Commons Sitting of 8 March 1983

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  EMPLOYMENT

    School Leavers
    Mr. Hooleyasked the Secretary of State for Employment how many boys and girls who left school in the summer of 1982 were still without a job or training place by 31 December 1982.
    The Secretary of State for Employment (Mr. Norman Tebbit): By 31 December 1982 fewer than 8,000 of the 600,000 1982 school leavers were without a job or the offer of a place on the youth opportunities programme.
    Mr. Hooley: That is another promise that has gone down the drain. What will happen to the thousands of boys and girls on the youth training programme when they complete that exercise? Where will they go, what type of jobs will they have, and what is their future?
    Mr. Tebbit: I am sorry that the hon. Gentleman should not have a kind word to say about any of the employers, the Manpower Services Commission, the trade unions and the others who have managed to get within an ace of carrying through that Christmas undertaking. The hon. Gentleman's attitude is mean and carping. As for the youngsters who will be going on the youth training scheme in September of this year, if the YOP scheme is an example, the YTS should do better in our economic circumstances. More than half the youngsters will be accommodated in either jobs or further training as they leave the YTS—[An HON. MEMBER: "Real jobs?"]—They will be real jobs. I hope that the hon. Gentleman will have one, one day.
    Mr. Marlow: Does my right hon. Friend agree that one of the Government's greatest successes has been their imaginative approach to the training of young people in a way that has never been done by any previous Government?
    Mr. Tebbit: Yes. When the Government started and approved the youth training scheme, the right hon. Member for Crosby (Mrs. Williams) was sufficiently gracious to say that she wished she could have persuaded her colleagues in the Socialist Government to do that. She congratulated the Government on their initiative.
    Mr. Barry Jones: As there are more than 250,000 17 and 18 year-olds out of work, does the right hon. Gentleman agree that he carries a heavy responsibility for that human tragedy?
    Mr. Tebbit: I carry responsibilities. I look forward to doing so for the next five, 10 or 15 years. The hon.
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    Gentleman must understand that this country is not the only one suffering from unemployment or the tragedy of youth unemployment. Britain is coping better than most.

    Long-term Unemployment
    Mr. Jim Marshallasked the Secretary of State for Employment how many people have been out of work for over a year; and what was the comparable figure in May 1979.
    The Under-Secretary of State for Employment (Mr. Selwyn Gummer): At January 1983 the number of unemployed claimants in the United Kingdom who had been unemployed for more than 52 weeks was 1,106,800, while the latest figure for employees in employment is 21 million. In April 1979 the number of registered unemployed who had been unemployed for over 52 weeks was 366,700.
    Mr. Marshall: Does the Minister accept that those figures show beyond any shadow of doubt the total failure of the Government's economic policy? If it is his intention to blame the world recession for the high levels of unemployment, will he tell the House what contribution the world recession has made to the overall reduction in inflation in the United Kingdom?
    Mr. Gummer: The hon. Gentleman mentioned the world recession. His original question concerned the reasons for unemployment. Unemployment is partly due to the world recession and largely due to the fact that this country allowed itself to become uncompetitive in world markets after years of Socialist Governments.
    Mr. Dorrell: Does my hon. Friend agree that the position of those long-term unemployed people who have savings of more than £2,500 is particularly unenviable? Does it not amount to a means-tested benefit? Will he make representations to his right hon. and learned Friend the Chancellor of the Exchequer to improve the position of those who suffer that disadvantage?
    Mr. Gummer: The problem that my hon. Friend has highlighted has existed under successive Governments and is a matter for my right hon. Friend the Secretary of State for Social Services.
    Mr. Allen McKay: The Prime Minister, the Minister and his colleagues seem to believe that wages have something to do with unemployment, but how does the hon. Gentleman account for the fact that in Yorkshire and Humberside the average wage is the lowest in Britain while unemployment is the highest?
    Mr. Gummer: The hon. Gentleman must accept that employment levels have fallen because Britain has been uncompetitive across the board. No region can overcome that. If the nation as a whole is uncompetitive, we shall not create the weatlh that we should. One cannot draw a distinction between one part of the country and another. The fact that there are lower wages in Yorkshire and Humberside can be contrasted with other parts of the country.
    Mrs. Shirley Williams: Will the Minister reconsider his disappointing answer to the question on unemployment benefit? Long-term supplementary benefit rates are not made available to the long-term unemployed, and the Government's advice that the unemployed should save

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    their redundancy pay is made an ass of because those involved cannot draw benefit if they have saved their money. Therefore, will the hon. Gentleman reconsider his answer?
    Mr. Gummer: The right hon. Lady is right to draw attention to an important issue. I am not being in any way unsympathetic when I say that it is a matter not for this Department but for my right hon. Friend the Secretary of State for Social Services, and I shall draw it to his attention.
    Mr. Needham: Does my hon. Friend agree that one of the reasons for the grave level of unemployment is action such as that taken by the president of the National Union of Mineworkers, who tries to call his members out on strike when he has the flimsiest of cases? Does my hon. Friend further agree that such action does little for miners' employment prospects?
    Mr. Gummer: My hon. Friend is right to point to one of the many reasons for unemployment. The difficulty is that Opposition Members will accept only a party political reason. However, every strike in this country cuts out jobs. Those who want to keep their jobs should bear in mind that it is important not to strike.

    Wage Awards
    Mr. Doverasked the Secretary of State for Employment if he has any plans to meet the chairman of the retail food and allied trades wages council to discuss the effects of wage awards on employment.
    Mr. Tebbit: I have no plans for a meeting at present. However, I have written to the chairman of the council telling him that it is abundantly clear that, if not modified, the awards proposed by this council will have damaging effects on employment.
    Mr. Dover: Does my right hon. Friend agree that when inflation is less than 5 per cent., a proposal for a wage increase of more than 8 per cent. will not help to increase employment in the food and allied industries? Is my right hon. Friend aware that there is price resistance and that fewer jobs are available because the volume of trade has fallen?
    Mr. Tebbit: My hon. Friend is absolutely right. If wages are pushed up to a level above that which customers are willing to pay, greater unemployment will certainly result.
    Mr. Harold Walker: Have not the Secretary of State and the Prime Minister repeatedly said that they have no intention of interfering in wage bargaining? Is it not true that the 8 per cent. increase was on a wage of £62, which is half the national average, and that the wage for a senior shop assistant was brought up to only £65? Is it not disgraceful that the Government and the Conservative party should try to make low-paid workers the scapegoat for the unemployment that the Government have created?
    Mr. Tebbit: The Government have no intention of interfering in wage negotiations. However, I have a responsibility to draw the attention of those concerned to the consequences of what they are doing—[Interruption] The right hon. Gentleman does not understand what he is saying.
    Mr. Harold Walker: I understand only too well what the Secretary of State is saying.
    Mr. Tebbit: I told the chairman that if the council ignored the representations and confirmed the proposed increase, I would be driven to conclude either that the council did not recognise links between wages and jobs or that it did not see it as part of its responsibilities to take that clear connection into account when making proposals about minimum wage rates. I should be glad to know which view the council takes.
    Mr. David Atkinson: Is my right hon. Friend aware that this week I received a letter from a bread and cake shopkeeper in my constituency saying that last year's 8 per cent. wage award led to redundancies and that this year's wage award would lead to more redundancies? When will employers be able to pay wages that they can afford without having to make redundancies?
    Mr. Tebbit: I can understand that point of view. Hon. Members should not underestimate the sheer fury and frustration that is expressed in the more than 300 letters that I have received in the past month. Many of them point out that redundancies will result if the wage award goes through. I cannot do anything about wages councils, because we are tied by our adherence to the treaty and the ILO convention, which cannot be renounced until 1985.
    Mr. Skinner: Is the Secretary of State aware that voters are concerned more about the fact that a director of a company in Britain, Mr. Ricardo Gordiano, can pick up more than £500,000 a year and that Mr. Fieldhouse can pick up £700,000 in a golden handshake—commonly called redundancy pay—than about low-paid workers receiving a miserly 8 per cent. increase on their poverty-stricken wages?
    Mr. Tebbit: I am not sure that that was uppermost in the minds of voters in Bermondsey recently.

    Youth Training Scheme (Equal Opportunities)
    Miss Joan Lestorasked the Secretary of State for Employment whether he is satisfied that girls will have access to equal opportunities on the youth training scheme; and if he will make a statement.
    The Minister of State, Department of Employment (Mr. Michael Alison): I am satisfied that girls will have equal access to the scheme.
    Miss Lestor: The right hon. Gentleman may well be satisfied, but is he aware that there is great concern that most members of the Manpower Services Commission's boards both regionally and nationally are male, as are the lecturers in the youth opportunities programme? Is the right hon. Gentleman further aware that traditional skills that are rapidly dying out—partly due to technology—are being offered to girls? [Interruption.] Will the right hon. Gentleman try to keep his Back Benchers in order? Will he bear in mind that many of those young girls are likely to be discouraged from participating in the courses because they feel that they do not have any link with what they are likely to be offered later in life?
    Mr. Alison: I am satisfied that there will be no prejudice against girls or women because the majority of the members of the commission are male. Indeed, the reverse is no doubt true. I believe that those involved will bend over backwards to take girls' needs properly into account. The youth training board has issued a statement requesting all parties involved in preparing and delivering

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    the scheme to accept the principle of equality of opportunity, and the board will shortly be considering more fully how that can be achieved.
    Mr. Myles: Is my right hon. Friend aware that there is an alarming lack of employment for girls in the countryside? Will he introduce training so that girls can obtain jobs in the countryside and so stop the drift away from rural areas?
    Mr. Alison: I take note of that point, but there will be equality of opportunity in the youth training scheme. However, girls must be allowed to choose the courses that they wish to pursue.
    Mr. Christopher Price: Will the Minister explain what Mr. David Young meant when he told the Select Committee that although there would be equal opportunities for girls in the technical and vocational educational initiative scheme, he could not guarantee that an equal number of girls would be catered for? Is the right hon. Gentleman aware that there are approximately equal numbers of boys and girls in most schools? How can he offer girls equal opportunities if there are so few of them in the scheme?
    Mr. Alison: The hon. Gentleman, who is a great educationist, will know that we cannot predetermine the proportions of girls and boys who will want to stay on at school, the number who will be on the labour market, the number who will find jobs or which girls will choose which courses on the training scheme.

