister has fairly said that he will come and report this matter to the House, but what does that mean? The only guarantee is that he will make a statement to the House. That does not guarantee that there will be a debate or that there will be any amendable motion. It guarantees nothing other than the fact that he is an honourable man and will come to the House and report the matter. We never doubted that the Minister is an honourable man, although perhaps he is misguided. It would be in character for him to come to the House, but that is not the assurance that I would expect, or one that would answer the question.
      I am still concerned. I am not yet convinced that in all possible circumstances the future, present and past pensioners of BT are adequately protected by the scheme. There is nothing illegal, wrong or immoral in incorporating the words of the amendment, which are:
      "Nothing in this Act shall prejudice the pensions of British Telecommunications employees past, present and future."
      Those are simple and straightforward words and if incorporated in the Act they can be legally enforced. If they are not, I suspect that we are laying up trouble for the future.
      It will not be long before the demands for profits by the shareholders of BT outstrip their social conscience towards

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      pensioners who are not theirs, who never worked for them and for whom they feel no affinity. Without those words, the pensioners will not be adequately protected. It is up to the Minister to stand up and tell us that we are right and that he accepts the words, which represent a simple idea. If he does not, he is refusing to give the categoric guarantee for which we have been asking. Therefore, we shall be justified in telling the Post Office pensioners and existing BT employees that their pensions are not protected and are at risk because of the Bill.
      Mr. Penhaligon: There is no point in denying that the Post Office employees are worried about this matter because manifestly they are. In even the most casual conversation with those affected by this legislation someone will raise this point. It is possible that that fear is not well founded.
      The Government will do themselves a great deal of good if they accept the new clause. On the whole, I am against the Bill and will undoubtedly vote against it on Third Reading. It is important that the Bill should not cause great disruption in the Post Office when it is implemented. I assure the Minister that accepting new clause 2 would do a great deal to reassure a large number of worried people. The new clause simply says:
      "Nothing in this Act shall prejudice the pensions of British Telecommunications employees past, present and future."
      It does not say that the pensions are guaranteed, but only that the legislation will not legally change the position of pensioners. That is a reasonable minimal request. It is the type of request that any employee would make if his company were taken over in the normal transaction of business on the stock market. I suspect that hon. Members would make such a request if we were no longer to have control over our pensions. The Post Office employees' fear is not half so irrational as some Conservative Members have suggested.
      The pension fund operated by the Post Office in its various guises over the years has been an improvement on the national insurance pension scheme. I do not believe that anyone has argued for a long time that the pension fund is funded on an actuarial basis. People are aware that, at least in part, their pensions depend on a Treasury guarantee. I understand that the Government's thrust in this legislation is to remove the Treasury guarantee on a number of fronts. That is the only half-credible argument that I have heard in favour of the Bill. The Government must be looking forward to removing the Treasury guarantee of pensions. The ordinary Post Office employee is aware that the pension he enjoys, which he has earned and to which he looks forward, is partly dependent on a Treasury guarantee. He is aware also that this legislation —which I suspect is about to be passed—will remove that guarantee. If the Post Office employee queries or worries about the security of his pension, we can hardly describe him as foolish or irrational—indeed, we would have to use those words if he did not raise the point.
      The new clause merely announces to all employees of BT throughout our great land that the Government are introducing this legislation but that nothing in it will affect the pensions of those employees. That seems to be a reasonable request. I hope that the Minister—unusually —will cut short the debate, beat the carol concert at 7.10 pm, and save a full 20 minutes of the time for
      1044
      discussing the next subject by recognising the validity of the arguments that have been presented and giving BT employees that guarantee. That is a simple matter and would do more than anything else to reassure scores of thousands of employees of the Government's genuine approach to them. Those employees are well aware of the rather unusual basis on which their pension has been based for so long. If the Treasury guarantee goes, undoubtedly there will be fear among BT pensioners. If the new clause is accepted, the Minister will find that a great deal of the opposition to the Bill will evaporate.
      The Under-Secretary of State for Trade and Industry (Mr. John Butcher): A large number of questions have been asked, and that is understandable because we are talking of the safeguards for existing and future pensioners of BT. We have been careful throughout the passage of the Bill to make clear the safeguards that exist for BT pensioners and current BT employees. It is not the underlying intention or specific effect of the Bill to change their pension entitlements, and pension obligations are specifically safeguarded. Nevertheless, I am bound to oppose the new clause as being unnecessary for past and present categories of BT employees and misguided in respect of new recruits taken on after the transfer date.
      It is worth repeating the safeguards that exist for BT pensioners and current BT employees. They are based in the pension fund trust deed which lays down the pension entitlements of employees retiring from BT' service. The Bill does not in any way diminish those safeguards. For existing BT pensioners, the trust deed prohibits any changes to its rules that would reduce their pension entitlements, so it would not be open to the successor company to reduce the benefit due to BT pensioners. Any changes to the rules of the trust deed in relation to current BT employees retiring in the future would require the agreement of all the trustees of the pension fund.
      I shall refer later to pensions that are linked to Civil Service rates of pensions which were the subject of one of about five or six questions raised by the hon. Member for Stoke-upon-Trent, Central (Mr. Fisher). Four of the nine trustees represent the trade unions, and all trustees, including five from the successor company, would be required by law to act in the best interests of the trusts' beneficiaries. I believe that that provides a large measure of protection.
      It is difficult to see how those safeguards could be enhanced by the new clause. The new clause may even create confusion by implying that there is something in the Bill to detract from the pension rights of existing pensioners and employees. If there were such a provision, the right course would be to amend it, and no one would be more ready than I to make the necessary amendment. There is no such provision, and the new clause as it relates to existing employees ansd pensioners may be unnecessary and, as has become evident in correspondence, it could also cause some confusion.
      The new clause poses a particular difficulty for new recruits or employees taken on after the transfer date. I give the example of a young man recruited by the successor company 10 years after the company has been successfully privatised. The new clause might appear to require that the pension entitlement when he retires 40 years later be the same as or at least no worse than it would have been if BT had remained a nationalised industry.

      1045
      How are we to know what would have happened had BT remained a nationalised industry? The question is perhaps too hypothetical to form the basis of successful legislation. In any case, the new clause is technically in error—it is obviously, therefore, a probing amendment —in that respect, since new recruits will be employees of the successor company rather than BT. I recognise that the underlying intention of the new clause may be to require that new recruits receive the same treatment as current employees. BT as a nationalised industry is thus not legally bound in its policy towards new recruits, nor should the successor company be bound in that way. So to bind it would in any case be wholly inappropriate to the company's private sector status.
      Specific questions have been raised, especially by the hon. Member for Stoke-on-Trent, Central and the hon. Member for Truro (Mr. Penhaligon), who homed in on some of the same points during an intervention in the excellent speech of my hon. Friend the Member for Kingswood (Mr. Hayward) — no doubt as an ex-personnel manager he is familiar with pension rights and pension obligations generally.
      I repeat that the trustees of the pension fund have a duty to provide pensions and to hold in trust the contributions paid by British Telecom, the Post Office and past and present employees. The benefits paid to pensioners are therefore governed by the pension fund deed. Under rules established by the deed, pensioners are entitled to periodic increases in their pensions in line with those enjoyed by civil servants. I should state categorically that the trust deed prohibits changes to its rules which would reduce the benefits of any person already entitled to the receipt of a pension. Therefore, it will simply not be open to the successor company to reduce the entitlement, even if it wished to do so.
      7 pm
      We then entered a discussion in which a number of hypothetical questions were raised. That does not mean that those questions do not deserve an answer. The hon. Member for Stoke-on-Trent, Central asked what would happen to the pension fund and how the trustees could observe their obligations if the company were in difficulties—that is to say, on the way to liquidation but before the major safeguard in clause 64 came into operation. The answer is that British Telecom is bound to make sufficient contributions to fund the pension fund's liabilities after allowance is made for employee contributions. If it cannot make those contributions, it is bankrupt and the Government backing under clause 64 comes into play to guarantee existing pension obligations. If BT is not bankrupt, the trustees can hold BT to meet its due pensions obligations, so in the final analysis pension rights are safeguarded.
      The hon. Gentleman also asked what would happen if workers were sacked. He suggested that an increase in redundancies might reduce the income of the fund and thus endanger its ability to make due payments. The health of the fund in terms of BT's and employees' contributions depends on the health and future of the telecommunications industry, so the possible impairment of BT's ability to make proper contributions is the real issue at stake. We believe that telecommunications is most definitely a growth sector. It would need a great deal of mismanagement for that not to be the case. There is
      1046
      scarcely a country in the western world in 'which telecommunications is not expanding, usually faster than the domestic economy as a whole.
      Taking the hypothetical question a little further, the hon. Gentleman asked what would happen in the case of premature retirements, perhaps in conjunction with a redundancy programme. If people left BT early, the obligations of the pension fund would to some extent be reduced because the amount of pension entitlement increases with the length of service. That is the other side of the equation. There is therefore no overwhelming reason to believe that there would be a problem.
      I hope that the debate has helped to allay anxieties. It has been a good and positive debate and I hope that in future we shall no longer hurl epithets across the Chamber suggesting that someone has somehow misled someone else. I put it on record today that existing BT pensioners should be entirely reassured and that existing employees' future pensions will be assured. I hope that the House 'will accept, however, that it would be quite out of order for us to bind the successor company in respect of employees who have yet to join that company.
      Mr. Fisher: With permission, I should like to reply to one or two of the points made by the Under-Secretary of State. We are grateful to him for stating clearly that the Government's understanding of the debate is that there is a sincere and genuine intention on both sides to protect pensioners and no intention on either side to cause anxiety. Far from it—I believe that both sides wish to clarify the position and to ensure that it is secure and sound. We certainly make no accusations of bad faith to pensioners on the part of any Minister. We accept that the Government's intentions are absolutely sincere, but we believe that they have not considered all the financial implications of privatisation and have therefore not fully grappled with the problems facing the pension fund and thus the extent of the insecurity facing BT employees.
      The Under-Secretary of State asked what provision in the Bill created uncertainty. This is perhaps a case of the wood and the trees: the provision is so large that he may have missed it. The provision that creates uncertainty is the privatisation of BT. Thai is the heart of the matter. The hon. Member for Kingswood (Mr. Hayward), who is unfortunately no longer present, failed to appreciate the distinction in pension status between a public corporation and a private sector company. The Under-Secretary of State fully recognised that when he said that the successor company would find it "unusual" to have index-linked pensions in the private sector. Certainly, few private companies operate fully financed index-linked schemes. In that sense, the successor company would be at odds with its compeitors and would have an extremely onerous financial responsibility.
      As the Under-Secretary of State recognised, there is a major distinction between private and public sector companies. Unless one can imagine this nation irrevocably going bankrupt—[Interruption.] I shall ignore my hon. Friend's suggestion that the Conservatives will achieve that, although they are certainly doing their best, so no one can say that they have failed for want of trying. Nevertheless, the pension fund of a public corporation always has the Government's ultimate guarantee to back it. The Minister for Information Technology, as an

      1047
      honourable man, will be the first to admit that that is not the case in the private sector, in which there is always the risk of the problems that we have described.
      The argument is actuarially so complicated that neither the Under-Secretary of State nor I, nor I believe any hon. Member, has the necessary expertise fully to comprehend the problem, but the ratio between the increased demands on the pension fund and the minimised contributions is probably about 5:1—that is, for every £1 million saved due to there being fewer people in the fund there will be £5 million in increased demands on the fund due to the redundancies to which we have referred.
      The Minister has not faced that issue in the Bill. The Under-Secretary of State failed to produce the figures. One must assume either that he does not have them or that he is reluctant to release them. We make the charitable assumption that he does not have the figures. At the very least, therefore, we suggest that in the interests of all pensioners and employees of BT the Minister has a responsibility to examine carefully the impact on the pension fund of the redundancies which both he and the Under-Secretary of State noticeably failed to deny.
      On that basis, confident in the belief that only in this way can the House fully secure and give peace of mind to BT employees, I commend the new clause to the House.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 187, Noes 309.

      Division No. 99]

      [7.21 pm

      AYES

      Adams, Allen (Paisley N)

      Dewar, Donald

      Archer, Rt Hon Peter

      Dixon, Donald

      Atkinson, N. (Tottenham)

      Dormand, Jack

      Bagier, Gordon A. T.

      Dubs, Alfred

      Banks, Tony (Newham NW)

      Duffy, A. E. P.

      Barron, Kevin

      Eadie, Alex

      Beggs, Roy

      Eastham, Ken

      Beith, A. J.

      Edwards, R. (W'hampt'n SE)

      Bell, Stuart

      Evans, loan (Cynon Valley)

      Bennett, A. (Dent'n & Red'sh)

      Evans, John (St. Helens N)

      Bidwell, Sydney

      Fatchett, Derek

      Blair, Anthony

      Faulds, Andrew

      Bray, Dr Jeremy

      Field, Frank (Birkenhead)

      Brown, Hugh D. (Provan)

      Fields, T. (L'pool Broad Gn)

      Brown, N. (N'c'tle-u-Tyne E)

      Fisher, Mark

      Brown, R. (N'c'tle-u-Tyne N)

      Flannery, Martin

      Brown, Ron (E'burgh, Leith)

      Foot, Rt Hon Michael

      Callaghan, Jim (Heyw'd & M)

      Forrester, John

      Campbell, Ian

      Forsythe, Clifford (S Antrim)

      Campbell-Savours, Dale

      Foster, Derek

      Canavan, Dennis

      Foulkes, George

      Carter-Jones, Lewis

      Fraser, J. (Norwood)

      Clark, Dr David (S Shields)

      Freeson, Rt Hon Reginald

      Clarke, Thomas

      Freud, Clement

      Clay, Robert

      Garrett, W. E.

      Cocks, Rt Hon M. (Bristol S.)

      George, Bruce

      Cohen, Harry

      Gilbert, Rt Hon Dr John

      Coleman, Donald

      Godman, Dr Norman

      Concannon, Rt Hon J. D.

      Golding, John

      Conlan, Bernard

      Gould, Bryan

      Cook, Frank (Stockton North)

      Hamilton, W. W. (Central Fife)

      Cook, Robin F. (Livingston)

      Hardy, Peter

      Corbett, Robin

      Harman, Ms Harriet

      Cowans, Harry

      Harrison, Rt Hon Walter

      Cox, Thomas (Tooting)

      Hart, Rt Hon Dame Judith

      Crowther, Stan

      Haynes, Frank

      Cunningham, Dr John

      Healey, Rt Hon Denis

      Dalyell, Tam

      Heffer, Eric S.

      Davies, Rt Hon Denzil (L'lli)

      Hogg, N. (C'nauld & Kilsyth)

      Davies, Ronald (Caerphilly)

      Home Robertson, John

      Davis, Terry (B'ham, H'ge H'l)

      Howell, Rt Hon D. (S'heath)

      Deakins, Eric

      Howells, Geraint

      1048

      Hoyle, Douglas

      Pendry, Tom

      Hughes, Mark (Durham)

      Pike, Peter

      Hughes, Robert (Aberdeen N)

      Powell, Raymond (Ogmore)

      Hughes, Roy (Newport East)

      Prescott, John

      Hughes, Sean (Knowsley S)

      Radice, Giles

      Hughes, Simon (Southwark)

      Randall, Stuart

      Janner, Hon Greville

      Redmond, M.

      John, Brynmor

      Rees, Rt Hon M. (Leeds S)

      Johnston, Russell

      Richardson, Ms Jo

      Jones, Barry (Alyn & Deeside)

      Roberts, Allan (Bootle)

      Kaufman, Rt Hon Gerald

      Roberts, Ernest (Hackney N)

      Kennedy, Charles

      Robertson, George

      Kilroy-Silk, Robert

      Robinson, G. (Coventry NW)

      Kirkwood, Archibald

      Rooker, J. W.

      Lambie, David

      Ross, Ernest (Dundee W)

      Lamond, James

      Ross, Stephen (Isle of Wight)

      Leighton, Ronald

      Rowlands, Ted

      Lewis, Ron (Carlisle)

      Ryman, John

      Lewis, Terence (Worsley)

      Sedgemore, Brian

      Litherland, Robert

      Sheerman, Barry

      Lloyd, Tony (Stretford)

      Sheldon, Rt Hon R.

      Lofthouse, Geoffrey

      Shore, Rt Hon Peter

      Loyden, Edward

      Short, Ms Clare (Ladywood)

      McCartney, Hugh

      Short, Mrs R.(W'hampt'n NE)

      McCusker, Harold

      Skinner, Dennis

      McDonald, Dr Oonagh

      Smith, C.(Isl'ton S & F'bury)

      McGuire, Michael

      Snape, Peter

      McKay, Allen (Penistone)

      Soley, Clive

      McKelvey, William

      Spearing, Nigel

      Mackenzie, Rt Hon Gregor

      Steel, Rt Hon David

      McNamara, Kevin

      Stott, Roger

      McTaggart, Robert

      Strang, Gavin

      McWilliam, John

      Thomas, Dafydd (Merioneth)

      Madden, Max

      Thomas, Dr R. (Carmarthen)

      Marek, Dr John

      Thompson, J. (Wansbeck)

      Martin, Michael

      Thorne, Stan (Preston)

      Mason, Rt Hon Roy

      Tinn, James

      Maxton, John

      Torney, Tom

      Maynard, Miss Joan

      Varley, Rt Hon Eric G.

      Meacher, Michael

      Wardell, Gareth (Gower)

      Meadowcroft, Michael

      Wareing, Robert

      Millan, Rt Hon Bruce

      Welsh, Michael

      Miller, Dr M. S. (E Kilbride)

      White, James

      Mitchell, Austin (G't Grimsby)

      Wigley, Dafydd

      Morris, Rt Hon A. (W'shawe)

      Williams, Rt Hon A.

      Morris, Rt Hon J. (Aberavon)

      Wilson, Gordon

      Nellist, David

      Winnick, David

      O'Brien, William

      Woodall, Alec

      O'Neill, Martin

      Young, David (Bolton SE)

      Orme, Rt Hon Stanley

      Park, George

      Tellers for the Ayes:

      Parry, Robert

      Mr. James Hamilton and Mr. Lawrence Cunliffe.

      Patchett, Terry

      Pavitt, Laurie

      NOES

      Adley, Robert

      Blaker, Rt Hon Sir Peter

      Aitken, Jonathan

      Body, Richard

      Alison, Rt Hon Michael

      Bonsor, Sir Nicholas

      Amess, David

      Bottomley, Peter

      Ancram, Michael

      Bowden, A. (Brighton K'to'n)

      Arnold, Tom

      Boyson, Dr Rhodes

      Ashby, David

      Braine, Sir Bernard

      Aspinwall, Jack

      Brandon-Bravo, Martin

      Atkins, Rt Hon Sir H.

      Bright, Graham

      Atkins, Robert (South Ribble)

      Brinton, Tim

      Atkinson, David (B'm'th E)

      Brittan, Rt Hon Leon

      Baker, Kenneth (Mole Valley)

      Brooke, Hon Peter

      Baker, Nicholas (N Dorset)

      Brown, M. (Brigg & Cl'thpes)

      Baldry, Anthony

      Bryan, Sir Paul

      Banks, Robert (Harrogate)

      Buchanan-Smith, Rt Hon A.

      Batiste, Spencer

      Burt, Alistair

      Beaumont-Dark, Anthony

      Butcher, John

      Bellingham, Henry

      Butler, Hon Adam

      Bendall, Vivian

      Butterfill, John

      Benyon, William

      Carlisle, John (N Luton)

      Berry, Sir Anthony

      Carttiss, Michael

      Best, Keith

      Chalker, Mrs Lynda

      Biffen, Rt Hon John

      Chapman, Sydney

      Biggs-Davison, Sir John

      Chope, Christopher

      1049

      Churchill, W. S.

      Hooson, Tom

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

      Howarth, Gerald (Cannock)

      Clark, Dr Michael (Rochford)

      Howell, Rt Hon D. (G'ldford)

      Clark, Sir W. (Croydon S)

      Howell, Ralph (N Norfolk)

      Clarke Kenneth (Rushcliffe)

      Hubbard-Miles, Peter

      Clegg, Sir Walter

      Hunt, David (Wirral)

      Cockeram, Eric

      Hunter, Andrew

      Colvin, Michael

      Hurd, Rt Hon Douglas

      Conway, Derek

      Irving, Charles

      Coombs, Simon

      Jenkin, Rt Hon Patrick

      Cope, John

      Jessel, Toby

      Cormack, Patrick

      Johnson-Smith, Sir Geoffrey

      Corrie, John

      Jones, Gwilym (Cardiff N)

      Couchman, James

      Jones, Robert (W Herts)

      Crouch, David

      Joseph, Rt Hon Sir Keith

      Currie, Mrs Edwina

      Kershaw, Sir Anthony

      Dickens, Geoffrey

      King, Roger (B'ham N'field)

      Dorrell, Stephen

      Knight, Gregory (Derby N)

      Douglas-Hamilton, Lord J.

      Knight, Mrs Jill (Edgbaston)

      Dover, Denshore

      Knowles, Michael

      du Cann, Rt Hon Edward

      Knox, David

      Dunn, Robert

      Lang, Ian

      Durant, Tony

      Latham, Michael

      Dykes, Hugh

      Lawler, Geoffrey

      Edwards, Rt Hon N. (P'broke)

      Lawrence, Ivan

      Eggar, Tim

      Lawson, Rt Hon Nigel

      Emery, Sir Peter

      Lee, John (Pendle)

      Evennett, David

      Leigh, Edward (Gainsbor'gh)

      Eyre, Reginald

      Lennox-Boyd, Hon Mark

      Fallon, Michael

      Lester, Jim

      Farr, John

      Lightbown, David

      Favell, Anthony

      Lilley, Peter

      Finsberg, Geoffrey

      Lloyd, Ian (Havant)

      Fookes, Miss Janet

      Lord, Michael

      Forman, Nigel

      Lyell, Nicholas

      Forsyth, Michael (Stirling)

      McCrindle, Robert

      Fowler, Rt Hon Norman

      McCurley, Mrs Anna

      Fox, Marcus

      Macfarlane, Neil

      Fraser, Rt Hon Sir Hugh

      MacKay, Andrew (Berkshire)

      Fraser, Peter (Angus East)

      MacKay, John (Argyll & Bute)

      Freeman, Roger

      Maclean, David John.

      Fry, Peter

      McNair-Wilson, M. (N'bury)

      Gale, Roger

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

      Galley, Roy

      McQuarrie, Albert

      Gardner, Sir Edward (Fylde)

      Major, John

      Garel-Jones, Tristan

      Malins, Humfrey

      Gilmour, Rt Hon Sir Ian

      Malone, Gerald

      Glyn, Dr Alan

      Maples, John

      Gorst, John

      Marland, Paul

      Gow, Ian

      Marlow, Antony

      Gower, Sir Raymond

      Marshall, Michael (Arundel)

      Grant, Sir Anthony

      Mates, Michael

      Greenway, Harry

      Maude, Francis

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

      Mawhinney, Dr Brian

      Griffiths, Peter (Portsm'th N)

      Maxwell-Hyslop, Robin

      Grist, Ian

      Mayhew, Sir Patrick

      Grylls, Michael

      Mellor, David

      Gummer, John Selwyn

      Merchant, Piers

      Hamilton, Hon A. (Epsom)

      Meyer, Sir Anthony

      Hamilton, Neil (Tatton)

      Miller, Hal (B'grove)

      Hampson, Dr Keith

      Mills, Iain (Meriden)

      Hanley, Jeremy

      Mills, Sir Peter (West Devon)

      Hannam, John

      Mitchell, David (NW Hants)

      Hargreaves, Kenneth

      Moate, Roger

      Harvey, Robert

      Monro, Sir Hector

      Haselhurst, Alan

      Montgomery, Fergus

      Hawkins, C. (High Peak)

      Morris, M. (N'hampton, S)

      Hawkins, Sir Paul (SW N'folk)

      Moynihan, Hon C.

      Hawksley, Warren

      Mudd, David

      Hayhoe, Barney

      Neale, Gerrard

      Hayward, Robert

      Nelson, Anthony

      Heathcoat-Amory, David

      Neubert, Michael

      Henderson, Barry

      Nicholls, Patrick

      Heseltine, Rt Hon Michael

      Norris, Steven

      Hickmet, Richard

      Oppenheim, Philip

      Hicks, Robert

      Osborn, Sir John

      Hill, James

      Ottaway, Richard

      Hirst, Michael

      Page, Richard (Herts SW)

      Hogg, Hon Douglas (Gr'th'm)

      Parkinson, Rt Hon Cecil

      Holland, Sir Philip (Gedling)

      Parris, Matthew

      1050

      Patten, John (Oxford)

      Stradling Thomas, J.

      Pawsey, James

      Sumberg, David

      Peacock, Mrs Elizabeth

      Tapsell, Peter

      Percival, Rt Hon Sir Ian

      Taylor, Teddy (S'end E)

      Pollock, Alexander

      Tebbit, Rt Hon Norman

      Porter, Barry

      Temple-Morris, Peter

      Powell, William (Corby)

      Terlezki, Stefan

      Powley, John

      Thatcher, Rt Hon Mrs M.

      Prentice, Rt Hon Reg

      Thomas, Rt Hon Peter

      Price, Sir David

      Thompson, Patrick (N'ich N)

      Proctor, K. Harvey

      Thorne, Neil (llford S)

      Raison, Rt Hon Timothy

      Thornton, Malcolm

      Rathbone, Tim

      Thurnham, Peter

      Renton, Tim

      Townend, John (Bridlington)

      Ridley, Rt Hon Nicholas

      Townsend, Cyril D. (B'heath)

      Ridsdale, Sir Julian

      Tracey, Richard

      Rifkind, Malcolm

      Trippier, David

      Roberts, Wyn (Conwy)

      Twinn, Dr Ian

      Robinson, Mark (N'port W)

      van Straubenzee, Sir W.

      Rossi, Sir Hugh

      Vaughan, Dr Gerard

      Rost, Peter

      Waddington, David

      Rowe, Andrew

      Wakeham, Rt Hon John

      Rumbold, Mrs Angela

      Waldegrave, Hon William

      Ryder, Richard

      Walden, George

      Sackville, Hon Thomas

      Walker, Bill (T'side N)

      Sainsbury, Hon Timothy

      Walker, Rt Hon P. (W'cester)

      St. John-Stevas, Rt Hon N.

      Waller, Gary

      Sayeed, Jonathan

      Walters, Dennis

      Scott, Nicholas

      Ward, John

      Shaw, Giles (Pudsey)

      Wardle, C. (Bexhill)

      Shaw, Sir Michael (Scarb')

      Warren, Kenneth

      Shelton, William (Streatham)

      Watson, John

      Shepherd, Colin (Hereford)

      Watts, John

      Shersby, Michael

      Wells, Bowen (Hertford)

      Sims, Roger

      Wells, John (Maidstone)

      Skeet, T. H. H.

      Wheeler, John

      Smith, Sir Dudley (Warwick)

      Whitfield, John

      Smith, Tim (Beaconsfield)

      Whitney, Raymond

      Soames, Hon Nicholas

      Wiggin, Jerry

      Speed, Keith

      Wilkinson, John

      Speller, Tony

      Winterton, Mrs Ann

      Spence, John

      Winterton, Nicholas

      Spencer, D.

      Wolfson, Mark

      Spicer, Michael (S Worcs)

      Wood, Timothy

      Stanbrook, Ivor

      Woodcock, Michael

      Stanley, John

      Yeo, Tim

      Steen, Anthony

      Young, Sir George (Acton)

      Stern, Michael

      Younger, Rt Hon George

      Stevens, Lewis (Nuneaton)

      Stevens, Martin (Fulham)

      Tellers for the Noes:

      Stewart, Allan (Eastwood)

      Mr. Carol Mather and Mr. Robert Boscawen.

      Stewart, Andrew (Sherwood)

      Stokes, John

      Question accordingly negatived.

    New Clause 3

      Duties of successor company as to staff
      'The successor company shall satisfy the Secretary of State that it will—

      (a) establish adequate consultative procedures including provisions for industrial democracy;

      (b) negotiate terms and conditions of employment including pay, promotion, job security and other benefits;

      (c) promote and encourage satisfactory levels of recruitment, training, safety, health and welfare, for its employees.'.—[Mr. Golding.]

      Brought up, and read the First time.
      Mr. Golding: I beg to move, That the clause be react a Second time.
      I should explain to the House that I am on the Front Bench only because my mate wants his supper.
      The Bill is a very bitter pill for the staff of BT. There are no safeguards for them. The Minister has refused to include any in the licence. He is full of assurances—

      1051
      vague, inevitably bland and always indeterminate. There are plenty of nods and winks. He is always saying that everything will be all right on the night. He is for ever saying, "I don't know what you're bothered about", and, "I can't see what the fuss is all about." But on clause after clause and issue after issue, nothing is put in writing. The hon. Gentleman must have been a very difficult man to court: nothing is put in writing.
      The past four years have been a story of the Government giving private assurances, but not saying anything too firm or putting anything in writing. Those assurances, nods and winks have come unstuck within a few months. There have been more changes in the course of history that the Minister has been plotting in the past three years than occurred in the Russian and French revolutions. Indeed, the hon. Gentleman talks of history when he means a cracked crystal ball into which he frequently looks.
      BT's staff have worked under a lifetime career guarantee arrangement. That lifetime career guarantee has led to civilised arrangements within the old Post Office and BT. It has led to great staff loyalty to the business. It is the nearest thing in Britain to the Japanese model. Postmaster-General after Postmaster-General, both Labour and Conservative, has paid tribute after their terms of office to the loyalty and dedication of the staff of the old Post Office, now BT.
      BT staff want not only job security, but careers, and career prospects have been available to them in BT. BT has escaped from the worst of the "us and them" attitude that prevails in British industry. BT engineers have worked hard in working hours, and have also studied hard. A feature of the life of a public sector telecommunications engineer has been that he has studied hard as well as worked hard during the day.
      Our apprenticeship arrangements in BT, jointly controlled, have been a model for British industry. It is well known that BT has trained for the nation, and has a first-rate record on training. Both apprentices and adult recruits have seen BT and the old Post Office as a career, and it is unusual to find that attitude among manual workers in Britain. With a promotion system based on merit, and not on the old school tie, youngsters and adults have gone for training and retraining, in order not only to tackle complex technical changes but to better themselves.
      I cannot speak highly enough of BT's central technical college at Stone, or of the teaching staff's commitment. That willingness to cope with technical change together with productivity bargaining has led to massive increases in productivity.
      If British industry in general, as well as private companies, had experienced the productivity increases that occurred in the old Post Office, now BT, there would have been not an economic decline in the past few years but an economic miracle. I have already referred to the absence of the traditional "them and us" attitude. Sadly that may change. Sometimes the Minister talks proudly of the so-called avhievements of liberalisation, but in the past few years there has been a black side to that.
      Liberalisation, as applied by Sir George Jefferson and as manifested in profit centres, is destroying good industrial relations in BT. During the past three years I have witnessed an enormous deterioration in BT's industrial relations. It is easier to destroy a constructive
      1052
      partnership than to create it. However, there was once a constructive partnership in which the unions played a full part.
      I have been a full-time officer of the POEU since 1960. It is sad to see the change in industrial relations within BT. It is not a change for the better. On the contrary I fear that it will be permanently for the worse. The POEU has played an important part in the development of British Telecommunications. All that is now at risk.
      7.30 pm
      Does anybody seriously believe that private industry will invest well over £100 million a year in training as does BT? I had responsibility in the Department of Employment under Albert Booth for training and I find it very difficult to envisage private employers, particularly at a time of economic stringency, spending such sums on training. One has only to look at other areas of the electronics industry and information technology to understand that that level of training is not sustained. British Telecommunications has invested well over £100 million in training 10,000 staff a year. That training will not take place when the shareholders get hold of the accounts and decide that they would prefer to see the money paid out in dividends rather than reinvested in technical staff training.
      I fear that promotion will be adversely affected in BT as in other British industries. Promotion will be made not on merit but on whom one knows, which school one went to, which club one frequents and who one's father is. I do not believe the same openness will prevail under private shareholding as has existed under public ownership.
      I shall not refer to pensions as my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) dealt adequately with that matter. I was a little dubious about my hon. Friend's doubts on whether the Government would take us into bankruptcy. Last night as I drove him home to north Staffordshire after the debate he kept on telling me he was seeing King Kong, and I doubted his stability then. Having heard him doubt that the Government would take us into bankruptcy, I question his stability again.
      Mr. Tony Marlow: We have not had the IMF mentioned yet.
      Mr. Golding: I see that King Kong has arrived even now in the House.
      The level of joint consultation that took place in the old Post Office is being undermined. Apart from changed managerial attitudes, decentralisation is responsible for that. We ought to be going further and enjoying worker participation, not destroying what has already been built up. No better area for experimentation in advanced forms of worker participation has existed than in British Telecommunications. Our unions and our staff have always taken a great interest in the financial affairs of British Telecommunications and in its future. The concerns of the unions have always gone beyond wages, hours and conditions. Our unions and staff have wanted to be involved in managerial decision making. Management is becoming more reluctant to let us become involved, and I fear that with privatisation and increased liberalisation we shall regress and not progress.
      Above all there is job security. The Minister of State has charged the POEU time and again with wanting to protect the jobs of its members. My answer to the charge

      1053
      is very simple: we are guilty of wanting to protect the jobs of our members. The Minister and the Under-Secretary do not understand the motivation of saving British jobs, with the execption of their own. The Minister of State seems willing to hop from constituency to constituency, but I doubt whether he would be willing for an American senator to represent Mole Valley in the House.
      Mr. Marlow: What a silly point!
      Mr. Golding: When hon. Members are prepared to give their jobs to the Japanese and to the Americans, they will have more right to say that they intend to give the jobs of British workers to the Americans and the Japanese in the name of some Conservative free trading philosophy.
      Telecommunications workers deserve job security. They have committed their lives, their skill and their dedication to the development of telecommunications in this country. They have been committed to the building up of one firm, they have been loyal and they deserve job security. Beyond that, job security will bring many benefits to British Telecommunications. In the past it has brought craft flexibility, loyalty, long service and benefits to British Telecommunications and its customers.
      In the following two debates the House will be considering further the customer. For the first time the Minister should make provision in the Bill for the protection of the interests of the staff. So far the Government have failed to give assurance to the staff. The staff deserve to have such assurance. The House should vote in favour of the new clause.
      Mr. McWilliam: I am surprised that the Minister did not leap up and say that he would accept new clause 3 because it is such an eminently reasonable one. All it calls for is the codification in the Bill of good industrial relations practice. The Minister will not accept it because he is afraid of Conservative Members and because he knows very well that they would scream and yell and shout. But those Conservative Members are already aware that, in industries where good industrial relations practice is built in, as in the terms of new clause 3, there exist good industrial relations, a lack of strikes, a codified system of settling disputes and a proper bargaining procedure. They know that people by and large get on better, work better and have fewer problems. Those hon. Members shout because they get much more fun out of it. They prefer to be nasty to people who do not deign to vote for them. That is their privilege. [Interruption.] Conservative Members can chat away if they like and they can make sedentary interventions. I shall give way to the Minister if he desires. I observe that the hon. Gentleman can make sedentary interventions, but he cannot rise to speak.
      This is a serious new clause. It calls in paragraph (a) for the establishment of
      "adequate consultative procedures including provisions for industrial democracy."
      We had industrial democracy in BT. An industrial democracy experiment was working extremely well and, because of it, an industrial dispute that might have taken place did not occur. That experiment was cravenly thrown out by the then chairman of BT because he did not like it. He did not want to be accountable to anyone other than the Minister. He certainly did not want to be accountable to the customer and, from the point of view of accountability to the work force, he felt that he knew better than people who had spent their lives in BT, so it was thrown out. It
      1054
      went for no other good reason than that it was disliked; it was thought almost to be a breach of the prerogative of management.
      It will come as no surprise to Conservative Members to know that, in my view, the only prerogative management has is to breathe. For everything else it must be answerable, whether it is dealing with the customers, shareholders or employees, or all three groups. Therefore, I denounce the autocratic systems of management that many Conservative Members would like to impose on British industry. We have seen the effects of tying people's hands behind their backs. People continue to fight, and they are made even more bitter. That is why we want to establish adequate consultative procedures and make some provision for industrial democracy. The new clause does not say that we should introduce it tomorrow or that we need another industrial democracy experiment. It simply refers to
      "procedures including provisions for industrial democracy".
      Paragraph (b) refers to negotiating
      "terms and conditions of employment including pay, promotion, job security and other benefits."
      I hope that BT will do all those things because there will be trouble if it does not, and rightly so, just as in any organised industry if an employer refuses to comply with such demands there is trouble. While investors put their money into a business, the employees put their lives into it, sometimes literally. That brings me to paragraph (c) of the new clause, which refers to promoting
      "satisfactory levels of recruitment, training, safety, health and welfare, for its employees."
      It is not much fun having to climb up a telegraph pole from which someone has fallen to find out if there was good reason why he fell. Nor is it much fun having to tell a lady that her husband died because the wood at the top of the pole was rotten or there was a loose step or the arm bolt had rusted through. Unfortunately, I have had to do those things. We must promote safety, and it should be codified. I accept that employees have protection under the Health and Safety at Work etc. Act, but in an industry as dangerous as this it should he codified.
      7.45 pm
      My hon. Friend the Member for Newcastle-under-Lyme rightly praised the training within BT, but I must remind him that in recent years there have been cutbacks in training and that, as a result, problems have arisen in finding people suitably qualified to do certain jobs. I accept that BT is probably the best employer in the country for providing training, but it has been cutting back, and I see that as a forerunner of what could happen after it becomes a public limited company, because shareholders are not interested in long-term benefits.
      It may take only three years of apprenticeship to train a technician, but it can take another 18 months, plus a year or so, for him to become a technical officer, and in my experience he is not worth a great deal until he has had much more experience and undergone more training. In the first 10 years of my marriage I spent at least one month of each year at the Post Office central technical Training college at Stone or at the Post Office college at Harrogate. Like my hon. Friend the Member for Newcastle-under-Lyme, I pay tribute to the standards of training offered at both. I also pay tribute to the accommodation offered at Stone, although my hon. Friend's praise was perhaps rather too fulsome. I gather that it has improved, but my hon. Friend did not have to eat the Stone food, which was