    Right to Strike
    Mr. Winnickasked the Secretary of State for Employment if he has any plans to introduce legislation to remove the right to strike from any groups of employees.
    Mr. Tebbit: No, Sir.
    Mr. Winnick: Has not the Secretary of State told the Select Committee on Employment what he may have in mind for workers in essential services? Is the right hon. Gentleman aware that what is needed is not the removal of the right to strike from any group of workers, but his own removal from office, since he has degraded a distinguished office of state by his notorious political behaviour and antics? Bearing in mind his plans for trade unionists, would he not be far better off in present-day Chile, Argentina or Poland, where he would be more at home with the rulers of those dictatorships?
    Mr. Tebbit: I shall resist the temptation to suggest some of the countries where the hon. Gentleman would find himself more at home. I shall repeat the answer that he clearly did not hear. I have no plans to legislate away the right to strike. I am considering—and I think the public would want me to consider—means to inhibit the propensity of people to strike in essential public services.
    Mr. Gorst: Is my right hon. Friend aware that when the general secretary of the Trades Union Congress appeared before the Select Committee last Wednesday he said that the Government had an obligation to take the necessary measures to protect public health and safety?
    Mr. Tebbit: Yes; and I notice that the general secretary of the TUC referred to the duty of the Government and their powers to use the armed forces to that end.
    Mr. Ashley: While the Secretary of State is in the mood to resist temptation, will he try to resist the temptation to undertake a vendetta against trade unions, which is what he is doing, thereby reducing the liberty of the individual? Does he accept that he may win a short-term victory, but that it will end in long-term disaster for industrial relations in this.country?
    Mr. Tebbit: I have no vendetta against the trade unions. I have every intention to do what I can to ensure that the members of trade unions are assured of their rights in relation to politically motivated leadership, which often forces them out on strike and acts against their best interests.
    Mr. Beaumont-Dark: Does my right hon. Friend agree that in many of the public services where there is a monopoly there is virtual absolute job security and that people who have such job security have a greater responsibility than others when there is a dispute? Does my right hon. Friend further agree that if he is contemplating changing the law about the right to strike those who have absolute job security should be the first to be looked at?
    Mr. Tebbit: No one has absolute job security. Those who go on strike in breach of their contracts with their employers lay themselves open to dismissal.

    Trade Union Reform
    Mr. Hoyleasked the Secretary of State for Employment whether he has any plans to meet the Trades Union Congress to discuss proposals on trade union reform.
    Mr. Tebbit: I have invited the TUC to give me its views, but the TUC has preferred not to accept my invitation.
    Mr. Hoyle: Surely the Secretary of State understands the reason. Why does he continue to attack the trade unions in the way that he does in spite of the fact that he says that there is no vendetta? Will he take into account the views of some of those who know more about the trade union movement than he does, and drop his half-baked crackpot schemes for the reform of the trade union movement, which are doing so much damage to industrial relations?
    Mr. Tebbit: I hope, of course, that the trade union movement will change its mind. Certainly some distinguished members, such as Mr. Gavin Laird, think that it is ridiculous that the TUC should take the attitude that it does. In answer to what the hon. Gentleman said about listening to people who have some knowledge of the matter, I listened carefully, and I noticed that the chairman of the TUC, referring to his own union, said:
    "Over the years we have suffered from extremism and communist power bids more than any other union."
    Referring to the extreme Left, he said:
    "They want to use this power for their own political ends—it would be a disaster if they succeeded."
    I agree with the chairman of the TUC.
    Mr. Timothy Smith: Is it not clear that the proposals in the Green Paper have substantial support among ordinary trade union members? In those circumstances, is it not a grave dereliction of duty on the part of the TUC not to discuss these proposals with the Government?
    Mr. Tebbit: I agree with my hon. Friend. Every opinion survey shows that the proposed measures have great support among trade unionists. To be fair to Mr. Murray, I understand that he told the Select Committee last week that the TUC would be willing to talk to the Government, provided that Parliament repealed the 1980 and 1982 Acts. I must say that I think Mr. Murray has a slightly odd idea of the relative roles of Parliament and the TUC.
    Mr. Varley: Does the Secretary of State appreciate that some of the hostility of the TUC towards him, and perhaps to some of his colleagues, is because they have given the impression over the past three years that their only policy towards the trade unions is mass unemployment, the whip of unemployment and oppressive legislation? Will he take this opportunity to say that what distinguishes a democracy and free society is the right to strike, as opposed to a dictatorship where that right is taken away?
    Mr. Tebbit: What distinguishes a democracy is that there are free and fair elections and that the majority control the Government. That is why this Government have the right to legislate in accordance with the proposals that they put before and had endorsed by the people in 1979.

    Long-Term Unemployment
    Mr. William Hamiltonasked the Secretary of State for Employment what was the total number unemployed for over 52 weeks on January of each of the past four years; and what steps are being taken to alleviate this problem.
    Mr. Craigenasked the Secretary of State for Employment what assessment of, and consequential provision for, the rise in the number of long-term unemployed his Department is making.
    Mr. Gummer: At January 1983 the number of unemployed claimants in the United Kingdom who had been unemployed for over 52 weeks was 1,106,800. The numbers registered as unemployed for over 52 weeks were 905,000 in January 1982, 455,000 in January 1981, and 355,000 in January 1980. Jobs are created only when we produce goods and services that people want at a price that they are prepared and able to pay. This Government have cut inflation dramatically, and as productivity rises we should become more competitive. In the meantime, the community programme, introduced last year, is the largest ever initiative to help the long-term unemployed.
    Mr. Hamilton: Is the 'Minister aware that that parrot reply will be no consolation to the more than 1 million workers who have now been out of work for more than a year, that number being more than treble the figure when the Government came to office? Do they disclaim all responsibility for that? When the next election comes, what will they do with those Saatchi and Saatchi posters? Will they put up another one saying "Conservative Government does not work"? What alibi will be given at the next election for those disgraceful figures?
    Mr. Gummer: The hon. Gentleman thinks that it is a parrot cry when we tell the truth. The truth is that the only jobs that can be made available are jobs that produce goods that other people want to buy. There is no other truth. Until the Opposition accept that view they will never contribute
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    to the ending of unemployment. It is because the Government have taken that view that we will conquer unemployment.
    Mr. Craigen: As we could well have 1·5 million longterm unemployed by the end of this year, will the Minister tell us whether he is satisfied with the present woefully inadequate provision that is made for long-term unemployment? Does he really feel that the community programme is meeting the needs of the 1·1 million longterm unemployed?
    Mr. Gummer: The hon. Gentleman is right to underline the fact—this is a matter about which we should all be concerned—that many people are unemployed for long periods. The community programme does not meet all the needs of all those people. That is why we have concentrated on producing new jobs right across the board. It is an important programme, and to provide 130,000 places on that programme is also important.
    Mr. Forman: As the plight of the long-term unemployed is not only a matter of major social concern, but places a considerable economic burden on the rest of the community—notably those in work—what plans does the Department have to expand the community programme so that it takes up the full number of places allocated for it, as envisaged by my right hon. and learned Friend the Chancellor of the Exchequer, and preferably supplements it with other ideas, such as the excellent enterprise allowance, to get more people back to work?
    Mr. Gummer: I am sure that my hon. Friend is right to say that we have to work as hard as we can—that is what we are doing—to make sure that the community programme is fully utilised. We have used the other programmes that we have brought forward precisely for that purpose. As always, we are considering other ways of providing jobs, but I am sure my hon. Friend will agree that, over and above that, we have to find real jobs for people, and that that can be done only by producing goods that people want to buy.
    Mr. J. Enoch Powell: When the Government persist in attributing unemployment to uncompetitiveness, how do they account for the persistent surplus on our trading account during the years in which unemployment has risen?
    Mr. Gummer: The right hon. Gentleman returns to his theme, but the fact is that we could have done a lot better. That is one of our problems.
    Mr. Kenneth Carlisle: What evidence is there that the community programme is helping the long-term unemployed to obtain jobs? Are the Government keeping a record of that?
    Mr. Gummer: It is important that the programme should provide jobs for the long-term unemployed. When someone has had a job, he is more employable thereafter. There are provisions that enable individual employers to spend nearly £1,000 on training during that period, and that will also help.

    Youth Opportunities Programme (Statistics)
    Mrs. Shirley Williamsasked the Secretary of State for Employment what proportion of young people who

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    completed youth opportunities programme courses between one year and six months previously entered (a) full-time employment and (b) further education.
    Mr. Speaker: No. 8, Mrs. Shirley Williams.
    Hon. Members: Stand up.
    Mr. Gummer: Information is not yet available—
    Mr. Speaker: Order. The Minister must not answer before the question is asked.
    Mrs. Shirley Williams: No. 8, Sir.
    Mr. Gummer: Information is not yet available on this particular group. The most recent—(Interruption] —national survey of those who joined youth opportunities programme schemes—
    Mrs. Williams: On a point of order, Mr. Speaker. I regret that I am completely unable to hear the Minister's reply owing to barracking from across the Floor.
    Mr. Gummer: Information is not yet available on this particular group. The most recent national survey of those who joined youth opportunities programme schemes between April and June 1981 shows that about 40 per cent. of young people subsequently found employment and a further 10 per cent. went into further education or training.
    Mrs. Williams: Is the Minister aware that on 23 April 1979 the Prime Minister said in Darlington—[HON. MEMBERS: "Reading".]—
    "We Tories believe in policies that will create real jobs—not just paying youngsters to do artificial jobs without a future".
    In view of the Prime Minister's remarks at Darlington, will the Minister now redeem the Prime Minister's promise by representing to his right hon. and learned Friend the Chancellor of the Exchequer that real jobs should be created by putting £3 billion to £4 billion into public investment and not into tax cuts, which will create only one job for every four that public investment creates? We need real jobs, not artificial ones.
    Mr. Gummer: The right hon. Lady does not meet the need to create real jobs by asking for general reflation by putting money into public expenditure. The right hon. Lady knows perfectly well that the only way to produce real jobs is to produce goods and services that people want to buy. That that has to be repeated again and again from the Dispatch Box, even to representatives of the Social Democratic party, shows the people of Darlington and elsewhere that if they want jobs the only party that will ever produce them is the Conservative party.
    Mr. Needham: Is not one of the reasons why we have such a high level of youth unemployment that adequate schemes for training young people were not introduced early enough and certainly were not introduced by the right hon. Member for Crosby (Mrs. Williams) when she had some authority in the matter? If the right hon. Lady had done something more we should not have such high numbers as we now have.
    Mr. Gummer: It would be easier to congratulate the right hon. Member for Crosby (Mrs. Williams) had she managed to do something about training during the many years that she held office in a Labour Government. The new training scheme has been needed in Britain for many years and should be seen as a major step forward in the training of young people.
    Mr. Barry Jones: Bearing in mind the growing and genuine fears of a major shortfall in training places this year, is it not reprehensible that in April the Government plan to cut from £18 to £15—a 16 per cent cut—the supplementary benefit of 16 and 17-year-olds living at home? Is not the nation entitled to be sceptical of the Government's competence when we read in The Sunday Times of a plan to dump unemployed teenagers into military service because the Government cannot find them jobs in civilian life?
    Mr. Gummer: The hon. Gentleman must do better than that. He knows perfectly well that there is no truth in any reports about dumping people into military service—
    Mr. Barry Jones: Answer the question.
    Mr. Gummer: If several questions are asked I shall answer them—
    Mr. Barry Jones: Answer the question.
    Mr. Speaker: Order. Will the hon. Gentleman stop tapping the table. It irritates me.
    Mr. Gummer: The hon. Gentleman asks whether the Government have plans to dump young people into military training. The Government have no such plans, and when the hon. Gentleman gives the Government credit for the largest training scheme that has been produced in the history of Britain, he will have a right to ask such questions.

    Wage Rates
    Mr. Dubsasked the Secretary of State for Employment what is his estimate of the percentage fall in wage rates that would be necessary to achieve full employment.
    Mr. Tebbit: Any such estimates would depend on a variety of variable factors, few of which are reliably predictable.
    Mr. Dubs: Is not the truth that the Secretary of State wants to get British wages down to the level of those in Hong Kong and Taiwan—under 50p an hour?
    Mr. Tebbit: The hon. Gentleman must know that he is being rather silly when he says such things. If people charge more for their labour than the market will bear, jobs will disappear.
    Mr. Wilkinson: Does my right hon. Friend agree that one of the worst aspects of the British economy is that while it has been a low wage economy for many years it has also been a low productivity economy and that what we need is not so much to bring wage levels down to those in Hong Kong and Taiwan as to increase productivity to their levels?
    Mr. Tebbit: Yes, indeed. We need to reach the productivity levels of Germany, the United States and Japan and then we would be able to pay much higher wages. That is the object of our policy. It is no good paying people more than the value of the work that they do.
    Mr. Flannery: Does the Minister not realise the simple fact that the lower wages are the fewer goods people can buy and, because they cannot buy the goods, that accelerates the slump?
    Mr. Tebbit: I realise that I am being taken on now by the intellectual wing of the Labour party. If the hon. Gentleman considered what would happen were wages to double, he would have to conclude that our projects would become uncompetitive and we would lose markets and jobs. That is precisely what has happened in recent years.
    Mr. Varley rose—
    Mr. Speaker: Order. In order that the House can understand my system, may I say that I should like to know in advance which Front Bench Members wish to speak, so that I can maintain the correct balance?
    Mr. Varley: The Secretary of State implies that present policies are working. How can that be so when 2·5 million people have lost their jobs, when plant after plant has been forced to close, when manufacturing production is down by one fifth and investment by one third, and when over the past four years our national wealth has been reduced by 5·5 per cent? If that is success, God help us when the Government admit failure.
    Mr. Tebbit: I am sorry to interrupt the right hon. Gentleman when he is rolling with delight at bad news but I must tell him that if, for example, he had been watching the ITN weekly job survey recently he would have seen that in the last month, for the first time for some considerable time, the new jobs recorded exceeded those lost. If the right hon. Gentleman likes he could have a list of many of the new jobs on the way—1,000 in Texaco in South Wales; 100 at Tattung television manufacturers in Bridgnorth; 1,200 on the urban development programme; 40 at Edgley Aircraft, Old Sarum; 1,000 at Hyster, Ayrshire; 200 at Leicestershire Co-operative—but, Mr. Speaker, you would not want me to go on too long and it only gives the right hon. Gentleman a great deal of pain.

    Wages Councils (Awards)
    Mr. John Townendasked the Secretary of State for Employment what have been the three highest percentage wage awards made by wages councils during the past three months.
    Mr. Alison: The three highest percentage increases in basic minimum rates in wages orders which took effect between 1 December and 28 February were 6·7 per cent., 6·2 per cent. and 5·9 per cent. However, proposals of increases in excess of 8 per cent. have been made recently but not yet confirmed.
    Mr. Townend: My right hon. Friend will have noted that all those figures are in excess of inflation, and 8 per cent.is 60 per cent. above the current rate of inflation. Will my right hon. Friend accept that such increases make nonsense of the Government's exhortations to industry to become more competitive? Is it not true that these wages can be paid for only by lost jobs and increases in prices? Despite international agreements, has not the time arrived when these bodies should be abolished because they are undermining the Government's anti-inflationary and employment policies?
    Mr. Alison: I agree with 90 per cent., if not 95 per cent., of what my right hon. Friend says. I hope that the proposals for an 8 per cent. increase will not be carried into effect.
    Mr. Cryer: Will the Minister accept that it is a nauseating spectacle when a Conservative Member of
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    Parliament, with half a dozen company directorships and a handsome salary to boot, attacks the lowest paid sector of our society? Why do not the Government express their concern about the 45 per cent. increase in farm incomes in 1982 instead of continuing this vendetta against low-paid workers?
    Mr. Alison: The hon. Gentleman is concerned only to make party political points. My hon. Friend the Member for Bridlington (Mr. Townend) is concerned with the possibility of people finding work, even at low rates that are well above the level paid in supplementary benefit.

    Employment Statistics
    Mr. Dormandasked the Secretary of State for Employment what is the number and percentage of people unemployed in the northern region and the United Kingdom, respectively.
    Mr. Gummer: At 10 February the number of unemployed claimants in the northern region was 231,074 and the rate was 17·8 per cent. The figures for the United Kingdom were 3,199,412 and 13·7 per cent.
    Mr. Dormand: Is the Minister aware that the disgraceful figures that he has just announced for the northern region will be made even worse if the replacement for the Sir Galahad is not built on Tyneside? Will he confirm that there is no question of the Sir Galahad replacement going to Australia? Does he agree that the record of the Tyneside shipyard workers in building many vessels of this type in the past shows that this is where the priority order should go? Will he, as a matter of urgency, consult his colleagues in the Department of Industry to see that the order is placed on Tyneside?
    Mr. Gummer: I shall see that my right hon. and hon. Friends in the Department know of the hon. Gentleman's proper concern.
    Mr. McQuarrie: The figure that my hon. Friend gives in respect of the United Kingdom is 9 per cent. lower than that for my constituency of Aberdeenshire, East, which is suffering many redundancies every day. Will my hon. Friend try to take some steps to ensure that work can be created in my area, which has not benefited from the golden age enjoyed by Aberdeen city?
    Mr. Gummer: I understand the careful concern that my hon. Friend has for unemployment in his constituency, but I am sure he will agree that in the end—one always comes back to it, I afraid—the only way that jobs are created is if those jobs are wanted in the sense that the goods and services that they produce can be sold at the price that people are able to pay.
    Mr. Beith: What hope will the unemployed get from the hon. Gentleman's Department if he persists with his plans to close or cut down the hours of jobcentres in some of the smaller communities where unemployment is highest? Does the Minister realise that some of the jobcentre closures afford savings of only £200 or £300 a year, and that many local authorities in the area would be happy to help with those minimal costs to ensure that a service of job finding is still available to people in places such as Amble?
    Mr. Gummer: I am sure that the hon. Gentleman will accept that we are seeking to make the system as efficient

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    as possible, and it is only sensible to look at some of the jobcentres that are of small use and to which a small number of people go, and make them as economic as possible. If the hon. Gentleman has a particular case in mind we shall look at it carefully. In the end, what we want is not the jobcentres that find the work, but the work itself.
    Mr. Radice: Has the Minister noted that despite the Prime Minister's commitment to real jobs, made in Darlington during the 1979 general election campaign, unemployment in the Darlington travel-to-work area has risen from 6 per cent. then to over 15 per cent. now?
    Mr. Gummer: The hon. Gentleman must accept that had we continued with the policies of the Labour Government unemployment would be much higher. For the first time a Government are taking the steps that will bring back to this country the economic basis that has been frittered away by years of under-productivity.

    Trade Union Democracy (Green Paper)
    Mr. Rentonasked the Secretary of State for Employment how many representations he has so far received from trade unions in response to his Green Paper on trade union democracy.
    Mr. Tebbit: I have so far received no representations from trade unions on our Green Paper "Democracy in Trade Unions". The period for consultations will continue until 8 April.
    Mr. Renton: Is that not a very depressing reply? Are trade union leaders not interested in democracy in their unions? If there continues to be no response from those who are fearful that more balance will lead to loss of office and of power for them, will my right hon. Friend make a strong appeal in the remaining weeks for ordinary trade unionists to write to him with their views on obtaining more balance and on opting out of the political levy in their union?
    Mr. Tebbit: My hon. Friend is slightly unfair to some of the trade union leaders, because many of them have a deep commitment to democracy in their unions and have been taking steps to achieve that. What is regrettable is that some have not and are seeking to thwart progress in this regard. I hope that more and more ordinary trade unionists, as well as those leaders such as Mr. Gavin Laird, who has said that these matters should be discussed with the Government, will come forward and give me their views.