      1055
      not all that great. Those are matters about which we should have the right to negotiate, and I accept that things have changed and improved.
      When we talk about satisfactory levels of recruitment we do not mean going to the public schools to recruit trainee managers and to the local comprehensives to recruit the rest of us. It does not mean recruiting purely at one level or another without adequate means of progressing between the two. Members of the POEU have always had an input into promotion. There is joint appraisement procedure and anybody wanting to apply for promotion can do so. People used to have to get a form from the branch secretary—a Whitley form under the old regional Whitley council—to make sure that the person was qualified to apply. In other words, the union checked his basic qualifications — his technical qualifications and length of service — rather than the management. The management dealt with it after that, and we have always had a close input into the recruitment system in BT. I would not suggest that it was perfect, but it was much better than procedures that I have seen operated elsewhere.
      For all those reasons, I hope that the House will accept the new clause. For the first time let us tell one of the newly privatised companies, "You can have the organisations even though we do not like the idea, but we want certain safeguards." In later debates we shall talk about customers and finance, but let us first safeguard the staff. They should be properly safeguarded because in an industry such as this they are probably the most important resource available.
      Mr. Richard Page: I shall be brief because the guillotine falls at 8 o'clock. In case the Minister has been persuaded by the eloquence and rhetoric of Opposition Members, particularly of the hon. Member for Newcastle upon Tyne—
      Mr. Golding: Cannot the hon. Gentleman utter a couple of sentences without making a mistake?
      Mr. Page: I appreciate that the hon. Gentleman gets exceedingly upset when his constituency is named wrongly. I should have referred to him as the hon. Member for Newcastle-under-Lyme (Mr. Golding).
      As I was saying, lest the Minister has been persuaded by the arguments of Opposition Members, I urge him vigorously to resist their blandishments. Their cry was that jobs would be saved in BT and that there was immense work flexibility, yet the history of the matter is littered with the failures of consensus management. The companies that have succeeded have been those in which management has gone forward and managed, and we can begin to see that happening in BT today. In the last couple of years, following the first liberalisation measure, BT has gone ahead. Anybody who has had to deal with British Telecom, whether on a private or a commercial basis, since its withdrawal from experiments with the union on controls, cannot speak highly enough of the improvements that have been introduced. Therefore my hon. Friend should rigorously resist the new clause.
      Mr. McWilliam rose—
      Mr. Page: No, I will not give way. I have got only 60 seconds before I should retire in favour of my hon. Friend.
      1056
      Does anyone really think that by resisting new technology, by building a mythical fence around the country and by keeping this all in one set of hands we can hold back the progress on information technology that is going on throughout the world? Jobs will come from embracing new technologies and new ideas. Industry will be able to export its products and we shall create jobs, not take them away.
      There must be flexibility within industry if we are to succeed. Japan has designated information technology as its major growth area for the next 10 years. We should be wise to do the same. Therefore, I ask my hon. Friend to resist the new clause.
      Mr. Butcher: The proposed new clause envisages that the Secretary of State will obtain assurances from the successor company about its relations with its work force and then presumably seek to monitor the implementation of the assurances. This would involve a continuing role for the Secretary of State which would be out of keeping with the conduct of BT as a private sector company.
      Government policy towards terms and conditions of employment in the private sector is aimed at establishing the minimum framework necessary to protect the rights of employers and employees. Hon. Members on both sides of the House will know that this debate has been heightened recently because of proposals from Europe in the name of Mr. Vredeling.
      This framework, where legislated, applies to companies generally although it allows for employers and employees to develop arrangements best suited to their requirements. It would be inappropriate to treat BT differently from other private sector companies once it has been privatised. What the new clause calls for is continued public sector control over BT's policy towards its employees and this would be contrary to the effect of the privatisation measure.
      BT must also be treated on all fours with other private sector companies in regard to industrial democracy. We welcome moves to promote the involvement of employees in the businesses they work for. That is why, for example, we will be offering BT employees the opportunity to take shareholdings in the successor company. But we do not consider that methods of informing and consulting employees is something which the Government should impose on any undertaking through legislation. This is much better left to employers and employees to pursue voluntarily, taking into account their particular circumstances. In a moment I shall deal with a couple of points made by Opposition Members about that.
      In regard to the provision in the new clause dealing with employees' welfare, health and safety, and training and recruitment, the health and safety of employees at work is already covered by legislation so I think a statutory provision for consulting the Secretary of State is unnecessary. The training and recruitment of employees will be matters which fall very much within the successor company's own interests. Again I find the implication here that the successor company should be subject to special vetting and direction by the Secretary of State over and above its duties and interests in these respects as a normal private sector company. It is this implication that we must oppose.
      The hon. Member for Newcastle-under-Lyme (Mr. Golding) made some observations with which we agree. Despite the unhappiness of recent months over industrial

      1057
      relations in BT, BT and its employees have enjoyed good industrial relations historically. We all hope that the unfortunate events of recent weeks will be seen in the fullness of time as an aberration in the history of good relationships. The loyalty of the employees of BT is not in question.
      While we are concerned about making the Secretary of State take over these safeguards from BT, we agree that the motion highlights and signposts a number of things which good management should do to get good working relationships and the best possible performance from its employees. Therefore, we do not necessarily disagree with some of the objectives in the new clause. We disagree fundamentally with its methodology, but we believe that it is in the interests of the successor company to get involved in many of the things highlighted by the new clause because the company will perform well only if it does so.
      I must advise my hon. Friends to oppose new clause 3.
      Question put, That the clause be read a Second time:—
      The House divided:—Ayes, 192, Noes 305.

      Division No. 100]

      [7.55 pm

      AYES

      Adams, Allen (Paisley N)

      Eadie, Alex

      Alton, David

      Eastham, Ken

      Archer, Rt Hon Peter

      Edwards, R. (W'hampt'n SE)

      Ashton, Joe

      Evans, loan (Cynon Valley)

      Atkinson, N. (Tottenham)

      Evans, John (St. Helens N)

      Bagier, Gordon A. T.

      Fatchett, Derek

      Banks, Tony (Newham NW)

      Faulds, Andrew

      Barron, Kevin

      Field, Frank (Birkenhead)

      Beggs, Roy

      Fields, T. (L'pool Broad Gn)

      Beith, A. J.

      Fisher, Mark

      Bell, Stuart

      Flannery, Martin

      Bennett, A. (Dent'n & Red'sh)

      Foot, Rt Hon Michael

      Bidwell, Sydney

      Forrester, John

      Blair, Anthony

      Forsythe, Clifford (S Antrim)

      Bray, Dr Jeremy

      Foster, Derek

      Brown, Gordon (D'f'mline E)

      Foulkes, George

      Brown, Hugh D. (Provan)

      Freeson, Rt Hon Reginald

      Brown, N. (N'c'tle-u-Tyne E)

      Freud, Clement

      Brown, R. (N'c'tle-u-Tyne N)

      Garrett, W. E.

      Brown, Ron (E'burgh, Leith)

      George, Bruce

      Callaghan, Jim (Heyw'd & M)

      Gilbert, Rt Hon Dr John

      Campbell, Ian

      Godman, Dr Norman

      Campbell-Savours, Dale

      Golding, John

      Canavan, Dennis

      Gould, Bryan

      Carter-Jones, Lewis

      Hamilton, James (M'well N)

      Clark, Dr David (S Shields)

      Hamilton, W. W. (Central Fife)

      Clarke, Thomas

      Hardy, Peter

      Clay, Robert

      Harman, Ms Harriet

      Cocks, Rt Hon M. (Bristol S.)

      Harrison, Rt Hon Walter

      Cohen, Harry

      Hart, Rt Hon Dame Judith

      Coleman, Donald

      Hattersley, Rt Hon Roy

      Concannon, Rt Hon J. D.

      Healey, Rt Hon Denis

      Conlan, Bernard

      Heffer, Eric S.

      Cook, Frank (Stockton North)

      Hogg, N. (C'nauld & Kilsyth)

      Cook, Robin F. (Livingston)

      Home Robertson, John

      Corbett, Robin

      Howell, Rt Hon D. (S'heath)

      Cowans, Harry

      Howells, Geraint

      Cox, Thomas (Tooting)

      Hoyle, Douglas

      Craigen, J. M.

      Hughes, Mark (Durham)

      Crowther, Stan

      Hughes, Robert (Aberdeen N)

      Cunliffe, Lawrence

      Hughes, Roy (Newport East)

      Cunningham, Dr John

      Hughes, Sean (Knowsley S)

      Davies, Rt Hon Denzil (L'lli)

      Hughes, Simon (Southwark)

      Davies, Ronald (Caerphilly)

      Janner, Hon Greville

      Davis, Terry (B'ham, H'ge H'l)

      John, Brynmor

      Deakins, Eric

      Johnston, Russell

      Dewar, Donald

      Jones, Barry (Alyn & Deeside)

      Dixon, Donald

      Kaufman, Rt Hon Gerald

      Dormand, Jack

      Kennedy, Charles

      Dubs, Alfred

      Kilroy-Silk, Robert

      Duffy, A. E. P.

      Kinnock, Rt Hon Neil

      1058

      Lambie, David

      Randall, Stuart

      Lamond, James

      Redmond, M.

      Leighton, Ronald

      Rees, Rt Hon M. (Leeds S)

      Lewis, Ron (Carlisle)

      Richardson, Ms Jo

      Lewis, Terence (Worsley)

      Roberts, Allan (Bootle)

      Litherland, Robert

      Roberts, Ernest (Hackney N)

      Lloyd, Tony (Stretford)

      Robertson, George

      Lofthouse, Geoffrey

      Rooker, J. W.

      Loyden, Edward

      Ross, Ernest (Dundee W)

      McCusker, Harold

      Ross, Wm. (Londonderry)

      McDonald, Dr Oonagh

      Rowlands, Ted

      McGuire, Michael

      Ryman, John

      McKay, Allen (Penistone)

      Sedgemore, Brian

      McKelvey, William

      Sheerman, Barry

      Mackenzie, Rt Hon Gregor

      Sheldon, Rt Hon R.

      McNamara, Kevin

      Shore, Rt Hon Peter

      McTaggart, Robert

      Short, Ms Clare (Ladywood)

      McWilliam, John

      Short, Mrs H.(W'hampt'n NE)

      Madden, Max

      Skinner, Dennis

      Marek, Dr John

      Smith, C.(Isl'ton S & F'bury)

      Martin, Michael

      Smith, Rt Hon J. (M'kl'ds E)

      Mason, Rt Hon Roy

      Snape, Peter

      Maxton, John

      Soley, Clive

      Maynard, Miss Joan

      Spearing, Nigel

      Meacher, Michael

      Stewart, Rt Hon D. (W Isles)

      Meadowcroft, Michael

      Stott, Roger

      Mikardo, Ian

      Strang, Gavin

      Millan, Rt Hon Bruce

      Thomas, Dafydd (Merioneth)

      Miller, Dr M. S. (E Kilbride)

      Thompson, J. (Wansbeck)

      Mitchell, Austin (G't Grimsby)

      Thorne, Stan (Preston)

      Molyneaux, Rt Hon James

      Tinn, James

      Morris, Rt Hon A. (W'shawe)

      Torney, Tom

      Nellist, David

      Varley, Rt Hon Eric G.

      Nicholson, J.

      Wardell, Gareth (Gower)

      O'Brien, William

      Wareing, Robert

      O'Neill, Martin

      Welsh, Michael

      Orme, Rt Hon Stanley

      White, James

      Paisley, Rev Ian

      Wigley, Dafydd

      Park, George

      Williams, Rt Hon A.

      Parry, Robert

      Wilson, Gordon

      Patchett, Terry

      Winnick, David

      Pavitt, Laurie

      Woodall, Alec

      Pendry, Tom

      Young, David (Bolton SE)

      Pike, Peter

      Powell, Raymond (Ogmore)

      Tellers for the Ayes:

      Prescott, John

      Mr. Frank Haynes and Dr. Roger Thomas.

      Radice, Giles

      NOES

      Adley, Robert

      Bright, Graham

      Aitken, Jonathan

      Brinton, Tim

      Amery, Rt Hon Julian

      Brittan, Rt Hon Leon

      Amess, David

      Brooke, Hon Peter

      Ancram, Michael

      Brown, M. (Brigg & Cl'thpes)

      Arnold, Tom

      Bryan, Sir Paul

      Ashby, David

      Buchanan-Smith, Rt Hon A.

      Aspinwall, Jack

      Bulmer, Esmond

      Atkins, Rt Hon Sir H.

      Burt, Alistair

      Atkins, Robert (South Ribble)

      Butcher, John

      Atkinson, David (B'm'th E)

      Butler, Hon Adam

      Baker, Kenneth (Mole Valley)

      Butterfill, John

      Baker, Nicholas (N Dorset)

      Carlisle, John (N Luton)

      Baldry, Anthony

      Carttiss, Michael

      Banks, Robert (Harrogate)

      Chapman, Sydney

      Batiste, Spencer

      Chope, Christopher

      Beaumont-Dark, Anthony

      Churchill, W. S.

      Bendall, Vivian

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

      Benyon, William

      Clark, Dr Michael (Rochford)

      Berry, Sir Anthony

      Clark, Sir W. (Croydon S)

      Best, Keith

      Clarke Kenneth (Rushcliffe)

      Biffen, Rt Hon John

      Clegg, Sir Walter

      Biggs-Davison, Sir John

      Cockeram, Eric

      Blaker, Rt Hon Sir Peter

      Colvin, Michael

      Body, Richard

      Conway, Derek

      Bonsor, Sir Nicholas

      Coombs, Simon

      Bottomley, Peter

      Cope, John

      Bowden, A. (Brighton Kto'n)

      Cormack, Patrick

      Boyson, Dr Rhodes

      Corrie, John

      Braine, Sir Bernard

      Couchman, James

      Brandon-Bravo, Martin

      Crouch, David

      1059

      Currie, Mrs Edwina

      King, Rt Hon Tom

      Dickens, Geoffrey

      Knight, Gregory (Derby N)

      Douglas-Hamilton, Lord J.

      Knight, Mrs Jill (Edgbaston)

      Dover, Denshore

      Knowles, Michael

      Dunn, Robert

      Knox, David

      Durant, Tony

      Lang, Ian

      Dykes, Hugh

      Latham, Michael

      Edwards, Rt Hon N. (P'broke)

      Lawler, Geoffrey

      Eggar, Tim

      Lawrence, Ivan

      Emery, Sir Peter

      Lawson, Rt Hon Nigel

      Evennett, David

      Lee, John (Pendle)

      Eyre, Reginald

      Leigh, Edward (Gainsbor'gh)

      Fallon, Michael

      Lennox-Boyd, Hon Mark

      Farr, John

      Lester, Jim

      Favell, Anthony

      Lightbown, David

      Fenner, Mrs Peggy

      Lilley, Peter

      Finsberg, Geoffrey

      Lloyd, Ian (Havant)

      Fletcher, Alexander

      Lord, Michael

      Forman, Nigel

      Lyell, Nicholas

      Forsyth, Michael (Stirling)

      McCrindle, Robert

      Fowler, Rt Hon Norman

      McCurley, Mrs Anna

      Fox, Marcus

      Macfarlane, Neil

      Fraser, Rt Hon Sir Hugh

      MacKay, Andrew (Berkshire)

      Fraser, Peter (Angus East)

      MacKay, John (Argyll & Bute)

      Freeman, Roger

      Maclean, David John.

      Fry, Peter

      McNair-Wilson, M. (N'bury)

      Gale, Roger

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

      Galley, Roy

      Major, John

      Gardner, Sir Edward (Fylde)

      Malins, Humfrey

      Garel-Jones, Tristan

      Malone, Gerald

      Gilmour, Rt Hon Sir Ian

      Maples, John

      Glyn, Dr Alan

      Marland, Paul

      Gorst, John

      Marlow, Antony

      Gow, Ian

      Marshall, Michael (Arundel)

      Gower, Sir Raymond

      Mates, Michael

      Grant, Sir Anthony

      Mather, Carol

      Greenway, Harry

      Maude, Francis

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

      Mawhinney, Dr Brian

      Griffiths, Peter (Portsm'th N)

      Maxwell-Hyslop, Robin

      Grist, Ian

      Mellor, David

      Grylls, Michael

      Merchant, Piers

      Gummer, John Selwyn

      Meyer, Sir Anthony

      Hamilton, Hon A. (Epsom)

      Miller, Hal (B'grove)

      Hamilton, Neil (Tatton)

      Mills, Iain (Meriden)

      Hampson, Dr Keith

      Mills, Sir Peter (West Devon)

      Hanley, Jeremy

      Mitchell, David (NW Hants)

      Hannam,John

      Moate, Roger

      Hargreaves, Kenneth

      Montgomery, Fergus

      Harvey, Robert

      Morris, M. (N'hampton, S)

      Haselhurst, Alan

      Morrison, Hon P. (Chester)

      Hawkins, C. (High Peak)

      Moynihan, Hon C.

      Hawkins, Sir Paul (SW N'folk)

      Mudd, David

      Hawksley, Warren

      Neale, Gerrard

      Hayhoe, Barney

      Nelson, Anthony

      Hayward, Robert

      Neubert, Michael

      Heathcoat-Amory, David

      Nicholls, Patrick

      Henderson, Barry

      Norris, Steven

      Heseltine, Rt Hon Michael

      Oppenheim, Philip

      Hickmet, Richard

      Osborn, Sir John

      Hicks, Robert

      Ottaway, Richard

      Higgins, Rt Hon Terence L.

      Page, Richard (Herts SW)

      Hill, James

      Parkinson, Rt Hon Cecil

      Hind, Kenneth

      Parris, Matthew

      Hirst, Michael

      Patten, John (Oxford)

      Hogg, Hon Douglas (Gr'th'm)

      Pawsey, James

      Holland, Sir Philip (Gedling)

      Peacock, Mrs Elizabeth

      Hooson, Tom

      Percival, Rt Hon Sir Ian

      Hordern, Peter

      Pollock, Alexander

      Howarth, Gerald (Cannock)

      Porter, Barry

      Hubbard-Miles, Peter

      Powell, William (Corby)

      Hunt, David (Wirral)

      Powley, John

      Hunter, Andrew

      Prentice, Rt Hon Reg

      Hurd, Rt Hon Douglas

      Price, Sir David

      Irving, Charles

      Proctor, K. Harvey

      Jessel, Toby

      Raison, Rt Hon Timothy

      Johnson-Smith, Sir Geoffrey

      Rathbone, Tim

      Jones, Gwilym (Cardiff N)

      Renton, Tim

      Jones, Robert (W Herts)

      Ridley, Rt Hon Nicholas

      Joseph, Rt Hon Sir Keith

      Ridsdale, Sir Julian

      King, Roger (B'ham N'field)

      Rifkind, Malcolm

      1060

      Rippon, Rt Hon Geoffrey

      Thomas, Rt Hon Peter

      Roberts, Wyn (Conwy)

      Thompson, Patrick (N'ich N)

      Rossi, Sir Hugh

      Thorne, Neil (Ilford S)

      Rost, Peter

      Thornton, Malcolm

      Rowe, Andrew

      Thurnham, Peter

      Rumbold, Mrs Angela

      Townend, John (Bridlington)

      Ryder, Richard

      Tracey, Richard

      Sackville, Hon Thomas

      Trippier, David

      Sainsbury, Hon Timothy

      Twinn, Dr Ian

      St. John-Stevas, Rt Hon N.

      van Straubenzee, Sir W.

      Sayeed, Jonathan

      Vaughan, Dr Gerard

      Scott, Nicholas

      Viggers, Peter

      Shaw, Giles (Pudsey)

      Waddington, David

      Shaw, Sir Michael (Scarb')

      Wakeham, Rt Hon John

      Shelton, William (Streatham)

      Waldegrave, Hon William

      Shepherd, Colin (Hereford)

      Walden, George

      Shersby, Michael

      Walker, Bill (T'side N)

      Sims, Roger

      Wall, Sir Patrick

      Skeet, T. H. H.

      Waller, Gary

      Smith, Sir Dudley (Warwick)

      Walters, Dennis

      Smith, Tim (Beaconsfield)

      Ward, John

      Soames, Hon Nicholas

      Wardle, C. (Bexhill)

      Speed, Keith

      Warren, Kenneth

      Speller, Tony

      Watson, John

      Spence, John

      Watts, John

      Spencer, D.

      Wells, Bowen (Hertford)

      Spicer, Michael (S Worcs)

      Wells, John (Maidstone)

      Squire, Robin

      Wheeler, John

      Stanbrook, Ivor

      Whitfield, John

      Stanley, John

      Whitney, Raymond

      Steen, Anthony

      Wiggin, Jerry

      Stern, Michael

      Wilkinson, John

      Stevens, Lewis (Nuneaton)

      Winterton, Mrs Ann

      Stevens, Martin (Fulham)

      Winterton, Nicholas

      Stewart, Allan (Eastwood)

      Wolfson, Mark

      Stewart, Andrew (Sherwood)

      Wood, Timothy

      Stokes, John

      Woodcock, Michael

      Stradling Thomas, J.

      Yeo, Tim

      Sumberg, David

      Young, Sir George (Acton)

      Tapsell, Peter

      Younger, Rt Hon George

      Taylor, Teddy (S'end E)

      Tebbit, Rt Hon Norman

      Tellers for the Noes:

      Temple-Morris, Peter

      Mr. Alastair Goodlad and Mr. Robert Boscawen.

      Terlezki, Stefan

      Question accordingly negatived.

    Clause 2

      ABOLITION OF BRITISH TELECOMMUNICATIONS' EXCLUSIVE PRIVILEGE
      Mr. Stott: I beg to move amendment No. 1, in page 2, line 29, leave out clause 2.
      Clause 2 deals with the abolition of BT's exclusive privilege. In many respects it is the heart of the Bill, as BT has enjoyed that privilege for more than 50 years. It is now to be destroyed. There are many key elements in that privilege which we have debated at length in Committee on this Bill and its predecessor. The Opposition are worried that clause 2 will adversely affect British manufacturers of telecommunications equipment.
      Question No. 8 on today's Order Paper was tabled by my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse). I regret that he was not able to be in the Chamber at Question Time. He asked the Secretary of State for Trade and Industry
      "how many pieces of telecommunications apparatus have been submitted for approval by the British Approvals Board for Telecommunications; and how many have been approved."
      It would have been interesting to learn the answer to the question tabled by my hon. Friend. I suspect that approvals have been few.

      1061
      There is evidence that some extension telephones being fitted under the liberalisation regime initiated by the Government have been of mainly imported telecommunications manufacture. That is causing us considerable concern because so far the Post Office and BT have ordered exchange equipment, underground logistical equipment and telephonic equipment primarily from British manufacturers. I hazard a guess that between 95 and 98 per cent. of the equipment that BT has ordered has been bought from British manufacturers. It is not surprising to read the comments of Sir Kenneth Corfield, the chairman and chief executive of Standard Telephones and Cables Ltd. a company based in Britain that provides BT with a fair proportion of its equipment. He has spent a lifetime in the industry, and is one of those who are widely admired by the Prime Minister for their entrepreneunal endeavour.
      Sir Kenneth Corfield said of the Bill:
      "BT, 'privatised', may choose to improve its facilities by dramatic changes in its purchasing policies abandoning the relationship it has built up over many years with United Kingdom major suppliers. This could delay deliveries, and leave the customer with worse facilities and a worse service. It could also irreparably damage the United Kingdom telecommunications equipment manufacturing industry."
      Those are the words not of a member of Her Majesty's Opposition, but of the chairman of a private enterprise company that has been relatively successful. That is Sir Kenneth Corfield's view on the Bill.
      The manufacturing base in Britain will be considerably eroded if we abolish the exclusive privilege of BT, as the Government are seeking to do this evening. There is evidence to suggest—
      Mr. Golding: Hear, hear.
      Mr. D. N. Campbell-Savours:: Hear, hear.
      Mr. Stott: My hon. Friends have not yet heard the evidence. Perhaps they will contain themselves, and cheer when I have given them it.
      In fact, it is not a reason to cheer, but the reverse. Britain is running a deficit on imported information technology equipment of about £1 billion per year. That figure was accurate in 1980. I remember that the hon. Member for Norwich, North (Mr. Thompson) chided me in Committee about my extrapolation of that figure. Perhaps I should not use the word "extrapolation" as the hon. Gentleman may be tempted to his feet again.
      It is my view, and that of eminent economic forecasters, that the balance of payments deficit for imported information technology equipment will increase from £1 billion to about £5 billion by the end of the 1980s. That is serious. The Government pretend that they want to enhance the status of information technology, but by removing BT's exclusive privilege we are inviting the Japanese, the Germans, the Americans and the Swedes to flood the British market with telecommunications equipment. That is only one of the issues that will arise if the Bill is passed and BT no longer has its exclusive privilege.
      8.15 pm
      It worries me that some of the telecommunications equipment now on the market is not up to standard. I told the Minister in Committee that the Post Office Engineering Union had conducted field research on the situation in the market place. I remind the House, particularly the
      1062
      Conservative Members who are present, almost all of whom were members of the Committee, that some advertisements and equipment are not marked, which clearly is in breach of the law. Other advertisements and equipment are marked, but in ways that are misleading to the customer and against the spirit or letter of the law. Even when advertisements and equipment are clearly marked, retailers actively encourage customers to buy non-approved apparatus, assuring them that it car be connected safely to the public network.
      Mr. Campbell-Savours: Mail order.
      Mr. Stott: That is right. One has only to read the daily or Sunday papers and the colour supplements or to look at any of the supermarkets that are now selling telecommunications equipment to realise that some of it is not up to the standards that would be required to connect it to the BT network. If that does not worry Conservative Members, I do not know what will. The equipment now being connected to our system comes largely or wholly from outside the United Kingdom. That should concern every one of us.
      Other issues with regard to the abolition of BT's exclusive privilege greatly concern us. That exclusive privilege contains another key provision, set out in BT's general duty in section 3 of the 1981 Act, which is repealed under clause 2. That provision is that BT should have regard to the social needs of the United Kingdom.
      There are many important aspects to the social duties. In case Conservative Members do not recognise this, the social duty imposed on BT and its work force plays a large part in the motivation of the work force. Before becoming a Member of Parliament I spent almost all my working life as an employee of the old Post Office and BT. The social duties and responsibilities enshrined in statute were an important part of all our lives. I should like to draw the attention of the House to four of those social duties.
      First, there is a need to provide a universal service. That emcompasses services in the remote rural areas as well as the big city centres. Other countries, such as France, have made it clear in recent years that the telephone service is an essential part of modern society and provides a vital element in social and national unity. The telephone service, like other utilities, is vital in those areas. Experience over the years has shown us that without the essential infrastructure elements, regions can become isolated and unattractive to new investment and add to the spiral of depression that is now well accelerated, due to the Government's policies.
      Secondly, the social duty includes an expectation that adequate public call offices and emergency services wall be provided — as a right, not because they are necessarily profitable. The provision of a national telecommunications service embraces the duty to ensure that the full range of telecommunications services is provided as an essential part of life in a modern compassionate society. That is something that the Government have tended to forget.
      Thirdly, the social duty incorporates the duty to make special provision for the disabled, the handicapped, the elderly and others who may need special assistance, and to provide the services which any civilised society recognises as vital not just to those who can afford there but to those who need them. The law of profitable return should be subjugated to the philosophy of social need. The

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      members of my union, for example, willingly install without payment special phones for the disabled. I did so when I was employed by British Telecom. It is part of an overall philosophy to providing a caring service for everyone. My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) will be speaking at the Dispatch Box in the debate on the disabled tomorrow.
      Fourthly, the social duty accepts that the concepts of a phone in every home and telecommunications for all are essential objectives of any national communications policy. It is ironic as well as tragic that the present Government, who espouse information technology in the manner of converts worshipping at some new totem pole, should put forward a Bill which takes away the social duty to provide telecommunications. Without the telephone connection, information technology becomes a joke.
      Present services will be lost. Furthermore, a privatised BT, without the philosophy of public service and concentrating on profit maximisation, will seriously jeopardise the national objective of ensuring that the telecommunications revolution is available to all. There is a real danger of the emergence of two nations—those with a telephone, and those without.
      Mr. Barry Henderson: Surely there already are two nations? Only about 70 per cent. of the population have a telephone.
      Mr. Stott: The hon. Gentleman must have psychic powers. That would have been my next remark. There is still some way to go before we achieve 100 per cent. with a telephone in every household. That is an essential prerequisite for any society that is united behind the communications revolution. Without the telephone—the initial connection, the initial fit — there cannot be participation in the communicating society. For those without a telephone, the information technology on which the Government rightly place so much stress will have no meaning. The telephone is now not just a useful addition to the home. It is an essential utility, like gas, electricity and water.
      Mr. Richard Page: The hon. Gentleman is talking about two nations—those with and those without. If the Bill becomes an Act, does he believe that the number of people who do not have a phone will increase or decrease?
      Mr. Stott: The hon. Gentleman must have been asleep during our long hours of debate in Committee. I and my hon. Friends, including my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), spelt out in detail our belief that after privatisation it will become increasingly difficult for those who live in the remote areas to be connected to the system. We argued that point until we were blue in the face.
      As a publicly owned corporation, British Telecom has a duty to provide facilities in the remote areas. I used to work in one of those areas. I used to climb telegraph poles there, as hon. Gentlemen will have heard me say repeatedly. The Opposition believe that the rural and semi-rural areas will be considerably disadvantaged by the passing of the Bill.
      The current American experience is relevant to this and other clauses. I reject the spurious comments of the
      1064
      Minister of State in Committee about how American problems are not relevant to the United Kingdom. There was an interesting report recently in the national newspapers. I do not know whether the document was surreptitiously leaked. It showed that a senior civil servant in the Department in charge of communications policy concurs with our view on certain points. The document contained the main thrust of the argument for the provisions of the Bill, but it signalled a warning to the Government that problems in rural areas could become much more acute as a consequence of the Bill.
      Mr. Golding: I hope that my hon. Friend will put it on record that that document was not leaked by any civil servant. It had a wider circulation. There is no possibility of that document, or any other document, having been leaked from within the Civil Service by the Department officials. Information seeps out occasionally, but it does not come from civil servants.
      Mr. Stott: I confirm my hon. Friend's comments. I was not suggesting that the document had been leaked by any civil servant within the Department of Industry. However, most of the document appeared on the back page of the Guardian, and I cite it to underpin what I have been saying in reply to the intervention of the hon. Member for Hertfordshire, South-West (Mr. Page).
      8.30 pm
      I was talking about the possibility of every household having a telephone, and how the exclusive privilege currently enjoyed by BT would achieve that better than the Bill's provisions. To achieve the objective of full national connection to the network, we will have to encourage those with smaller incomes to have a telephone. It is essential for any business reaching maturity, to cut prices to bring the remaining customers into the industry. That is exactly opposite to what is happening. Because of the pressures of re-balancing the tariffs to be competitive and avoid cross-subsidisation, connection charges have risen sharply and are likely to be pushed up even further. The very people who should be encouraged most to be connected are faced with rising prices deliberately aimed at them. That is the market oriented approach.
      It is hardly likely that a privately-owned BT plc would consider it worthwhile to subsidise telephone connections —assuming that it was permitted to do so—in the hope that at some time in the future the line may pay its way. Investors would not see that as an economic use of the company's assets or money.
      Consequently, the idea of a public service operated nationally on the basis of equal access to equal service will be fatally undermined by privatisation and the profit motive. It will no longer be possible to maintain an integrated national service which takes into account all the community's needs as at present.
      That is why the social element in BT's general duty, which is thrown out by the Bill, is important. However, we find little, if any, mention of the word "social" in the Bill, but the word "competitive" features prominently. We know from bitter exprience that allowing "competitive" to override "social" means that those in most need are pushed under in favour of those who demand profit.
      The ending in clause 2 of BT's exclusive privilege in regard to having the social, industrial and commercial needs of the United Kingdom at heart will finally achieve