  PRIME MINISTER

    Engagements
    Mr. Foulkesasked the Prime Minister if she will list her official engagements for Tuesday 8 March.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others, including one with the Deputy Prime Minister of Hungary. I also unveiled a sculpture of my noble Friend the Lord Home in another place. In addition to my duties in the House I shall be having further meetings later today.
    Mr. Foulkes: Will the Prime Minister confirm that her vacillation over the appointment of a new chairman for the coal board is because Lazard Frere is demanding yet
    702
    another transfer fee of £1·8 million, a sum it would take a miner 250 years to earn? What a reflection on British management that the Government think that the only person capable of running the coal board is this superannuated superman from the United States.
    The Prime Minister: I have nothing further to add to what I said last week about the chairmanship of the National Coal Board. I remind the hon. Gentleman that the gentleman of whom he is speaking is a distinguished Scotsman who has done well for the coal industry.
    Sir Neil Marten: Has the Prime Minister read, and I see no reason why she should have, the speech of Mr. Gaston Thorn, President of the European Commission, on 8 February, in which he said that it was time to shelve the Luxembourg compromise? While I do not necessarily expect my right hon. Friend to reply straight away, could she study the speech and let me know what she thinks?
    The Prime Minister: My right hon. Friend's surmise that I have not read that speech by Mr. Thorn, is correct, although I seem to have read quite a number. I do not believe that the Luxembourg compromise should be shelved.
    Mr. David Steel: Is the Prime Minister aware that we all hope that the miners will not be provoked into voting for strike action? Is she also aware that despite the Gentleman's considerable ability, what the coal board needs is not a temporary chairman but somebody who has a long-term commitment to the future of the industry and is involved in it?
    The Prime Minister:: The gentleman to whom I believe the right hon. Member refers has an excellent record in the coal industry—
    Mr. Foulkes: Rubbish.
    The Prime Minister: —which I described last week. One is not thinking in terms of a short-term chairman.
    Mr. James Callaghan: I ask the Prime Minister a simple statistical question. Will she confirm that the Chancellor of the Exchequer will need to reduce the standard rate of income tax by 9p in the pound in the Budget next week if the real level of total taxation on the average family is to be reduced to the point at which it stood when I left office?
    The Prime Minister: That figure, which I understand has been given in a parliamentary answer, takes no account whatsoever of increases in earnings over the period. If those are taken into account, even for those at lower income levels, real take-home pay is now higher than it was in 1978–79.
    Mr. Myles: Is my right hon. Friend aware that the distilleries in my constituency could substantially cut their energy costs by 25 per cent. and get a 25 per cent, grant for doing so, but they do not do it because of Scargillism?
    The Prime Minister: I hope that the distilleries in my hon. Friend's constituency will continue to flourish and that they will choose the fuel that makes their costs most efficient.
    Mr. Foot: As we are approaching Budget time, will the Prime Minister take the opportunity to answer the question of my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan)? Will she tell us how much extra

    703
    revenue in 1982–83, compared with 1978–79, in tax and national insurance the Government are receiving as a result of the tax changes introduced by the Government?
    The Prime Minister: I cannot give precise figures, nor would the right hon. Gentleman expect me to. He can find them perfectly well through tabling written questions, so that the figures can be absolutely precise. The yield in income tax plus national insurance contributions is greater. If his promises to the old-age pensioners were to be added, the cost in income tax and national insurance contributions would be enormous. Although he has been careful about the costs of his programme, in so far as it is equal to what the pensioners asked for it would cost an extra £17·5 billion.
    Mr. Foot: Is the right hon. Lady aware that the answer to the question, which she said she could not give, is £9 billion a year? [HoN. MEMBERS: "Why ask?"] That is the answer to the question. That figure confirms my right hon. Friend's figure. Will the right hon. Lady confirm, a week before the Budget, that her Government have raised £9 billion more in taxation and national insurance than did my right hon. Friend in his last year of office?
    The Prime Minister: Yes, but of course pensions have gone up considerably in real terms. They have gone up more than the increase in the cost of living. Is the right hon. Gentleman suggesting that in order to cut the national insurance contribution one should cut old-age pensions?
    Mr. Cunliffeasked the Prime Minister if she will list her official engagements for 8 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Cunliffe: Has the right hon. Lady seen the report by the independent low-pay unit, which discloses that poor families in Britain are taxed twice as heavily as similar families in any other country in Europe? Is she aware that the report shows that since the Government came into office the number of families in the poverty trap has doubled? Is she not ashamed of that state of affairs? Does it not amply prove that her Government's suicidal fiscal policies have militated against the interests of the poor sections of the community by rewarding the richer sections, which her party represents?
    The Prime Minister: The hon. Gentleman is right, I believe, in one thing, which is that taxation starts at lower levels of income here than overseas, and that it starts at a higher level of standard rate of income tax. What the hon. Gentleman has ignored is that the United Kingdom has a much longer basic rate of tax compared with other EC countries. In other words, that basic rate of tax goes on for a longer time before it is increased than in other countries. The hon. Gentleman also ignores the fact that, even for those at lower income levels, real take-home pay is now higher than it was during the last year of the Labour Government.
    Mr. Pawseyasked the Prime Minister if she will list her official engagements for 8 March.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Pawsey: Is my right hon. Friend aware that since she came to office the number of owner-occupiers has increased by over 1 million? Does she agree that lowering
    704
    interest rates will accelerate that process? Does she also agree that it is far better that homes should be owned by individuals than by the state?
    The Prime Minister: Yes, Sir. Thanks to the Government's policies a record number of dwellings are in owner-occupation. If a number of councils were quicker in replying to applications to purchase council houses, the number would be greater. It is also true that there has been a considerable increase in home improvement grants, particularly last year. The figures have almost reached those of 1972–73.
    Mr. Norman Atkinsonasked the Prime Minister if she will list her official engagements for Tuesday 8 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Atkinson: Now that it has been authentically leaked that the National Health Service's policy study group is considering the possibility of recommending raising prescription charges to £2 per item, will the Prime Minister assure the House that never, so long as she is Prime Minister, will she allow prescription charges to rise to 10 times the amount that they were when she came to office?
    The Prime Minister: From time to time prescription charges have to be raised. The hon. Gentleman will be aware of the number of exemptions that there are from prescription charges, including the elderly and children. The very considerable number of exemptions means that those who really need prescriptions because they are chronically sick get them free.

    Inflation
    Mr. Kenneth Carlisleasked the Prime Minister whether she will make a statement on the current rate of inflation.
    The Prime Minister: Inflation at 4·9 per cent. is now at its lowest level since early 1970.
    Mr. Carlisle: Does my right hon. Friend agree that it is good news for this country that the rate of inflation is at its lowest for 13 years and is at half the rate it was when the Government took office? Is it not also good news for the pensioners and those on fixed incomes, because the value of their savings will be protected? Will it not boost jobs, because interest rates will follow inflation and give confidence to business to plan for the future?
    The Prime Minister: Yes, Sir, it is very good news that inflation is down as low as it is. We still have to get it down further so that we can compete with some of our most efficient competitors. I agree with my hon. Friend that that will have a good effect on interest rates and therefore on confidence for the future. I also especially agree with my hon. Friend that savings will keep their value. Had we not had the level of inflation that we have had over the past 20 years, many pensioners would have savings that would be worth more in real terms today than they are. The money that they saved many years ago would still be able to buy goods to the same value as when the money was earned.
    Mr. John Morris: Has the Prime Minister given further thought to the dual control of cruise missiles—
    Mr. Speaker: Order. This is not an open question. It is about the current rate of inflation.
    Mr. Woodall: Has the Prime Minister received a letter from Mr. James Nicolson of Tadcaster, as most right hon. and hon. Members have, about his mother's intention to put up for auction her late husband's Victoria Cross in order to—
    Mr. Speaker: Order. We give a good run on open questions, but this one must be on inflation.
    Mr. Woodall: On pensions, Sir.
    Mr. Speaker: No, it is on inflation.
    Mr. Woodall: On a point of order, Mr. Speaker. It is the same intention. This arises because of inflation.
    Mr. Speaker: Order. The hon. Gentleman is quite right now.
    Mr. Woodall: Mr. Nicolson's mother wants to draw the Prime Minister's attention to the circumstances of pre-1974 war widows. Will the Prime Minister please give an unequivocal assurance that the anomalies that apply to pre - 1974 war widows because of inflation will be removed as soon as possible?
    The Prime Minister: The Government have reduced inflation to a lower level than that to which the Labour Government reduced it. Moreover, the Government have been especially meticulous to increase war widows' pensions way beyond others and to give extra age allowances for war widows' pensions. Further, war widows' pensions have been completely relieved of tax. I am grateful to the hon. Gentleman for allowing me to draw the House's attention to the Government's excellent record on war widows' pensions.

Statutory Instruments, &c.
Mr. Speaker: By leave of the House, I shall put together the Questions on the six motions relating to statutory instruments.
Ordered,
That the draft Pig Industry Levy Scheme 1983 (Confirmation) Order 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the Representation of the People Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the Representation of the People (Northern Ireland) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Farm and Horticulture Development (Amendment) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Agriculture and Horticulture Development (Amendment) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the Agriculture and Horticulture Grant (Variation) Scheme 1983 (S.I., 1983, No. 273) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Cope.]

Buyers' Premium (Abolition)
3.31 pm
Mr. Andrew Faulds: I beg to move,
That leave be given to bring in a Bill to abolish the buyers' premium at auctions.
The traditional role of auctioneers has long been that of disposing of other people's property and charging the seller a commission for acting as agent in such disposals. But in 1975, the two leading fine art auctioneers, Sothebys and Christies, got together somewhat surreptitiously and decided to pull a fast one on their customers by simultaneously introducing a so-called buyer's premium of 10 per cent. in addition to the seller's 10 per cent. commission.
One of the difficulties that arises when one discusses the auctioneers' buyer's premium is that there is widespread misunderstanding as to what precisely it is. First, it is not, despite what auctioneers would have us believe, a commission payable by buyers at auction. It is simply a spurious device whereby an auctioneer effectively doubles the commission that is payable by the seller who, more often than not, is unaware of that double dealing as the real selling price is the hammer price plus the premium. Thus, when the vendor is told that his article has fetched, say, £100, the auctioneer is deceiving him as, with a premium of 10 per cent., the buyer actually pays the auctioneer £110, the auctioneer furtively pocketing the extra £10.
The truth is that the seller reads on his statement that his property has been sold for f£100 from which the auctioneer merely deducts his selling commission. This is reminiscent of the three-card trick where the quickness of the deal deceives the eye. Mr. Charles Lee, president of the British Antique Dealers' Association, has circulated a letter to the members of that organisation in which he neatly summarises the effects of this impropriety. He says:
"It is not the expense of auction sales, which when taking vendor's commission and buyers' premium together adds up to some 18–20 per cent. of sale value, to which the dealers object. It is the fact that the imposition of the buyers' premium disguises the true cost. Apart from the incidence of taxes such as VAT and Stamp Duty, there is no other type of sale transaction in this country in which an extra charge of 10 per cent. is imposed on the buyer over and above the sale price. In effect the extra cost falls on the seller, as the buyer must allow for the premium in assessing his maximum offer. The 'hammer price' at auctions therefore tends to be lower than it would be if the true cost of sale was properly charged as vendor's commission.
To the extent that sellers are misled into believing that the cost of sale is no more than the vendor's commission, and bearing in mind that buyers get no benefit whatever in return for paying the premium, market conditions in the art world are distorted by … 'this … practice',"
A stamp auctioneer and dealer from the west country has made the point in these terms:
"This premium is just a device to increase commission charges without the vendor realising it. Most vendors are told we have 'reduced' our commission and now charge a reduced rate. The fact that there is a double commission is not pointed out to him. The vendor thinks the auctioneer is being competitive whilst in fact he is charging much more than the straight vendor and buyer auctioneer ֵ The buyer in many instances does not know that there is VAT to be paid on the premium. Also in an auction room it is practically impossible for him to work out the final price he has to pay. When bidding commences he has to have a computer of a brain to work out the bidding plus premium plus VAT."
Leading figures in the arts world were vociferous in their condemnation of this new practice. Leading dealers such as I have quoted in fine arts and antiques were much