      1065
      the Government's aim of breaking down the one national organisation that provides a universal telecommunications service.
      The Government are rejecting crucial arguments as to why the network should be considered as a whole with a single operator able to balance the conflicting pressures of profitability and national service. That is what BT stands for. It has existed for well over half a century. It is manned by caring people who have been employed in the industry since they left school. I and my hon. Friend know that two or three generations of one family have been employed in BT because there is a commitment to public service.
      We are proud of the service that we render to the customer, and that is why we believe that BT's exclusive privilege should be maintained. I as a partisan politician, and members of the POEU and the Union of Communications Workers, who are not partisan politicians but merely BT employees, fear that the service will be undermined. That is why I felt it necessary to spend some time putting forward the Opposition arguments as to why we believe it is vital that BT should maintain its exclusive privilege. I hope that my right hon. and hon. Friends will join me in the lobby to prove that.
      Mr. Simon Coombs: I agree with the hon. Member for Wigan (Mr. Stott) in one thing only—that the clause is critical to the Bill. It is vital for the future of telecommunications that BT's exclusive privilege should be ended. It would be wrong for the House to allow to pass the remarks made by the hon. Gentleman when he said that the ending of that exclusive privilege would mean unlimited competition or the destruction of the industry.
      The cosy relationship that has continued for many years between BT and the manufacturers of BT's equipment will be removed. It was a cosy relationship that allowed so much time to develop equipment that it was out of date before it reached the market and the service of the consumer. The spur of foreign intervention is now beginning to have its effect on BT. During the past decade and a half, the British share of the world market in telecommunications equipment has declined from 25 per cent. to 5 per cent. That is a deterioration which this clause and the Bill as a whole seek to rectify. I am personally aware of the changes that the advent of competition in the past few years has brought to BT. This clause means a greater choice of networks for the consumer. Mercury's intervention in the future will be limited, but there is no doubt that even after an uneasy start, Mercury is gaining credibility. British Telecom should attempt to beat the competition rather than try to destroy it, as some members of the organisation have attempted recently.
      I do not have time to go into detail about the scare stories that have come from the Opposition tonight. There have been references to the American experience, but as was said in Committee, that experience is different to what we face. We are a smaller country with a completely different balance between local and trunk lines. There are other differences between the two countries that make the comparison in which the Opposition have indulged misleading, unhelpful and positively destructive to British Telecom's future good standing. I believe that much of what the Opposition have done during the many hours of debate has been for political purposes only.
      Mr. Stott: What is this?
      Mr. Coombs: The hon. Member for Wigan said that he was a political partisan, and that is the basis upon which the Opposition have worked. We know and respect that, but it is wrong to speculate about the future from the standpoint of political prejudice. When one hears the Opposition Front Bench talk about their long experience in the industry, one suspects that their fears for the future are based upon their memories of a happy past long since gone, when the era of cosy uncompetitiveness allowed them to carry on at their own speed in their own way. Those times have now gone. Thank goodness they have. I believe, as do my right hon. and hon. Friends, that the ending of exclusive privilege will allow steady progress towards competition — controlled competition, but competition nevertheless—which will be good not only for BT and its employees, but, primarily and most importantly, for its customers.
      Mr. A. J. Beith: I want to explain why Liberals and Social Democrats do not want clause 2 to remain in the Bill, despite its superficial attractions. I am no stout defender of monopolies of any kind, including that of British Telecommunications, and it would be mistaken to portray the BT monopoly as an unmixed blessing which has helped us in every way over the years. We have seen the problems that it has created over the years in the attitude to equipment and the connection of equipment to the telephone system. It has been a highly conservative attitude. We have also seen the problems of customers trying to get a satisfactory billing arrangement with BT, finding it difficult to battle against a monopoly, whether a public or private monopoly. It would be quite wrong to pretend that the path of monopoly was always a rosy one. Hon. Members who are anxious to bring in an element of competition into the telephone system should remember other aspects of the problem as well. So we do not believe that the Bill, removing BT's monopoly and at the same time failing to provide adequate alternative safeguards, can properly meet our concern.
      It has been suggested in some quarters that too much competition will break out all over the place when BT's monopoly is removed. Our fear—it is a strong fear in the remote area that I represent—is that there will be no competition at all, because no one will attempt to provide a service, not even BT, under the greater pressures that will face it. I agree with the hon. Member for Wigan (Mr. Stott) when he spoke of the public service ethos in BT that governed its attitude to services in remoter areas and services for disadvantaged customers. That ethos cannot survive the situation that the Government seek to create, unless the most stringent safeguards are written into the Bill, and they are not there now. It is inconceivable that BT can continue its public service ethos when all the commercial pressure on it in future will be to act as a fully competitive agency.
      The hon. Member for Swindon (Mr. Coombs) seemed to suggest that it was wrong to look back on the old days of BT, that it was something to be ashamed of, and that we should look into a bright and cheerful future of aggressive competition. There are some things about the old days that customers liked. There was the assumption that there should be a telephone box in every small rural community. There was the assumption that if one wanted to be connected to a telephone service, wherever one lived, it should be possible at a reasonable charge. The

      1067
      public is anxious to keep those features of the old days, although the new dashing radical conservatism is ready to sweep them away.
      8.45 pm
      I ask hon. Members to think about what will happen in the remoter parts of the country if we rely on pure competition to deal with all the problems. It is more expensive to provide services in certain rural areas—but not all. I do not want to give the impression that all rural services depend on a benevolent attitude on the part of the provider of the services, but there are some which require an element of cross-subsidy and which a new competitive approach cannot provide by itself.
      I represent an area where communities are a long way apart from one another, and where shepherds live in remote hillside farms and cottages. I spend a lot of time trying to get telephone connections and telephone facilities for them. It has been apparent over the past couple of years that the pressure is already on. British Telecommunications has already been pushed into a more competitive approach, and it is already finding it more difficult to maintain telephone boxes and to provide services.
      Mr. Hayward: The hon. Gentleman is talking about rural areas, but possibly he is not aware that the Standing Committee discussed the question on three occasions. Unfortunately, his party's representative was present on only one of those occasions.
      Mr. Beith: I hope that we shall discuss the problems of rural areas on this clause, on the next clause and on many other occasions. The hon. Gentleman himself may be unaware that I have spoken on the matter on earlier occasions on this Bill and on the previous Bill. It may be impossible for us all to speak on every occasion. Nevertheless, I hope that he recognises the widespread concern.
      I quoted on a previous Bill the example of an area in my constituency where it took years to get BT to provide a telephone box. In the end it provided one in a place where, time after time in the winter months, people who were thought to be lost in the snow would be sitting in a farmhouse watching the rescuers set out on television, unable to make contact with the outside world because there was no telephone. Eventually BT was prevailed upon to provide a telephone connection in that locality. There are other examples like that. Now I find it increasingly difficult to persuade BT to provide such facilities, except at a disproportionate cost. I know of a recent case where BT quoted a private subscriber a cost of £5,000 for initial connection to the public telephone service. That price is beyond the reach of anybody on any normal income. That is the product of the recent pressures on BT, and it will get worse in the situation that clause 2 seeks to create.
      Mr. Henderson: Is that under the present BT, which the hon. Gentleman said had such a social conscience? So it is happening already under the existing system. Under the Bill, when that ridiculous situation arises, at least the private subscriber can go to the Director General— a provision, which the hon. Gentleman intends to vote against.
      Mr. Beith: The hon. Gentleman has not been listening. I said that that was happening under the increasing
      1068
      pressures which are already on BT. Anyone who knows what has been happening in BT over the past few years knows that it has been gearing itself up to a more competitive approach to the public telephone system. The existing legislation has done that. The Government's attitude and pressure from Ministers have caused that. We shall go further down that road if clause 2 is enacted. Far from it being easier to get the £5,000 telephone connection, it will be more difficult under what is now proposed.
      On the next clause, I hope that we shall deal in more detail with the attempt to provide safeguards to protect rural consumers. We are convinced that the inclusion of clause 2 in the Bill will be a serious threat to the continued provision of services, both telephone connections and call boxes in rural areas, and it is therefore something that we cannot support.
      Mr. Butcher: We have had a brief but informed debate. It has raised many of the Bill's complexities, not least the implications of the abolition of the exclusive privilege.
      The hon. Member for Berwick-upon-Tweed (Mr. Beith) in a thoughtful speech, voiced great concern about the future of services in rural areas, in the light of the abolition of the exclusive privilege. He is correct to look further in the Bill, to clause 3, and to see there the strong obligations that the Bill places on British Telecommunications to maintain the universal service, and in particular, certain aspects of the service which the hon. Member for Wigan (Mr. Stott) called social services. The hon. Member for Berwick-upon-Tweed will know that it is our objective to see two competing national cellular radio systems in short order. This would be a new set of networks, which do not require land lines and which may help people who are snowed in, watching the rescue operations coming to their area, without being able to get in touch with them. There is also a programme for the installation of a new form of telephone exchange, the UXD5, which will bring to rural areas features that will take a long time to appear in the major cities. So there is a strong case for saying that technology is coming to the rescue, and that it will come to the rescue at a competitive price.
      The hon. Member for Wigan, who has recently been made his party's information technology spokesman, made a thoughtful speech. He was right to point out that obligations must be placed on BT in addition to the obligations that competitive pressures alone may bring to bear. I refer the hon. Gentleman to clause 3 and to the subsequent debate on the Opposition's next amendment.
      May I put on the record a statement which I think should be made in response to the hon. Gentleman's key point about the possibility that BT may change its habits, may not think in terms of United Kingdom Ltd. and may not think in terms of the interests of British equipment suppliers? I commend to the hon. Gentleman the following words:
      "It is certain that an enterprising Britain, a commercial Britain competing in a toughening world market, will need two things from British Telecom. First, a communications and information technology service of the first order; and secondly, support for the domestic information technology industry.
      Opportunity is knocking on British Telecom's door, in the form of Government's decision to privatise us, and to use their own words, 'to free us from the web of Government interference

      1069
      and control.' It's a mandatory offer, but we on the Board have accepted the challenge — on the basis that the Government mean what they say and can deliver. It is vital that they do.
      We see this not as a matter of political dogma, but as the best way for our business to succeed in the coming years. Technology is changing our business and our market. British Industry is littered with the corpses of businesses who have refused, or left it too late, to recognise and adapt to change. We don't want to face either our customers or our staff with that kind of disaster … The UK needs a major force in information technology if it is not to be left behind in this vital industry of the future. The very small and not so small firms producing equipment and services in this sector need a strong domestic market base, with BT as a major UK flagship, around which they can prosper both at home and abroad."
      No doubt the hon. Member for Wigan has guessed that those are the words of Sir George Jefferson, and we commend them.
      Question put, That the amendment be made:—
      The House divided: Ayes 176, Noes 295.

      Division No. 101]

      [8.51 pm

      AYES

      Adams, Allen (Paisley N)

      Foot, Rt Hon Michael

      Alton, David

      Forsythe, Clifford (S Antrim)

      Archer, Rt Hon Peter

      Foster, Derek

      Ashton, Joe

      Foulkes, George

      Atkinson, N. (Tottenham)

      Freeson, Rt Hon Reginald

      Bagier, Gordon A. T,

      Freud, Clement

      Banks, Tony (Newham NW)

      Garrett, W. E.

      Barron, Kevin

      George, Bruce

      Beggs, Roy

      Gilbert, Rt Hon Dr John

      Beith, A. J.

      Godman, Dr Norman

      Bell, Stuart

      Golding, John

      Bennett, A. (Dent'n & Red'sh)

      Gould, Bryan

      Blair, Anthony

      Hamilton, James (M'well N)

      Bray, Dr Jeremy

      Hamilton, W. W. (Central Fife)

      Brown, Gordon (D'f'mline E)

      Hardy, Peter

      Brown, Hugh D. (Provan)

      Harman, Ms Harriet

      Brown, N. (N'c'tle-u-Tyne E)

      Harrison, Rt Hon Walter

      Brown, R. (N'c'tle-u-Tyne N)

      Hart, Rt Hon Dame Judith

      Brown, Ron (E'burgh, Leith)

      Heffer, Eric S.

      Callaghan, Jim (Heyw'd & M)

      Hogg, N. (C'nauld & Kilsyth)

      Campbell, Ian

      Home Robertson, John

      Campbell-Savours, Dale

      Howell, Rt Hon D. (S'heath)

      Canavan, Dennis

      Howells, Geraint

      Carter-Jones, Lewis

      Hoyle, Douglas

      Clark, Dr David (S Shields)

      Hughes, Mark (Durham)

      Clarke, Thomas

      Hughes, Robert (Aberdeen N)

      Clay, Robert

      Hughes, Sean (Knowsley S)

      Cocks, Rt Hon M. (Bristol S.)

      Janner, Hon Greville

      Coleman, Donald

      John, Brynmor

      Cook, Frank (Stockton North)

      Jones, Barry (Alyn & Deeside)

      Cook, Robin F. (Livingston)

      Kaufman, Rt Hon Gerald

      Corbett, Robin

      Kennedy, Charles

      Cowans, Harry

      Kilroy-Silk, Robert

      Cox, Thomas (Tooting)

      Kinnock, Rt Hon Neil

      Craigen, J. M.

      Lambie, David

      Crowther, Stan

      Lamond, James

      Cunliffe, Lawrence

      Leighton, Ronald

      Cunningham, Dr John

      Lewis, Ron (Carlisle)

      Davies, Rt Hon Denzil (L'lli)

      Lewis, Terence (Worsley)

      Davies, Ronald (Caerphilly)

      Litherland, Robert

      Davis, Terry (B'ham, H'ge H'l)

      Lloyd, Tony (Stretford)

      Deakins, Eric

      Lofthouse, Geoffrey

      Dewar, Donald

      Loyden, Edward

      Dormand, Jack

      McCusker, Harold

      Duffy, A. E. P.

      McGuire, Michael

      Eadie, Alex

      McKay, Allen (Penistone)

      Eastham, Ken

      McKelvey, William

      Edwards, R. (W'hampt'n SE)

      Mackenzie, Rt Hon Gregor

      Evans, loan (Cynon Valley)

      McNamara, Kevin

      Evans, John (St. Helens N)

      McTaggart, Robert

      Fatchett, Derek

      McWilliam, John

      Faulds, Andrew

      Madden, Max

      Field, Frank (Birkenhead)

      Maginnis, Ken

      Fields, T. (L'pool Broad Gn)

      Marek, Dr John

      Fisher, Mark

      Martin, Michael

      Flannery, Martin

      Mason, Rt Hon Roy

      1070

      Maxton, John

      Ryman, John

      Maynard, Miss Joan

      Sedgemore, Brian

      Meacher, Michael

      Sheerman, Barry

      Meadowcroft, Michael

      Sheldon, Rt Hon R.

      Mikardo, Ian

      Shore, Rt Hon Peter

      Millan, Rt Hon Bruce

      Short, Ms Clare (Ladywood)

      Miller, Dr M. S. (E Kilbride)

      Short, Mrs H.(W'hampt'n NE)

      Mitchell, Austin (G't Grimsby)

      Skinner, Dennis

      Molyneaux, Rt Hon James

      Smith, C.(Isl'ton S & F'bury)

      Morris, Rt Hon A. (W'shawe)

      Smith, Rt Hon J. (M'kl'ds E)

      Morris, Rt Hon J. (Aberavon)

      Smyth, Rev W. M. (Belfast S)

      Nellist, David

      Snape, Peter

      Nicholson, J.

      Soley, Clive

      O'Brien, William

      Spearing, Nigel

      O'Neill, Martin

      Stewart, Rt Hon D. (W Isles)

      Orme, Rt Hon Stanley

      Stott, Roger

      Paisley, Rev Ian

      Strang, Gavin

      Park, George

      Thomas, Dafydd (Merioneth)

      Parry, Robert

      Thomas, Dr R. (Carmarthen)

      Patchett, Terry

      Thorne, Stan (Preston)

      Pavitt, Laurie

      Tinn, James

      Pike, Peter

      Torney, Tom

      Powell, Raymond (Ogmore)

      Wardell, Gareth (Gower)

      Prescott, John

      Wareing, Robert

      Randall, Stuart

      Welsh, Michael

      Redmond, M.

      White, James

      Rees, Rt Hon M. (Leeds S)

      Wigley, Dafydd

      Richardson, Ms Jo

      Williams, Rt Hon A.

      Roberts, Allan (Bootle)

      Wilson, Gordon

      Roberts, Ernest (Hackney N)

      Winnick, David

      Robertson, George

      Young, David (Bolton SE)

      Rooker, J. W.

      Ross, Ernest (Dundee W)

      Tellers for the Ayes:

      Ross, Wm. (Londonderry)

      Mr. Don Dixon and Mr. Frank Haynes.

      Rowlands, Ted

      NOES

      Adley, Robert

      Carlisle, John (N Luton)

      Aitken, Jonathan

      Carttiss, Michael

      Amery, Rt Hon Julian

      Chalker, Mrs Lynda

      Amess, David

      Chapman, Sydney

      Ancram, Michael

      Chope, Christopher

      Arnold, Tom

      Churchill, W. S.

      Ashby, David

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

      Aspinwall, Jack

      Clark, Dr Michael (Rochford)

      Atkins, Rt Hon Sir H.

      Clark, Sir W. (Croydon S)

      Atkins, Robert (South Ribble)

      Clarke Kenneth (Rushcliffe)

      Atkinson, David (B'm'th E)

      Clegg, Sir Walter

      Baker, Kenneth (Mole Valley)

      Colvin, Michael

      Baker, Nicholas (N Dorset)

      Conway, Derek

      Baldry, Anthony

      Coombs, Simon

      Banks, Robert (Harrogate)

      Cope, John

      Batiste, Spencer

      Cormack, Patrick

      Beaumont-Dark, Anthony

      Corrie, John

      Bellingham, Henry

      Couchman, James

      Bendall, Vivian

      Crouch, David

      Benyon, William

      Currie, Mrs Edwina

      Berry, Sir Anthony

      Dickens, Geoffrey

      Best, Keith

      Dorrell, Stephen

      Biffen, Rt Hon John

      Douglas-Hamilton, Lord J.

      Biggs-Davison, Sir John

      Dover, Denshore

      Blaker, Rt Hon Sir Peter

      Dunn, Robert

      Body, Richard

      Durant, Tony

      Bonsor, Sir Nicholas

      Edwards, Rt Hon N. (P'broke)

      Bowden, A. (Brighton K'to'n)

      Eggar, Tim

      Boyson, Dr Rhodes

      Evennett, David

      Braine, Sir Bernard

      Eyre, Reginald

      Brandon-Bravo, Martin

      Farr, John

      Bright, Graham

      Favell, Anthony

      Brinton, Tim

      Fenner, Mrs Peggy

      Brittan, Rt Hon Leon

      Finsberg, Geoffrey

      Brooke, Hon Peter

      Fletcher, Alexander

      Brown, M. (Brigg & Cl'thpes)

      Forman, Nigel

      Bryan, Sir Paul

      Forsyth, Michael (Stirling)

      Buchanan-Smith, Rt Hon A.

      Fowler, Rt Hon Norman

      Bulmer, Esmond

      Fox, Marcus

      Burt, Alistair

      Fraser, Peter (Angus East)

      Butcher, John

      Freeman, Roger

      Butler, Hon Adam

      Gale, Roger

      Butterfill, John

      Galley, Roy

      1071

      Gardner, Sir Edward (Fylde)

      Maples, John

      Garel-Jones, Tristan

      Marland, Paul

      Gilmour, Rt Hon Sir Ian

      Marlow, Antony

      Glyn, Dr Alan

      Marshall, Michael (Arundel)

      Goodlad, Alastair

      Mates, Michael

      Gorst, John

      Mather, Carol

      Gow, Ian

      Maude, Francis

      Gower, Sir Raymond

      Mawhinney, Dr Brian

      Grant, Sir Anthony

      Maxwell-Hyslop, Robin

      Greenway, Harry

      Mellor, David

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

      Merchant, Piers

      Griffiths, Peter (Portsm'th N)

      Meyer, Sir Anthony

      Grist, Ian

      Miller, Hal (B'grove)

      Grylls, Michael

      Mills, Iain (Meriden)

      Gummer, John Selwyn

      Mills, Sir Peter (West Devon)

      Hamilton, Hon A. (Epsom)

      Miscampbell, Norman

      Hamilton, Neil (Tatton)

      Mitchell, David (NW Hants)

      Hampson, Dr Keith

      Moate, Roger

      Hanley, Jeremy

      Montgomery, Fergus

      Hannam, John

      Morris, M. (N'hampton, S)

      Hargreaves, Kenneth

      Morrison, Hon P. (Chester)

      Harvey, Robert

      Moynihan, Hon C.

      Hawkins, C. (High Peak)

      Mudd, David

      Hawkins, Sir Paul (SW N'folk)

      Neale, Gerrard

      Hawksley, Warren

      Nelson, Anthony

      Hayhoe, Barney

      Neubert, Michael

      Hayward, Robert

      Nicholls, Patrick

      Heathcoat-Amory, David

      Norris, Steven

      Henderson, Barry

      Oppenheim, Philip

      Heseltine, Rt Hon Michael

      Osborn, Sir John

      Hickmet, Richard

      Ottaway, Richard

      Hicks, Robert

      Page, Richard (Herts SW)

      Higgins, Rt Hon Terence L.

      Parris, Matthew

      Hill, James

      Patten, John (Oxford)

      Hind, Kenneth

      Pawsey, James

      Hirst, Michael

      Peacock, Mrs Elizabeth

      Hogg, Hon Douglas (Gr'th'm)

      Percival, Rt Hon Sir Ian

      Holland, Sir Philip (Gedling)

      Pollock, Alexander

      Hooson, Tom

      Porter, Barry

      Hordern, Peter

      Powell, William (Corby)

      Howarth, Gerald (Cannock)

      Powley, John

      Howell, Ralph (N Norfolk)

      Prentice, Rt Hon Reg

      Hubbard-Miles, Peter

      Price, Sir David

      Hunter, Andrew

      Proctor, K. Harvey

      Hurd, Rt Hon Douglas

      Raison, Rt Hon Timothy

      Irving, Charles

      Rathbone, Tim

      Jessel, Toby

      Renton, Tim

      Johnson-Smith, Sir Geoffrey

      Ridley, Rt Hon Nicholas

      Jones, Gwilym (Cardiff N)

      Ridsdale, Sir Julian

      Jones, Robert (W Herts)

      Rifkind, Malcolm

      Joseph, Rt Hon Sir Keith

      Rippon, Rt Hon Geoffrey

      King, Roger (B'ham N'field)

      Roberts, Wyn (Conwy)

      Knight, Gregory (Derby N)

      Rossi, Sir Hugh

      Knight, Mrs Jill (Edgbaston)

      Rost, Peter

      Knowles, Michael

      Rowe, Andrew

      Knox, David

      Ryder, Richard

      Lang, Ian

      Sackville, Hon Thomas

      Latham, Michael

      St. John-Stevas, Rt Hon N.

      Lawler, Geoffrey

      Sayeed, Jonathan

      Lawrence, Ivan

      Scott, Nicholas

      Lawson, Rt Hon Nigel

      Shaw, Giles (Pudsey)

      Lee, John (Pendle)

      Shaw, Sir Michael (Scarb')

      Leigh, Edward (Gainsbor'gh)

      Shelton, William (Streatham)

      Lennox-Boyd, Hon Mark

      Shepherd, Colin (Hereford)

      Lightbown, David

      Shersby, Michael

      Lilley, Peter

      Silvester, Fred

      Lloyd, Ian (Havant)

      Sims, Roger

      Lord, Michael

      Smith, Sir Dudley (Warwick)

      Lyell, Nicholas

      Smith, Tim (Beaconsfield)

      McCrindle, Robert

      Soames, Hon Nicholas

      McCurley, Mrs Anna

      Speller, Tony

      Macfarlane, Neil

      Spence, John

      MacKay, Andrew (Berkshire)

      Spencer, D.

      MacKay, John (Argyll & Bute)

      Spicer, Michael (S Worcs)

      Maclean, David John.

      Squire, Robin

      McNair-Wilson, M. (N'bury)

      Stanbrook, Ivor

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

      Stanley, John

      Major, John

      Stevens, Lewis (Nuneaton)

      Malins, Humfrey

      Stevens, Martin (Fulham)

      Malone, Gerald

      Stewart, Allan (Eastwood)

      1072

      Stewart, Andrew (Sherwood)

      Waller, Gary

      Stokes, John

      Walters, Dennis

      Stradling Thomas, J.

      Ward, John

      Sumberg, David

      Wardle, C. (Bexhill)

      Tapsell, Peter

      Warren, Kenneth

      Taylor, Teddy (S'end E)

      Watson, John

      Tebbit, Rt Hon Norman

      Watts, John

      Temple-Morris, Peter

      Wells, Bowen (Hertford)

      Terlezki, Stefan

      Wells, John (Maidstone)

      Thomas, Rt Hon Peter

      Wheeler, John

      Thompson, Patrick (N'ich N)

      Whitfield, John

      Thorne, Neil (Ilford S)

      Whitney, Raymond.

      Thomton, Malcolm

      Wiggin, Jerry

      Thurnham, Peter

      Wilkinson, John

      Townend, John (Bridlington)

      Winterton, Mrs Ann

      Tracey, Richard

      Winterton, Nicholas

      Trippier, David

      Wolfson, Mark

      Twinn, Dr Ian

      Wood, Timothy

      van Straubenzee, Sir W.

      Woodcock, Michael

      Vaughan, Dr Gerard

      Yeo, Tim

      Viggers, Peter

      Young, Sir George (Acton)

      Waddington, David

      Younger, Rt Hon George

      Wakeham, Rt Hon John

      Waldegrave, Hon William

      Tellers for the Noes:

      Walden, George

      Mr. Robert Boscawen and Mr. Tim Sainsbury.

      Walker, Bill (T'side N)

      Wall, Sir Patrick

      Question accordingly negatived.
      Amendment made: No. 2 in page 2, line 30, leave out `made by statutory instrument'.—[Mr. Butcher.]

    Clause 3

      GENERAL DUTIES OF SECRETARY OF STATE AND DIRECTOR
      Mr. Golding: I beg to move, amendment No. 3, in page 2, line 36, leave out clause 3.
      It is regrettable that we have only two hours to debate this clause because it was inadequately debated in Committee. The fall of the guillotine has frustrated the democratic process of this House. The difficulty with this clause is that, from time to time, with regular monotony, the Government have changed it. It is not a static clause and it is not the same clause as was introduced back in November 1982. It has been changed out of all recognition.
      There are Conservative Members who have since been put into purdah, but who assisted in changing this clause to the point where it is almost unrecognisable, seen from the standpoint of November 1982. The changes that the Government have been forced to introduce to clause 3 underline the importance of the effective opposition that we have mounted to the clause. It underlines also the fact that, far from scaremongering, we saw the Bill's inconsistencies many months ago. The chopping and changing of clause 3, the introduction of one new formula after another and the popping out of the hat of one rabbit of a report after another show that the Government's proposals have been unplanned and inept. The Government do not yet know what they want to do with the Bill. That is why they are still uncertain about the clause.
      By including clause 3—I may return to this point on Third Reading — the Government have admitted the central contradiction of their privatisation policy. They know that privatisation will harm the customer and that it will especially damage the residential subscriber. The intention behind clause 3 has been to repair some of the

      1073
      damage that privatisation will inflict on the customer. The Government are having difficulty reconciling the principles of competition with the desire to save customers who will suffer from the type of competition that the Government are introducing.
      My job is to tell the House of the so-called improvements to clause 3 that have been introduced during the short time that the Bill has been debated. They have been substantial. Despite those improvements, clause 3 is harmful to British telecommunications and is inadequate. It sets out apparently to protect the residential customer, but it fails to do so. My hon. Friend the Member for Wigan (Mr. Stott) laid a trailer to his arguments when he said that clause 3 sets out to destroy British manufacturing industry, and it can succeed.
      I apologise to Conservative Members if I abandon intuition for the moment and deal with facts, but they must be faced. Fact No. 1 is that British residential telephone charges are among the lowest in the world. That has been commonly agreed by the Government and the Opposition. Fact No. 2 is that many residential charges do not cover the costs of the telephone service. The costs have been made up by charging big business users more than is necessary. Big business users have supported project Mercury to escape helping the ordinary customer. That is the nub of the Bill. For months on end I have been subjected to sedentary abuse from inexperienced Conservatives. Now, at the last knockings, the Secretary of State himself has been sent along to try to do the job that others have completely failed to do. He will have the opportunity, of which he did not avail himself in Committee, to put the Government view. The nub of the Bill is the reluctance of big business to cross-subsidise the ordinary residential subscriber.
      Fact No. 3 follows from facts Nos. 1 and 2. It is that residential charges will be higher under liberalisation and privatisation than they would have been under public ownership. That is one of the reasons why public opinion has shifted so remarkably in the past 12 months. The ordinary residential subscriber now realises that privatisation is a Tory con—a way of taking money from the pockets of ordinary working people and putting it into the bank accounts of the rich. Residential charges will be increased to reduce the costs for big business.
      Mr. Timothy Wood: Will the hon. Gentleman state clearly whether he supports the overcharging of commerce and industry and, if so, whether he believes that that is damaging to British competitiveness generally?
      Mr. Golding: I support and have always supported cross-subsidisation, just as I support the Minister's proposals for access charges, which follow the same principle. I do not believe that the cross-subsidisation that I have described is any more harmful than that proposed by the Minister. It has been to the benefit of ordinary people that they have been able to obtain their telephone service at a cheaper rate because additional charges have been placed on big business.
      Mr. Archie Hamilton: What about small business?
      Mr. Golding: The Government Whip—known as "Archie" — finds it no easier to remain silent in the Chamber than he did in Committee before he got the sack.
      1074
      He asks about small business. The Government, of course, are creating small businesses. They are creating small businesses out of ICI, Shell, BL and the rest. All the big businesses that we used to have will become small businesses under the Government and their Whips.
      The Government say that assurances are to be found in the licence, that prices will be subject to restrictions and that there will be controls. I know that my hon. Friend the Member for Wigan feels strongly about this because in political advertisements paid for by the public BT has been calling the same tune. Those assurances are not worth the paper that they are written on. The licence being sold to the general public for a pound is not worth that amount of money.
      9.15 pm
      The Minister produced out of a hat an RPI minus X formula to which he has referred for almost a year. We still do not know what X means. The Minister has not a clue what X means. The hon. Member for Epsom and Ewell (Mr. Hamilton), who was sacked from the Committee, says that his right hon. Friend means system X. He might as well mean system X as he does not know what else it can mean. Probably a civil servant has said, "Tell them that it is X. They will never know. By the time they have asked what X means, the Bill will have passed through the Commons." Such has been the Minister's approach. Every time he faces a difficulty, he brushes it aside, talks to the Leader of the House, obtains a guillotine, stops our questions and hopes that their Lordships will be asleep, not having read any of our proceedings. The technique has been to dodge the difficult questions. Laryngitis or not, what does X mean? I doubt that we shall get an answer.
      The intention of the formula is to keep BT's prices for connection charges, exchange line rentals, local call charges and call charges from public call boxes below the level of inflation. The Government are using the formula to give an impression that they are keeping prices down. The past two years have seen only increases. The formula could have been used in the past two years to introduce increases that were completely unjusified and unnecessary. The Government can tell the public, "Under this new system we shall keep prices below the cost of living, although we do not know by how much. We will tell you that when we have assessed everything after the Bill has been enacted." All that sounds smashing. The Government fail to tell the public that under public ownership charges have been below the cost of living for years. As a result of increased productivity by the staff and massive public investment, they said that their target would be a real reduction in costs of 5 per cent.
      If the formula means that the figure will be worse than that achieved under public ownership, we will have something to say. Unfortunately, at that time it will be too late as the Government will have bulldozed the Bill through both Houses. When the Bill is enacted, even though its provisions will become inceasingly unpopular, they will announce decisions which will mean a raw deal for the customer. The formula is cosmetic and fraudulent. Prices will probably be higher under private ownership than under public ownership.
      The Government do not know how to guarantee profitability to the investor and at the same time peg prices while creaming off profitable business through Mercury. They do not know how to do it, they have not got a clue. That is made clear even in the financial columns of the

      1075
      posh newspapers that normally support the Tory party. Every financial commentator is sceptical. That is a polite way of describing their cynicism about the Government's proposals to privatise BT. The Government do not have a clue about what the pricing policy is to be. There can be no doubt that the formula will be inadequate.
      In Committee we made it clear to the Minister that unless he could give us decisions about some of the important issues, it was not yet time to take decisions. Let us take the example of what items are to be considered for inclusion in the average. It makes a big difference whether trunk calls are included or excluded. The Government could say that they will take the average increase in prices.
      We already know that under privatisation and liberalisation, BT will reduce the cost of international calls to compete with Mercury. My constituents, who are ordinary working people, do not make many international calls. Big business men in the City make them. The Minister of State smiles at me. I know that the constituents of Mole Valley are a bit better heeled than the constituents of Newcastle-under-Lyme, so I exempt them. Those rich people may well make more international calls. However, most of us represent ordinary working people and they certainly make very few international calls.
      Reductions in the cost of international calls will not make much difference to most people. The introduction of Mercury represents one of the most wasteful investments to have been made in Britain since railways were constructed parallel to one another. However, since its introduction, BT has decided to reduce the cost of trunk calls. I hope that it does so in order to drive Mercury out of business.
      Privatisation and liberalisation mean that the cost of international and trunk calls will fall. To make up the money in the kitty the cost of local calls will be increased. That will hurt the constituents of most hon. Members unless they represent very posh constituencies. It will hurt all those who make many more local calls than trunk and international calls. Clearly, the Government are taking money out of the pockets of working people so that big business can be given more cash. We oppose that, because it is bad. The latest opinion polls on this privatisation measure show that the public also oppose it.
      There has been no proper discussion. The Minister of State was floored several times in Committee by detailed questions. For example, we asked him whether the licence made it possible for BT to keep the price the same while changing the nature, quality and size of the service. It does not do so, but we asked him because it embarrassed him. We have had no satisfactory answer. I call it the Sainsbury factor— the principle where by the price remains the same, but the size of the packet shrinks. How will the Government deal with what I call the Sainsbury factor, the changing of the commodity?
      The Financial Times has been telling the Government that if the local call area in London is made smaller, much more profit will ensue. Will the Government stop that? Will the Government state in the licence that London customers will not be penalised?
      No willingness has been shown by the Minister of State to help Londoners since he left his last two London seats. Before he went to Mole Valley he might have given
      1076
      London some assistance, but, having exhausted his London seats and gone further south, he seems unsympathetic to my proposition.
      I have also asked the Minister of State—I gave up asking questions of the Under-Secretary of State on 10 February — what he intends to do about the cost of maintenance and maintenance charges. Will he put a ceiling on the charges that can be imposed upon customers for the maintenance of equipment? There is no separate maintenance charge at present. The maintenance charge is included in the rental charge. Will BT be able to have a separate maintenance charge in future? I made this point to the Minister of State in Committee. Will BT customers be exploited, as I have been exploited, by private companies charging £14·75 for four minutes' work? If the telephone goes out of order and a call is made at the subscriber's house necessitating only four minutes' work, will the telephone subscriber be handed a bill for £14·75 and be told that is the minimum call-out charge?
      How does the Minister of State intend to guarantee the continuance of the quality of service? Should there be a statement in the licence which says: "Thou shalt not behave as badly as television companies, thou shalt not behave as badly as the private companies that maintain electric cookers"? I brought tears to the eyes of the Government Front Bench when I explained during consideration of this Bill, the difficulties I had in getting my cooker repaired. During consideration of the previous Bill the repair item was a television. The Under-Secretary of State should take the question of maintenance seriously. Telephone customers have had a good public service and the surveys indicate customer satisfaction. I cite that as one reason why public opinion says it does not want the Bill. Public opinion does not want to get rid of a good maintenance service for the residential subscriber in exchange for the shoddy service often offered by private enterprise companies.
      The draft licence as presently written is not very helpful. The House would welcome the Under-Secretary of State's observations on the Bill before Third Reading. I assume that he has been silent because he has been wondering how on earth he will justify the Bill tomorrow night. Is there any other reason why he has been so silent?
      9.30 pm
      Mr. Marlow: Yes, because the hon. Gentleman will not stop talking!
      Mr. Golding: The hon. Member for Northampton, North (Mr. Marlow) is now assisting the Secretary of State. My advice to the right hon. Gentleman is to disown his hon. Friend as quickly as possible.
      The BT licence will not protect residential customers and one need only look at the small print to see that the exceptions will make the licence meaningless. For example, we are told that people are entitled to a service if there is a reasonable demand for it. When one asks what is meant by "reasonable demand", the answer is usually, "A reasonable demand is one that is backed by money. If people are prepared to pay the full cost of a service, they are entitled to it."
      The vast number of rural subscribers and a substantial number of residential subscribers are provided with a telephone service at below cost. In other words, somebody else pays. I do not find anything wrong with people in the countryside receiving cross-subsidisation from people