709
opposed to the new charge. Boycotts of auctions were mooted and some dealers actually absented themselves from auctions for a while. But, of course, business has to go on. Unfortunately, such gestures were not supported widely enough to have any effect. To their everlasting credit, other auctioneers who disapproved of Sotheby's and Christie's misleading ploy of the buyer's premium decided not to introduce such a charge. Foremost among them were Messrs. Phillips. Due credit should be paid to them. They held out until economic and commercial necessity to compete forced them to do so. But, to underline their dislike of the premium, they decided never to charge it for acquisitions by public museums and galleries in Britain. That stance has the unqualified support of the National Art Collections Fund. But the same consideration for national interests is not shown by that conniving twosome, Sothebys and Christies.
The art trade referred the collusion between Sothebys and Christies to the Office of Fair Trading on two separate occasions, but Sir Gordon Borrie eventually claimed that he did not have sufficient evidence or proof. The dealers tried to stop the buyer's premium by bringing a High Court action against Sothebys and Christies in 1981, alleging collusion. As such, it was a registrable charge under restrictive trade practices legislation and thus the two auctioneers had broken the law by failing to register it.
There is an interesting story here. The case was about to be tried when, quite suddenly, and without warning, after some sort of involvement by that eminent panjandrum Lord Goodman, who has played the role of official intervener on a number of occasions, the two trade organisations—the British Antique Dealers' Association and the Society of London Art Dealers—were persuaded, I know not by what means, to join Sothebys and Christies for a champagne get-together at Claridge's at 3·30 one morning. They caved in to the auctioneers by withdrawing their case.
To be fair to the dealers, they were frightened by the appalling legal costs that were involved in pursuing their action. And, they had been led to believe that the auction houses would review and possibly withdraw their buyer's premiums and that a new era of trust and collaboration between Britain's auctioneers and dealers had dawned. That was some sad hope. From that day onwards, the auctioneers have held the whip hand over buyers and sellers alike.
The Department of Trade considered the matter to be of little importance. The Department's mistake is that, whereas perhaps this arrangement is not of crucial
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importance if it affects only the richest in the land, it becomes very serious when almost every small auctioneer has been forced to follow the example of Christies and Sotheby's. Thus, everyone now who buys and sells at auction through a premium charging house in Britain is subject to what The Times, in an excellent leading article, described accurately as a "shoddy little deception." That leading article was a good deal more knowledgeable and exact in its analysis of this matter than The Times has been recently on several other issues. It concluded by saying that the legislature should end this ploy, referring to the buyer's premium. I trust that we shall do that, and I hope that no party political controversy will be allowed to inhibit any necessary legislation.
I have been informed by letter that the chairman of the Museums and Galleries Commission—that excellent gentleman Sir Arthur Drew—has written personally in support of my Bill to the Secretary of State for Trade. The museum commissioners are appointed by the Prime Minister to advise government on important matters affecting our public institutions and the private sector that helps them. As the chairman has given that advice, surely it is now the Government's duty to act upon it It would be infinitely preferable if the Government, knowing that they had the blessing of the entire art world and of the House, were to introduce an appropriate Bill that would receive the support of the House to enable it to be processed with some expedition. I hope that the Government will show that due concern and responsibility and pick up my excellent effort to change this matter in legislation.
Question put and agreed to.
Mr. Speaker: Who will prepare and bring in the Bill?
Mr. Faulds: Mr. Jim Callaghan—perhaps I should point out that that is my hon. Friend the Member for Middleton and Prestwich, although I am sure that I have the support of my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan)—Mr. Patrick Cormack, Mr. David Crouch, Mr. Tam Dalyell, Mr. John Garrett, Sir John Langford-Holt, Mr. George Morton, Mr. Stephen Ross, Mr. Neville Sandelson, Mr. A. W. Stallard, and Sir Derek Walker-Smith—a goodly band—and myself.

Buyers' Premium (Abolition)
  BUYERS' PREMIUM (ABOLITION)
  Mr. Andrew Faulds accordingly presented a Bill to abolish the buyers' premium at auctions: And the same was read the First time; and ordered to be read a Second time upon Friday 22 April and to be printed. [Bill 99.]
Orders of the Day
  Energy Bill
  As amended (in the Standing Committee), considered
  Energy Bill
    New Clause 1

      PURCHASES BY ELECTRICITY BOARDS FROM LOCAL AUTHORITIES
      '(1) This section applies to any purchase of electricity by an Electricity Board in accordance with arrangements made in pursuance of—

      (a) section 21(2) of the Control of Pollution Act 1974 (production of heat and electricity from waste, etc.), or

      (b) section 11(2) of the Local Government (Miscellaneous Provisions) Act 1976 (production of heat etc. by local authorities).

      (2) The price at which a purchase to which this section applies is made shall be the same as it would be by virtue of section 7 above if the purchase were made in compliance with a request under section 5 above; and subsections (4) and (5) of section 7 shall apply to a purchase to which this section applies as they apply to a purchase made in compliance with such a request.
      (3) Section 9 above shall apply to a dispute as to—

      (a) the price at which a purchase to which this section applies is to be made, or

      (b) the reasonableness of any payment demanded by an Electricity Board in accordance with section 7(4) above as applied by this section,

      as it applies to disputes within section 9(1)(a) to (e).'.—[Mr. Gray.]
      Brought up, and read the First time.
      3.42 pm
      The Minister of State, Department of Energy (Mr. Hamish Gray): I beg to move, That the clause be read a Second time.
      Section 21(2) of the Control of Pollution Act 1974 and section 11(2) of the Local Authorities (Miscellaneous Provisions) Act 1976 require that electricity generated by local authorities must be used on the authorities' own premises or be sold to an electricity board. The board is obliged to take the electricity, but there are no provisions about the price that it must pay. We discussed the position of local authorities in Committee, as reported in c. 252 of Hansard, and I agreed that provision should be made for local authorities to benefit directly from the prices available to private generators.
      Therefore, I am pleased to introduce this new clause, which proposes that an electricity board should be obliged to purchase the electricity at the price specified in a tariff fixed under clause 7(1) of the Bill. If there is no applicable tariff in force or if, owing to special circumstances, the applicable tariff is not appropriate, the price that the board is obliged to pay for the electricity must be based upon the principles set out in clause 7. Under that clause, a board may recover from the local authority its costs and expenses incurred in taking the supply. The clause also makes provision for disputes involving prices to paid to local authorities similar to that made for prices paid to private generators.
      The clause extends to local authorities the framework for fair prices for electricity paid by a board. It has been welcomed by the Association of County Councils, and I commend it to the House.
      Mr. John Smith: I welcome the new clause, which follows a concession made by the Minister in Committee when the Opposition asked about the position of local authorities in this legislation.
      It seemed to me then, as it does now, that the Government could well have inserted this provision in the Bill at the beginning had the Bill been properly thought out. However, in Committee, when the Bill was subject to searching analysis, several difficulties were revealed, and this afternoon Government amendments will be brought forward to deal with the difficulties exposed in Committee. However, at least this part of the Bill is being put right by the Government, and I should be churlish if I were to oppose it.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 2

      DUTY OF AREA BOARDS TO SUPPLY
      'In section 27 of the Schedule to the Electric Lighting (Clauses) Act 1899 as incorporated with the Electricity Act 1947 (duty to supply premises within fifty yards of a distributing main) after subsection (1) there shall be inserted—
      "(1A) Subsection (1) of this section shall not apply in relation to premises to which a supply of energy is already given, directly from electric lines belonging to the Undertakers, by a private supplier.".'.—[Mr. Gray.]
      Brought up, and read the First time.
      Mr. Gray: I beg to move, That the clause be read a Second time.
      Area boards and Scottish boards are under a duty contained in the schedule to the Electric Lighting (Clauses) Act 1899 to give a supply of electricity to premises within 50 yards of a distributing main upon being required to do so by the owner or occupier. This new clause would relieve a board from that duty in cases where the premises receive a supply of privately generated electricity through the board's transmission and distribution system.
      The clause, which we have tabled at the request of the Electricity Council, removes any doubt about the board's obligations and rights in respect of consumers who, while they are not the board's consumers, remain connected to the board's system. The new clause makes it clear that a consumer who receives a private supply through a board system will be regarded as the customer of the private generator, not of the board Any electricity supplied by the board in those circumstances—for example where consumption exceeded the private generator's output—will be regarded as being provided to the private generator under the Bill, and not to the consumer in accordance with the duty to supply contained in the 1899 schedule. That prevents the board from having to conduct a commercial relationship with both the private generator and his customer, and it overcomes the problem that it would be impossible to meter and to separate, for billing purposes, a private supply and a board supply conveyed through the same line to a private generator's customer. We expect our proposal to lead to a fully workable solution, and I commend the new clause to the House.
      Mr. Arthur Palmer: Those hon. Members who have followed the Bill through Committee will be obliged for the Minister's explanation. I am reassured by the right hon. Gentleman's statement that the new clause is being inserted at the request of the Electricity