      1077
      living in the city. Nor do I find anything wrong with residential subscribers receiving some cross-subsidisation from big business.
      If the Secretary of State follows the logic of his argument he will have to say that the customer must pay the full cost of the service. If that were to happen, Britain's telecommunications system would be decimated. It cannot and should not be run on a full-cost basis. It is not only an economic service but a social service. It has a great contribution to make in the social fabric of the nation.
      Indeed, in my view many families should have a telephone whether or not they can afford the full cost. If the Secretary of State does not believe that, then tomorrow night he will have to justify the Minister of State's action in introducing access charges and placing a control on prices. It is clear that the Minister of State does not believe that every customer should pay the full price, and he has introduced cross-subsidisation because he shares my view. Although he does not share my view in its entirety, he accepts that some people are entitled to a telephone service —he confines it to a telephone service—whether or not they can afford the full cost. That is why he has placed a tax on international and trunk calls, called "access charges". The Secretary of State, by tomorrow night, had better decide how far he agrees with the philosophy of the Minister of State.
      The licence is inadequate because it is full of escape clauses. It gives discretion to the Director General of Telecommunications and it makes it impossible for the residential subscriber at times of difficulty to get the service that is needed. My hon. Friend the Member for Wigan referred to an article in The Guardian of 25 November headed, "Towards the Year 2000". It is clear that the Government intend that telecommunications in Britain should be developed in such a way that the nation is divided.
      In an intervention an hon. Member asked whether it was not true that even now there are two nations, those with telephones and those without. The answer is yes. The position is changing constantly because the number of telephones is increasing all the time. However, it is clear from the Guardian article and from the cable policy of the Government that there will still be two nations. One half of the country will have an advanced telecommunications system and the other half will have a rudimentary telephone system.
      Mr. Henderson: The hon. Gentleman has said that he approves of total cross-subsidisation for BT operations. Does he feel that subscribers' payments for their telephones should be used, through BT and cross-subsidisation, to enable BT to continue the major investment in cable which it has undertaken? Is that right?
      Mr. Golding: Yes. There should be mixed funding. Some should come from the customer, some from provision for depreciation and some from borrowing, but that is another subject which we shall deal with later. The answer to the hon. Gentleman is yes: a simple question, a simple answer.
      I am sorry that the Chief Whip for the Liberal party is not here because I wish to speak about call boxes. The position is unsatisfactory. Sir George Jefferson and the Minister of State are leading people to believe that there will be no attack on call boxes. That is not justified by the licence.
      The Secretary of State for Trade and Industry (Mr. Norman Tebbit): Some people have been attacking call boxes with crowbars for years.
      Mr. Golding: The Secretary of State says that some people have been attacking call boxes with crowbars for years. What a contemptible contribution to a debate on telecommunications. We are debating the liberalisation and the privatisation of the foremost public enterprise in Europe, and what does the Secretary of State talk about —the vandalisation of call boxes with crowbars. That may be the experience of the Secretary of State but it is not my experience. I have never vandalised a call box in my life.
      What is missing in the argument about kiosks is the specification of the minimum figure that a box has to take in revenue before it is at risk. That is not in the licence. All we are told is that a minimum figure will be laid down and that if the box takes less than the minimum figure it will be at risk. Various estimates have been given. There has been talk of £1,000 a year. It is nonsense to talk in such terms. Currently kiosks lose BT about £77 million a year. There is an average loss of about £1,000 per kiosk. The kiosks in London railway stations are profitable so many kiosks must lose a great deal of money.
      I am not in favour of abolishing kiosks; I think the Secretary of State would be. His philosophy would be that people should get a big house with two telephones. We are two nations. We have not achieved even the favourable Disraeli state of affairs refereed to by the Minister of State. As has already been pointed out, there is still a considerable number of people who cannot afford a telephone. It is only reasonable that we provide them with kiosk facilities. The kiosk is still at risk.
      We are still waiting for the Minister to tell us what "rural" means. We have had statement after statement on what he will do about rural areas but he has not told us what they are. However, he is repentant and has now concluded that, having written such a provision into the Bill, he must decide what "rural" means. Will we have that information before tomorrow night? If we do not, what is the point of it being mentioned in the Bill? It is also time that the Government told us more about the low user rebate.
      It is disgraceful what clause 3 will do to British manufacturers of telecommunications and electronic equipment. The Secretary of State is not bothered whether we have such an industry —that is why he has been made Secretary of State for Trade and Industry. I said recently that the Minister with responsibility for the west midlands should be called the Minister for Overseas Development. The Secretary of State should oversee his functions. The purpose of their sending officials to and having discussions with America and Japan is to destroy British companies by giving business to Japanese and American companies. The Secretary of State and the Minister spend their lives denigrating British industry and sucking up to the Japanese and the Americans. How is it that we can have a Secretary of State for Trade and Industry, a Minister with responsibility for the west midlands and a Minister for Information Technology who have each little regard for British industry that they are intent on destroying it?
      Mr. Marlow: Let us have a serious debate.
      Mr. Golding: The hon. Gentleman should consider whether Lord Weinstock has ever been known to come out in opposition to a Tory measure. Moreover, the chairman of Standard Telephones and Cables opposes the Bill. The remarkable feature of the Bill is that it has brought together the chairman of Standard Telephones and Cables, the head of General Electric Company Ltd.—Lord Weinstock—the trade unions in BT, parish councils, women's institutes, the National Farmers Union and even all the Opposition parties. That takes some doing, but the Secretary of State has managed it. He has the capacity to unite men of reason against such a measure. There is united opposition to the Bill and I hope that there will be united opposition to clause 3 which is such a sloppy part of it.
      Mr. Henderson: The past few minutes, during which we have listened to the hon. Member for Newcastle-under-Lyme (Mr. Golding), have been nostalgic as I did not have the privilege of serving on the Committee which considered the Bill. In the past three quarters of an hour the hon. Gentleman has given us a brief resumé of the speeches which he made during the 161 hours of consideration on the first Bill. On that occasion I had the duty of serving on the Committee. I suspect that about 130 of those 161 hours were a broader elucidation of the views which the hon. Gentleman has summarised so succinctly today.
      9.45 pm
      The one thing that the hon. Gentleman did not do was to tell us why he opposed the clause. That is interesting. I believe that the hon. Gentleman opposes the clause not because it does not help consumers but because it does not give the totally free hand to BT that it has had until now to do what it wishes with consumers. The hon. Gentleman mentioned the "dynamic relocation"—in computer terms —of certain words in the clause. Since I saw the clause in the original Bill, it has changed considerably. However, far from being a negation of the democratic process, it has done credit to the democratic process. What was a good clause in the original Bill and an improvement on the existing circumstances has become, through the democratic process and the work of members of the Committee, a better clause. I hope that the House will approve it.
      The hon. Gentleman referred to a marginal shift in public opinion on the privatisation of BT. I should have thought that if there had been no shift of public opinion the hon. Gentleman would wonder why his friends had spent £1 million or more on advertising. I should have thought that they would expect at least some return from an expensive advertising campaign to try to influence public opinion. Much of the attempt to change public opinion was based on misrepresentations of the facts and the reality of what is in the Bill.
      For example, the hon. Gentleman referred to telephone charges for private subscribers. The private subscribers' bills pay for 90 per cent. of the long-term capital investment of BT. One possible result of privatisation, and one of its great merits, is that more of the capital investment can be sought on the market, from which capital resources normally come, and not from the poor modest subscriber.
      Until now BT has operated under a generalised, weak and largely unenforceable general obligation. In the Bill, particularly in the clause, it has been replaced by the
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      creation of Oftel and the appointment of the director, who has a clear duty. The clause lays a duty on the Secretary of State and the director specifically to ensure that the objectives in the Bill to protect the consumer will be carried out. That is of particular importance to constituents in rural areas such as mine.
      The hon. Member for Berwick-upon-Tweed (Mr. Beith) said that a large sum of money was charged by BT under the present rules for connections in rural areas. If that was an unreasonable charge, at least under the new regime proposed in the Bill, that person could have appealed to the director and asked him to consider whether it was a fair, reasonable and sensible charge. There is no such protection at present. The clause improves substantially the rights of the consumer.
      I particularly welcome the fact that the clause provides not only for telephone services throughout the United Kingdom, as at present, but for "telecommunication services", which implies wider services than merely the telephone service. The clause states that BT will satisfy the need for
      "in particular, emergency services, public call box services, maritime services and services in rural areas".
      I welcome those clear duties on the Secretary of State and the director. Perhaps more important, in clause 3(1)(b), we find that finance is to be made available to ensure that those things happen. At present there is no such clear obligation. Also, each will have a duty to carry out the aims and objects defined in subsection (2). I particularly welcome paragraph (a)—
      "to promote the interests of consumers … in particular, those who are disabled … in respect of the prices charged for, and the quality and variety of, telecommunication services provided and telecommunication apparatus supplied".
      The emphasis in the clause is on the interests of the consumer in general and in particular the interests of consumers who might, in the face of a substantial and powerful commercial interest, be potentially at risk. Those people have been intelligently identified in the clause. The duty is clear. I believe that Opposition Members oppose the clause because it is concerned with the consumer rather than the supplier.
      Mr. McWilliam: Talk of concern for the consumer sounds odd in the context of the Bill because very little in it measures up to the reality of such concern. I congratulate the hon. Member for Fife, North-East (Mr. Henderson) on managing completely to misunderstand the finances of BT. He said that the charges on private subscribers fund 90 per cent. of the investment. I do not know how he makes that calculation if the private subscribers themselves do not produce any profit and there is therefore no surplus to provide capital. I also challenge the hon. Gentleman's view about the reasonableness of charges. What the hon. Member for Berwick-upon-Tweed (Mr. Beith) said about reasonable charges and charges in rural areas was quite right. I do not believe that the present level of charging is reasonable.
      Under clause 3(1)(a) the Secretary of State and the director must ensure the provision of services so as to
      "satisfy all reasonable demands for them".
      However, paragraph (b) states "without prejudice" that those who are to provide the services must be able to finance them. That means that the general duty of the director is financial rather than social. It may well be, financially speaking, perfectly reasonable to charge £6,000 or £7,000 for an installation in a rural area and yet

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      completely unreasonable on social grounds to do so. The director will have to have regard to the financial grounds. No one would argue about that. I cannot see the point that the hon. Gentleman was making.
      My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) referred to the two nations—those with and those without a telephone. I believe that the Bill will encourage that tendency. With the Government's intentions on cabling, the Bill will make matters worse. We are talking about those who do not have what are currently regarded as normal telephone services. We are not taking account of what is happening in cabling. Even on the Government's plan, only half the population will have access to the new enhanced cable, data and telecommunications systems by the year 2000. The other half, unless they have modern digital equipment, will not get any service at all. The service will certainly be extremely limited because a privatised British Telecom is unlikely to invest enough manpower to maintain the services that are provided today even in the rural areas.
      In view of the areas that Conservative Members generally represent, it is surprising how callous they are about the rural services. I am one of the few Labour Members who can boast that he has an entire branch of the National Farmers Union in his constituency. Indeed, I have a forest in my constituency. I know the kind of pressures that my constituents will find when the Bill becomes a reality. They have not been backward in telling me of them and their worries. Conservative Members seem to equate service in the rural areas with service to the wealthy middle class people who choose to live there.
      We rely on the rural areas for our food and recreation. The vast majority of people who live in rural areas do so because that is where their jobs are. They are generally low paid compared with those of us who live in urban areas who have jobs. They suffer the added disadvantage of communication difficulties because of distance. The telephone is a necessity in rural areas. It is still something of a luxury in urban areas for many families.
      The Government are saying that they will put up the price of that necessity in the rural areas. I take great exception to that. The social consequences are horrendous. There are problems when one is faced, as I am, with a reduction in ambulance services and the additional distance that people have to go to call an ambulance if they cannot afford a telephone. They will have to find a neighbour who may be more than a mile away and whom they may not be able to reach in a car because the roads are iced up in the winter or they will have to find a telephone kiosk. But I doubt whether any telephone kiosk will exist in rural areas because few will meet the required minimal financial return. We are talking about a life and death service being callously removed from people who generally have to make a sacrifice to have that service in their houses.
      Conservative Members will come to regret the day that they proposed these measures and will be surprised by the reaction when the inevitable happens.
      The clause imposes a duty
      "to maintain and promote effective competition between persons engaged in commercial activities connected with telecommunications in the United Kingdom."
      What about those people interested in the telecommunication services outside the United Kingdom? My hon. Friend the Member for Newcastle-under-Lyme talked about the Minister's officials being in America and Japan trying to
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      flog shares in BT. He did not say that there was little point in those officials trying to flog system X in America arid Japan, not because it is a poor system or too expensive —taken all in all, it is not—but because it is impossible to sell as they have put up positive barriers against us. They want open access to our markets and the Minister wants them to have it.
      My hon. Friend mentioned the destruction of the telecommunications equipment manufacturing industry and the serious impact that that will have on jobs, particularly in areas such as Merseyside, Tyneside, Glasgow and Fife which are major telecommunications equipment production centres. The already outrageous levels of unemployment will increase.
      We are faced also with the problem of financing this measure. It is clear from the statements that BT has already made, the kind of activities in which it has indulged and the establishment of Mercury that the Government are not interested in anything but allowing their friends to milk the highest possible profit from the major cities in the south and to blazes with the rest of the country. Mercury is not going anywhere north of Preston.
      There are some words in the clause which say that it would be nice to maintain services and that if it is reasonably possible to do so they should be maintained. Again, it comes down to the word "reasonably". I do not know what the Minister means by "reasonably' in this context. He has never been anything but subjective in his use of the word. He has never spelt it out. He has never said exactly what he thinks it means. He has just given us what he thinks is a reasonable explanation. If he starts being subjective about a subjective word again this evening, we shall be no further forward than we were in Committee, and that was not very far. Again, therefore, I express my concern about what the Minister meant by "reasonable" in terms of the services.
      10 pm
      Even the Minister will admit that, in many of the changes proposed in the last Telecommunications Bill and in this one, the Ministers were much influenced by what was happening in America on liberalisation, the experience of the FCC, and the liberalisation on AT and T's attitude. However, AT and T, when faced with the choice of retaining or shedding its subsidiary companies —which provide telephone systems, and not just the trunk network—volunteered to get rid of them so that it could get involved in the high profit enhanced services on line. As a result, our colleagues in the American House of Representatives had to take action. I quote from the Financial Times of 12 November this year:
      "The US House of Representatives voted late on Thursday to limit the massive increase in local telephone charges expected to result from the planned breakup of the Bell telephone system."
      The Minister goes on about his access charges from the same article:
      "AT and T, the telecommunications giant, has spent millions of dollars lobbying in favour of a so-called access charge. They failed."
      Despite all that, despite the fact that the House of Representatives was able to do a little towards limiting the article concludes:
      "Despite the House action US local telephone charges are still set at least to double after January 1. This is because local telephone companies, in an effort to maintain margins and reprice services, have filed a request for at least $7 billion in rate increases with local state regulators".

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      The American experience has been, despite what Conservative Members may say, and despite what they may believe, that local telephone charges increased dramatically. Indeed, they are set to double. I challenge the Minister to explain to the House what mechanisms exist to prevent them doubling in this country. If they double, they can be seen only as an additional tax on ordinary people in order to subsidise big business, for whose benefit the Bill is solely intended.
      Mr. Patrick Thompson: The Opposition have gone for overkill in tabling this amendment. If the importance of the amendment is in proportion to the length of the speeches on it, clearly it is highly important for them that clause 3 should be removed from the Bill, although this is the clause that provides the protection for which they have continually asked throughout Committee and again tonight.
      Clause 3 provides protection for the consumer and for the purchaser. The clause provides protection to the disabled. This is the very clause that removes the harsh commercial realities from the scene and ensures that the ordinary person, about whom the Opposition wax so eloquently, does not suffer as a result of the Bill. I find it extraordinary, therefore, that the Opposition should table the amendment and attach so much importance to it. I agree with my hon. Friend the Member for Fife, North-East (Mr. Henderson) that clause 3 is a highly important part of the Bill. The last thing that one would want to remove from the Bill is clause 3. The Opposition are using a wrecking tactic and we have known all along that the Opposition's purpose is to stop the Bill in its entirety. We might as well face up to that.
      Since I joined Standing Committee A—Opposition Members may be surprised about this—I have had many discussions with people who work in the telecommunications industry in my constituency and elsewhere. Indeed, within the past 48 hours I have had an interesting day at the British Telecom research laboratories at Martlesham Heath. I learnt a great deal there and from my discussions with my constituents who work for British Telecom. Of course they have some concerns about the Bill but during those discussions I have not gained a distorted impression that has been put across by Opposition Members. My confidence in this measure has increased during the time that I have been studying the details of the Bill.
      Clause 3 lays general duties on the Secretary of State and the Director General of Telecommunications. Provisions are laid down in clause 3 that are essential to running telecommunications services in this country. As I have already pointed out — I hope that the hon. Member for Wigan (Mr. Stott) will take this on board once and for all—the needs of the community are protected in the clause. Indeed, the needs of users are also protected for the foreseeable future.
      Despite the ramblings of Opposition Members, there are points in clause 3 to which we should address ourselves seriously. Under clause 3(2)(d) the Director General of Telecommunications has a duty to exercise functions in such a way as
      "to promote research into and the development and use of new techniques".
      I believe that this is a responsibility that he must take seriously and watch carefully with regard to the future.
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      Without successful research and development, we cannot take advantage of the twofold revolution which is taking place in world telecommunications. In the industrial countries there is a revolution in the sense that the telephone is being replaced by the socket, the plug or whatever the technical term may be, in our house. We can plug into that socket the ordinary telephone into which we talk. We can also plug into it all types of other devices about which I do not have time to talk this evening. We shall be able to interact with other systems, banking systems and so on. This revolution is going on.
      The Opposition have wept crocodile tears about the fact that only 70 per cent. of the population have telephones. They completely forget the recent dramatic expansion in the number of telephones in use in this country. Between 1970 and 1983 the number of telephones has increased from 5·8 million to 15·5 million. The growth was most rapid during periods of Conservative Government, between 1970–74 and 1979–83. According to the figures, the period of stagnation, where there was one, was under the Labour Government. This shows up the nonsense to which we have had to listen during hour after hour of debate. It is time we put this to rest once and for all.
      The Bill provides a climate for a thriving telecommunications industry. There will be no bonanza for British industry where there is a deficiency, and this includes research and development. Our present position as one of the six countries leading the world in telecommunications must be maintained and we shall do so only if we take research and development seriously. However, there is a genuine difficulty. Over the years since the second world war the British Government have taken initiatives on research into large systems and have set up the large Government research laboratories about which we have heard, including the one at Martlesham Heath. Under that regime industrial firms had scope only for technical contributions and design components and so on. This has led to problems, in that the research departments of industrial firms have not been as advanced as they might be when compared with Government establishments. I do not know what the answer is, and we are in changing circumstances, but I am sure that the Director General of Telecommunications will take this on board when he is encouraging research and development in this important industry. The board of the new British Telecom plc, when the flotation occurs and the company is going, will have to make serious judgments about the proportion of money that it puts into research and development. This is a deadly serious point, and it is vital that the board gets the balance right.
      There is always the danger that the view could be taken that a particular type of research has no obvious pay-off and might be dropped as an unnecessary overhead. This may have a short-term financial benefit, but in the longer term it could be a disaster for research and commercial prosperity. The Secretary of State and the Director should take this matter seriously as we move into the era after the Bill has become law.
      Time will not permit me to refer at length to training and the supply of skilled graduates in engineering that will be required if we are to keep our lead in this industry and go ahead.
      I hope that, in spite of the tedious nature of some of these debates, the management and unions involved in the telecommunications industry, once this debate is over, will adopt enlightened attitudes. I hope that management

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      will look to the long term, particularly with regard to research and development, and that the unions and all those working in the telecommunications industry will look to the tremendous opportunities to be gained from the Bill. I hope that they will be thinking about industrial action— not about the kind of industrial action about which we heard at the start of the debate, but the kind of exciting industrial action that can occur in the industry if we get on with the job.
      We must not listen to those who mourn the passing of a golden age. I could wax eloquent upon gold, as a theme of our debates. For example, there is the new electronic mail system which is called "Telecom gold". The other day, I was trying to think of a suitable name for the new electronic voice that never tires and goes on and on, and I was tempted to call it "Telecom Golding". We must not allow the initiative to slip away to foreign competitors. This is a serious duty. We must keep ahead of the field in technical developments. Clause 3 ensures that the Director has this aim in mind. That is why we should oppose this amendment. It is clearly nonsense.
      10.15 pm
      Mr. Charles Kennedy: Although the Ministers have not yet spoken, the comments from Government Back Benchers so far have shown that they are out of touch with reality. As a Scottish Member, I was especially surprised by the comments by the hon. Member for Fife, North-East (Mr. Henderson) about the Bill's safeguards for rural telephone services. Although his constituency may not be as scattered or widespread as mine, none the less it will display many features that will be central to both our constituencies if the legislation is passed. I am sure that as problems begin to arise, as emergency services begin to suffer, and as those who live in more remote areas — admittedly, they are paying higher charges and higher servicing prices already —begin to suffer more, the hon. Gentleman will, like me, be one of those hon. Members both south and north of the border who will hear much about their difficulties. It is sad that by that stage it will be too late, because the legislation will have been implemented.
      The hon. Member for Newcastle-under-Lyme (Mr. Golding) made an important point when he said that there are about 77,000 telephone boxes and that they lose almost £80 million a year. Those are inescapable facts.
      Mr. Henderson: The hon. Member for Newcastle-under-Lyme (Mr. Golding) did not mention that the economics of telephones, which are very profitable, should not be completely unrelated to kiosks.
      Mr. Kennedy: I agree that the two aspects are not wholly unrelated, but I believe that the hon. Member for Fife, North-East would be the first to agree that kiosks are extremely important in rural areas. They will be threatened by this legislation. This will not immediately come about because of what the Minister of State wants to do. To be fair to him, great problems already exist. I am sure that most right hon. and hon. Members will have seen an article in The Times of 13 November which is entitled "And yet so far". The article states:
      "A television advertisement for British Telecom 'shows a pristine red telephone box surrounded by sheep in a mist-shrouded landscape."
      That could be a part of Ross, Cromarty and Skye. The article continues:
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      "A voice-over proclaims the merits of Telecom's far-flung service. The booth is in fact a fake, erected in Cumbria's Wrynose Pass for the purpose of the advertisement. Local farmer Christopher Akrigg, who appears in the commercial, has been trying to get a public telephone box installed on that very spot, for a very long time, such is the demand for his own phone by passing motorists during the tourist season. He is out of luck. Telecom plans not to expand but to reduce public phone boxes in the Lake District because, it says, that they are underused."
      If that is a fair expression of how ridiculous the position is at the moment, imagine what it will be like once the legislation is enacted.
      We heard about definitions being needed f or rural areas. I am aware that the Minister of State has some considerable knowledge of my constituency. He will see many examples of those isolated telephone boxes and the type of telephone kiosks mentioned in that article in one of the communities most removed from the House—the island of Skye. Portree, Broadford, Ewe, Dunvegan, Gairloch and Kyle of Lochalsh demonstrate the type of problems that will exist if privatisation proceeds. It is a sad fact that the elected representatives of those areas have spoken strongly against this type of measure. I ant talking not simply about in Parliament but about regional councils and Government agencies, such as the Highlands and Islands Development Board, which is an arm of Government initiative and enterprise in the Highlands of Scotland. All their protestations, however, will not matter much because once the guillotine falls and the measure is passed there will be nothing that Members of Parliament can do but listen to the protests and problems that will inevitably come from their constituents.
      Mr. Marlow: The hon. Gentleman talks about his constituents. We all have constituents, as he will appreciate. When the hon. Member for Blaydon (Mr. McWilliam) said earlier that the Bill did nothing for consumers, the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) nodded his agreement and said "Hear, hear." Clearly, as a member of the Social Democratic Party and representing that party on the Bill, the hon. Gentleman believes that the Bill does nothing for consumers. Rumour has it that the hon. Gentleman was a member of the Standing Committee on the Bill, but we did not see him there very much. I believe that on one occasion when he actually came into the Committee someone suggested that he was a member of the press who had got on to the wrong side of the barrier. Had he attended the Committee, he would realise that the Bill abolishes monopoly. If he believes that abolishing monopolies does not help the consumer, that is an interesting point of view for the Social Democratic Party.
      Mr. Kennedy: It is clear from that fatuous intervention that two points went over the hon. Gentleman's head. First, if he thinks that the Bill creates real competition in the interests of the consumer when it merely institutionalises one monopoly and puts another monopoly alongside it, he has missed many of the arguments. Secondly, judging from the reaction of hon. Members who served on the Committee, I believe that my interventions in the Committee were more pertinent and more popular in my constituency than any that I heard from the hon. Gentleman.
      I shall not detain the House much longer, especially as my time has been drawn out by fatuous interventions of that kind. There is a divide in our nation and it is evident in many aspects of our politics. As communications technology is one of the major advances sweeping Britain

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      as we head towards the end of the 20th century, it is especially sad that this will be yet another divide exacerbated politically by the Government's actions. When the hon. Member for Newcastle-under-Lyme was talking about telephone users in rural areas it was sad to hear the Secretary of State for Trade and Industry, who is ultimately responsible for the Bill, muttering something about somebody else paying for the services that those consumers enjoy. That is true. Somebody else finances the services that we enjoy in the Highlands of Scotland. Somebody else has to underwrite those services. That is as much a social obligation as a financial reality and we should support it.
      I hope that the House will support the amendment and that we shall continue to expose the hollow decisions taken by the Government which will affect rural constituencies throughout the country
      Mr. Peter Thurnham: We have come to know the Bill well after so many hours in Committee.
      Clause 3 is at the heart of the Bill, placing a duty on the Secretary of State and his watchdog, Oftel, to control prices and promote competition. For the next five years, competition will be limited. We must therefore look to the price formula RPI-minus-X to control prices. My constituents want to know whether X will be greater than RPI so that prices will actually fall in cash terms. The answer in Bolton must definitely be "Yes" as Bolton is the most efficient BT area in the country in terms of both service and productivity. BT's own figures show that productivity in Bolton is 50 per cent. better than for the rest of the country as a whole. If BT could bring the rest of the country up to that standard in the next five years, X could equal 8 per cent., which should comfortably take care of inflation.
      I asked Mr. David Knowles, the manager of the Bolton-Blackpool area—British Telecom refer to the Blackburn area, although Bolton has the largest exchange in the area —the secret of his success. He said it resulted from good team work and underground engineering. In view of Bolton's premier position in the country, I suggest that Oftel, the new office of the Director General of Telecommunications, should be based in Bolton, and I shall be pleased to show him how efficient British Telecom can be. I shall encourage him to bring new entrants into the market who, I hope, will benefit from the new proposed regional aid for service companies.
      I hesitate in suggesting that British Telecom should move its head office to Bolton, because my only criticism of the Bill relates to its lack of competition. The thought of BT and its supposed watchdog both being in the same town and working with Bolton's customary good team work and well-oiled underground communications would most deter BT's competitors.
      My reservations about the Bill involve competition. I urge the Secretary of State to use the next five years to advantage. We need more than a monopoly supplier of international lines, more than a duopoly of inland lines and cellular radio and better than a British approvals board which frightens off small manufacturers with excessively expensive and slow procedures for unnecessarily elaborate and complex standards.
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      Owing to the lack of competition we must rely on the formula RPI-minus-X, which must be set arbitrarily. A footnote to the licence states that
      "X will be determined near the date on which the licence comes into force, taking account of circumstances at that time."
      The footnote will soon become a large X factor headline.
      In setting the value of X, the Secretary of State must balance the interests of customers, investors, employees and all those dependent on the fortunes of the industry. I urge him to be fair to all those who can contribute to improvements in productivity and who hope to benefit from them. In being fair to investors and employees, the Secretary of State may not consider that X can be set as high as 8 per cent., as my constituents might wish. I hope that he will set the X factor at least as high as the average increase in productivity for United Kingdom industry as a whole, which the Chancellor of the Exchequer showed in his autumn statement as 2·7 per cent. per annum for the past three years.
      But British Telecom can do better. I have a letter from its chairman showing that in the past five years the reduction of British Telecom's real unit costs has been 3 per cent. per annum. I suggest that there should be no difficulty in floating 51 per cent. of BT on the stock market with an X factor of at least 2·5 per cent. or 3 per cent.
      A suggestion has been made that a £4 billion flotation may be difficult for a stock market that has raised only £3 billion in new equity issues in the past year. We should examine the total capitalisation and turnover of the market to gauge its capacity. With a total market capitalisation of £250 billion and an annual turnover of £75 billion, a £4 billion issue should be a stimulus and not a problem. I regard the low level of the previous year's equity issues as having nothing to do with lack of capacity but merely lack of opportunity.
      I look forward to next autumn's flotation of British Telecom as a hugely successful demonstration of the benefits of privatisation which will bring gains to customers, employees and investors.
      I recommend the House to accept clause 3 in its entirety
      Mr. Stuart Randall: Subsection (1)(a) refers to the duties of the Secretary of State and the Director. It states:
      "to secure such telecommunication services as satisfy all reasonable demands".
      I shall refer to the telecommunications service in Hull. I have previously said in the Chamber that Hull is very proud of its telecommunications service. It has been extremely successful. It is the only independent telephone operation on the British mainland. The network covers a very small area — about 120 square miles. Hull city takes up about 30 square miles, although the total area also embraces the two boroughs of Holderness and Beverley. The boundary of the Hull network was established in 1898, under the original Telegraph Act.
      10.30 pm
      We have not yet seen the licence for Hull, but I think that we can accept that under the Bill the area will be the same as it is now. I assume that that is so. There are 180,000 telephones in the area and 150,000 working lines. There are about 750 people operating the system and about 14 main exchanges. The operation is thus quite small and compact but it is very efficient, and we are proud of it.
      Quite a range of telephony services are at present provided. We provide the lines, all the line plant, trenches

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      and so on. We also provide all the overhead cables where necessary, and all the switching equipment. However, that is restricted to the area that I have described. In addition telex services are provided. Hull's telephone department provides the lines, and at present BT provides the switching. We provide the lines for data and certain other pieces of equipment, and BT provides the rest. Therefore, the service, in terms of who does what, is rather fragmented at present and slightly confused.
      Several Conservative Members have mentioned the consumer. However, those who live in that part of the country, which has a municipalised telephone service, are very happy with the service that they receive. They enjoy many advantages. For example, the telephone connection charge in Hull is only £25. It is still possible to make a telephone call that lasts all day for 5p, because the calls are not timed. The social consequences of that are important.
      The rental cost of line equipment going into the home and of telephone apparatus in Hull is about 10 per cent. below the national figure. I have cited three areas in which the consumer benefits considerably. As a result, telephone penetration in Hull is extremely high. About 84 per cent. of residential units in the area have telephones. That is due to the policies of the local authority, which is responsible for running the service. We need not privatise, because that service is both public and superb. If anything in the new legislation caused a deterioration of the services, I assure the Minister there would be uproar from the people of Hull.
      There is still great uncertainty surrounding the services in Hull because at present we do not have the licence. The draft licence on its own is meaningless. It is essential to have the licence to go with it to know exactly what will happen to the services and the effect on the consumer. As there is still no licence for Hull, I ask the Minister to confirm whether Mercury will be able to provide all kinds of telecommunications services in the Hull area. If that is so, it would be fair and sensible for the telephone operation in Hull to have the option of providing a similar range of services as defined by the network. I should welcome the Minister's confirmation on this matter because it is an important issue over which there is considerable uncertainty in the absence of a Hull licence. If the telephone department in Hull is not to be permitted to provide all the services, which services will be the exception?
      Looking to the future, hon. Members will know that a recent decision was made in Hull to procure system X for its trans-exchanges. Between £20 million and £30 million is due to be spent over the next few years in installing the equipment. Reference has been made to the loss of jobs as a result of reduction in the size of the telecommunications industry. I believe Hull has made a great contribution in procuring system X that will do much to help protect jobs and assist the telecommunications manufacturing industry.
      System X will provide a substantial advance to the benefit of consumers. When system X is interconnected with other system X systems throughout the country, a very high speed of connection will be available to consumers. Such advances augur well. Other benefits include the provision of alarm services and abbreviated dialling at the exchange
      Mr. Wood: I have tried to relate the hon. Member's remarks to the clause under discussion and to the general debate. Two matters only are coming over to me. First is the argument that there will be merit in having not just one British Telecommunications but a number of local organised telephone services. Secondly, what are the specific matters in clause 3 by which the hon. Gentleman believes Hull will be disadvantaged?
      Mr. Randall: I referred in my opening remarks to the provision of telecommunications services. I have endeavoured to show that, if the terms and conditions of the licence were detrimental to the interest of Hull, the services provided would not be satisfactory.
      With system X, I believe that in the future we shall be providing combined voice and data through the same switching equipment. The policy of the Hull telephone department is to integrate voice, data, text, video, image and so on all in one network. That is our aspiration, in addition to increasing the range of services.
      As we are making this investment in British equipment that has all the functions that I have described, that justifies Hull in providing all the telecommunications services— of voice, text, data and so on— so as to exploit this equipment and get value for money from this large investment in British products.
      It is also the intention of the Hull telephone department to accelerate the introduction of digital services, and we hope that the recent decision about system X will allow the department to exploit the growing BT digital network to the advantage of our colleagues in BT and, of course, of the customers.
      Another matter of concern that will become clearer when the discussions on the Hull licence take place is the sale of terminal equipment. We are assuming that BT and Mercury will be able to sell terminal equipment in the designated area for Hull, but the Hull telephone department cannot sell such equipment outside its area. The difficulties are obvious, and I hope that the Minister will comment on the subject and will be able to provide an equitable arrangement for dealing with the problem.
      The accounting arrangements for calls involving the Hull network and the rest of the national network are another matter of concern. I understand that this subject will be discussed in the new year by officials. I hope that the Minister will give an assurance that the Hull telephone department will be fairly treated and that perhaps similar arrangements will be made for the area as have been made for other local area managers
      Mr. Phillip Oppenheim: I must begin with a humble apology to the hon. Member for Newcastle-under-Lyme (Mr. Golding). Hon. Members who, like me, were members of Standing Committee A will recall that I referred to the hon. Members for Newcastle-under-Lyme and for Stoke-on-Trent, Central (Mr. Fisher) as Bill and Ben the Flowerpot Men. I referred to them in that way for two reasons. First, like Bill and Ben, as soon as Bill sat down, Ben stood up, and vice versa. Secondly, like Bill and Ben, neither spoke much sense. However, I gather that the hon. Member for Newcastle-under-Lyme has taken the greatest exception to my remarks, has complained in the most bitter terms to a close relative of mine, and has asked that any suggestion that he might be confused with a now sadly departed colleague should be absolutely scotched. I am happy to say that no confusion was intended.

      1091
      The hon. Member for Newcastle-under-Lyme mentioned in his lengthy peroration that Lord Weinstock of GEC had come out against the Bill. That should not surprise hon. Members. Could that opposition to the measure not have something to do with the fact that GEC and its shareholders have benefited for far too long from the cosy, monopoly purchasing power of BT? For too long it has been a member of BT's circle of charmed approved suppliers. No wonder it is against the Bill.
      10.45 pm
      I fully support the Bill and the safeguards within it. I welcome especially clause 3 (2)(h), which calls on the Director
      "to maintain and promote outside the United Kingdom competitive activity on the part of persons providing …telecommunication apparatus".
      This can only mean that the Government intend to do something about the disgraceful situation in regard to access for our telecommunications manufacturers to overseas markets. Currently the French, Japanese, German and Swedish markets do not even maintain the pretence of free access. I am not in favour of protectionism. It does not work. Not only does it limit consumer choice but in the long term it makes industry uncompetitive and inefficient. The manufacturers of Sweden, Japan, Germany and France have access for their products into our markets but our manufacturers do not have reciprocal access to their markets.
      Foreign equipment is coming into this country in large quantities. I could go on at length to give examples of the types of foreign equipment. I have done so in Standing Committee. I should like to concentrate briefly on one area, keyphones, the electronic replacement for key and lamp systems. Until recently only the British-made BT Herald and Ensign systems were available in this country. Now, however, several systems from overseas have been approved.
      These include a system from the Nippon Electric Co. which is being imported by Ans-a-phone, an American system being imported by an organisation called TIE, a German system from Shipton Communications Ltd, which comes from the Deutsche Telephonwerke and Kabelindustrie Aktiengesellschaft, which has fortunately changed its name to suit market requirements. As I pointed out to the hon. Member for Newcastle-under-Lyme, this German company is based on a road with the name Wrangelstrasse which he should consider visiting some time. Finally, Northern Telecom of Canada is introducing a system assembled in Eire.
      What does Plessey — the great white hope of the British telecommunications industry — have to answer the threat? The answer, I regret to say, is that it is importing a Japanese system from the Nitsuko company, although, to be fair, it intends to launch its own British-made system next year.
      Even if we get a proportion of local assembly of these products, often this proportion is very low. All too often the addition of a plastic casing and a highly misleading "Made in the United Kingdom" sticker is the net result of local assembly. Regrettably, the right of access to overseas markets is almost totally lacking to our manufacturers.
      I should like to read an extract from a letter I received from one of our major manufacturers:
      1092
      "Past experience with other products suggests that entry into most European countries and EEC countries in particular would be covertly blocked, certainly as far as sales to the national administrations are concerned. Selling in the private/commercial sector might also be effectively controlled through the approval procedures, even if the market is theoretically liberalised for the particular class of equipment being offered."
      I know that my hon. Friend the Under-Secretary is well aware of the problem. I have received assurances that something will be done to counteract it. I urge that the great advantages enshrined in this speech—in the Bill —[Interruption.] The hon. Member for Newcastle-under-Lyme is all too easily amused. Obviously years of listening to his own speeches have lowered his tolerance for amusement. I urge that the great advantages enshrined in the Bill — advantages for the consumer, for BT employees and for my constituents — should not be allowed to be offset by the negative effects of unfair competition from overseas companies in nations that do not allow reciprocal access to their markets for our manufacturers
      Mr. Butcher: The House has had another weighty debate. Many interesting observations have been made and many questions have been asked. I shall do my best to answer the many points that hon. Members on both sides of the House have raised.
      The debate on clause 3 must be near to setting a record for the length of time that any one clause has ever been debated. So far, it has been debated for more than 100 hours in two Committee stages — 65 hours in the previous one and 36 in this—and there has been some fairly lengthy consideration by the House.
      However, as hon. Members on both sides of the House have observed, there is no doubt as to the importance of clause 3. It imposes duties on the Secretary of State and the Director General of Telecommunications which will govern how they exercise their functions as provided by the Bill. Those duties set the framework for the implementation of much of the Bill. They are important to, and provide safeguards for, operators of telecommunications systems, the providers of telecommunications services, the telecommunication manufacturing industry and, last but not least, the consumer. I should like now to concentrate on the latter and explain how clause 3 provides firm legislative safeguards for consumers that are, perhaps, better than those whoch have ever been provided. That is especially so in respect of services which we all agree are essential—those to rural and remote areas, emergency services, public call boxes, services to ships at sea and services to the disabled.
      Anxiety has been expressed that, because such services are loss-making or, at best, uncommercial, they will no longer be provided. That is simply not the case. They will continue to be provided, as clause 3 imposes a duty on the Secretary of State and the Director General to exercise their functions to ensure that they are. The issue of licences and the inclusion of conditions in them is a most important function in that respect. We have already published the draft of the licence that the Secretary of State would issue to BT when the Bill comes into force. That draft contains conditions that oblige BT to provide such services. Under the conditions of the licence, BT will be obliged to provide telecommunications services throughout the United Kingdom to satisfy all reasonable demand and to provide services to customers in rural areas, public call boxes,

      1093
      emergency services, services to ships at sea and services for the disabled. No doubt we shall have more debate on the disabled later on Report.
      Those obligations will be enforced by the Director General using his powers under the Bill. Nevertheless, Opposition Members have said that they are not proper obligations just as they have said that the duty in 3 (1)(a) is not a proper duty because it is limited to "reasonable" demands so long as provision is "practicable". We had a lengthy debate on that matter in Committee. I should like to reassure the House that those limitations are not a let-out. They do not let BT off the hook of its obligations to provide services. They are simply essential to make the duties and the obligations in licences workable.
      For example, it would not be sensible if BT were put under an obligation, which was ultimately enforceable in the courts, to do something which it was physically impossible for reasons beyond BT's control to do. I doubt whether the Secretary of State could find anyone willing to accept a licence if it imposed obligations to provide services which were not subject to the limitations of reasonableness of demand and practicability of provision.
      The limitations will not operate at whim. They are spelt out in the licence—condition 42 of the draft licence. Therefore, when a person requests a service and BT declines to provide it, if the matter is brought to the Director General's attention he will be guided by that condition when deciding whether BT is under an obligation to provide services in the circumstances in question. If he decides that BT is under such an obligation, he may issue an order to force BT to provide a service. If he considers that BT is not under an obligation, it does not have to provide it, but the Director's interpretation of what is practicable or reasonable can always be challenged by the complainant in the courts. I hope that that goes some way towards reassuring my hon. Friends and Opposition Members.
      In the debate we also heard claims that, although service will be provided, the quality of service to the ordinary customer will decline as BT directs its investment to the business sector and neglects the ordinary customer. It has also been claimed that with the ending of the role of the Post Office Users National Council in respect of telecommunications, consumers will no longer have a voice to represent their interests. I accept neither of those arguments.
      I shall deal first with consumer protection. POUNC has played a useful role, but it has been one of persuasion rather than of enforcement. Faced by a problem, it has had to use its powers to persuade BT to do something. While I expect that in future much will be negotiated voluntarily, the power of the Director ultimately to force BT to carry out its obligations, will stregthen the Director's arm in such negotiations. That can only be to the benefit of consumers.
      In any case, it would not be appropriate for POUNC to continue, as it is designed to look after a nationalised industry, a state of affairs that we are bringing to an end. Therefore, we are setting up Oftel under the Director General of Telecommunications. I believe that that will strengthen the voice of the consumer. The Director will be under statutory duties, by virtue of clause 3, to promote the interests of the consumer not only as regards the provision of the essential services but in respect of the quality, variety and price of telecommunications services
      1094
      and apparatus available. The mention of the word "quality" brings me to the second claim, that the service to the ordinary consumer will decline.
      As I said, the Director will have a duty in respect of quality and service. In accordance with that duty, I expect him to keep a close eye on the quality of service that is provided. In doing so he will no doubt be informed by the representations of consumers, but he can also ask BT for the information, and I expect him to monitor things such as the time taken to install telephones, the number of crossed lines and the ready supply of special apparatus to the ordinary consumer. I expect that he will keep in close touch with BT about developments because it is in both BT's and the customers' interests to improve the quality of BT's services. However, in the last resort, if the Director were dissatisfied with BT's response, he could seek to impose a licence condition requiring it to provide a service of a specified quality,.
      In that context, several Opposition Members advanced yet again the notion of two nations—a deprived nation and a nation that was filled, by contrast, with telecommunications services. They repeated that allegation, regardless of the fact that communications services will be improved through the impact of new technology. The example of cable television was given. It was said that it would cover only half the country over the next 10 to 15 years. There is no doubt that cable television will take some time to expand across the country. It may not extend to the rural areas, as it will be expensive to install. However, Opposition Members also forget that other forms of technology will be of benefit to rural areas. They forget that satellites, microwave and cellular radio systems can deliver advanced communications facilities similar to those available in the cities, when there is no broad band cable and no cheaper way of delivering data or, in- due course, voice communication, other than through the air. We do not have to be wired through cables for ever to deliver voice telephony or data communications.
      I thank my hon. Friend the Member for Norwich, North (Mr. Thompson) for his observation on research and development. We take that matter seriously. BT cannot afford to ignore those requirements.
      My hon. Friend the Member for Bolton, North-East (Mr. Thurham) was absolutely right to highlight the performance of his local area telecommunications network. Through the hon. Member for Kingston upon Hull, West (Mr. Randall) I congratulate Hull on choosing system X. It is a good product which will safeguard jobs in a number of companies whose names we shall not mention tonight.
      The hon. Member for Newcastle-under-Lyme (Mr. Golding) let the cat out of the bag when he said that he wanted to see BT drive Mercury out of business. [HON. MEMBERS: "Hear, hear."] In other words, the hon. Gentleman is an unreconstructed monopolist. He does not want competition. He fails to understand—
      It being Eleven o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to the Order [21 November] and the Resolution this day, to put forthwith the Question already proposed from the Chair.
      Question put, That the amendment be made:—
      The House divided:Ayes 192, Noes 317.

      Division No 102]

      [11 pm

      AYES

      Adams, Allen (paisley N)

      Ashton Joe

      Archer, Rt Hon peter

      Atkinson, N. (Tottenham)

      1095

      Bagier, Gordon A. T.

      Hogg, N. (C'nauld & Kilsyth)

      Banks, Tony (Newham NW)

      Howell, Rt Hon D. (S'heath)

      Barnett, Guy

      Hoyle, Douglas

      Barron, Kevin

      Hughes, Mark (Durham)

      Beggs, Roy

      Hughes, Robert (Aberdeen N)

      Beith, A. J.

      Hughes, Roy (Newport East)

      Bell, Stuart

      Hughes, Sean (Knowsley S)

      Bennett, A. (Dent'n & Red'sh)

      Hughes, Simon (Southwark)

      Bidwell, Sydney

      Janner, Hon Greville

      Blair, Anthony

      John, Brynmor

      Bray, Dr Jeremy

      Johnston, Russell

      Brown, Gordon (D'f'mline E)

      Jones, Barry (Alyn & Deeside)

      Brown, Hugh D. (Provan)

      Kaufman, Rt Hon Gerald

      Brown, N. (N'c'tle-u-Tyne E)

      Kennedy, Charles

      Brown, R. (N'c'tle-u-Tyne N)

      Kilroy-Silk, Robert

      Brown, Ron (E'burgh, Leith)

      Kirkwood, Archibald

      Bruce, Malcolm

      Lambie, David

      Callaghan, Jim (Heyw'd & M)

      Lamond, James

      Campbell, Ian

      Leighton, Ronald

      Campbell-Savours, Dale

      Lewis, Ron (Carlisle)

      Canavan, Dennis

      Lewis, Terence (Worsley)

      Carter-Jones, Lewis

      Litherland, Robert

      Clark, Dr David (S Shields)

      Lloyd, Tony (Stretford)

      Clarke, Thomas

      Lofthouse, Geoffrey

      Clay, Robert

      Loyden, Edward

      Cocks, Rt Hon M. (Bristol S.)

      McCusker, Harold

      Cohen, Harry

      McDonald, Dr Oonagh

      Coleman, Donald

      McGuire, Michael

      Concannon, Rt Hon J. D.

      McKelvey, William

      Cook, Frank (Stockton North)

      Mackenzie, Rt Hon Gregor

      Cook, Robin F. (Livingston)

      McNamara, Kevin

      Corbett, Robin

      McTaggart, Robert

      Cowans, Harry

      McWilliam, John

      Cox, Thomas (Tooting)

      Madden, Max

      Craigen, J. M.

      Maginnis, Ken

      Crowther, Stan

      Marek, Dr John

      Cunliffe, Lawrence

      Martin, Michael

      Cunningham, Dr John

      Mason, Rt Hon Roy

      Davies, Rt Hon Denzil (L'lli)

      Maxton, John

      Davies, Ronald (Caerphilly)

      Maynard, Miss Joan

      Davis, Terry (B'ham, H'ge H'l)

      Meacher, Michael

      Deakins, Eric

      Meadowcroft, Michael

      Dewar, Donald

      Mikardo, Ian

      Dixon, Donald

      Millan, Rt Hon Bruce

      Dormand, Jack

      Miller, Dr M.S. (E Kilbride)

      Dubs, Alfred

      Mitchell, Austin (G't Grimsby)

      Duffy, A. E. P.

      Molyneaux, Rt Hon James

      Eadie, Alex

      Morris, Rt Hon A. (W'shawe)

      Eastham, Ken

      Morris, Rt Hon J. (Aberavon)

      Evans, Ioan (Cynon Valley)

      Nellist, David

      Evans, John (St. Helens N)

      Nicholson, J.

      Fatchett, Derek

      O'Brien, William

      Faulds, Andrew

      O'Neill, Martin

      Field, Frank (Birkenhead)

      Orme, Rt Hon Stanley

      Fields, T. (L'pool Broad Gn)

      Paisley, Rev Ian

      Fisher, Mark

      Park, George

      Flannery, Martin

      Parry, Robert

      Foot, Rt Hon Michael

      Patchett, Terry

      Forrester, John

      Pavitt, Laurie

      Forsythe, Clifford (S Antrim)

      Pike, Peter

      Foster, Derek

      Powell, Raymond (Ogmore)

      Foulkes, George

      Prescott, John

      Fraser, J. (Norwood)

      Randall, Stuart

      Freeson, Rt Hon Reginald

      Redmond, M.

      Freud, Clement

      Richardson, Ms Jo

      Garrett, W. E.

      Roberts, Allan (Bootle)

      George, Bruce

      Roberts, Ernest (Hackney N)

      Gilbert, Rt Hon Dr John

      Robertson, George

      Godman, Dr Norman

      Robinson, G. (Coventry NW)

      Golding, John

      Rooker, J. W.

      Gould, Bryan

      Ross, Ernest (Dundee W)

      Hamilton, James (M'well N)

      Ross, Stephen (Isle of Wight)

      Hamilton, W. W. (Central Fife)

      Ross, Wm. (Londonderry)

      Hardy, Peter

      Rowlands, Ted

      Harman, Ms Harriet

      Sedgemore, Brian

      Harrison, Rt Hon Walter

      Sheerman, Barry

      Hart, Rt Hon Dame Judith

      Sheldon, Rt Hon R.

      Hattersley, Rt Hon Roy

      Shore, Rt Hon Peter

      Haynes, Frank

      Short, Ms Clare (Ladywood)

      Heffer, Eric S.

      Short, Mrs R.(W'hampt'n NE)

      1096

      Skinner, Dennis

      Torney, Tom

      Smith, C.(Isl'ton S & F'bury)

      Wallace, James

      Smith, Rt Hon J. (M'kl'ds E)

      Wardell, Gareth (Gower)

      Smyth, Rev W. M. (Belfast S)

      Wareing, Robert

      Snape, Peter

      Welsh, Michael

      Soley, Clive

      White, James

      Spearing, Nigel

      Wigley, Dafydd

      Stewart, Rt Hon D. (W Isles)

      Williams, Rt Hon A.

      Stott, Roger

      Wilson, Gordon

      Strang, Gavin

      Winnick, David

      Straw, Jack

      Woodall, Alec

      Thomas, Dafydd (Merioneth)

      Young, David (Bolton SE)

      Thomas, Dr R. (Carmarthen)

      Thompson, J. (Wansbeck)

      Tellers for the Ayes:

      Thorne, Stan (Preston)

      Mr. George Robertson and Mr. Allen McKay.

      Tinn, James

      NOES

      Adley, Robert

      Couchman, James

      Aitken, Jonathan

      Crouch, David

      Amess, David

      Currie, Mrs Edwina

      Ancram, Michael

      Dickens, Geoffrey

      Arnold, Tom

      Dorrell, Stephen

      Ashby, David

      Douglas-Hamilton, Lord J.

      Aspinwall, Jack

      Dover, Denshore

      Atkins, Rt Hon Sir H.

      Dunn, Robert

      Atkins, Robert (South Ribble)

      Durant, Tony

      Atkinson, David (B'm'th E)

      Dykes, Hugh

      Baker, Kenneth (Mole Valley)

      Edwards, Rt Hon N. (P'broke)

      Baker, Nicholas (N Dorset)

      Eggar, Tim

      Baldry, Anthony

      Emery, Sir Peter

      Banks, Robert (Harrogate)

      Evennett, David

      Batiste, Spencer

      Eyre, Reginald

      Beaumont-Dark, Anthony

      Fallon, Michael

      Bellingham, Henry

      Farr, John

      Bendall, Vivian

      Favell, Anthony

      Benyon, William

      Fenner, Mrs Peggy

      Berry, Sir Anthony

      Finsberg, Geoffrey

      Best, Keith

      Fletcher, Alexander

      Biffen, Rt Hon John

      Fookes, Miss Janet

      Biggs-Davison, Sir John

      Forman, Nigel

      Blaker, Rt Hon Sir Peter

      Forsyth, Michael (Stirling)

      Body, Richard

      Fowler, Rt Hon Norman

      Bonsor, Sir Nicholas

      Fox, Marcus

      Bottomley, Peter

      Fraser, Peter (Angus East)

      Bowden, A. (Brighton K'to'n)

      Freeman, Roger

      Boyson, Dr Rhodes

      Fry, Peter

      Braine, Sir Bernard

      Gale, Roger

      Brandon-Bravo, Martin

      Galley, Roy

      Bright, Graham

      Gardner, Sir Edward (Fylde)

      Brinton, Tim

      Garel-Jones, Tristan

      Brittan, Rt Hon Leon

      Gilmour, Rt Hon Sir Ian

      Brooke, Hon Peter

      Glyn, Dr Alan

      Brown, M. (Brigg & Cl'thpes)

      Goodlad, Alastair

      Browne, John

      Gorst, John

      Bryan, Sir Paul

      Gow, Ian

      Buchanan-Smith, Rt Hon A.

      Gower, Sir Raymond

      Bulmer, Esmond

      Grant, Sir Anthony

      Burt, Alistair

      Greenway, Harry

      Butcher, John

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

      Butler, Hon Adam

      Griffiths, Peter (Portsm'th N)

      Butterfill, John

      Grist, Ian

      Carlisle, John (N Luton)

      Grylls, Michael

      Carttiss, Michael

      Gummer, John Selwyn

      Chalker, Mrs Lynda

      Hamilton, Neil (Tatton)

      Chapman, Sydney

      Hampson, Dr Keith

      Chope, Christopher

      Hanley, Jeremy

      Churchill, W. S.

      Hannam,John

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

      Hargreaves, Kenneth

      Clark, Dr Michael (Rochford)

      Harvey, Robert

      Clark, Sir W. (Croydon S)

      Haselhurst, Alan

      Clarke Kenneth (Rushcliffe)

      Hawkins, C. (High Peak)

      Clegg, Sir Walter

      Hawkins, Sir Paul (SW N'folk)

      Cockeram, Eric

      Hawksley, Warren

      Colvin, Michael

      Hayhoe, Barney

      Conway, Derek

      Hayward, Robert

      Coombs, Simon

      Heathcoat-Amory, David

      Cope, John

      Henderson, Barry

      Cormack, Patrick

      Heseltine, Rt Hon Michael

      Corrie, John

      Hickmet, Richard

      1097

      Hicks, Robert

      Neubert, Michael

      Higgins, Rt Hon Terence L.

      Newton, Tony

      Hill, James

      Nicholls, Patrick

      Hind, Kenneth

      Norris, Steven

      Hirst, Michael

      Oppenheim, Philip

      Hogg, Hon Douglas (Gr'th'm)

      Ottaway, Richard

      Holland, Sir Philip (Gedling)

      Page, Richard (Herts SW)

      Hooson, Tom

      Parris, Matthew

      Hordern, Peter

      Patten, John (Oxford)

      Howarth, Alan (Stratf'd-on-A)

      Pattie, Geoffrey

      Howarth, Gerald (Cannock)

      Pawsey, James

      Howell, Ralph (N Norfolk)

      Peacock, Mrs Elizabeth

      Hubbard-Miles, Peter

      Percival, Rt Hon Sir Ian

      Hunt, David (Wirral)

      Pollock, Alexander

      Hunter, Andrew

      Porter, Barry

      Hurd, Rt Hon Douglas

      Powell, William (Corby)

      Irving, Charles

      Powley, John

      Jessel, Toby

      Prentice, Rt Hon Reg

      Johnson-Smith, Sir Geoffrey

      Price, Sir David

      Jones, Gwilym (Cardiff N)

      Prior, Rt Hon James

      Jones, Robert (W Herts)

      Proctor, K. Harvey

      Joseph, Rt Hon Sir Keith

      Pym, Rt Hon Francis

      Kershaw, Sir Anthony

      Raison, Rt Hon Timothy

      King, Roger (B'ham N'field)

      Rathbone, Tim

      Knight, Gregory (Derby N)

      Renton, Tim

      Knight, Mrs Jill (Edgbaston)

      Ridley, Rt Hon Nicholas

      Knowles, Michael

      Ridsdale, Sir Julian

      Knox, David

      Rifkind, Malcolm

      Lang, Ian

      Rippon, Rt Hon Geoffrey

      Latham, Michael

      Roberts, Wyn (Conwy)

      Lawrence, Ivan

      Rossi, Sir Hugh

      Lawson, Rt Hon Nigel

      Rost, Peter

      Lee, John (Pendle)

      Rowe, Andrew

      Leigh, Edward (Gainsbor'gh)

      Rumbold, Mrs Angela

      Lennox-Boyd, Hon Mark

      Ryder, Richard

      Lester, Jim

      Sackville, Hon Thomas

      Lightbown, David

      Sainsbury, Hon Timothy

      Lilley, Peter

      St. John-Stevas, Rt Hon N.

      Lloyd, Ian (Havant)

      Sayeed, Jonathan

      Lord, Michael

      Scott, Nicholas

      Lyell, Nicholas

      Shaw, Giles (Pudsey)

      McCrindle, Robert

      Shaw, Sir Michael (Scarb')

      McCurley, Mrs Anna

      Shelton, William (Streatham)

      Macfarlane, Neil

      Shepherd, Colin (Hereford)

      MacKay, Andrew (Berkshire)

      Shersby, Michael

      MacKay, John (Argyll & Bute)

      Silvester, Fred

      Maclean, David John.

      Sims, Roger

      McNair-Wilson, M. (N'bury)

      Skeet, T. H. H.

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

      Smith, Sir Dudley (Warwick)

      McQuarrie, Albert

      Smith, Tim (Beaconsfield)

      Major, John

      Soames, Hon Nicholas

      Malins, Humfrey

      Speed, Keith

      Malone, Gerald

      Speller, Tony

      Maples, John

      Spence, John

      Marland, Paul

      Spencer, D.

      Marlow, Antony

      Spicer, Michael (S Worcs)

      Marshall, Michael (Arundel)

      Squire, Robin

      Mates, Michael

      Stanbrook, Ivor

      Mather, Carol

      Stanley, John

      Maude, Francis

      Steen, Anthony

      Mawhinney, Dr Brian

      Stern, Michael

      Maxwell-Hyslop, Robin

      Stevens, Lewis (Nuneaton)

      Mayhew, Sir Patrick

      Stevens, Martin (Fulham)

      Mellor, David

      Stewart, Allan (Eastwood)

      Merchant, Piers

      Stewart, Andrew (Sherwood)

      Meyer, Sir Anthony

      Stokes, John

      Miller, Hal (B'grove)

      Stradling Thomas, J.

      Mills, Iain (Meriden)

      Sumberg, David

      Mills, Sir Peter (West Devon)

      Tapsell, Peter

      Miscampbell, Norman

      Taylor, Teddy (S'end E)

      Mitchell, David (NW Hants)

      Tebbit, Rt Hon Norman

      Moate, Roger

      Temple-Morris, Peter

      Monro, Sir Hector

      Terlezki, Stefan

      Montgomery, Fergus

      Thomas, Rt Hon Peter

      Morris, M. (N'hampton, S)

      Thompson, Patrick (N'ich N)

      Morrison, Hon P. (Chester)

      Thorne, Neil (Ilford S)

      Moynihan, Hon C.

      Thornton, Malcolm

      Mudd, David

      Thurnham, Peter

      Neale, Gerrard

      Townend, John (Bridlington)

      Nelson, Anthony

      Tracey, Richard

      1098

      Trippier, David

      Wells, John (Maidstone)

      Twinn, Dr Ian

      Wheeler, John

      van Straubenzee, Sir W.

      Whitfield, John

      Vaughan, Dr Gerard

      Whitney, Raymond

      Viggers, Peter

      Wiggin, Jerry

      Waddington, David

      Wilkinson, John

      Wakeham, Rt Hon John

      Winterton, Mrs Ann

      Waldegrave, Hon William

      Winterton, Nicholas

      Walden, George

      Wolfson, Mark

      Walker, Bill (T'side N)

      Wood, Timothy

      Wall, Sir Patrick

      Woodcock, Michael

      Waller, Gary

      Yeo, Tim

      Walters, Dennis

      Young, Sir George (Acton)

      Ward, John

      Younger, Rt Hon George

      Wardle, C. (Bexhill)

      Warren, Kenneth

      Tellers for the Noes:

      Watson, John

      Mr. Robert Boscawen and Mr. Archie Hamilton.

      Watts, John

      Wells, Bowen (Hertford)

      Question accordingly negatived.
      11 pm
      Mr. Deputy Speaker then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at Eleven o'clock.
      Amendment made: No. 4, in page 3, line 44, leave out `16 or'.

    Clause 4
      MEANING OF TELECOMMUNICATION SYSTEM" AND RELATED EXPRESSIONS
      Amendment made: No. 5, in page 4, line 16, leave out `except in section 6 below'.—[Mr. Butcher.]
    Clause 8

      SPECIAL PROVISIONS APPLICABLE TO CERTAIN LICENCES
      Amendment made: No. 6, in page 10, line 28, at end insert—
      '(1A) It is immaterial for the purposes of subsection (1) above whether the licence also includes conditions requiring the person to whom the licence is granted to refer for determination by the Director such questions arising under the conditions mentioned in paragraphs (a) to (e) of that subsection as are specified in the licence or are of a description so specified.'.—[Mr. Butcher.]

    Clause 9
      PUBLIC TELECOMMUNICATION SYSTEMS
      Amendment made: No. 7, in page 11, leave out lines 13 to 15.—[Mr. Butcher.]
    Clause 11

      PROVISIONS SUPPLEMENTARY TO SECTION I0
      Amendments made: No. 8 in page 13, line 39, leave out `by statutory instrument'.
      No. 9, in page 14, leave out lines 15 to 18.—[Mr. Butcher.]

    Clause 16
      SECURING COMPLIANCE WITH LICENCE CONDITIONS
      Amendment made: No. 11, in page 19, line 33, leave out clause 16. —[Mr. Butcher.]
    Clause 17

      PROVISIONS SUPPLEMENTARY TO SECTION 16
      Amendments made: No. 12, in page 21, line 9, leave out from 'by' to 'have' in line 12 and insert
      'a final or provisional order and desires to question its validity on the ground that the making or confirmation of it was not within the powers of section (Securing compliance with licence conditions) above or that any of the requirements of section (Procedural requirements) above'.
      No. 13, in page 21, line 14, leave out
      'of the order under subsection (8) of that section'
      and insert
      'on him of a copy of the order'.
      No. 14, in page 21, line 17, leave out 'the order is' and insert
      'the making or confirmation of the order was'.
      No. 15, in page 21, line 21, leave out
      'an order under section 16 above'
      and insert
      'a final or provisional order'.
      No. 16, in page 21, line 23, at end insert—
      '(3A) No criminal proceedings shall, by virtue of the making of a final order or the making or confirmation of a provisional order, lie against any person on the ground that he has committed, or aided, abetted, counselled or procured the commission of, or conspired or attempted to commit, or incited others to commit, any contravention of the order'.
      No. 17, in page 21, line 24, leave out
      'an order under section 16 above'
      and insert
      'a final order or a provisional order which has been or is subsequently confirmed'.
      No. 19, in page 21, line 32, leave out
      'an order under section 16 above
      and insert
      'a final or provisional order'.
      No. 21, in page 21, line 40,
      'orders made under section 16 above'
      and insert
      'final and provisional orders'. —[Mr. Butcher.]

    Clause 18

      REGISTER OF LICENCES AND ORDERS
      Amendments made:
      No. 22, in page 21, line 43, leave out from 'register' to end of line 4 on page 22, and insert
      'the provisions of—

      (a) every licence granted under section 7 above and every modification or revocation of, and every direction or consent given or determination made under, such a licence; and

      (b) every final or provisional order, every revocation of such an order and every notice under section(Securing compliance with licence conditions)(5) above'.

      No. 23, in page 22, line 6, leave out 'particulars' and insert 'provision'.
      No. 24, in page 22, line 8, leave out 'those particulars' and insert 'that provision'.
      No. 25, in page 22, leave out lines 16 to 18.—[Mr. Butcher.]

    Clause 19

      APPROVAL OF CONTRACTORS
      Amendment made:
      No. 26, in page 23, leave out lines 25 to 27. —[Mr. Butcher.]

    Clause 21

      APPROVAL ETC. OF APPARATUS
      Amendment made:
      No. 27, in page 26, leave out lines 11 to 13. —[Mr. Butcher.]

    Clause 23

      APPROVAL ETC. OF METERS
      Amendment made:
      No. 28, in page 28, line 43, leave out from beginning to end of line 2 on page 29. —[Mr. Butcher.]

    Clause 24

      DELEGATION OF FUNCTIONS UNDER SECTIONS 2I AND 23
      Amendment made:
      No. 29, in page 29, leave out lines 23 to 37. —[Mr. Butcher.]

    Clause 26

      INFORMATION ETC. TO BE MARKED ON OR TO ACCOMPANY TELECOMMUNICATION APPARATUS
      Amendments made:
      No. 30, in page 30, line 42, leave out from 'section' to 'may' in line 43.
      No. 31, in page 31, leave out lines 5 to 7. —[Mr. Butcher.]

    Clause 27

      INFORMATION ETC. TO BE GIVEN IN ADVERTISEMENTS
      Amendment made:
      No. 32, in page 32, line 1, leave out from 'description' to end of line 5. —[Mr. Butcher.]

    Clause 34

      COMPULSORY PURCHASE OF LAND IN NORTHERN IRELAND
      Amendment made:No. 33, in page 37, line 7, leave out subsection (6) and insert—
      '(6) The enactments for the time being in force relating to the assessment of compensation in respect of land vested in a district council by an order made under Schedule 6 to the Local Government Act (Northern Ireland) 1972 shall, subject to any necessary modifications, apply in relation to any land vested in a public telecommunications operator by an order made under this section.'. —[Mr. Butcher.]

    Clause 52

      CABLE PROGRAMME SERVICES
      Amendments made: No. 34, in page 47, line 34, leave out from beginning to first `by' in line 33 and insert

      1101
      'In this Part' "cable programme service" means a service consisting in the sending by any person'.
      No. 35, in page 47, line 34, leave out
      `sounds or visual images to which this section applies'
      and insert
      'of sounds or visual images or both'.
      No. 36, in page 48, line 4, leave out from 'to' to `conveyed' in line 6 and insert
      'a service consisting of the sending of sounds or visual images or both by any person if, while they are being'
      No. 37, in page 48, line 9, leave out 'to which this section applies' and insert 'or both'
      No. 38, in page 48, line 11, leave out from beginning to "except" in line 12 and insert
      "References in subsections (1) and (2) above to sounds are references to speech or music or both"
      No. 39, in page 48, leave out lines 16 to 23 and insert
      "References in subsections (1) and (2) above to visual images are references to visual images which are such that sequences of them may be seen as moving pictures".—[Mr. Butcher.]