      713
      Council. The change could have two effects. One is to relieve the board of any obligation to supply in circumstances where a private consumer takes power from the grid but when, in theory, that power is supplied by a private generator possibly somewhere else in the United Kingdom. The second effect is that in some circumstances it will consolidate the position of private suppliers.
      What will happen if a private customer who is supplied by a private generator—perhaps on the other side of the kingdom, via the national grid which extends everywhere either through the Central Electricity Generating Board network or the secondary network into the area boards—decides that the terms are not as favourable as in the past and wishes therefore to go back to the public supplier? That is a contradiction, which has arisen throughout the passage of the Bill. I hope that that possibility is allowed for. Does it mean that the consumer on this occasion no longer has a right to exercise the power which has been exercised by prospective customers ever since the 1899 Act was introduced? Once having sold his soul to a private generator, will he be able to retrieve the former position of having a statutory right to take a supply from the public network in the ordinary way?
      Mr. Gray: I believe that I can help the hon. Member. I said that the new clause makes it clear that the consumer receiving a private supply through a board system will be regarded as the private generator's customer and not as a customer of the board. Any future negotiation which took place would have to be conducted in the usual way. There is nothing to prevent a change of supply, should the consumer wish it. If at some future date a new negotiation is started, there is no reason why the supplier should not be changed.
      Mr. John Spellar: I thank the Minister of State for his explanation. Like my hon. Friend the Member for Bristol, North-East (Mr. Palmer), I welcome the new clause, but I see a further difficulty with it which again, to a certain extent, underlies the paradoxes of the Bill. What will be the position of a customer if a supplying company goes out of business either because of technical failures—perhaps because of an unsafe plant—or, indeed, on economic grounds? The customer who has taken on the supply would be in a difficult position. While there should not be an undue obligation on the electricity board, the new clause will give pause for thought to potential customers. The new clause underlies the difficulties into which the Bill is heading in terms of our breaking away from the enormous economic and engineering merits of an integrated grid system.
      Mr. Gray: This is the same query in a different guise to that raised by the hon. Member for Bristol, North-East (Mr. Palmer). My answer is the same. What the hon. Member for Birmingham, Northfield (Mr. Spellar) suggests is not unheard of. I can give other examples of where particular supplies cease to be available. New negotiations must take place at that time.
      Mr. John Smith: I, too, see the logic behind the new clause and understand why the Electricity Council wished the Government to include the new clause in the Bill. It would be quite unfair if the electricity boards were under an obligation to continue to supply to a past customer who had elected to obtain his electricity from the private sector.
      714
      In those circumstances, it would be unfair for the electricity board to have a statutory duty to supply. As my hon. Friend the Member for Birmingham, Northfield (Mr. Spellar) pointed out, those who elect to take private sector generated electricity should pause and consider before they do so because, as a result of the new clause, they will lose the statutory right to have electricity supplied to them. That could be an important matter not only for a domestic consumer but perhaps for an important industrial consumer.
      I have my doubts about whether there will be so much difficulty at the end of the day because I do not think that there will be much in the way of privately generated electricity. A great deal of the Bill is a figment of the ideological imagination of the Secretary of State and others who wish to be able to report to the Prime Minister that they have privatised this or privatised that so that they can go a few inches up the privatisation table. None the less, we must take it seriously just in case difficulties arise.
      I hope that all those who are contemplating the change, particularly those who are dependent on electricity for their industrial processes, will pause and consider before they do so, because under the terms of the new clause they will thereby lose the important right which has existed ever since 1899, as part of the Electric Lighting (Clauses) Act. The Minister said something which worried me. He said that if the private sector generating capacity failed to satisfy the customer, the customer could then make another choice. It could be awkward if people popped in and out of the public electricity supply system. If they found that they had been failed by the private sector, the good old public sector would then bail them out. It will have a continuing obligation. If a customer decides that he will have privately generated electricity but then finds that that was a great mistake—he may well find that out—why should the board have to take him back without any penalty? Should he not have to pay the extra cost involved? Should there not be a penalty of some description? Why should he be bailed out by the public sector if he has discovered that his folly in the private sector was not beneficial to him?
      While I do not disapprove of the elementary fairness that lies behind the concept of the new clause—we appreciate the anxiety of the Electricity Council to see the new clause incorporated in the Bill—will the Minister deal with my question about the person who, having suffered at the hands of the private sector, seeks succour from the public sector? Will the public sector have an opportunity to recoup some of the costs involved in taking the customer back on board?
      Mr. Gray: The right hon. Member for Lanarkshire, North (Mr. Smith) has allowed his philosophical prejudices to get the better of him. In the first place, I have absolutely no doubt that anyone deciding to take electricity from a private generator would satisfy himself, during the negotiations which took place at the beginning, that the generator was of substance and was able to give a longterm supply of electricity. No doubt the Electricity Council weighed up all these points before it decided to ask us to include the new clause in the Bill.
      No apology is necessary for the obligation of the state sector to supply should things go wrong. The public sector has an obligation, and if it is to be relieved of that obligation by the introduction of private generation that can only be good for competition. Our general philosophy,

      715
      in contrast to that of the right hon. Member for Lanarkshire, North, is that there should be competition and that, as far as possible, there should be a sharing of electricity supply. Indeed, the more generation that is provided by the private sector, the better.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 3

      AMENDMENTS RELATING TO METERS
      'The enactments mentioned in Schedule (Electricity: amendments relating to meters) to this Act shall have effect subject to the amendments specified in that Schedule.'.—[Mr. John Moore.]
      Brought up, and read the First time.
      4 pm
      The Under-Secretary of State for Energy (Mr. John Moore): I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to take Government amendments Nos. 11, 15, 22, 23, 24, 26 and 27.
      Mr. Moore: In the new clause and schedule and seven consequential amendments, the Government propose three changes concerning meters that I said in Committee would be brought forward.
      First, we are proposing that a meter measuring the supply to a customer of a private supplier, where that supplier uses an electricity board's distribution system and the customer takes the supply directly from the system, shall be certified and subject to the statutory procedure for the determination of disputes about meter accuracy. That change is being proposed at the specific request of the electricity supply industry. It is, naturally, concerned to ensure that where an electricity supply involving three parties—the customer, a board and a private supplier—is being measured the Board should continue to have some reassurance about the accuracy of that measurement. It is also especially important in those circumstances that if any dispute over meter accuracy were to arise an independent determination could be made by one of my Department's meter examiners which would be binding on all three parties. The Government accept that it is reasonable for the electricity supply industry to seek the protection of its interests and those of its consumers in these provisions, and are happy to commend them to the House.
      The second change proposed by the amendments has been urged on the Government by both the meter manufacturers and the electricity supply industry. We are proposing that the Secretary of State should have the power to authorise manufacturers and repairers of meters themselves to certify the meters they produce or repair. Under the present statutes all meters, both new and reconditioned, must be offered for certification by an area electricity board. They are tested by the board and certified by one of my Department's meter examiners on the basis of tests carried out on a sample of meters selected from the batch offered for certification. In its report on the supply and export of electricity supply meters in August 1979, the Monopolies and Mergers Commission commented on the fact that new meters were tested both by manufacturers and area boards before being offered for certification. It
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      criticised that unnecessary duplication of effort. The proposal for self-certification in the amendments will meet the MMC's criticism. It is possible for that change to be made now because of the considerable advances in recent years in the technology of meter design, manufacture and testing.
      As a result, much greater confidence can now be placed in the control of quality during the manufacturing and repairing processes. Self-certification will thus provide a more flexible and efficient system for ensuring meter accuracy without in any way adversely affecting current safeguards for the consumer. Authorisations for self-certification will be subject to stringent conditions laid down by the Secretary of State governing the procedures to be used and regular control audits will be carried out by the Department's meter examiners. As I have said, that change has been requested by both manufacturers and area boards because both will benefit considerably. For example, manufacturers can offer sales of certified meters in crucial export markets and area boards will be relieved of the necessity of testing new meters and will be able better to utilise the capacity of their meter testing stations in improving their throughput of reconditioned meters to cope with the continuing increased demand.
      I should emphasise that self-certification will be introduced gradually. It will obviously take time for manufacturers and boards to set up the necessary procedures and to have them audited and approved. The amendments therefore provide for the existing statutory certification procedures to continue and, even where it proves necessary, to be extended to manufacturers premises. Self-certification and the existing procedure will operate in parallel until such time as there is no longer any demand for certification by meter examiners.
      The third and last change proposed in the amendments concerns the costs involved in determining disputes about meter accuracy. If a consumer considers that his meter is not accurately measuring his supply, his first course of action is to take it up with his electricity board. It applies a number of tests including, in some cases, the installation of a check meter. Should it find that, according to its measurements, the meter is operating within the statutorily permitted limits of accuracy, the consumer is not bound to accept that as final. He can as a last resort exercise his statutory right to have the meter checked by one of my Department's meter examiners. Though such disputes, at between 500 and 600 a year, are relatively few compared with the 20 million meters installed, they are costly to resolve.
      The present statutes provide no specific power for those costs incurred by the meter examiner service to be recovered. Such a power is now proposed. We have also taken the opportunity to examine the most appropriate and equitable way for recovering these costs. We believe that the bulk of them should continue to fall on area boards, but we wish to be able, in appropriate circumstances, to ask others such as a private supplier or a consumer to contribute. We believe that there is a case for seeking at least a small nominal contribution from them towards this service. We are accordingly framing the power in this sense, though details as to how the regulations will be framed have yet to be settled. It is likely that if a nominal contribution were sought from consumers after determination of the dispute, it would be small in relation to the total cost involved and would be waived if the meter was found to be at fault.

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      The changes in the legislation concerning meters that the Government are proposing in the amendments will be beneficial to the electricity supply industry, the meter manufacturer and the electricity consumer. They are essentially non-controversial, and I accordingly commend them to the House.
      Mr. Palmer: When we discussed the clause dealing with meters in Committee, I viewed it not exactly with suspicion but with great care. It appeared to give additional safeguards to the electricity boards. The Minister will remember that I asked how it would affect the working of the almost famous piece of legislation, the Electricity Supply (Meters) Act 1936. That was 11 years before nationalisation. Before that date, metering of electricity supplies was somewhat confused. If a customer had a dispute with the authorised undertaking—whether municipal or a company—he negotiated about the accuracy of the meter. The meter was often sent to the National Physical Laboratory. If it was found to be accurate, the consumer was charged for the cost of testing. The authorised undertaking could tell the consumer that if he did not like the meter he could supply his own, but that if he did not do so it would charge him rent. That is how meter rents came about.
      As I said in Committee, this is a part of the general evolution of the electricity supply industry. Meters are important because from the dawn of civilisation—certainly since we began to live as human beings in ordinary communities—the transmission of value from one individual to another has always been a serious matter for Governments. Hence, we have a coinage that is supposed to retain its value, and weights and measures with legislation governing them. The electricity meter is a means of judging the value of a supply—the transmission of value from one individual or corporate body to another. Accuracy is of tremendous importance. We must remember the amount of electricity that is generated and consumed in Britain every day, because that reinforces the importance of accurate metering.
      The matter was of great importance before 1936. The position was so confused that in 1935 or 1936, despite previous enactments, the then Government introduced special legislation. The system of meter examiners was established. The Minister was good enough to write to me on that point. He gave me the information that there are altogether 23 meter testing examiners.
      Mr. John Moore: Twenty-four.
      Mr. Palmer: I am obliged. There are 24 meter examiners, including the boss meter examiner, who is known as the chief meter examiner for the nation.
      This is a very serious matter. As we all know, in any Member of Parliament's constituency, if a consumer gets a large electricity bill he often decides that the meter is the culprit and that it is not accurate. This kind of thing, with bills increasing and perhaps more and more people unable to pay them, means that the accuracy of meters is being challenged. Therefore, the importance of the office of chief meter examiner to the country cannot be overestimated. He is a most important functionary.
      I am glad that the intention of the Government's proposals is to protect the consumer. The object of the changes, as I understand from the hon. Member for Croydon, Central (Mr. Moore), is to extend the system of
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      meter examiners to private suppliers of energy into the grid under the special circumstances envisaged by the legislation and to do the complicated metering of supplies when the national grid is being used as a common carrier. That can be quite a complicated metering matter. This is all to the good, and we are using a procedure which has been tested since the 1936 Act.
      What I think is more doubtful is the new provision that meter manufacturers are to be entrusted with the statutory obligation to ensure the accuracy of meters; the electricity boards will not alone certify the accuracy of meters but those who make the meters are to do the certification. I suppose that, subject to proper checks, that is a practicable proposition, but it is certainly a break with the past. It may well be argued that manufacturers have less material interest in correcting the inaccuracy of metering, provided it favours the supplier, than the boards, because they are perhaps neutral in this matter.
      The House needs to satisfy itself that the meter examiners will have as much power in relation to the factories of the makers of meters as they have at the moment in relation to the premises of area boards. In future, batches of meters—as the hon. Member for Croydon, Central, said, they are now being batch tested to a great extent—may arrive from the manufacturers and be sent straight out to the consumers for use on the system, with the electricity boards not intervening with an intermediate check.
      In these circumstances, it is important that we should have an assurance that the testing stations—meter makers test meters all the time; they are bound to do so as part of their job—and their testing facilities will be as open to the meter examiners as the meter testing stations of the electricity boards are at present.
      From the point of view of the employees, this is a matter of transferring work in many cases from the boards to the manufacturers. The trade unions have put this point to me, as they no doubt have to others who were members of the Standing Committee. The unions are interested to know whether this will mean a reduction in the meter staff employed by the electricity boards. The hon. Member for Croydon, Central seemed to say that they would be able to deploy their staff resources differently, but, as I say, the transfer of testing to the manufacturers is now to be allowed and batch testing is certainly on the increase.
      Therefore, as the House will appreciate, the unions have a real interest in obtaining some facts on the effect: of this change. Electricity supply metering is a great science, and I have known a few men who have devoted their lives to ensuring the accuracy of meters. They discuss jewels, not in the way that we discuss the crown jewels, but from the point of view of the friction on meter bearings in order to ensure accuracy and—this is a very important: point—to prevent fraud. It is possible, of course, to slow meters by various devices and meters have to be designed to avoid that.
      I apologise for taking the time of the House, but this is fundamentally a very important question. I should be glad to have the observations of the Under-Secretary.
      4.15 pm
      Mr. John Moore: I know the House will not mind if I start by saying that all of us on the Committee benefited throughout, as the House already has tonight, from the remarks of the hon. Member for Bristol, North-East (Mr. Palmer). We learnt a great deal of the electricity industry's

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      history from him in seminars in the Committee, and I do not think that he need apologise for giving us the benefit of his wisdom and information on the subject. I should not encourage hon. Members to read the Committee Hansards in detail because the hon. Gentleman gave one or two examples—vicariously, I trust, as an observer—of what happened in the past with regard to meters, and I certainly would not encourage the general public to read them with any care.
      I should like to take up the points that were made, quite legitimately, by the hon. Gentleman. As far as numbers are concerned, I apologise for intervening from a sedentary position. I thought that the hon. Gentleman was talking about the number of meter testing stations as opposed to examiners. The number of meter examiners in my Department, as opposed to the head man, is 21—not 23 or 24. There are 24 meter testing stations for the area board.
      As far as the involvement of the meter manufacturers is concerned, I should stress again that the decision to allow self-certification was taken at the request not just of the meter manufacturers but of the electricy supply industry. That change was heralded by the 1979 Monopolies and Mergers Commission report. Also, of course, as the hon. Gentleman will know better than most of us, it was taken because of the welcome major technical advances that have taken place in this area.
      There will be no restraint on the meter examiners' access to the manufacturers. They obviously need the same access and relationship as they have with the area testing stations. I certainly give that assurance. It is essential if they are to do their job properly.
      The hon. Gentleman also legitimately raised a point that has been raised at meetings with my right hon. Friend the Minister of State about the implications for jobs. In the last analysis this is a matter for debate between the industry and the unions concerned. However, the hon. Gentleman is right to bring to the attention of the House the legitimate concerns expressed at meetings with my right hon. Friend and at what I gather was a further meeting with the electricity supply industry on the implications involved. Perhaps it would help if I put on record the specific position so that the background is clear.
      There are 24 area board testing stations, including that in Scotland. They employ about 1,200 staff and test about 1·5 million reconditioned meters and 760,000 new meters per year. Although new meters represent a large proportion of the number tested, they account for only 4 to 5 per cent. of the work load, the vast bulk of which relates not to testing but to reconditioning. The reconditioning work will be unimpaired by the change. I gather that as the boards will be released over a period from the task of testing new meters, the stations will be able to increase their output of reconditioned meters. Clearly, the implications of self-certification must be a subject for discussion between the industry and the unions, but I think that the facts that I have given put the matter into better perspective. Certainly we in no way wish to deprive the consumer of the excellence of service in the crucial area of self-certification.
      Mr. John Home Robertson: The Minister referred to the large numbers of meters that are tested. As a docile, law-abiding citizen
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      who simply pays the electricity bill when it arrives, I have always tended to assume that it is right. How many of the meters tested are found to be inaccurate?
      Mr. Moore: My excellent brief contains statistics about those which have already gone through a considerable process of queries. This may give a better idea of the situation. In the 539 disputes determined by Department examinations, 8 per cent. of the meters were found to be faulty. I emphasise that that is 8 per cent. not of all meters but only of those subject to dispute. As there are 20 million meters at large, that shows what a tiny proportion of them are faulty and proves the excellence of manufacture and of the certification process. The number is very small indeed, and so it should be.
      Mr. John Smith: I agree wholeheartedly with the Minister's generous reference to the work of my hon. Friend the Member for Bristol, North-East (Mr. Palmer) in the Standing Committee. For many years, my hon. Friend has been the doyen of electricity supply industry debates. I wish publicly to express the gratitude of the Opposition to him for the great contribution that he has made to this Bill and the close attention that he pays to all electricity matters. I know that his own trade union values that highly. It is a classic example of constructive trade unionism in action—watching the development of legislation on behalf of the crucial trade union with which he is proud to be associated.
      I understand that the Electricity Council has told the trade unions that it does not expect any adverse effects on employment to result from the new arrangement. If the Minister can now assure us that the Government also do not expect there to be any adverse effects on employment, fears about the possible transfer of work may be laid to rest. If the Minister can help on that, considerable progress will be made.
      Mr. Moore: I appreciate the right hon. Gentleman's concern, but I must revert to my remarks about perspective. We are dealing with 24 stations and 1,200 employees. I recognise the importance of all those jobs, but in some areas a significant increase in work load is expected over a period while the expected reduction as a result of the new system will be only 4 to 5 per cent. I am not in the business of trying to manage the industry, and as a Minister I think that I would be wise to stick to the remarks that I made earlier. Clearly the implications of self-certification for staff at area board meter testing stations is a matter for the trade unions and the industry. Nevertheless, I think that I have said enough to show the very minor nature of the change compared with the potential increase in work load.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 4

      STATUTORY CODE OF PRACTICE FOR DISCONNECTIONS
      `1. In this section—

      (a) "the Disconnection Rules" means the regulations specified in subsection (3) of this section;

      (b) "supplier of electricity" means the Electricity Board, local authority or any other person who supplies electricity however generated;

      (c) "domestic premises" means premises used for human habitation;

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      (d) "disconnect" means cut off, discontinue or withhold a supply of electricity and "disconnecting" and "disconnection" shall be construed accordingly.