    Clause 53
      PROHIBITION ON UNLICENSED CABLE PROGRAMME SERVICES
      Amendment made: No. 40, in page 49, leave out lines 12 to 14.—[Mr. Butcher.]
    Clause 55

      ENTRY AND SEARCH OF PREMISES
      Amendments made: No. 41, in page 50, line 17, leave out from "warrant" to end of line 25 and insert
      "to enter and search the premises specified in the information at any time within one month from the date of the warrant"
      No. 42, in page 50, line 28, leave out from "section" to end of line 31.—[Mr. Butcher.]
      Mr. Fisher: I beg to move amendment No. 43, in page 51, line 14, leave out clauses 56 to 68.
      These clauses vest the property of BT in a company nominated by the Secretary of State. In normal language, they are the clauses that privatise British Telecom. They are what the Bill is about—the selling-off of £4,000 million of public assets. This is a company that you, Mr. Deputy Speaker, and I, and every other private residential subscriber to the telephone system, have built up with our contributions through our phone bills over the years. It is our company. It is paid for by us, and it is providing a universal service to every person, a universal quality of service at a universal price, and it has been doing that extremely well for the past 71 years.
      11.15 pm
      Above all, it is a service — this should be particular interest to hon. Members—that is accountable to us in the House. That is a responsibility that the House should jealously guard but one that the Government seek to remove from the House. Not only are the Government and the Secretary of State, by the Bill, seeking to sell off, completely irresponsibly, valuable public assets that do the public and the country good; they are doing no service to the House by removing from it the responsibility for a vital public service.
      Why are the Government doing this? In Committee the Minister gave us a checklist of what he considered to be the reasons for privatising BT, and it was a pretty puny list. He said that it was consequential on the breaking up of the exclusive privilege of the monopoly, that it would free BT
      1102
      from state control, that it would allow it free access to the money markets, that it would give commercial freedom to the management and that it would spread share ownership. Those were the five reasons why the Government are selling off £4,000 million of public assets, and the Minister is confirming them visually now, although that does not give them any more force. Let us go through these reasons to see how they stand up to any scrutiny.
      The first two reasons are token, even for a Minister whom the Committee has cross-examined and whose actions it scrutinised for over 100 hours of Committee. We know that his heart is not in this, and all Conservative Members with any sense of public service do not have their hearts in it either. Both the Minister and the Under-Secretary, possibly unlike the Secretary of State, understand the public service, and do not believe in the Bill. Therefore, the first two reasons are not sufficient.
      The first reason — that it is consequential on the breaking up of the exclusive privilege —is a load of nonsense. Privatisation does not inevitably follow from liberalisation. Labour Members have varying degrees of enthusiasm for liberalisation, but it has been proceeding for the past three or four years. There would be no need for privatisation if the Government considered that what was exclusive was good. There are mixed opinions. I am not saying that liberalisation has not been in the consumers' interest, particularly as there has been a more forceful marketing approach by BT. Liberalisation could easily have continued without privatisation. To try to make the one consequential on the other is complete eyewash, and will not bear even the most rudimentary scrutiny.
      As for the suggestion that privatisation would free BT from state control, that is just as bad. It is desirable to free a company from state control only if the Government of the day are using that company badly. Intelligent, enlightened and responsible Government is useful control, and a means of making a public corporation accountable. For the Government to say that they consider that their executive power is detrimental to a public corporation is a gross admission of maladministration, incompetence and futility.
      The Minister of State says that the Government cannot manage BT's affairs competently, and that therefore they must sell BT and leave it to someone who can manage its affairs. That is an admission of defeat. It is amazing that the Minister of State was sufficiently naive to bring this measure forward as a reason for privatising BT. I should have thought that that would be something of which the Minister would be ashamed and that he would have tried to disguise from us the fact that in their heart of hearts the Government are prepared to admit that they cannot competently manage BT's affairs. It is extraordinary that the Government can come before a Standing Committee and admit that they cannot run a public corporation like BT. The Government's reasons do not stand up to scrutiny.
      Financial affairs are matters of greater substance, although when we scrutinise them they become more complicated and the waters become more murky. The Minister of State and the Government tried to give the impression in public and through advertisements— an extremely expensive campaign, which was paid for out of BT's purse—that BT was a drain on the public, that it ought to be removed from public concern and left private industry. Nothing could be further from the truth. To give that impression to the public was to mislead it totally. BT

      1103
      has large loans. In the last account, BT had £3,395 million worth of loans over various terms. All of them were at the full market rate of interest.
      BT pays its way and, far from being a drain on the public purse, it is a net contributor. It is making profits. It has an external financing limit, but for the last few years that limit has been negative — BT contributes to the Treasury and to the State. It is of benefit to us all. In the autumn statement two or three weeks ago the Chancellor announced that BT's external financing limit for 1984–85 was a negative limit of £250 million. This country, the Government and all of us are benefiting from BT's extremely good management, under public ownership. That is a record of which we should be proud. We should not be using BT as a type of milk cow for the public purse
      Mr. Michael Meadowcroft (Leeds, West): Milch COW
      Mr. Fisher: I take that correction. At this time of night my enunciation may not be all that it should be
      Mr. Golding: I am sure that my hon. Friend would realise that in Staffordshire many of us say "milk cow". We have not had the education of the hon. Member for Leeds, West (Mr. Meadowcroft)
      Mr. Fisher: With such an external financing limit, BT, under this Government, has been used as a form of rather devious public taxation. It is wrong for the Government to give any other impression, and to try to say that in some way BT should be hived off because it is not operating in the public interest. Of course BT operates in the public interest. Apart from providing services and fulfilling the interests of the customer, in cold commercial terms, BT stands in the Government's balance books as asset to the public in terms not only of fixed capital assets but profits from turnover and revenue. It is nonesense in commercial and financial terms to sell BT.
      Not satisfied with milking BT dry through negative external financing limits, the Government are getting greedier and, as their economic policies fail, they are becoming more desperate for capital to bolster up the inadequacies and ineptness of those policies. They are desperately looking around for capital. During questions on the autumn statement, the hon. Member for Mid-Sussex (Mr. Renton) said that it was a question of flogging the furniture to pay for the food. Even on the most simplistic financial analysis that is a ludicrous way of proceeding and a most irresponsible way for the Government to conduct economic affairs.
      Selling off BT is just one part of that. It shows up in the autumn statement, in the Chancellor's assessment of the amount of money that would go to the Exchequer in 1984–85 from the sale of Government assets as being £1·9 billion, most of which is likely to be from BT. That leaves a number of questions unanswered, however, as the capital receipts from the sale of BT are expected to be about £4 billion. We shall come to the other questions about that statement in due course. Selling off capital assets to balance the revenue incompetence of the Government is a desperate and fatal weakness at the heart of the Government's economic policies. The sale of BT is a perfect example.
      There is a bitter irony in the sale of the shares on which the City, the stock exchange and the people of this country
      1104
      should ponder. It has not been fully appreciated by everyone, perhaps not even by Sir George Jefferson and the management of BT, that privatisation and the selling of the shares will not benefit BT at all. The only people to benefit will be the Government. When any other company goes to the stock exchange for a quotation to sell shares, the company benefits from the sale, but all the proceeds from the sale of BT will go to the Exchequer and none will assist the future financial policy and capital structure of BT. That has not been made sufficiently clear so far. The Minister has not pointed that out, but the City and BT would do well to recognise it because they will not make a penny out of the sale
      Mr. Golding: My hon. Friend is being rather soft on some people in the City who will certainly make money out of the sale. They will try to make money out of it whether it is in the interests of BT or not. One of the indictments of the Government is that they will hand over the sale of the shares to people without any interest in telecommunications or the health of the industry in Britain
      Mr. Fisher: My hon. Friend is right. At this stage BT looks likely to provide a healthy carcase and there will be plenty of scavenging birds of prey in the shape of stockbrokers and bankers seeking to make a quick kill when the time comes. Those people are beneath consideration in this debate. They are the dross, the flotsam and jetsam of the private stock exchange system. We are dealing here with important matters of public service.
      Mr. Golding: Surely my hon. Friend is not suggesting that we should not expose the antics of the City in relation to the sale of BT shares, as it must be our responsibility now to ensure that the British public, those who work in BT and the customers, know how the sale will be exploited by the City
      Mr. Fisher: I look forward to my hon. Friend's contribution on that when we debate the sale of the shares in more detail. At that stage we must, of course, examine the way in which previous sales of public assets by the Government have lead to sordid and less that than creditable quick profits and killings by a few individuals at the public expense. I am sure that such an argument will be deployed admirably by hon. Members in the debate.
      The principal issue in the debate is whether the shares should be sold and who will benefit? I believe that the Government and not BT will benefit.
      11.30 pm
      Mr. Hayward: The hon. Gentleman has been extremely scathing about one group of persons within the City. Does he realise that that group contributes more to the Exchequer than does BT?
      Mr. Fisher: If the debate is allowed to range to such matters as invisible exports and earnings perhaps we should debate the autumn statement. We must return to the amendment involving privatisation.
      I do not disregard the role performed by the City of London. It contributes much to our invisible earnings. When private or public companies wish to exchange shares, merchant banks and stockbrokers have a perfectly respectable role to perform. My hon. Friends and I object to the Government—the stockbrokers and the merchant bankers are not primarily guilty in this affair—allowing

      1105
      a valuable public asset, which provides a good service to the customer and to every person who is lucky enough to have a telephone, to be sold for a quick and cheap profit. The Government are guilty in this matter. Their agents, the stockbrokers and merchant banks, are mere accessories after the fact. The guilty men on the Government Front Bench are guarding their larynxes. Perhaps tomorrow they will find a voice, but their lack of voice will not disguise the fact that they cannot answer the case and have nothing to say.
      The Minister said that BT will have access to the market for raising capital. Should it go to the market? The Minister, when elaborating on this point in Committee, said that BT will be more flexible and able to raise capital faster. BT has, for the past 10 years, been self-financing its capital investment, and it has a large capital investment programme.
      One would have thought that the good solid Victorian value of self-help that it followed would have been ideologically attractive to the Government. I suspect that "Self-Help" by Samuel Smiles would have been on the shelves of a Grantham greengrocer's shop. "Neither a borrower nor a lender be." The injunction is "Invest in thine own self. Make your fortune that way."
      Some senior Conservative Members have expressed unhappiness about the Government borrowing money for the public good, but the Government now say that BT's method of self-financing does not make good sense. When the Opposition ask the Government to borrow money to finance capital investment projects which the infrastructure of our country desperately needs, why do the Government decline to do so and say that the public sector borrowing requirement is too high and cannot be increased, even if that meant people returning to work, increase output, greater exports and recovery. Why do the Government say that the PSBR cannot be increased by a penny? It is strange that the Government have a different opinion when they refer to the financial structure of BT.
      In spite of that, I do not entirely disagree with the Minister of State. There are undoubtedly snags with self-financing. The pressures that arise when it is practised exclusively are considered as snags by customers. These pressures have their effect on bills and prices. It is true that BT's self-financing has been extremely successful over the past few years, but a certain amount of external financing is not unappealing. That argument is supported by the BT unions, which are in favour of self-financing. The concept is already being put into effect in small ways. For example, there is leasing and sale and leaseback. If BT had been allowed to develop Buzby bonds as it wished to, they could have been a success. I have referred to the attempts to find ways of external financing at an embryonic stage.
      The Opposition have no ideological resistance to the idea of external financing. Equally, there is no reason why external financing should be only a consequence of privatisation. It is not necessary to flog shares to raise finance externally. If the Government had chosen, they could have changed definitions within the PSBR. They could have allowed BT to borrow in the market place. However, they chose not to do so, and the Minister of State or the Secretary of State will answer that charge tomorrow. The Government have chosen not to allow BT to borrow in the market place in the absence of privatisation, and there is no logic, rhyme or reason for that.
      I accept that external financing of the sort that BT has followed over the past two years creates pressures, but
      1106
      BT's price increases throughout the 1970s have always been behind inflation. That is a good record, especially when we recognise the pressure that external financing places on price increases. The policy has worked well for BT, for the customer and for Britain.
      The Government would have found the best possible world if they had refrained from privatising BT and had allowed it to continue to raise money externally. Thai would have allowed public service, public accountability and public control of a valuable public asset. Some liberalisation would have allowed greater flexibility and would have encouraged management to market more vigorously. It would have led to some financial flexibility. That could have been achieved without going private. However, the Government were obsessed with corn-petition. Their ideological blindness has made them inexorably determined to privatise, come hell or high water or any other barrier.
      I do not object to ideology. The Opposition have their ideologies, because that is part of the political arena and political background. I object to the blindness, not the ideology. The result is that we have the worst of all possible worlds. We shall have no public service and no greater financial flexibility. Indeed, we shall have some insecurity. The sale of shares will create insecurity. Which is the more hazardous or which is the more desirable: should we let BT stay public and borrow in the market place or should we force BT to go private and flood the stock exchange with shares that it cannot absorb?
      I note that the Minister is making almost silent interjections from a sedentary position because of the condition of his larynx. I have the impression that they are framed in thoroughly unparliamentary language. The Minister knows only too well that, in asking the stock exchange to sell £4,000 million of shares on our behalf, he is asking the technically impossible. Last year, the stock exchange sold £3,000 million of new business. That was a great increase on the previous year and was one of the best years that the stock exchange had had for 10 years. But we are asking just one sale of shares to be 25 per cent. up on that. The Government are being naive, disingenuous or simply inconsiderate. What would it do to their borrowing, or to the whole gilts market? Either the Government have not thought things out, or they have a very devious way of selling the shares and they have not had the courtesy to include it in the Bill, or in its schedules.
      If the Government have some other way of selling the shares, they should have told the House quite openly, and should have allowed us to consider the proposal. However, they chose not to do that, and so we must assume that they will sell the shares mainly on the London stock exchange. If that is so, they have a duty to tell the House how they intend to do so, and over what period of time
      Mr. McWilliam: Why does my hon. Friend make that assumption when the evidence is that the Minister's officials have been in America and Japan exploring ways of flogging off the shares there? Has my hon. Friend considered that the Minister is trying to do a little bit of damage limitation on the London gilt market by exploring ways of promoting them on the New York and Tokyo stock exchanges?
      Mr. Fisher: In the early days of the Committee, hon. Members made that very point to the Minister. My hon. Friend the Member for Blaydon (Mr. McWilliam) was

      1107
      foremost among them in asking the Minister on which stock exchanges shares would be sold. My next-door-neighbour from north Staffordshire, my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), coined a phrase that suitably sums up the Government's attitude to BT. He said it was the Yankee, Arab, Nippon, Anglo something or other—
      Mr. Golding: The name is the Yankee Nippon Arab Telephone Company. The word "Anglo" would not be recognised by the Government lot
      Mr. Fisher: I must correct my hon. Friend. The customers will be "Anglo". It is only the shares that will be foreign-owned.
      We pressed the Minister on that point. To be fair, in some embarrassment and after a certain amount of consultation with his officials, he returned to the Committee and appeared to give an undertaking that only a few shares—about 10 to 15 per cent.—would be sold on foreign stock exchanges. I think that my memory serves me right, but I shall give way to the Minister if he can find his voice and wishes to correct me. However, that is 10 to 15 per cent. too many. It is disgraceful, but a lot less disgraceful than the 50 per cent. or 60 per cent. of shares that was, I suspect, in the Minister's mind at the beginning
      Mr. Golding: See all, hear all but say nowt did not give an undertaking. His words were hedged round, just as they are over the sale of shares to Japan. He said that that was not under active consideration at the moment. My hon. Friend is again falling into the danger of committing the sin of Stoke-on-Trent, Central, which is to take the Minister on trust. I do not think that my hon. Friend will find the word "undertaking" in the report of our Committee proceedings. There may have been all sorts of nods, winks and nudges, but, unless I am very much mistaken, my hon. Friend will not find the word "undertaking" there. The Minister does not work like that. He leads hon. Members up the garden path. Someone from Stoke-on-Trent, Central might go up that path, but someone from Newcastle-under-Lyme stays at the garden gate, and reads what the Minister actually said
      Mr. Fisher: I stand corrected. I plead my inexperience, kind-heartedness and trustful nature in mitigation. I take my hon. Friend's point that one has to scrutinise the Minister of State's words rather more carefully. Without the record in front of me, I cannot recall his precise words on the first day of our proceedings, but the spirit of what he said was clear to everyone. Whereas at the start of the morning he appeared to be saying that a substantial amount of shares would be sold abroad, by the end of the day I believe he had to admit that few, if any, or a small amount only, would be sold. As my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) indicated, we on the Opposition Benches oppose totally any sale of shares to foreign ownership of this valuable public asset that is the rightful property of every person in this country. If the Government are determined to overrule us and sell some, then let it be as few as possible. But we object to any sale of shares.
      11.45 pm
      Sir John Biggs-Davison: I have learnt a great deal from the hon. Gentleman. I have an interest in the debate, although I did not have the privilege of sitting on the Standing Committee.
      Can the hon. Gentleman tell me whether it would be possible for me, if I had the money, which I have not, to obtain shares in Standard Telephones and Cables in the United States?
      Mr. Fisher: I am afraid I did not catch the name of the company.
      Sir John Biggs-Davison: The company does not matter. Would it be open to a British subject to obtain shares in a telephone company in another country? Why is it so wrong for there to be a foreign shareholding in a British telephone undertaking?
      Mr. Fisher: I believe that there are controls on foreign shareholdings in AT and T, but I give way to my more experienced hon. Friend
      Mr. Golding: If the hon. Gentleman had had the privilege to serve on the Committee, he would have heard that in Japan there is an absolute bar and in America only the most negligible holdings are permissible. Those countries will allow us to hold no stock in their companies, apart from negligible holdings. The Government are hell-bent on selling as much as they can abroad
      Mr. Fisher: It is always informative when the House considers Japan's handling of its affairs as against our handling of our affairs. In spite of protestations from the Government, not only has Japan built up its home market since the war by very strong, often non-tariff, barriers against imports into Japan—the very policy that this Government refuse to recognise as being the only way out of the recession for this country; some flexible, variable and probably non-tariff barrier to protect our industry as we recover—but the Government do not recognise that in the matter of ownership of companies, Japan jealously guards the right to control its own economy. This country should do likewise.
      Let me come to the fourth point of commercial freedom that the hon. Gentleman would be greatly extended by privatisation. The Minister of State, when he had a voice, spoke very eloquently on this point. Indeed, it was one of his favourite speeches. He gave it to hon. Members several times in Committee and each time the Committee enjoyed it a great deal. He would say that this aspect of commercial freedom was what it was all about, this was the new world opening up to BT, the very essence of the challenges for BT. Then he would rhapsodise about this commercial freedom. After this great barrage of beautiful poetic language, he gave an example of the commercial flexibility it would provide. He said, for instance, that Cable and Wireless had recently done a deal with the Texas Railroad Company. [Interruption.] Hon. Members may laugh, but the best is yet to come. The purpose of the deal was to gain a contract in the Guang Dong province of China. Is that why the Government believe that we should privatise BT—to bring telephones to a part of China? Obviously the Minister of State's missionary zeal has been hidden up till now. I hope that he tells that—the real reason why the Government are privatising BT

      1109
      —to his constituents of Mole Valley. In other words, our 300 hours in Committee were about bringing telephones to China
      Mr. Hayward: The hon. Gentleman's sneering references to Guang Dong province display his ignorance of the fact that the Chinese are hoping to use that as their economic cockpit during the next 25 years
      Mr. Fisher: My ignorance on many matters is very large—[HON. MEMBERS: "Hear, hear."]—and I readily acknowledge the enormous, even encyclopaedic, knowledge of the hon. Member for Kingswood (Mr. Hayward) of the Chinese economy. That he kept it hidden throughout our proceedings in Committee is a testament to his modesty. No doubt he will regale the House with his great expertise on Chinese economic affairs in the future.
      The final point that the Minister of State made was that privatisation would spread share ownership. It was a totally phoney argument because those who benefit from the sale of public corporations are not the small investors. The Government continually talk about helping the little man, about making sure that employees have a chance and about enabling people such as the hon. Member for Epping Forest (Sir J. Biggs-Davison) as an individual to acquire shares, but the facts prove otherwise.
      In February 1982, when Amersham International was sold, there were 65,000 lots on the day of sale. Four months later there were 8,601; two thirds of the shareholdings in Amersham International were in lots of more than £250,000. The Minister of State's idea of small shareholdings is very different from ours, and he knows in his heart of hearts that such sales do not spread share ownership at all. He adduced a totally phoney argument.
      The Government's case for privatising BT does not begin to hold water. The Minister made some play with the financial impact of privatisation, and that bears analysis. Shareholders will require dividends, and in this company those dividends will be substantial. The Minister has been coy about discussing the result of the demands of dividends on the cash flow and outflow of BT. When it is considered that the fixed assets, based on the sale price, will be about £8 billion, the return on that capital, even a modest return, will be considerable. Even allowing for a considerable capital appreciation, and therefore perhaps reduced dividend expectations by shareholders, it is not over-greedy to suggest that shareholders will be looking for a 4 per cent. annual dividend. That will be £320 million and that will place an enormous pressure on the financial performance of a privatised BT. Quite apart from unbalancing services, the needs of a small number of firms in private ownership, some of them foreign, will take priority over the needs of some 15 million private shareholders.
      The more one looks at the Government's case the more flimsy and insubstantial it appears to be. When one considers how the shares are to be sold, where they will be sold, on what exchanges and on what terms, the Government's case does not add up. In Committee the Minister of State was remarkably reticent on many of those subjects. He was elusive about what he meant. When questioned about the massaging of the capital reconstruction of the company, about the sudden 24 per cent. increase in depreciation last year, conveniently in the penultimate year before privatisation, and about the price rises that will come next year to boost profits in the year
      1110
      of the sale—subjects that will undoubtedly brighten the image of BT prior to the sale, but on which the Minister was inconvenienced and on which he spoke rather faster — his answer became less and less coherent and Less substantial.
      The Minister of State should answer the questions about the capital reconstruction of BT, the pension fund, depreciation and the way in which price rises will be managed by BT next year. All those will have a substantial effect. We have a right to expect from the Minister of State clear statements on what exchanges will be used to sell the shares and how they will be sold
      Mr. Hayward: The hon. Gentleman has yet again referred to the exchanges that will be used. Earlier in his speech he seemed to recall easily the question that the hon. Member for Blaydon (Mr. McWilliam) put to the Minister. He seems to have conveniently forgotton the very clear answer that the Minister gave about the exchanges on which the stocks would be floated
      Mr. Fisher: On the contrary, the Minister of State was extremely elusive on this. We want to know not only about the exchanges that will be used but about the method of sale. When questioned about the methods of convertible bonds and so on that have been leaked and floated in the press he was very elusive. The time has come for him to make a clear statement about how BT will be sold and over what period. The House, the public and the employees and customers of BT have a right to know now how the company will be disposed of.
      The Government's case has crumbled. I leave the floor for any attempt that they may make at this eleventh hour to win the argument. They could not win it in Committee, however hard they tried. Conservative Members sitting behind the Minister of State did not try very hard and did not make much of a case. We make one promise to potential buyers: we will be the next Government and we will bring back into public ownership without speculative gain this valuable public asset. That will be done in the interests of a universal public service, of the employees and certainly of the customers
      Mr. Golding: Can my hon. Friend give us the assurance that tomorrow afternoon he will savage the Government and not treat them so kindly as he has tonight? Will he get behind their motivation and talk less of the techniques that they will use and more of the sordid nature of the business they will be conducting?
      12 midnight
      Mr. Fisher: I shall have to leave that to hon. Members who are more capable of doing it than I. Even on the basis of this wholly inadequate scrutiny, the case that the Minister presented to the Committee does not bear analysis. It is not a responsible or adequate explanation for the sale of £4 billion of public assets. It will stand as a black mark against the Government's economic mismanagement of the country and its public assets
      Mr. John McWilliam: In the time remaining—
      It being Twelve o'clock, further consideration of the Bill stood adjourned, pursuant to the order [21 November]
      Bill, as amended (in the Standing Committee), to be further considered this day.

      Select Committees (Government Departments)
      Order read for resuming adjourned debate on Question [8 December]
      That Standing Order No. 99 (Select committees related to government departments) be amended, as follows:

      Paragraph 2, in the Table, item 1, leave out '9' and insert '11'.

      Paragraph 2, in the Table, item 3, leave out '9' and insert '11'.

      Paragraph 2, in the Table, item 4, leave out '9' and insert '11'.

      Paragraph 2, in the Table, leave out item 9.

      Paragraph 2, in the Table, item 11, leave out '9' and insert '11'.

      Paragraph 2, in the Table, after item 11, insert 'Trade and Industry/Department of Trade and Industry/11/3'.

      Line 20, leave out 'Industry and Trade' and insert 'Trade and Industry'.
      Line 38, at end insert—
      '(d) to communicate to any other such committee its evidence and any other documents relating to matters of common interest, and
      (e) to meet concurrently with any other such committee for the purposes of deliberating, taking evidence, or considering draft reports.'
      Question again proposed
      Mr. Speaker: Before we commence this debate, I remind the House that under the order agreed to by the House last Monday this debate is in two parts. First there is the debate on the motion to amend Standing Orders and on the amendment standing in the name of the hon. Member for Berwick-upon-Tweed (Mr. Beith), which I have already selected, if he wishes to move it. Under last Monday's Order, I am required to put the Questions on the amendment and on the main motion after one and a half hours.
      Secondly, there is the debate on the five motions—Nos. 4 to 9, dealing with individual Committees. I have selected all of the amendments to these motions. At the end of another one and half hours, I am required to put successively the Questions on the five motions and on the amendments thereto.
      12.1 am
      The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): The reason for tonight's debate is, I think, well known. Difficulties have arisen over the representation of the smaller Opposition parties on the departmental Select Committees. I do not intend to engage in any sterile speculation as to the factors that have led to an impasse in this matter. I merely note that objections have already been raised on several occasions to the nominations for membership proposed by my hon. Friend the Member for Gedling (Sir P. Holland) on behalf of the Committee of Selection.
      Motions to re-establish eight of the Committees were approved by the House last Friday, but there remain six of the Committees provided for in Standing Orders—those on Agriculture, Defence, Education, Science and Arts, Employment, Social Services, and Welsh Affairs —which have still not yet been set up. The principal purpose of tonight's debate, therefore, is to enable the House to come to decisions on the membership of these six Committees.
      It is a wearisome task to arrive at everyone's ideal solution in a House with six smaller Opposition parties sharing less than 50 seats. No formula is likely to be without its critics.
      In the course of the extensive consultations which have been taking place about this matter, however, it has become apparant that there might be a better chance of reaching wider general agreement if the membership of these Committees were somewhat enlarged. I make such
      1112
      a proposal with some diffidence, not least in the context of the Liaison Committee's preference for more compact departmental Select Committees. Indeed, the Liaison Committee pointed out that there must be a limit to the size of these Committees if all right hon. and hon. Members are to have adequate opportunities during evidence-taking sessions.
      However, I have concluded that a limited increase in numbers would provide the Committee of Selection and the House itself with a wider margin of discretion in seeking to balance the sometimes conflicting claims to membership by the parties concerned.
      The effect of the proposals now before the House would accordingly be to provide that, with the exception of the Scottish Affairs Committee, which would still have 13 members, all the remaining departmental Select Committees would have a uniform membership of 11 right hon. and hon. Members. This would mean that the number of members on four Committees—those on Agriculture, Education, Science and Arts, Employment and Social Services — would be increased from nine to 11 members.
      In this I have been concerned to achieve the minimum feasible increase which is consistent with contributing helpfully to finding an agreed solution. I have not thought it right where disagreement still exists in relation to particular Committees—as in the cases of Defence and of Welsh Affairs—to expand the membership on an ad hoc basis to satisfy all claimants. That is simply not a practicable way in which to proceed.
      I repeat that these proposals differ somewhat from those made by the Liaison Committee last Session. However, those recommendations were made in the context of a Parliament with a somewhat different party composition to the present Parliament. Furthermore, the main and majority concern at present must be to proceed on the basis that offers the best chance of avoiding further delay.
      The first of the other amendments in my name on the Order Paper is merely a change in nomenclature, which reflects the formation of the combined trade and industry Department. The other amendments relate to the recommendations that were made by the Liaison Committee in its first report on the Select Committee system, last session. As my written reply to my right hon. Friend the Member for Taunton (Mr. du Cann) stated, the Government share that Committee's view that, in order to help facilitate further co-ordination on the work of Select

      1113
      Committees, it is desirable that individual Committees should in future be able to show their evidence to other Committees, and that they should be given the power to join with other Committees in order to take evidence, deliberate, or make reports. The motions referring to amendments to line 38 of Standing Order No. 99 are in accordance with the Government's commitment, and would give the departmental Select Committees the necessary powers to do that.
      I recognise that the Liaison Committee's report made recommendations with regard to other possible changes in our Select Committee arrangements. I suggest, however, that the over-riding need tonight is to enable the remainder of the new departmental Select Committees to begin their important work without any further delay.
      12.7 am
      Mr. A. J. Beith: I beg to move, as an amendment to the Question, in line 9, at end insert—
      "Paragraph 2, in the Table, item 14, leave out '11' and insert
      The purpose of the amendment is to increase the size of the Select Committee on Welsh Affairs so that it is the same size as the Select Committee on Scottish Affairs and has 13 members, which seems a perfectly reasonable proposition.
      I dismiss the notion that the reason why the Select Committees have not been set up until almost Christmas can be attributed to the disagreement reflected in the motions and amendments. We did not embark on the process until after the summer recess because the Labour party waited until it had elected its shadow Cabinet. I shall not argue whether that was desirable, but it cannot be laid at the door of the minority parties that the process was not started until relatively recently.
      The Leader of the House's motion increases the size of some Committees. There is no logic in his selection of Committees to increase. It does not conform to the wishes of the Liaison Committee and, perhaps more striking, it does not even conform to the objective of enlarging Committees on which many hon. Members want to serve. The Leader of the House may be aware that among the Committees that he has chosen to enlarge are some on which hon. Members were not greatly enthusiastic to serve.
      If it is argued later that there are on the Order Paper Liberal nominations for six Committees, I can tell the House that we were pressed to furnish a nomination for one of the Committees on which there was a vacant Opposition place, but there was no great enthusiasm to serve on it. I shall not embarrass hon. Members or the Committee by saying which one it was. The Leader of the House knows full well that he did not choose Committees on which hon. Members very much wanted to serve. That cannot have been the logic of it. He simply took those that happened to have nine members and increased the number to 11.
      The Liaison Committee's suggestion was that only Committees that had a Sub-Committee should have 11 members. We should not have to follow that either. We should look at the situation in this Parliament and see what would help to ensure that the Committees had a proper spread of members.
      With regard to the Select Committee on Welsh Affairs, it is impossible to represent the two significant minorities
      1114
      in Wales — the Liberals and Plaid Cymru — without increasing the size of the Committee unless other parties are prepared to give up what would be their rightful share of the normal figures used by the Committee of Selection. The Government could well afford to do it. I have put down an amendment to the later motion to enable them to take that route if they prefer. They do not have many Welsh Members, and I doubt whether all those Welsh Members are filled with unbounded enthusiasm for serving on the Committee.
      If the Government did not favour that route, it would have been perfectly reasonable to increase the size of the Select Committee on Welsh Affairs in order to accommodate an alliance that gained 23.8 per cent. of the votes in Wales at the general election. It is ludicrous that the representatives of nearly a quarter of the voters should be excluded from the Select Committee which deals with Welsh affairs. I can see no reasonable defence of that.
      It is no part of my case that Plaid Cymru should be excluded from the Committee. We gained nearly three times as many votes in Wales as Plaid Cymru, but it is reasonable that Plaid Cymru should be represented on the Committee. I can well understand that party's view that, of all the Select Committees, this is the one on which Plaid Cymru Members most want to serve.
      My hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) has been a member of the Select Committee on Welsh Affairs since its creation. Fie has served on the Committee with distinction. It is generally accepted in Wales, and, I believe, in the House, that he has been an asset to the Committee in its work. I can see no argument and no reasonable defence for removing him from the Committee, and I do not believe that the Leader of the House could find a convincing argument. If we do not enlarge the Committee we shall exclude from it one of its most effective and respected members, even though the political grouping that he represents got nearly a quarter of the votes in Wales. No one could defend that.
      I therefore seek the support of the House in increasing the Committee to a size that would enable us to represent on it all the parties that have a legitimate interest in the affairs of Wales. If we fail to do so, we shall be deliberately flying in the face of what the people of Wales decided at the ballot box.
      12.12 am
      Mr. Dafydd Wigley: I support the amendment, and I suggest to Labour Members that it is in their interests to do so too. At the general election, 20 of the 38 seats in Wales were Labour seats, and yet there are to be only three Labour Members out of 11 on the Select Committee
      Mr. John Maxton: On the Scottish Affairs Select Committee we have four seats out of 13. That is equally ridiculous
      Mr. Wigley: I accept that increasing the number to 13 will not solve the problem, but it would be better to have four members than three and increasing the numbers to 13 will make room for an additional Labour Member.
      I believe that the balance in the Welsh Affairs Select Committee and in the Scottish Affairs Select Committee should reflect the balance of opinion within Wales and Scotland. The reports of the Select Committees come

      1115
      before the House before any decisions are taken. I can see no reason why the same pattern should not exist in the Select Committees as in the Scottish Grand Committee and the Welsh Grand Committee.
      That would not be a major departure, but the amendment does not go even as far as that. It seeks only to ensure that all the parties in Wales are represented. It would be unfair to Plaid Cymru, as it was in the previous Parliament, to give it no voice on the Select Committee. In this Parliament, it would be equally unfair to the Liberals and the alliance. In this and the previous Parliament, the situation has been unfair to the Labour party.
      In considering the balance that the Committee should reflect, we should cast our minds to Northern Ireland. If there was a Northern Ireland Select Committee on the same principles, it would include only one Northern Ireland Member. That would be ridiculous. The House must get rid of the idea that the politics of the various parts of the United Kingdom are identical with the politics of England. They are not.
      The proposal is a reasonable one, and it will facilitate the setting up of Sub-Committees. The Welsh Office is not a single function Department. It covers health, housing education, roads and so on. There is a crying need for Sub-Committees within the structure, and if there were 13 members it would be easier to set them up.
      Taking the Committees as a whole, the Liberals have not done badly in getting six seats. They have done rather better than many other people, but the other part of the alliance has not done so well
      Mr. Dennis Skinner: It is all the same
      Mr. Wigley: That is a matter of internal argument in which I should not like to become involved. The amendment refers to Wales, and I should have thought that it was of interest to all Opposition parties. I commend it to the House
      Mr. Ray Powell: I should like to take up the remarks of the hon. Member for Caernarfon (Mr. Wigley) on the issue of representation. I tend to support the amendment, but we should find out whether there have been discussions through the usual channels to discover whether the rules for creating the Select Committees have been changed since they were set up in 1979.
      In 1979 the Labour party was represented by four members on the Select Committee on Welsh Affairs; the Government had six members, and the Liberals one. That was a fair and even balance, and as a result some excellent reports were presented to the House. I ask the Leader of the House whether the rules for allocating representation on the Select Committees have been changed since 1979. The Labour party has 20 elected Members in Wales, the Conservative party 14, the Welsh nationalists two, and the Liberal party two. If the Government make the appropriate allocation on the basis of the 1979 representation, the Labour party should have at least four seats. At present it has three.
      The Select Committees were set up primarily to investigate the Establishment. The Select Committee on Welsh Affairs was set up primarily to investigate the Welsh Office. How on earth can we investigate the Establishment when the Establishment predominates in the
      1116
      Committees? I can imagine the attitude of the Tory Members on the Select Committee on Welsh Affairs with a Labour Chairman, two further Labour Members, seven Tories and one Liberal or Welsh nationalist if we tried to probe the Secretary of State for Wales or the Welsh Office and their actions. I ask the House to support the amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 26, Noes 129.

      Division No. 103]

      [12.18 am

      AYES

      Beith, A. J.

      Lewis, Ron (Carllsle)

      Carlile, Alexander (Montg'y)

      Lewis, Terence (Worsley)

      Davies, Ronald (Caerphilly)

      Marek, Dr John

      Davis, Terry (B'ham, H'ge H'l)

      Maxton, John

      Foulkes, George

      Paisley, Rev Ian

      Freud, Clement

      Powell, Raymond (Ogmore)

      George, Bruce

      Ross, Stephen (Isle of Wlght)

      Hamilton, James (M'well N)

      Thomas, Dafydd (Merioneth)

      Harrison, Rt Hon Walter

      Thomas, Dr R. (Carmarthen)

      Haynes, Frank

      Williams, Rt Hon A.

      Home Robertson, John

      Howells, Geraint

      Tellers for the Ayes:

      Hughes, Simon (Southwark)

      Mr. Michael Meadowcroft and Mr. Dafydd Wigley.

      Johnston, Russell

      Kennedy, Charles

      NOES

      Ashby, David

      Hogg, Hon Douglas (Gr'th'm)

      Atkins, Rt Hon Sir H.

      Hogg, N. (C'nauld & Kilsyth)

      Atkinson, David (B'm'th E)

      Holland, Sir Philip (Gedling)

      Baker, Nicholas (N Dorset)

      Howarth, Gerald (Cannock)

      Baldry, Anthony

      Hubbard-Miles, Peter

      Batiste, Spencer

      Hunt, David (Wirral)

      Beggs, Roy

      Jones, Gwilym (Cardiff N)

      Best, Keith

      Knight, Gregory (Derby N)

      Biffen, Rt Hon John

      Knowles, Michael

      Biggs-Davison, Sir John

      Lang, Ian

      Boscawen, Hon Robert

      Lawrence, Ivan

      Bottomley, Peter

      Leigh, Edward (Gainsbor'gh)

      Bright, Graham

      Lilley, Peter

      Brown, M. (Brigg & Cl'thpes)

      Lord, Michael

      Burt, Alistair

      Lyell, Nicholas

      Campbell-Savours, Dale

      McCrindle, Robert

      Carttiss, Michael

      Macfarlane, Neil

      Churchill, W. S.

      McKay, Allen (Penistone)

      Clark, Dr Michael (Rochford)

      MacKay, Andrew (Berkshire)

      Clegg, Sir Walter

      Maclean, David John.

      Cocks, Rt Hon M. (Bristol S.)

      McNair-Wilson, M. (N'bury)

      Conway, Derek

      Maginnis, Ken

      Cope, John

      Major, John

      Couchman, James

      Malone, Gerald

      Currie, Mrs Edwina

      Marshall, Michael (Arundel)

      Dixon, Donald

      Mates, Michael

      Durant, Tony

      Mather, Carol

      Dykes, Hugh

      Maxwell-Hyslop, Robin

      Emery, Sir Peter

      Mayhew, Sir Patrick

      Fallon, Michael

      Miller, Hal (B'grove)

      Forsyth, Michael (Stirling)

      Molyneaux, Rt Hon James

      Forsythe, Clifford (S Antrim)

      Morrison, Hon P. (Chester)

      Fox, Marcus

      Neubert, Michael

      Garel-Jones, Tristan

      Newton, Tony

      Goodlad, Alastair

      Nicholls, Patrick

      Gorst, John

      Nicholson, J.

      Gow, Ian

      Norris, Steven

      Gower, Sir Raymond

      Osborn, Sir John

      Hamilton, Hon A. (Epsom)

      Ottaway, Richard

      Hamilton, Neil (Tatton)

      Page, Richard (Herts SW)

      Hanley, Jeremy

      Parris, Matthew

      Harvey, Robert

      Parry, Robert

      Haselhurst, Alan

      Pawsey, James

      Hawkins, Sir Paul (SW N'folk)

      Peacock, Mrs Elizabeth

      Hayward, Robert

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

      Henderson, Barry

      Powley, John

      Hickmet, Richard

      Proctor, K. Harvey

      Hind, Kenneth

      Rathbone, Tim

      Hirst, Michael

      Rippon, Rt Hon Geoffrey

      1117

      Roberts, Wyn (Conwy)

      Terlezki, Stefan

      Ryder, Richard

      Thompson, Patrick (N'ich N)

      Sainsbury, Hon Timothy

      Thorne, Neil (Ilford S)

      Sayeed, Jonathan

      Thurnham, Peter

      Silvester, Fred

      van Straubenzee, Sir W.

      Sims, Roger

      Wakeham, Rt Hon John

      Skinner, Dennis

      Wardle, C. (Bexhill)

      Smith, Tim (Beaconsfield)

      Warren, Kenneth

      Soames, Hon Nicholas

      Watson, John

      Speed, Keith

      Watts, John

      Spence, John

      Wheeler, John

      Spencer, D.

      Wood, Timothy

      Spicer, Michael (S Worcs)

      Yeo, Tim

      Stern, Michael

      Stevens, Lewis (Nuneaton)

      Tellers for the Noes:

      Stewart, Andrew (Sherwood)

      Mr. Harry Greenway and Mr. Andrew Rowe.

      Stradling Thomas, J.

      Taylor, Teddy (S'end E)

      Question accordingly negatived.
      Main Question put and agreed to.
      Ordered,
      That Standing Order No. 99 (Select committees related
      to government departments) be amended, as follows:

      Paragraph 2, in the Table, item 1, leave out '9' and insert `11'.

      Paragraph 2, in the Table, item 3, leave out '9' and insert '11'.

      Paragraph 2, in the Table, item 4, leave out '9' and insert '11'.

      Paragraph 2, in the Table, leave out item 9.

      Paragraph 2, in the Table, item 11, leave out '9' and insert '11'.

      Paragraph 2, in the Table, after 11, insert 'Trade and Industry/ Department of Trade and Industry/11/3'.

      Line 20, leave out 'Industry and Trade' and insert 'Trade and Industry'.
      Line 38, at end insert—
      '(d) to communicate to any other such committee its evidence and any other documents relating to matters of common interest, and
      (e) to meet concurrently with any other such committee for the purposes of deliberating, taking evidence, or considering draft reports.'

      Agriculture
      12.29 am
      Sir Philip Holland: I beg to move,
      That Mr. Richard Body, Mr. Robin Corbett, Mr. David Harris, Mr. Michael Lord, Mr. Albert McQuarrie, Miss Joan Maynard, Mr. James Nicholson, The Reverend Ian Paisley, Mrs. Marion Roe, Mr. John Spence and Mr. Tom Torney be members of the Agriculture Committee.
      Mr. Speaker: For the convenience of the House, it might be helpful if we were to debate together the motions on defence, education, science and arts, employment. social services and Welsh affairs.
      Sir Philip Holland: The Committee of Selection has tried to meet the wishes of the House in relation to the departmental Select Committees. I believe that, when the House understands the complexity of the problem, it may wish to review the present arrangements. As this is almost certainly the last occasion on which I shall have the honour to address the House as Chairman of the Committee of Selection, I should like also, in the light of experience and with hindsight, to express a personal view that in 1979 the House was mistaken in making a decision, for the 'first time in our long history, to separate the functions of selection and appointment. The difficulties created by that have been further exacerbated by the erosion of the two-party system with the development of a House composed of a multiplicity of dissimiliar political parties. I hope that I may be in order if, a little later in my remarks—I shall not be too long — I suggest remedies on the grounds that the problems arising from the 1979 decision and the changing nature of the House are, in a general sense, the reasons behind the need for this debate and the delays that occurred in setting up the Select Committees.
      I shall explain our workings in relation to the Select Committees under four heads: first, the instruction that the House gave in 1979 in setting up the departmental Select Committees; secondly, a broad general application of a much earlier instruction related to a totally different type of Committee, which we have used; thirdly, the custom and practice developed over many years by the Committee of Selection in making appointments to other types of Committee on which we have had to draw; and fourthly, the precedent set at the beginning of the last Parliament in relation to departmental Select Committees.
      Under Standing Order No. 99, as amended earlier today, the House decrees a maximum number of members for each of the departmental Select Committees. Standing Order No. 82(2) states:
      "No motion shall be made for the nomination of members of select committees appointed under Standing Order No. 99 … or for their discharge, unless:

      (a) notice of motion has been given at least two sitting days previously, and

      (b) the motion is made on behalf of the Committee of Selection by the chairman or another member of the committee."

      No other instruction or advice has been given to the Committee of Selection on how to perform its task in respect of those Select Committees. In this context, the Committee is not required by the House to have regard either to the composition of the House or to the qualification of Members nominated. The new edition of "Erskine May" beginning at the foot of page 684 reports:
      "In 1979 when the House was debating the first nominations by the Committee of Selection for the Select Committees relating to Government departments, the Chairman of the Committee of

      1119
      Selection stated that in nominating members of such Committees, the Committee enjoyed full discretion and was under no obligation to consult, to take advice, or to indicate any criteria of choice. To assist the House he indicated that the Committee would not for the time being nominate members of the Government, Parliamentary Private Secretaries and regular Opposition Front Bench spokesmen."
      The House accepted that recommendation in 1979, and for the past four years has not seen fit to encroach in any way on the total discretion of the Committee of Selection in relation to selection. In 1979, the House in effect said to us, "We want the members of the Committee of Selection to nominate members for these committees, and the Committee had better get on with it in the best way it thinks fit."
      We are under no requirement to recognise the strength of the Government or the Opposition parties and certainly we are not required to afford any right to nomination to any political party. Indeed, in Standing Orders there is nowhere any mention of any political party and I believe that only Standing Order No. 6 on the arrangement of public business makes any reference to Her Majesty's Opposition. According to Standing Orders in most cases we are either Ministers or private Members.
      The rules that we have observed in preparing these nominations, therefore, are entirely of our own making, of an ad hoc nature and can be changed by us at any time without notice or notification unless we receive a specific instruction to the contrary from the House.
      On my second point, lacking guidance from the House on how to proceed, we have had to draw on our own experience when selecting for appointments to a very different kind of Committee, appointed under different rules and subject to a different Standing Order. Because of the substantial differences between the two types of Committee, clearly we cannot use identical criteria, but we have tried to adapt one of the basic principles applied in broad outline only. I refer, of course, to our experience in selecting and appointing to Standing Committees established to consider Bills and statutory instruments.
      Standing Order No. 65(2) states:
      "In nominating such Members"—
      that is, to Standing Committees, not Select Committees—
      "the Committee of Selection shall have regard to the qualifications of those Members nominated and to the composition of the House".
      Even there the House leaves it entirely to the Committee to interpret those words in its own way. The qualifications of an hon. Member to serve on a Standing Committee may mean anything from simple availability to a high level of technical expertise. The composition of the House may refer to hon. Members with different work experience, different educational backgrounds, different political interests or different subject interests or, more broadly, those who support the Government and those who oppose the Government. It is, of course, the last interpretation that has been adopted by the Committee over many years, with the acquiescence of the House.
      There are substantial differences between Standing Committees and Select Committees. Select Committees are appointed for the whole Parliament to specialise in a single subject of government and to engage in an investigative rather than a legislative function. Therefore,
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      we believe that only the most general criterion applied to the Standing Committee—that is, the balance between Government and Opposition—can be adopted.
      On the third point, in recent years in relation to Standing Committees we have developed the practice of recognising that there are two Opposition groups with sufficient numbers to merit the offer of places on each Committee of a certain size. The Opposition Members on the Committee of Selection have therefore offered to the smaller of the two Opposition groups — that is, an amalgam of minority parties—the appropriate number of places on each Standing Committee for which its numbers qualify.
      In the time that I have served on the Committee of Selection, since 1974, there have been many occasions on which minority parties, for reasons of their own, have not been interested in taking up all the places offered to them, and they are at liberty to do that. The places have therefore had to be occupied by the majority Opposition party to retain the balance that the Committee of Selection wished to achieve between Government and Opposition. In practice, therefore, over the years, it has not been possible to apply a rigid arithmetical formula to differentiate between the various groupings on the Opposition side, not least because of the very selective way in which minority parties have been prepared to co-operate
      Mr. A. J. Beith: Can the hon. Gentleman cite one occasion in all the time that he and I have worked together both on and with the Committee of Selection when I have failed to co-operate when he has asked me to do so?
      Sir Philip Holland: I said that the minority parties had not always taken up the places offered to them. I will give one or two examples. On 9 December 1981 we appointed hon. Members to four Standing Committees, on two of which the minority parties did not wish to appoint Members.
      Fourthly, when we selected the nominations for the Select Committees in 1979—
      Mr. Beith: The hon. Gentleman has not answered my question.
      Sir Philip Holland: I have answered it in my own way.
      In 1979 two minority parties over-subscribed Members and three exhibited little interest in the Select Committees. As interest and application from the smaller opposition parties in 1979 was uneven—I am not arguing against the hon. Member for Berwick-upon-Tweed (Mr. Beith) on this matter — the Committee of Selection was not surprised when only one minority Opposition party—the hon. Member for Berwick-upon-Tweed is aware of the party — applied for more than its strictly arithmetical entitlement through the spokesman for the minority parties on the Committee. So long as this did not upset the general balance as between Government and Opposition, the Committee found it acceptable.
      The difficulty of preparing nominations that would find general acceptance in the House arises from the existence of no fewer than seven dissimilar opposition parties, plus the fact that the Committee of Selection is not a negotiating body—nor was it ever designed to be
      Mr. John Maxton: Is the hon. Gentleman aware that the Conservative party in Scotland is the minority party? The hon. Gentleman's Committee

      1121
      of Selection had great difficulty in finding sufficient Conservative Members during the previous Parliament to serve on the Scottish Select Committee and some hon. Members failed to attend on many occasions.
      Sir Philip Holland: We are the Parliament of the United Kingdom and not a Parliament purely for Scotland or Wales. The Committee of Selection must observe that fact as a fundamental principle.
      The task of finding sufficient Members for the Scottish Select Committee is outside the scope of the debate. However, the hon. Gentleman will note that we did find sufficient Members for that Committee——
      Mr. John Home Robertson rose—
      Sir Philip Holland—appropriate to the numbers on both sides of the House. However, we are not discussing the Scottish Select Committee.
      The difficulty of preparing nominations that would find general acceptance in the House arises from the existence of no fewer than seven dissimilar opposition parties. Without a negotiating process — the wheeling and dealing that makes the smooth function of democracy possible—it becomes impossible for the Committee of Selection to reconcile the legitimate but often conflicting aspirations of seven dissimilar opposition parties, which are united only in their general opposition to some, but not necessarily always the same, Government policies.
      I think that this is something about which the House should think seriously, and the question of who should be responsible for the selection and the appointment of members of the Select Committee needs to be reviewed in the light of experience. I am speaking as an individual Member and not as the Chairman of the Committee of Selection. If the House expects Select Committees to be generally supported by a multiplicity of dissimilar parties, it may be that only the negotiators in the House, the usual channels, will be in a position to achieve that support. It may be that they should be responsible for selecting and appointing the members. If selection is to be the result of negotiation between a multiplicity of groupings in the House, only the Whips are equipped to carry that out.
      Yet early in 1979, with no knowledge of how the Committee of Selection would handle the matter, the House expressed its hostility to the idea that the Whips should be involved. If that remains the view of the House, the only way to avoid excessive delays in establishing the departmental Select Committees at the beginning of each Parliament, and to make changes in membership when these become necessary during the life of a Parliament, is for the House to trust the Committee of Selection to appoint the members.
      The House has trusted the Committee to appoint the Chairmen and members of each Private Bill Committee since 1839. It has appointed the members of each Standing Committee since about 1880. If the Committee errs in its selection and appointment, the House always has a remedy at hand in the form of an appropriate motion. If the Committee appoints and the appointments can be altered later, at least the Committees start their business. Over the past 150 years the Committee of Selection has never had regard to the composition of the House when dealing with Private Bill Committees. Apart from Standing Committees, there is nothing sacrosanct about that principle.
      1122
      I shall move from the general to the particular. The motions nominating Members to the Agriculture. Education, Science and Arts, Employment, and Social Services Committees were modified in line with the prepared amendment to Standing Order No. 99 and had to wait the approval by the House of that amendment earlier today before they could be moved. That is why the motions are being moved tonight. The Education, Science and Arts Committee motion lists one member fewer than the maximum number permitted because the Opposition were not ready at first to fill the vacancy. However, at the meeting that took place earlier today of the Committee of Selection, a nomination was approved by the Committee and the appropriate motion will be laid should that Committee motion be approved by the House. The appropriate motion to add the extra Opposition Member will be tabled immediately after the motion has been approved.
      The background to the amendments to the Defence Committee motion, which were tabled by the right hon. Member for Lagan Valley (Mr. Molyneux) and his right hon. and hon. Friends, is that the minority parties proposed two names for one vacancy. After I had drawn the attention of the Committee to a letter that I had received from the right hon. Gentleman, a spokesman for the minority parties on the Committee, the hon. Member for Woolwich (Mr. Cartwright) spoke briefly but objectively and fairly to the claims of the two candidates for the vacancy. He gave equal time and emphasis to their respective claims. Hon. Members will have noted that the hon. Gentleman was the SDP nominee
      Mr. Dennis Skinner: The hon. Member for Woolwich (Mr. Cartwright) is not in his place.
      Sir Philip Holland: Support for the hon. Member for Woolwich was immediately expressed with no dissenting voice. Therefore, as Chairman, I was not required to express a view. As I did not express a view to the Committee, it is not my intention to do so tonight on the merits or demerits of either candidate or to vote on the amendment. That is something that the House must resolve.
      The amendments to the Welsh Affairs Committee tabled by the hon. Member for Berwick-upon-Tweed (Mr. Beith) are in a different category. I have explained that as a Committee we have normally adhered to the formula of reflecting the composition of the House as between Government and Opposition. We have deviated from that formula only for the four Committees that have been enlarged by the Standing Order amendment. The Conservative party told the Committee that it wished to offer one of the two extra places to which it was entitled on the Government-versus-Opposition basis to the Opposition, and the Opposition accepted that offer. As we received acceptance of the offer, we have accepted deviation from the normal rule for those four Committees.
      The Liberal amendment is designed to ignore the balance of the House as between Government and Opposition, and to take a Conservative place that is not on offer. That is a tactic that I believe the House must resist. I hope that we may now remove all remaining impediments to the establishment of the Committees, and I wish them well in their endeavours.
      12.49 am
      Mr. James Molyneaux: At an earlier stage I contemplated saying words of thanks and appreciation to the Chairman of the Committee of Selection on behalf of the minority parties, but as there seem to be murmurs of dissent from the Benches in front of me, I had better confine my thanks to being those of the Ulster Unionist party.
      We appreciate the patient efforts of the Chairman and the Committee of Selection to find a satisfactory and acceptable solution to the problem posed by our arrival here in various groupings and numbers. In mitigation, I should say that that is not, strictly speaking, our fault. We were sent here by our electors and would be failing in our duty to them if we did not put forward our separate views and policies. Our amendments seek to secure allocation of the three places on the Select Commitees to which we are entitled by virtue of our numbers. I understand that the minority party entitlement, expressed in decimal points, is as follows: the alliance 5·35, giving it five places; the Ulster Unionists 2·58, giving us three places; the Democratic Unionist Party 0·7, giving it one place.
      If carried, motion No. 4 would give us one place. If motion No. 8 is approved, we would have two places. If the other motions are carried including motion No. 5, unamended, we would still be one place down, whereas the alliance, which is entitled to five places, would have seven places. In view of what has been said, perhaps I should explain that all the Northern Ireland Members are somewhat restricted in their choice of Committee. Of the 14 Select Committees, only four — the Agriculture Committee, the Defence Committee, the Foreign Affairs Committee and the Treasury and Civil Service Committee —are concerned with Departments that directly exercise functions in Northern Ireland. A fifth Committee, the Social Services Committee, has a very real influence and bearing on Northern Ireland because of the convention of parity in social service benefits. That requires that legislation should ditto that introduced in the House by the United Kingdom Department.
      I hope that the inclusion of my hon. Friend the Member for Belfast, South (Rev. Martin Smyth) in the Social Services Committee will result in a simultaneous application of what one might term "rubber stamp" legislation and regulations in both parts of the United Kingdom. However, as I have said, without our amendments to motion No. 5, we shall have only two places.
      The tragic events in Northern Ireland during the past few weeks will, I trust, have convinced hon. Members that the Defence Committee should have a Northern Ireland Member in its ranks. The scale of the Army commitment, the Army's role in the defence of the United Kingdom's frontier, and the potential value of Ulster's naval and air bases in countering Russian threats in the eastern Atlantic all point to the desirability and, I hope it is agreed, the need for a Northern Ireland Member to play a full part in that Committee's deliberations.
      When I was invited to put forward a name, I was in no difficulty whatsoever. My choice was almost automatic. I am convinced, as I trust the whole House will be convinced, that the most valuable and suitable candidate is my hon. and gallant Friend the Member for Fermanagh and South Tyrone (Mr. Maginnis). He served in the Ulster Defence Regiment from 1970 to 1981. In 1972 he emerged
      1124
      from the Sandhurst officer commission course, the standard TA course, with a Regular Army commission. Following completion of his company commander's course at Warminster, he alternated periods of active service command in Northern Ireland with secondments in England where he assisted in training units of the Regular Army. My hon. and gallant Friend is still at a comparatively early stage in his political career. He still blushes a little when he comes to writing that section of his election address headed "Facts about your candidate". so I shall not embarrass him further.
      I trust that I have made the case for three Committee places to go to the Ulster Unionist party. I hope that I have made an equally convincing case for the approval and support of the amendments.
      12.55 am
      Sir John Biggs-Davison: Before speaking briefly in support of the amendments standing in the name of the right hon. Member for Lagan Valley (Mr. Molyneaux) and his right hon. and hon. Friends, I should like to express my appreciation of the explanation given by my hon. Friend the Member for Gedling (Sir P. Holland) of the complexities in which the House is involved. The right hon. Member for Lagan Valley has given a very convincing reason why his hon. Friend the Member for Fermanagh and South Tyrone (Mr. Maginnis) should serve on the Defence Committee.
      In supporting the hon. Member for Fermanagh and South Tyrone, I mean nothing against the hon. Member for Woolwich (Mr. Cartwright). He is not present. I suppose that is because he is bashful and does not want to hear his case discussed. I am told that he is on a party delegation. I have great respect for the hon. Gentleman, who has progressed from darkness to a sort of light in his political thinking. I pay tribute to him. I have nothing against him. However, for the reasons given by the right hon. Member for Lagan Valley, I think it would be better, not from a party point of view, but from the point of view of the House, that the hon. Member for Fermanagh and South Tyrone should sit on the Committee.
      Such a Committee should not be overweighted with military gentlemen, but there is no danger of that: there are not so many hon. or right hon. Members with recent military experience. Northern Ireland is a Province where the armed forces of the Crown are engaged and endangered, and the hon. Member for Fermanagh and South Tyrone, through his service in the Ulster Defence Regiment, his present position in the Regular Army Reserve of Officers and his close interest in defence matters, is an admirable Member to sit on the Committee. I hope that he will have the support of Conservative and Unionist Members on the Government Benches.
      12.58 pm
      Dr. David Owen: I believe that the House is faced with a choice that it should not be asked to make. The House is being asked to choose between two Members, both of whom have a legitimate right to be on the Defence Committee. Nothing I say, I hope, will be misconstrued in any way by the Ulster Unionists or, indeed, by anyone who comes from the Province having the perfectly understandable reason of wanting a representation on that Committee.
      There is a much more important issue that the House has to discuss. The Leader of the House ought to have

      1125
      expanded the membership of the Defence Committee to make it possible for an Ulster Unionist and a Member of the Liberal or Social Democratic party to be on it. I strongly urge the House not to seek to delete my hon. Friend the Member for Woolwich (Mr. Cartwright) from the Select Committee but to seek to enjoin the Leader of the House to enlarge the Committee so that there be representation of the Ulster Unionists.
      In making the case for my hon. Friend the Member for Woolwich, I should perhaps first explain why he is not here. First, I know that he would not have wanted to vote on an issue that affects him personally. Secondly, he is on a NATO delegation, where he is the joint rapporteur of a report on nuclar weapons; that meeting is taking place today and therfore he is not able to be here. He has been the representative from this House to NATO since 1976.
      I do not need to demonstrate my hon. Friend's constituency interest on matters of the Army; Woolwich is, after all, the headquarters of the Royal Artillery and the home of the Woolwich arsenal, but everybody who knows my hon. Friend the Member for Woolwich knows him to be a man of the utmost integrity and principle. Whatever one's view of party politics, one must agree that his victory in Woolwich was more than a testament just to my party; it was a great testament to his personal qualities. He is greatly respected. Indeed, for three years he served on the Select Committee on Defence, and the House should hesitate before his name, a name put forward by that Committee, is deleted so as to accommodate—perfectly reasonably and understandably — the feelings of hon. Members from Northern Ireland.
      The Leader of the House decided, so as to increase representation, to increase the size of Committees. I am baffled—and I hope that the right hon. Gentleman will answer this debate—as to why he did not increase the size of the Select Committee on Defence, a Committee on which there are strong and legitimate interests.
      To argue the political case for retaining my hon. Friend the Member for Woolwich, it is fundamentally important to the House to reflect in the Select Committee on Defence all the different viewpoints in the country on the issue of defence. Not to have any representation of Liberal or Social Democrats on the Committee would be to deprive nearly 8 million voters—[Interruption.] That is a fact, but it is also something much more important. The creation of the Social Democratic party owed a great deal to the fact that there were people who could no longer stomach the changes of policy. That viewpoint is now legitimately reflected in this House by the votes of millions of people, and it is reflected in the personality and integrity of an hon. Member who has the respect of hon. Members in all parts of the House.
      It would be greatly misconstrued if the House were to vote to delete my hon. Friend's name. I understand that it would also be misconstrued if there were any expression of feeling that Northern Ireland should not be represented. It should be represented on the Select Committee on Defence, but the way to achieve that representation is not by deleting my hon. Friend the Member for Woolwich. We should urge the Leader of the House—who, as I say, should answer this debate; he cannot escape responsibility for the fact that the size of the Select Committee is a matter for him, while its membership is a matter for the House—to accept that there is a strong wish that we ensure that on this most sensitive Committee of all, there is full representation of all the views of hon.
      1126
      Members in all parts of the House, and particularly the necessity to represent the views of those who come from the Province, where, most people readily accept, there is especial concern about defence questions.
      I urge the House not to seek the end which most of us seek by deleting the name of my hon. Friend the Member for Woolwich from the Select Committee. If that were to happen, not only would the committee be deprived of a valued member, but the representation of the political parties in the House would be wholly distorted on the issue of defence. We should be ignoring the views of 8 million voters in Britain and doing great damage to the integrity of and representation in the House. Therefore, I ask Conservative and Labour Members, whatever their views, to see this issue on its merits as a House of Commons issue and retain my hon. Friend the Member for Woolwich on the Committee.
      1.5 am
      Mr. John Gorst: I do not want to make more than one point other than to agree with the speech made by the leader of the Social Democratic Party, the right hon. Member for Plymouth, Devonport (Dr. Owen). His aguments were both plausible and persuasive.
      The House, while agreeing the membership of each Select Committee, is in some difficulty with regard to the chairmanship of each Committee. This is fully understood to be a matter for each Select Committee to dec ide for itself. That has worked well and fairly, and I make no complaint about it.
      My reservation is that in its deliberations the Committee of Selection has suggested that there should be on one of these Committees one Member who, despite an extremely distinguished career, at one stage held the position of Chief Whip of one of the parties. Whichever party it was, the same point applies. The House has no control, once Select Committees have been approved, over who becomes Chairman or—and this is much more important—who becomes the Chairman of the Liaison Committee which makes many important decisions about the functioning of the Select Committees once they are in operation.
      I urge hon. Members to consider for the future whether it is appropriate that we have no say, once the Select Committees have been set up, as to who will be Chairman of the Liaison Committee which guides the deliberations of the Select Committees
      Mr. Robin Maxwell-Hyslop: Or on the Liaison Committee
      Mr. Gorst: Or on the Liaison Committee.
      1.7 am
      Mr. A. J. Beith: The hon. Member for Gedling (Sir P. Holland) was wrong to imply —he may not have intended to do so—that I had not co-operated closely with him over a long period on matters such as this.
      Sir Philip Holland: Clearly the hon. Member misunderstood what I said. When I spoke of co-operation, I meant co-operation in terms of taking all vacancies on Select Committees or taking only some. It was to that that I was referring, not any personal co-operation between individuals
      Mr. Beith: The hon. Gentleman tempts me to go further and point out to him that not only have there been

      1127
      occasions when by agreement between Opposition parties places which might otherwise have gone to a minority party have gone to the Labour party, but also that on one occasion in the course of the affair we are describing—the filling of places on Select Committees—the hon. Gentleman came to me and pressed my party to take a place on a Committee for which there was not a nomination for another party. That is a point I would not have made in the debate had he not suggested that we were slow to make nominations—quite the contrary.
      The fact that my party has six Select Committee nominations on the Order Paper is the direct result of my seeking to accommodate the request that he made personally to me. In any such matter I have sought always to co-operate with the Committee of Selection and with the representatives of other parties on that Committee.
      Also, we have not pressed the claim for, nor have been accorded, the prospect of a chairmanship of any of the Select Committees, although the minority parties collectively could on any arithmetical test claim the right to one chairmanship out of the chairmen to be appointed. I agree with the hon. Member for Hendon, North (Mr. Gorst) that the House plays too small a part in the choice of Chairmen of Committees. The Committee of Selection does not play much part in it either. That is still very much a back stair Whips matter. The House should seek to play a larger part in the filling of these key posts.
      Those who have argued for the appointment of Select Committees over the years have argued that the position of Chairman of a Select Committee should be a key Back-Bench post which is as important in the affairs of the House as the position of a Minister and as important for a Member to aim for. The House should take a closer interest in the appointment of Members to those positions.
      The right hon. Member for Lagan Valley (Mr. Molyneaux) was right to say that the Official Unionist party, in seeking to reach its appropriate number of places on Committees, is up against a difficulty in that many Select Committees do not, by the nature of the Departments they shadow, concern themselves sufficiently with the affairs of Northern Ireland. He has therefore been obliged to restrict his nominations. He has widened his net more recently, but there was a stage in the discussions when the Official Unionist party sought places only on the Select Committees on Defence and Foreign Affairs which are the most heavily subscribed of all. It was extremely difficult to meet either, let alone both, of those requests. I recognise his problem —it is similar to that of the Welsh nationalists which I have mentioned. Such parties have more interest in some Committees and less in others than parties which are based in different parts of the United Kingdom.
      With regard to the case of my hon. Friend the Member for Woolwich (Mr. Cartwright), it should be clearly drawn from what the hon. Member for Gedling said that, however much he says that he does not wish to take part in the decision on whether my hon. Friend should be appointed, the Committee of Selection took a decision that he should be appointed. The burden of what the hon. Member for Gedling said was that the Committee of Selection's decision should be supported by the House. The Committee examined the two nominations and, as the hon. Member for Gedling rightly pointed out, my hon. Friend was presented carefully and objectively—as is always the case — by agreement with the minority
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      parties. There has been no complaint about the execution of that agreement. The Committee made its recommendation — it is the only recommendation of a Social Democratic Member for any Committee. If the House votes down the Committee's decision, it will deprive the SDP of any place on any Select Committee and thus deprive it of its reasonable entitlement, bearing in mind the SDP's numbers and the extraordinary support that it and the Liberals have in the country.
      It was appalling that, in the first debate, the Leader of the House did not answer any of the questions which were raised about the enlargement of Committees. He had no answer. There is no logic in his decision to enlarge some Committees from nine to 11 members. He seemed to suggest that that was part of the general response to the interest in serving on the Committees. He knows that that is not so. Indeed, one of the Committees he chose to enlarge had incomplete nominations because, until today, the Labour party was unable to furnish a nomination for it. There is heavy interest in some of the Committees that he has enlarged and more limited interest in others. Why did he not pay some attention to the Committees on which many hon. Members wish to serve and on which it was more difficult to accommodate the wishes of the parties? He did so when the wishes he needed to accommodate were those of the Official Unionists, but he did not do so for hon. Members for all parties or, in the case of the Defence Select Committee, SDP Members.
      It would have been far more reasonable if the Leader of the House had enlarged the Committees for the membership of which the pressure was greatest. As he has not done that, we are obliged to press an amendment which is designed to ensure that there is a Liberal Member on the Select Committee on Welsh Affairs. The only reasonable way to do that, as the Labour party is now reduced to quite small numbers in that Committee, is to ask the Government for one of their numerous places.
      I do not think that the Government have found it easy to fill all of their places in that Committee. If the full story of how they have had to go about filling those places were told, it would make interesting subject matter for an article or perhaps even a novel. The Conservatives have many seats on that Committee on the basis not of its support in Wales but of its support throughout the United Kingdom. It would be a reasonable gesture for them to make one of those places available to the two minority parties that want a place. As they will not do that, I must press the amendment to replace a Conservative Member with my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) who is a long-serving and respected member of that Committee and speaks in it for nearly one quarter of the voters in Wales.
      It is preposterous that one quarter of the voters in Wales should be denied representation on the one Committee which concerns itself with Welsh affairs. Such a proposition cannot be defended outside the House, no matter how many right hon. and hon. Members in it try to do so. I therefore ask for the support of fair-minded right hon. and hon. Members who have some recognition of their responsibilities to the country in pressing an amendment to secure that one quarter of the voters in Wales have a voice in the Select Committee on Welsh Affairs.
      1.14 am
      Mr. John Maxton: As the hon. Member for Gedling (Sir P. Holland) said, the Select Committee on Scottish Affairs has already been appointed by the House, so is not subject to debate, but the hon. Gentleman made some general points about Select Committees to which hon. Members are entitled to refer.
      The hon. Gentleman said that he did not like this way of doing things. He felt that the Committee of Selection should be given the power to select and should get on with it, and we should not even have the power to debate motions. I agree that this is the wrong method. First. it is wrong that at this time of night we should debate such an important subject
      Mr. George Foulkes: Morning
      Mr. Maxton: At this time of the morning, as my hon. Friend says.
      I disagree with the Member for Gedling, who said that there should not be a debate. There should be a debate. The orders should be tabled as a debatable motion. They should be on the Order Paper and debated on a specific occasion. They should not be dragged on because of a protest, which happened this time. They should be tabled so that every hon. Member knows exactly when they are debated, so that if he wishes to make a point, he will make sure that he is present in the Chamber to do so. The motion should not be slipped through late on a Friday afternoon.
      If the Committee of Selection decides the balance of the Committees, we should not debate the names. It is wrong for the House to indulge in talking about personalities, taking people off and putting them on Committees. The Committee of Selection should put down motions saying what the numbers for each party on each Committee should be. Those motions should be debatable and amendable. That would get away from the House indulging in talking about personalities, which is wrong.
      I refer to the role of the Select Committees. The Committee of Selection decided that largely it would take the balance of the Committees on the same basis as Standing Committees. As the hon. Member for Gedling said, they have a wholly different role. I served on the Select Committee on Scottish Affairs and the Public Accounts Committee, neither of which is for debate tonight, but on both Committees the aim has always been to investigate genuinely what the Government are doing and not to indulge in party politics.
      The Committees try to find genuine common ground for investigation, which they do on a non-party basis. However, to do that, members of the Committees must be prepared to do the work, whatever their party allegiance. On one of the Select Committees that is not so. I use the Select Committee on Scottish Affairs purely as an example, which may compare with a Select Committee that is to be debated. The Conservative party has 10 members from which it can select eight for the Select Committee on Scottish Affairs. Two of its members have been appointed to other Select Committees, so it is down to the bedrock of the membership. Members of the Committee have made it clear that they do not wish to serve on it and will not do the job of investigation. If that is to be a Committee of investigation, it should have a full membership of hon. Members who are prepared to do the investigation. It would be better if the party structure that
      1130
      the Committee of Selection uses was not used on that Committee and some others. If the Committee is to do the genuine job that it is required to do, all 13 members must work flat out to monitor the Scottish Office, which is an enormous brief, wider than the Welsh brief. The job cannot be done if the Committee is carrying passengers. —[Interruption.] Conservative Members may jeer, but all those who served on that Committee in the previous Parliament know perfectly well that there were two or three passengers
      Mr. Foulkes: Name them
      Mr. Maxton: I shall not name them. Conservative Members know perfectly well who they are. They were passengers then, and they will be passengers in the present Parliament. The Committees need working members. It is time to change the rules for selecting members and for seeking the decision of the House.
      1.21 am
      Sir Peter Emery: When we look at today's date, and remember when this Parliament met for the first time, we realise that nearly a fifth of the life of the Parliament has been lost to the Select Committees because of the delay in appointing them. I do not wish to discuss the possible reasons for that. I appreciate that they are connected with politics and with appointments. However, such matters should not take precedence over the work of the House. I urge the Leader of the House to consider asking the Procedure Committee, at some time when it has been appointed, whether it should not consider the possibility of instructing the Committee of Selection that the Committees should be appointed within, say, eight weeks of the date on which the House reassembles.
      It is normally suggested that the Committees could be appointed within four weeks. If that is the case, party considerations such as Front Bench and Committee appointments—whichever party is in power makes no difference — should not be permitted to delay the appointment of the Committees and prevent the House from seeing the results of their work. A Procedure Committee should consider how we could make the appointments to the Committees much more quickly, so that such a delay never occurs again.
      1.23 am
      Dr. John Gilbert: I have a particular interest in the composition of the Select Committee on Defence, for which my name is before the House tonight. I have been a member of that Committee and of its predecessor, the Defence and External Affairs Sub-Committee of the Expenditure Committee, ever since 1970, except for the time when I was the Minister. The Committee has worked well and harmoniously. I agree strongly with my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) that it should not be the function of the House to discuss the personalities of individual members. It must be extremely embarrassing for them to have their attributes discussed in the House, but that is the kernel of the present problem, leaving aside the more general questions that my hon. Friends have quite properly raised.
      I totally support the view of the right hon. Member for Plymouth, Devonport (Dr. Owen) that the Select Committees should be enlarged. In private discussions, I have urged the same thing. The Select Committee on

      1131
      Defence should have at least 12 members and perhaps 13. There is no reason why membership of Select Committees should be regarded as a privilege for the handful of hon. Members who are fortunate enough to be appointed.
      I take a dispassionate view of the claims of the two hon. Members who are in contest for the seat on the Select Committee. I know nothing about the talents of the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis), and it follows that I have nothing against him. I have much sympathy with the case put forward by the leader of the Official Unionist party, claiming a seat on the Committee for a member of his party. However, the hon. Member for Woolwich (Mr. Cartwright) was an excellent and diligent member of the Select Committee on Defence in the previous Parliament. I found him an extremely able colleague, even though he is not a member of my party. I should regret it if the House were to vote against him tonight.
      The Committee of Selection has a most disagreeable, difficult and unenviable job, and I should not want to serve on it. I congratulate the Committee on its work and I shall vote to support the selection that is has brought to the House in the discharge of its duties, and I hope that my right hon. and hon. Friends will agree. That signifies nothing against the hon. Member for Fermanagh and South Tyrone whom I should welcome on the Committee if it could be enlarged, but it would be monstrous if the House were to vote against an established member of the Committee who has done excellent work.
      1.25 am
      The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I shall be brief because I sense that the House would like to reach a decision fairly soon. I agree with the right hon. Member for Dudley, East (Dr. Gilbert) that there is a certain distaste and embarassment in having to make a judgment about fellow Members whose personal qualities are much esteemed. I think it more appropriate, given my position, if I do not vote in the Divisions that will now take place.
      The hon. Member for Berwick-upon-Tweed (Mr. Beith) asked earlier when we discussed motion No. 3 on the occasion of our first debate why I had been hesitant about having a substantial enlargement of the membership of the Committees. I sought to make the point in my speech and perhaps he will allow me to read what I said into the record a second time:
      "I have been concerned to achieve the minimum feasible increase which is consistent with contributing helpfully to finding an agreed solution."
      This may be an occasion where one discovers that one's optimism about being able to do anything helpful is misplaced. The Liaison Committee recommended that the size of the Committees should be reduced rather than expanded. I believe that the House would find itself in rather more difficulties if it expanded membership and it would find that it had done no more than open up an new series of difficulties rather than closing some matters of passing irritation.
      Let us assume that there is a Select Committee which is of such overwhelming interest that the House feels it should have two minor party representatives, but let us suppose that the interest is not assuaged by that gesture and the parties say, "This is a matter of such concern that the
      1132
      Committee should fairly represent the composition of the House." We would then find that we had a membership which, theoretically, could be as high as 23. One can see the difficulties and arguments that would proceed from that. This is something to which the House can return. My hon. Friend the Member for Honiton (Sir P. Emery) has reminded us that that option is available. The question was raised in the context of the enlargement of the Select Committee on Defence. That option was available to its proponents but there is no motion on the Order Paper and the debate proceeded without that option having to be exercised. The more immediate task is to get the departmental Select Committees re-established and working. I hope that this evening will see that end secured.
      Question put and agreed to.
      Ordered,
      That Mr. Richard Body, Mr. Robin Corbett, Mr. David Harris, Mr. Michael Lord, Mr. Albert McQuarrie, Miss Joan Maynard, Mr. James Nicholson, The Reverend Ian Paisley, Mrs. Marion Roe, Mr. John Spence and Mr. Tom Torney be members of the Agriculture Committee.

      DEFENCE
      Motion made, and Question proposed.
      That Sir Humphrey Atkins, Mr. John Cartwright, Mr. Churchill, Mr. Dick Douglas, Mr. Bruce George, Dr. John Gilbert, Mr. Edward Leigh, Mr. Michael Marshall, Mr. Michael Mates, Mr. Keith Speed and Mr. Neil Thorne be members of the Defence Committee.—[Sir Philip Holland, on behalf of the Committee of Selection.]
      Amendment proposed to the Question, pursuant to the Order [12 December] leave out `Mr. John Cartwright'. —[Mr. Molyneaux.]
      Question put, That the amendment be made:—
      The House divided: Ayes 106, Noes 23.

      Division No. 104]

      [1.30 am

      AYES

      Ashby, David

      Hayward, Robert

      Atkins, Rt Hon Sir H.

      Hickmet, Richard

      Baldry, Anthony

      Hind, Kenneth

      Batiste, Spencer

      Hirst, Michael

      Beggs, Roy

      Hogg, Hon Douglas (Gr'th'm)

      Best, Keith

      Hogg, N. (C'nauld & Kilsyth)

      Biggs-Davison, Sir John

      Home Robertson, John

      Boscawen, Hon Robert

      Howarth, Gerald (Cannock)

      Bottomley, Peter

      Hubbard-Miles, Peter

      Bright, Graham

      Hunt, David (Wirral)

      Burt, Alistair

      Jones, Gwilym (Cardiff N)

      Campbell-Savours, Dale

      Knight, Gregory (Derby N)

      Carttiss, Michael

      Knowles, Michael

      Cocks, Rt Hon M. (Bristol S.)

      Lang, Ian

      Conway, Derek

      Lawrence, Ivan

      Cope, John

      Leigh, Edward (Gainsbor'gh)

      Couchman, James

      Lewis, Ron (Carlisle)

      Cowans, Harry

      Lilley, Peter

      Currie, Mrs Edwina

      Lord, Michael

      Dixon, Donald

      Loyden, Edward

      Durant, Tony

      Lyell, Nicholas

      Dykes, Hugh

      McCusker, Harold

      Emery, Sir Peter

      Macfarlane, Neil

      Forsythe, Clifford (S Antrim)

      McKay, Allen (Penistone)

      Foulkes, George

      MacKay, Andrew (Berkshire)

      Fox, Marcus

      Maginnis, Ken

      Garel-Jones, Tristan

      Major, John

      Goodlad, Alastair

      Malone, Gerald

      Gorst, John

      Marek, Dr John

      Greenway, Harry

      Mather, Carol

      Hamilton, Hon A. (Epsom)

      Maxton, John

      Hanley, Jeremy

      Maxwell-Hyslop, Robin

      Harrison, Rt Hon Walter

      Meyer, Sir Anthony

      Harvey, Robert

      Miller, Hal (B'grove)

      Haselhurst, Alan

      Molyneaux, Rt Hon James

      Haynes, Frank

      Neubert, Michael

      1133

      Newton, Tony

      Soames, Hon Nicholas

      Nicholls, Patrick

      Spence, John

      Nicholson, J.

      Spencer, D.

      Osborn, Sir John

      Stern, Michael

      Page, Richard (Herts SW)

      Stevens, Lewis (Nuneaton)

      Paisley, Rev Ian

      Stewart, Andrew (Sherwood)

      Parris, Matthew

      Stradling Thomas, J.

      Parry, Robert

      Terlezki, Stefan

      Pawsey, James

      Thompson, Patrick (N'ich N)

      Peacock, Mrs Elizabeth

      Thorne, Neil (Ilford S)

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

      Wakeham, Rt Hon John

      Powell, Raymond (Ogmore)

      Wardle, C. (Bexhill)

      Powley, John

      Warren, Kenneth

      Proctor, K. Harvey

      Watts, John

      Rathbone, Tim

      Wood, Timothy

      Rowe, Andrew

      Sainsbury, Hon Timothy

      Tellers for the Ayes:

      Sayeed, Jonathan

      Mr. William Ross and Rev. Martin Smyth.

      Skinner, Dennis

      NOES

      Beith, A. J.

      Penhaligon, David

      Bruce, Malcolm

      Ross, Stephen (Isle of Wight)

      Carlile, Alexander (Montg'y)

      Sims, Roger

      Clark, Dr Michael (Rochford)

      Smith, Rt Hon J. (M'kl'ds E)

      Davis, Terry (B'ham, H'ge H'l)

      Steel, Rt Hon David

      Freud, Clement

      van Straubenzee, Sir W.

      George, Bruce

      Wallace, James

      Gilbert, Rt Hon Dr John

      Wheeler, John

      Howells, Geraint

      Wigley, Dafydd

      Hughes, Simon (Southwark)

      Johnston, Russell

      Tellers for the Noes:

      Kirkwood, Archibald

      Mr. Michael Meadowcraft and Mr. Charles Kennedy.

      Maclennan, Robert

      Owen, Rt Hon Dr David

      Question accordingly agreed to.
      Dr. Owen: On a point of order, Mr. Speaker. Can you help the House? I have no complaints about the conduct of the Division or the vote. However, are you aware of the fact that the Patronage Secretary and the hon. Member for Watford (Mr. Garel-Jones), who is also a Whip, who were in the No Lobby extracting Members of the Conservative party on instructions from the Whip, were heard to say, "No, you are not meant to be in this Lobby"? We have been assured—[Interruption.]
      Mr. Speaker: Order. I shall put the right hon. Member out of his misery. What goes on in either of the Division Lobbies is not a matter for me
      Mr. Beith: On a further point of order, Mr. Speaker. It is matter of order that the Leader of the House may have given the impression by what he said in his speech that not only he but the Government were taking a neutral view on the matter. He said that he did not intend to vote on the issue and did not believe that it would be right for him to do so—a view, incidentally, which the Chairman of the Committee of Selection also took. I understood that the Leader of the House had said that he would abstain. I assumed from that statement that the Government Whips would not be in the Lobby seeking to deter hon. Members from voting for the motion. The right hon. Gentleman may have mislead the House in what he said, and I therefore ask you, Mr. Speaker, to give him the opportunity to say whether that was so
      Mr. Skinner: Further to that point of order, Mr. Speaker. I do not wish to call upon you to intervene, like ACAS, in this matter between the Liberal party and the SDP. We heard from the Leader of the House earlier that
      1134
      in the allocation of seats the Liberals had managed to get six and the SDP only one I believe that a great row between the two parties is at the bottom of this matter.
      Further amendment made: after 'Mr. Edward Leigh`, insert 'Mr. Ken Maginnis'. —[Mr. Molyneaux.]
      Main Question, as amended, agreed to.
      Ordered,
      That Sir Humphrey Atkins, Mr. Churchill, Mr. Dick Douglas, Mr. Bruce George, Dr. John Gilbert, Mr. Edward Leigh, Mr. Ken Maginnis, Mr. Michael Marshall, Mr. Michael Mates, Mr. Keith Speed and Mr. Neil Thome be members of the Defence Committee.

      EDUCATION, SCIENCE AND ARTS
      Ordered,
      That Mr. Martin Flannery, Mr. Clement Freud, Mr. Harry Greenway, Mr. Sean Hughes, Mr. Robert Key, Mr. Terry Lewis, Mr. Michael McNair-Wilson, Sir William van Straubenzee, Dr. Gerard Vaughan and Mr. George Walden be members of the Education, Science and Arts Committee. — [Sir Philip Holland, on behalf of the Committee of Selection.]

      EMPLOYMENT
      Ordered,
      That Mr. Tony Baldry, Mr. Gordon Brown, Mr. Don Dixon, Mr. Ken Eastham, Mr. John Gorst, Mr. Greville Janner, Mr. Ron Leighton, Mr. Gerry Neale, Mrs. Elizabeth Peacock, Mr. Andrew Rowe and Mr. Peter Thurnham be members of the Employment Committee. —[Sir Philip Holland, on behalf of the Committee of Selection.]

      SOCIAL SERVICES
      Ordered,
      That Mr. James Couchman, Mr. David Crouch, Mrs. Edwina Currie, Mr. Roy Galley, Mr. Ron Lewis, Mr. Tony Lloyd, Mr. Michael Meadowcroft, Sir David Price, Mrs. Renee Short, The Reverend Martin Smyth and Mr. Nicholas Winterton be members of the Social Services Committee. — [Sir Philip Holland, on behalf of the Committee of Selection.]

      WELSH AFFAIRS
      Motion made, and Question proposed,
      That Mr. Robert Harvey, Mr. Tom Hooson, Mr. F'eter Hubbard-Miles, Mr. Gwilym Jones, Dr. John Marek, Sir Anthony Meyer, Mr. Keith Raffan, Mr. Stefan Terlezki, Dr. Roger Thomas, Mr. Gareth-Wardell and Mr. Dafydd Wigley he members of the Welsh Affairs Committee. — [Sir Philip
      Holland, on behalf of the Committee of Selection.]
      Amendment proposed to the Question, pursuant to the
      Order [12 December], leave out 'Mr. Robert Harvey'. —[Mr. Beith.]
      Question put, That the amendment be made:—
      The House divided: Ayes 25, Noes 112.

      Divison No. 105]

      [1.44 am

      AYES

      Beith, A. J.

      Maxton, John

      Bruce, Malcolm

      Owen, Rt Hon Dr David

      Carlile, Alexander (Montg'y)

      Parry, Robert

      Foulkes, George

      Penhaligon, David

      Freud, Clement

      Powell, Raymond (Ogmore)

      Home Robertson, John

      Ross, Stephen (Isle of Wight)

      Howells, Geraint

      Smith, Rt Hon J. (M'kl'ds B)

      Hughes, Simon (Southwark)

      Steel, Rt Hon David

      Johnston, Russell

      Thomas, Dafydd (Merioneth)

      Kennedy, Charles

      Wallace, James

      Kirkwood, Archibald

      Lewis, Ron (Carlisle)

      Tellers for the Ayes:

      Lloyd, Tony (Stretford)

      Mr. Michael Meadowcroft and Mr. Dafydd Wigley.

      Maclennan, Robert

      Marek, Dr John

      1135

      NOES

      Ashby, David

      MacKay, Andrew (Berkshire)

      Atkins, Rt Hon Sir H.

      Maclean, David John.

      Baldry, Anthony

      McNair-Wilson, M. (N'bury)

      Batiste, Spencer

      McWilliam, John

      Beggs, Roy

      Maginnis, Ken

      Best, Keith

      Major, John

      Biggs-Davison, Sir John

      Malone, Gerald

      Boscawen, Hon Robert

      Mates, Michael

      Bottomley, Peter

      Mather, Carol

      Bright, Graham

      Maxwell-Hyslop, Robin

      Burt, Alistair

      Miller, Hal (B'grove)

      Campbell-Savours, Dale

      Molyneaux, Rt Hon James

      Carttiss, Michael

      Neubert, Michael

      Churchill, W. S.

      Newton, Tony

      Clark, Dr Michael (Rochford)

      Nicholls, Patrick

      Clegg, SirWalter

      Nicholson, J.

      Cocks, Rt Hon M. (Bristol S.)

      Osborn, Sir John

      Conway, Derek

      Ottaway, Richard

      Cope, John

      Page, Richard (Herts SW)

      Couchman, James

      Paisley, Rev Ian

      Cowans, Harry

      Parris, Matthew

      Currie, Mrs Edwina

      Pawsey, James

      Dixon, Donald

      Peacock, Mrs Elizabeth

      Dykes, Hugh

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

      Emery, Sir Peter

      Powley, John

      Forsythe, Clifford (S Antrim)

      Proctor, K. Harvey

      Fox, Marcus

      Rathbone, Tim

      Garel-Jones, Tristan

      Ross, Wm. (Londonderry)

      Goodlad, Alastair

      Rowe, Andrew

      Gorst, John

      Ryder, Richard

      Greenway, Harry

      Sainsbury, Hon Timothy

      Hamilton, Hon A. (Epsom)

      Sayeed, Jonathan

      Hanley, Jeremy

      Sims, Roger

      Harrison, Rt Hon Walter

      Skinner, Dennis

      Haselhurst, Alan

      Smyth, Rev W. M. (Belfast S)

      Haynes, Frank

      Soames, Hon Nicholas

      Hayward, Robert

      Speed, Keith

      Henderson, Barry

      Spence, John

      Hickmet, Richard

      Spencer, D.

      Hind, Kenneth

      Stern, Michael

      Hirst, Michael

      Stevens, Lewis (Nuneaton)

      Hogg, Hon Douglas (Gr'th'm)

      Stewart, Andrew (Sherwood)

      Hogg, N. (C'nauld & Kilsyth)

      Stradling Thomas, J.

      Holland, Sir Philip (Gedling)

      Terlezki, Stefan

      Howarth, Gerald (Cannock)

      Thompson, Patrick (N'ich N)

      Hunt, David (Wirral)

      Thorne, Neil (Ilford S)

      Jones, Gwilym (Cardiff N)

      Thurnham, Peter

      Knight, Gregory (Derby N)

      van Straubenzee, SirW.

      Knowles, Michael

      Wakeham, Rt Hon John

      Lang, Ian

      Wardle, C. (Bexhill)

      Leigh, Edward (Gainsbor'gh)

      Warren, Kenneth

      Lilley, Peter

      Watts, John

      Lord, Michael

      Wheeler, John

      Loyden, Edward

      Wood, Timothy

      Lyell, Nicholas

      McCusker, Harold

      Tellers for the Noes:

      Macfarlane, Neil

      Sir Anthony Meyer and Mr. Peter Hubbard-Miles.

      McKay, Allen (Penistone)

      Question accordingly negatived.
      Main Question put:—
      The House divided: Ayes 102, Noes 19.

      Division No. 106]

      [1.55 am

      AYES

      Ashby, David

      Carttiss, Michael

      Atkins, Rt Hon Sir H.

      Churchill, W. S.

      Baldry, Anthony

      Clark, Dr Michael (Rochford)

      Batiste, Spencer

      Cocks, Rt Hon M. (Bristol S.)

      Beggs, Roy

      Conway, Derek

      Best, Keith

      Cope, John

      Biffen, Rt Hon John

      Couchman, James

      Biggs-Davison, Sir John

      Cowans, Harry

      Boscawen, Hon Robert

      Currie, Mrs Edwina

      Bottomley, Peter

      Dixon, Donald

      Bright, Graham

      Forsythe, Clifford (S Antrim)

      Burt, Alistair

      Fox, Marcus

      Campbell-Savours, Dale

      Garel-Jones, Tristan

      1136

      Goodlad, Alastair

      Nicholson, J.

      Gorst, John

      Ottaway, Richard

      Hamilton, Hon A. (Epsom)

      Page, Richard (Herts SW)

      Hanley, Jeremy

      Paisley, Rev Ian

      Harrison, Rt Hon Walter

      Parry, Robert

      Harvey, Robert

      Pawsey, James

      Haselhurst, Alan

      Peacock, Mrs Elizabeth

      Haynes, Frank

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

      Hayward, Robert

      Powley, John

      Henderson, Barry

      Proctor, K. Harvey

      Hickmet, Richard

      Rathbone, Tim

      Hirst, Michael

      Ross, Wm. (Londonderry)

      Hogg, Hon Douglas (Gr'th'm)

      Rowe, Andrew

      Holland, Sir Philip (Gedling)

      Ryder, Richard

      Howarth, Gerald (Cannock)

      Sainsbury, Hon Timothy

      Hunt, David (Wirral)

      Sayeed, Jonathan

      Jones, Gwilym (Cardiff N)

      Sims, Roger

      Knight, Gregory (Derby N)

      Smyth, Rev W. M. (Belfast S)

      Knowles, Michael

      Soames, Hon Nicholas

      Lang, Ian

      Spence, John

      Lilley, Peter

      Spencer, D.

      Lord, Michael

      Stern, Michael

      Loyden, Edward

      Stevens, Lewis (Nuneaton)

      Lyell, Nicholas

      Stradling Thomas, J.

      McCusker, Harold

      Terlezki, Stefan

      Macfarlane, Neil

      Thomas, Dafydd (Merioneth)

      MacKay, Andrew (Berkshire)

      Thompson, Donald (Calder V)

      Maclean, David John.

      Thompson, Patrick (N'ich N)

      McNair-Wilson, M. (N'bury)

      Thurnham, Peter

      McWilliam, John

      van Straubenzee, Sir W.

      Maginnis, Ken

      Wakeham, Rt Hon John

      Major, John

      Wardle, C. (Bexhill)

      Malone, Gerald

      Warren, Kenneth

      Mates, Michael

      Watts, John

      Mather, Carol

      Wigley, Dafydd

      Maxwell-Hyslop, Robin

      Wood, Timothy

      Molyneaux, Rt Hon James

      Neubert, Michael

      Tellers for the Ayes:

      Newton, Tony

      Sir Anthony Meyer and Mr. Peter Hubbard-Miles.

      Nicholls, Patrick

      NOES

      Bruce, Malcolm

      Patchett, Terry

      Carlile, Alexander (Montg'y)

      Penhaligon, David

      Freud, Clement

      Pike, Peter

      Howells, Geraint

      Powell, Raymond (Ogmore)

      Hughes, Simon (Southwark)

      Ross, Stephen (Isle of Wight)

      Kennedy, Charles

      Steel, Rt Hon David

      Kirkwood, Archibald

      Wallace, James

      Lloyd, Tony (Stretford)

      Maclennan, Robert

      Tellers for the Noes:

      Marek, Dr John

      Mr. A. J. Beith and Mr. Russell Johnston.

      Meadowcroft, Michael

      Owen, Rt Hon Dr David

      Question accordingly agreed to.
      Ordered,
      That Mr. Robert Harvey, Mr. Tom Hooson, Mr. Peter Hubbard-Miles, Mr. Gwilym Jones, Dr. John Marek, Sir Anthony Meyer, Mr. Keith Raffan, Mr. Stefan Terlezki, Dr. Roger Thomas, Mr. Gareth Wardell and Mr. Dafydd Wigley be members of the Welsh Affairs Committee.
      2.3 am
      Mr. David Steel: On a point of order, Mr. Speaker. It will be within your recollection and that of the House that a short while ago the Chairman of the Committee of Selection told the House that the matter of appointments to Select Committees was not something in which the Whips should be involved. It will be obvious to all that that was not only wide of the truth but the reverse of it.
      Sir Philip Holland rose—
      Mr. Beith: Further to that point of order, Mr. Speaker. Before you call the hon Member for Gedling (sir P.

      1137
      Holland), you should know that the Chairman of the Committee of Selection was in the Lobby thanking hon. Members for voting the way that he had claimed he himself would not vote. He stood in the Lobby throughout the preceding Division, thanking hon. Members for being present.
      Sir Philip Holland: With permission, Mr. Speaker, I shall answer that allegation.
      I was in the Lobby to thank hon. Members who had stayed on a series of private Members' motions. I was in the side where the majority of hon. Members were and I thanked the majority. The Members who were in the other side were there for a very good reason, to promote their own amendment. Therefore, the Members who stayed not to promote an amendment were the ones I had to thank
      Mr. Peter Bottomley: Given the allegation by the Liberal Whip, the hon. Member for Berwick-upon-Tweed (Mr. Beith), the explanation my hon. Friend the Chairman of the Committee of Selection, and the evidence of those hon. Members who were there in the Division Lobby, which the Liberals were not, I think that it would be appropriate for the hon. Member to withdraw his allegation
      Mr. Simon Hughes: On one matter that the House discussed, the recommendation of the Committee of Selection was supported by a minority, not by the majority who voted. In that instance, surely it would have been appropriate—and I respect the impartiality of the Chairman—that he should have been in the relevant Lobby taking the view that his Committee took. What the hon. Member says, therefore, does not conceal the fact that he had a consistent attitude throughout the debate and it does not support what he now says to the House
      Mr. Speaker: None of these are matters for the Chair.

      Berkshire (Planning and Development)
      Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
      2.6 am
      Mr. Andrew MacKay: I raise the subject of planning and development in central Berkshire on the motion of the Adjournment of the House.
      This issue is of crucial importance to my electors. I shall put the problem into a statistical perspective.
      The Department of the Environment instructed the royal county of Berkshire that it had to make provision for the building of 8,000 houses in central Berkshire. It was then up to the county, through the central Berkshire structure plan, to allocate where these houses went. I feel that the county council behaved less than fairly in allocating 5,150 of these houses to the district council area of Bracknell, and this is very much to be regretted. I am the first to realise that this is not a matter for my hon. Friend the Under-Secretary of State for the Environment who will answer the debate.
      I mentioned that this issue causes considerable concern in my constituency. It unites those of all political persuasions. It has the full backing of every member of the Bracknell district council, many preservation groups and all the parish and town councils making up my constituency.
      Let me explain some of the reasons why we oppose the development. First, it will spoil outstandingly beautiful countryside, particularly round the villages of Warfield and Binfield. There are at present 600 to 800 houses in the parish of Warfield. It is proposed through the structure plan foisted on the county council by the Government to permit the building of 4,000 houses in Warfield in addition to the present 600 to 800. It is also proposed that there should be an extra 300 houses in Binfield.
      Next, we object strongly because we do not have the infrastructure in the area to cope with this development, and I am particularly thinking of the Sandhurst area, which must bear the brunt of the remaining development. The way in which the area has expanded in recent years has meant that more than sufficient houses have been built for the available hospitals, schools and particularly roads. We are in the process of ruining established communities in Sandhurst, Warfield and Binfield.
      At the same time, we are jeopardising that great success story, Bracknell new town. It has now reached its optimum size, as outlined by the New Towns Act, and it would be sheer folly dramatically to increase Bracknell so that it spreads to the south to Sandhurst and to the north to Warfield and Binfield. Bracknell needs time to bed down and it will not be allowed that process if the structure plan is implemented.
      Our next objection is that there is no longer a proven demand for these houses. The Bracknell News carried out a survey that showed that house price increases in Bracknell in the last year have been running at 7 per cent. We do not need to be greatly enlightened economists to realise that with the cost of living and average wage increases also running at about 7 per cent., there cannot be a great shortage of supply or a great excess in demand, otherwise house prices would have been shooting up much faster.
      Speaking as a poacher turned gamekeeper—in that until recently I was a director of a substantial development

      1139
      company in the midlands—I do not believe the statistics that we have been given by the development industry. The industry has every right to try to persuade us that we should develop, but we, as the representatives of Berkshire, have every right to point out that those statistics are false and dangerous.
      I will put the problem in a national perspective. If we continue to force the county of Berkshire to allow the building of 8,000 extra houses in central Berkshire, we could be allowing one long urban sprawl to develop along the M4 and M3 from London to Reading and perhaps eventually to Bristol. It is not wanted by the people of Berkshire or, for that matter, of Hampshire. Contrast that with the Government's excellent record in rejuvenating inner cities. An immense amount of taxpayers' money has rightly been put into rejuvenating the inner cities, and that has had all-party support in the House and in the community. It is wholly contrary to encouraging people and industry to stay in the inner cities to allow mass extra development down the M4 in Berkshire.
      As illustrated by the statement on regional policy yesterday, the Government are committed to ensuring not only that the regions will survive the world economic recession but that their employment opportunities will be increased. I cannot believe that encouraging extra development in Berkshire can do anyting but jeopardise the employment prospects and the economy of many hard-pressed regions.
      In summary, we have a policy that is completely out of date for the 1980s and the 1990s. It is a 1960s policy, based on a period of low unemployment and high prosperity, when my hon. Friend the Member for Wokingham (Sir W. van Straubenzee), who previously represented Bracknell, and my hon. Friend the Member for Stevenage (Mr. Wood), who so ably led Bracknell district council, were being told by major employers, "We will not expand in Bracknell; we will not even come to Bracknell because there are no houses for our employees." That is history. Today when I visit the major employers in Bracknell they tell me without exception that they do not require extra houses on a large scale and that they, like the rest of the community, are opposed to the structure plan.
      If we are not careful we shall continue with an outdated policy that is not in the national interest and most certainly not in the interests of my electors. Its logical conclusion would be industrial wastelands in the midlands and the north and total desecration of the countryside in Berkshire and elsewhere in the so-called golden triangle. I cannot believe that my hon. Friend can want that policy to succeed. No doubt he will realise that it is out of date.
      We are not Luddites. We do not believe that the earth is flat. Of all hon. Members of the House, with my ex-development interest I cannot be called a starry-eyed environmentalist. We can cope with modest development. Evolution or in-filling in parts of Bracknell is in order. We are not against any development, and certainly not against the building industry, but we are completely opposed to the swamping of our beautiful county against the wishes of the population. I plead with my hon. Friend to act, and to act quickly.
      2.18 am
      Sir William van Straubenzee: I am grateful to my hon. Friend for permitting me a moment or two—and it will be no more—in what is essentially his debate to reinforce what he said, knowing the area so well, having had the honour to represent it until last June. He is a most valued member of the team of Members of Parliament in Berkshire. I think it will be agreed that we have worked as a team. It is typical of his energy that at 2 o'clock in the morning he was initiating this debate.
      Throughout we have been received with every courtesy by my hon. Friend the Under-Secretary. He does his job with ability and courtesy, which we appreciate, as we appreciate his presence tonight.
      By next October I shall have represented this area for 25 years, yet I do not remember any issue upon which more people have felt more strongly. This is not restricted to cranks; these are ordinary, quiet people who feel deeply about the issue. Secondly, having represented the area for so long I believe that we can say of Berkshire, and especially of the area that my hon. Friend and I represent, that it has taken its share—some would say more than its share—of the necessary expansions that have taken place since the second world war, and that it deserves consideration now. I therefore warmly support all that my hon. Friend has said.
      2.19 am
      The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): The residents of east Berkshire and Wokingham have every reason to be grateful for the manner in which the debate has been introduced at this early hour of the morning. I am grateful for the constructive way in which my hon. Friends the Members for Berkshire, East (Mr. MacKay) and for Wokingham (Sir W. van Straubenzee) have presented their arguments. I assure them that we still continue to take every consideration and keep an open door policy so that every representation that they wish to make will be recognised and honoured fully.
      Perhaps I might begin by painting some of the background which I, as a resident of Berkshire for some 14 years, understand fully. In the past 20 years, Berkshire has been one of the most rapidly growing counties in the country. The emergence of the M4 to the north and of the M3 to the south have triggered off an enormous expansion which, at some stages, the ancillary services have been unable to keep up with in regard to some towns and villages in the county. Berkshire's population has increased from 404,000 in 1951 to well over 680,000 in 1981. That represents an increase of 69 per cent. While the population of England and Wales increased by 1 per cent. between 1976 and 1982, Berkshire's rose by 8 per cent. It is interesting to note that, in 1951, the population of central Berkshire was 198,000. By 1983 it had risen to more than 400,000. That gives some idea of the scale of the anxiety of residents of Wokingham and east Berkshire.
      Central Berkshire comprises the districts of Bracknell, Wokingham and Reading and the eastern part of Newbury district. It has witnessed the substantial and highly successful growth of Bracknell new town and, on its edges, the significant growth of Reading. In Bracknell, the population has risen from 5,000 when the new town was designated in 1949 to 49,000 when the coporation was wound up in 1982. During that period about 19,000 houses

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      were built as were some 122 factories totalling 318,000 sq m of floor space and some 83,000 sq m of offices. In all, some 25,000 jobs were created. Currently there are commitments for a further 51,000 sq m of offices.
      In Reading the population has grown from 114,000 in 1951 to more than 133,000 in 1983. Employment has more than doubled. Most significant of all has been the growth of Reading as an office centre. About 137,000 sq m of office space was permitted between 1976–82. All of those figures confirm the substantial development which has occurred in Berkshire, especially in central Berkshire. I therefore understand fully my hon. Friend's anxiety at the implications if such growth is to continue.
      My hon. Friend the Member for Berkshire, East rightly drew attention to the attractions of royal Berkshire. Much of it is indeed beautiful and its chief attractions have been recognised and safeguarded by the designation of the greater part of west Berkshire and the western part of central Berkshire, which comprise the north Wessex downs, as an area of outstanding natural beauty. Moreover, the north-eastern part of central Berkshire, including the Thameside areas, is designated as an area of great landscape value. There are other areas of landscape quality in the county. In central Berkshire alone there are 20 or so conservation areas and many listed buildings and ancient monuments.
      It is important to reassure my hon. Friends and their constituents of my right hon. Friend's recognition of the permanence of the green belt. I give them a categorical assurance that the green belt is permanent and fully recognised.
      I recognise and accept the importance of safeguarding both the special areas and the general character of the county against excessive development pressures but, on the other hand, excessive restriction of development could result in a loss of economic vitality, which would have implications for the area and possibly for the national economy, towards which Berkshire makes and can continue to make an important contribution.
      Of course, economic activity in the county has been a focus for development. I mentioned Bracknell new town and the growth of Reading. Economic activity in the county has benefited from those developments, but I accept that there is a need to take stock regularly to ensure that the pace of development does not outgrow the capacity of the area to absorb it without damage or without creating imbalance between the provision of employment and housing and the provision of services.
      The average rate of house building in central Berkshire over the past decade has, of course, reflected the development in Bracknell new town. That point concerns my hon. Friend the Member for Berkshire, East. 'The winding up of the development corporation, bringing to an end the period of induced growth, has led to a reduction in the average building rate, and the county council has been concerned that the provision of land for housing should take account of that. My right hon. Friend the Secretary of State was able to agree last year that the release of land under policy H4—my hon. Friends will, I hope, forgive me if I do not refer to the details of policy H4, but everybody who represents that area knows what I mean—of the central Berkshire structure plan, which is a contingent policy, need not commence until the end of 1983, given the current building rate of about 3,000 a year.
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      In approving the structure plan in 1980 my right hon. Friend the then Secretary of State referred to the need for monitoring, which might suggest a need for adjustment in the pace of growth, and there has been a flexible approach.
      The modification to the housing policies in the structure plan caused great anxiety within the county, but considerable time has been allowed to enable the county council in consultation with the district councils to search for the most suitable sites, taking into account the environmental issues and the problems of infrastructure. The county council has had a difficult task to identify sites for the additional housing provision, and I am pleased that it has made progress.
      As my hon. Friend the Member for Berkshire, East said, the Berkshire county council has suggested that a substantial proportion of the additional housing should be provided within Bracknell district but that it does not consider that there will be a need to release the greater part of the land required for that housing until after 1986.
      The allocation of land for the additional housing is essentially a matter for the district councils in central Berkshire together with the county council, and I understand that Bracknell district council will deal with this matter in its local plans; there will of course be opportunity for public discussion of any proposed allocations made in the local plans.
      The developments that have taken place in central Berkshire in recent years and that have given rise to concern over the rate and scale of growth in the county are largely the result of planning permissions, or commitments to development, existing when the structure plan was approved and are not the consequence of the modification to the central Berkshire structure plan.
      It is of course essential that proper account should be taken of the impact that development has had in the areas where it has taken place, and provision for new development should be sensitive to the environment and should have regard to the capacity of the area to absorb further growth. The Berkshire county council is anxious that unrestrained development should not be allowed but that there should be some trailing off of housing development to protect existing communities and the environment. I fully accept its right to express that concern.
      The county council made its proposal to alter policy 1–14 of the central Berkshire structure plan to strengthen its control over the rate of land release, pending a full reappraisal of the housing policies to be undertaken as part of the council's review of its structure plans.
      My hon. Friend will know that my right hon. Friend the Secretary of State rejected the county council's proposal, primarily because he considered that it would not be appropriate to deal with the single issue of policy H4 now, in isolation, when the county council intends very shortly to publish its proposals for a full review of its structure plans.
      I know that the county council attached importance to its proposal to alter policy H4, but I am sure that it recognises that there will be advantage in looking at the problems arising from a continuing pressure for development in a comprehensive way, taking into account not only housing but employment, development and, of course, the all-important infrastructure provision. To have dealt with the alternative on its own would have delayed

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      work on the review of the structure plan, which will provide the opportunity for a broad reassessment of planning policies.
      It is within the framework of the formal review of the structure plans that future planning and development control policies should be worked out. My right hon. Friend referred to the opportunity for reassessment which will be given by the review when he met Conservative councillors from Berkshire county council, including the chairmen of some levy committees, last month.
      My hon. Friend will forgive me if I am not as forthcoming as he might wish on some of these matters, but he will understand that the responsibility for proposals to alter the structure plan following the review is the county council's and that the council must submit proposals to my right hon. Friend for approval. Before any such proposals are approved they will need to go through the statutory procedures, including public consultation. That process ensures that all views, including those which my hon. Friend has expressed, will be taken into account, and the county council will be able to bring forward any evidence in support of its proposals.
      I can assure my hon. Friends that when my right hon. Friend and I consider the proposals put to us by the Berkshire county council we will listen carefully to all the arguments with an open mind. I give my hon. Friends that categorical assurance. I am bound to say, however, that proposals to restrict future levels of housing and employment development will need to be justified by reference to analysis of trends in population, household growth, and the local economy, and also to the county council's assessment of the capacity of the area to accommodate development and the need to safeguard the environment and preserve the quality of life.
      It will also be necessary for the county council to take account of advice current at the relevant time on the provision of land for housing and on industrial development, but my right hon. Friend, in announcing that
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      the draft circulars on housing and green belts are to be revised, has stressed the Government's commitment to conservation and the preservation of good agricultural land. The revised circulars will emphasise the role of planning as a mechanism for balancing the need for development, the interests of conservation and the need to ensure that structure plans deal in broad terms with the scale of provision needed for housing developments while taking full account of local factors.
      My hon. Friends have rightly referred to the strains which rapid growth has placed upon infrastructure in central Berkshire. Certainly the implications for infrastructure provision are an important consideration in deciding on levels of growth. Development may not always wholly finance the infrastructure needed to support it, particularly where preliminary infrastructure is needed to open up areas, or where, for example, the development has traffic consequences beyond its immediate area. I understand that fully. The consideration of infrastructure provision, the provison of schools and of public services generally is an essential part of the overall consideration of future levels of growth. All these issues will have a bearing on the proposals to be put forward in the structure plans review.
      It seems to me that the review of the Berkshire structure plans on which the county council is now engaged is the right route to resolve the objection my hon. Friends have raised to a continued fast rate of growth in the county.
      We shall watch the progress and preparation of the plans within the county. All these matters will be taken into full consideration when we deliberate upon them. This has been a most important debate, and I realise that people throughout the county feel acutely about these matters. this debate will have an important bearing on how local representatives assess the problems in coming months. I am grateful to my hon. Friends for raising the matter.
      Question put and agreed to.
      Adjourned accordingly at twenty-seven minutes to Three o'clock.