      (2) Notwithstanding any provision to the contrary, a supplier of electricity shall not disconnect any domestic premises whether under section 21 of the Electric Lighting Act 1882 or section 18 of the Electric Lighting Act 1909 or otherwise on the grounds that the owner or occupier has not paid any sum of money due to him for electricity except in accordance with the Disconnection Rules.
      (3) Within six months of the passing of this Act the Secretary of State shall, after consulting the Electricity Council, the North of Scotland Hydro Electric Board, the South of Scotland Electricity Board, the Electricity Consumers' Council, each area electricity consultative committee, the Scottish Electricity Consultative Council and such other representatives of customers as he shall deem expedient make regulations specifying inter alia—

      (a) the circumstances in which a supplier of electricity

      (i) shall not

      (ii) may

      disconnect any domestic premises;

      (b) the procedures to be followed by a supplier of electricity

      (i) prior to disconnecting a domestic premises

      (ii) after having disconnected a domestic premises to try to recover sums of money owed to him for electricity by a customer whether by instalments or otherwise and to assist that customer to be able to meet the cost of his electricity supply;

      (c) the provision to be made for appeals and arbitration;

      (d) the information to be collected and made public by a supplier of electricity relating to the operation of the Disconnection Rules,

      the purpose of such regulations being the very considerable reduction of the incidence of disconnection of domestic premises and nothing in this section shall limit the content of the Disconnection Rules to achieve that purpose.
      (4) The Disconnection Rules shall come into force nine months after the passing of this Act.'.—[Mr. Eadiej
      Brought up, and read the First time.
      Mr. Alex Eadie: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Paul Dean): With this it will be convenient to take new clause 5—Extending the code of practice to private suppliers—
      '1. (1) In this section "a private supplier" means a person other than an electricity board who supplies electricity generated other than by an electricity board or a local authority.
      (2) Where a private supplier supplies electricity to premises used for human habitation and a debt to the supplier for a supply of electricity to those premises exists he shall not disconnect the supply of electricity or refuse to connect or reconnect such supply without first conforming to the rules laid down in the relevant Code of Practice currently accepted by the Electricity Council as a Code of Practice for Electricity Boards.
      (3) Where a private supplier supplies electricity for any premises used for human habitation, he shall be obliged to provide the Electricity Council with such information as it shall from time to time reasonably request.
      (4) Where the owner or occupier of premises used for human habitation has a debt to a private supplier, then section 18 of the Electric Lighting Act 1909 shall not apply to the area board for the area in which the premises are located insofar as the debt to the private supplier is concerned.'.
      Mr. Eadie: Members who served on the Standing Committee will recall that we debated this matter at that time but did not press it to a Division as we wished to reflect on what the Minister had said. The Government's reply was not entirely unhelpful, but we felt that our arguments required further examination and debate and that the House should have the opportunity to discuss the matter further on Report.
      I am pleased to see that my hon. Friend the Member for West Stirlingshire (Mr. Canavan) is present, as he
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      presented a bill on the right to fuel, and I shall not trespass on the comments that he may wish to make. We had a very good debate on this in Committee. It is clear that the subject of disconnections and the code of practice relating to them is now occupying the minds of many people.
      In dealing with new clauses 4 and 5, it would be churlish of me not to refer to the contribution made by the hon. Member for Bedford (Mr. Skeet) in Committee. As usual, he was able to identify the problem. He said:
      "For the year prior to 30 September 1982, disconnections in England and Wales totalled 97,827. In Scotland there were. 16,525, making a total of 114,352."—[Official Report, Standing Committee G, 15 February !983; c. 489.]
      He identified a problem that the Government and the House cannot ignore. We know that there is a problem, that is why the House must contribute to the discussion of that problem today.
      It has been argued that the problem of disconnections and the code of practice may be exaggerated and that the relationship between the Department of Health and Social Security and the electricity board is good. From my experience as a Minister, I do not deny that the relationship is good, but it is also my experience, and no doubt that of many other hon. Members, that however good the relationship may be it has been known to break down. That being so, we have a responsibility to consider the problem afresh.
      The need to look at the problem afresh may result from the enormous social pressures caused by high unemployment. Indeed, the pressures caused by an official total of 3·5 million unemployed may well be more than the boards and the DHSS can handle. If that is true, it is the Government's duty to study how matters are operating at present and to put forward solutions because they are responsible for the high levels of unemployment.
      4.30 pm
      I know that the argument is advanced that one could alleviate the problem by installing more pre-payment meters. I have never been against pre-payment meters, but the Government would be foolhardy if they thought that their introduction would solve the problem. Some people say that if consumers had a greater freedom to choose prepayment meters the problem would disappear. I am sure that if the Minister looked at his brief he could tell the House of all the problems that might arise from the introduction of pre-payment meters. Criticisms of prepayment meters may have been harsh. When considering such a solution, we must be honest and say that people who have such meters pay more for their electricity. It is often those people who can ill afford to pay more who have to fall back on using them.
      A social problem is presented by pre-payment meters. One used to put sixpence or a shilling in the meter, but now it is about 50p. Some households therefore have a considerable amount of money which in some cases is not well protected. It may cause the family a great deal of worry if there are young children, depending upon the area in which they live. I am not arguing against pre-payment meters. I am arguing against those people who believe that the problem of disconnections can be solved by the panacea of introducing pre-payment meters.
      Mr. Spellar: There is considerable danger to meter collectors in a number of areas, which explains the boards' reluctance to install meters. My hon. Friend is talking

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      about vast sums of money. After he has made a few visits, a meter reader may be carrying several hundreds, if not thousands, of pounds.
      Mr. Eadie: I am grateful to my hon. Friend. He confirms the point that people should not believe that the introduction of pre-payment meters is a panacea for solving the problem of disconnections. My hon. Friend makes a good point. We can all be critical about disconnections. We can feel great emotion and compassion about them. We have all had people whose supply has been disconnected corning to our surgeries.
      My hon. Friend the Member for Bristol, North-East (Mr. Palmer) mentioned in Committee that we must consider the distasteful job we give our employees when we ask them to carry out disconnections. We are asking an employee who may be a trade unionist, as we are, to disconnect a supply. He may feel that he should not disconnect the supply, but he is under instructions from his employer.
      My hon. Friend the Member for Birmingham, Northfield (Mr. Spellar) makes the powerful point that we are talking about the collection of perhaps £50 or L£100 per household. The meter reader has to collect that money. It is not just the household that is at risk by having these comparatively unprotected sums of money in the house; the people who collect the money also run a risk. I must stress that I am not arguing against pre-payment meters; I am saying that they are not the solution to the problem of disconnections, although in some areas they may help more than in others.
      Many pressure groups were quoted in Committee. As the Minister knows, they are sometimes called one-party pressure groups. They are a legitimate part of our democratic procedure. Some of us have been grateful to pressure groups because they have sometimes identified problems that we have been unable to identify or, if we have identified them, by research and diligence the pressure groups have given us information, facts and figures and brought urgent matters to the attention of the House.
      There are many pressure groups. There are those involved with single-parent families, the unemployed or people who have problems. I chose the example of Age Concern because I had been invited to speak at a rally in Westminster hall. I quoted its slogan, which I felt was good, "To be old and cold". It then follows with the question, "for how much longer?" I know that people argue that the supply of few elderly people and pensioners is disconnected. Age Concern concedes that. However, one must accept that some are disconnected. When talking about the elderly, one disconnection is one too many.
      Pensioners and the elderly have a fear of disconnection. The result is that they economise more than they should in providing creature comforts and warmth. Few people understand that the elderly go through the winter with a fear of disconnection. I described it in Committee as "purgatorial misery". The elderly spend the winter in purgatorial misery because of the fear of disconnection.
      The House, the Government and the Opposition have a responsibility to study the problem of disconnections and the statutory code. One can be pretty emotional about this subject. I do not want to be. I want to give the facts. I do not allege that the Minister will be without compassion or
      724
      understanding. I impress upon the Minister that there is a problem which the Government should examine to see whether it is possible to find a solution. I hope that when the Minister replies he will not say that the elderly are protected by the code of practice. If the Government deploy that argument, they must concede that, although the elderly, under the code of practice, may be protected, they are not protected when staying with relatives.
      I wrote an article a fortnight ago on our efficiency in looking after the elderly. It seems to be the conventional wisdom that children or grandchildren do not give a damn for the elderly. That is not true. When one considers the percentage of the elderly in sheltered housing or old people's homes, it becomes clear that the vast majority are looked after by their children, their grandchildren or other relatives. It is not true to say that people are passing the buck to the Government and the state. That is a gross slander on the children, the grandchildren and other relatives of the elderly. The percentage of elderly people in state care is only 2·5. The Government must concede that the majority of old folk are looked after by relatives. That is not an assertion; it is a fact. Why are we not giving attention to the fact that elderly people living with relatives are not protected under the code of practice? The matter requires urgent examination.
      I have given an example to show how the system does not work entirely as we think it should work. I believe that the Minister gave in Committee—his remarks can be found in col. 497—a very understanding reply. However, anomalies arise from disconnections that show that something is wrong. Too much authority is given to the boards. I have recounted the story of a young girl, not a constituent of mine, who took a private rented flat. On the day she took the flat, she asked the electricity authorities to read the meter. Three days later, without checking, the electricity board broke into her home. When the girl came home, she found that the flat had been broken into. As she did not know who was responsible, she sent for the police. The police were able to inform her that the electricity authority had broken in, on the basis that the previous tenant owed money to the board. It was three days before the electricity supply was restored and four weeks before the damage to the door of the flat was repaired.
      That incident raises interesting possibilities. It is relevant to the new clause. I believe that the police, when they were aware of what had happened, should have charged the electricity board with illegal entry and with breaking into the flat. In his reply, the Minister agreed. I recognise that the Minister has asked me to give him details of the case. I am not able, on grounds of confidentiality, to do so. I can assure him, however, that the case is authentic.
      The chief constable was contacted several weeks ago on the basis that the electricity board should have been prosecuted. Nothing has been heard from the chief constable since then. If, as the Minister explained, it is laid down clearly that the electricity board can be prosecuted, I am puzzled why it has taken the chief constable so long to reply and to say what action is being taken. It is important for hon. Members to examine the powers of electricity boards.
      4.45 pm
      It is possible to produce many statistics when examining the consequences of disconnections. All hon. Members could give facts and figures to show the

      725
      magnitude of the problem. The seriousness of the problem has been illustrated by the Electricity Consumers' Council. The same evidence emerges from figures produced by the Office of Population Censuses and Surveys. In mild winters, there are on average 60,000 more deaths than in summer. In very cold winters, there are on average 300 more deaths daily, increasing the figure to 90,000. There is also a 50 per cent. or more increase in infant deaths in winter compared to summer. Such increases are not found in Sweden or other European countries that have efficient heating of houses and better nutrition. On a percentage basis, there is less central heating in houses occupied by the elderly. The fact that the elderly are more likely not to have centrally heated homes needs to he examined.
      I do not know the figures of deaths from hypothermia. I recall, however, the moving television interview with Dr. Geoffrey Taylor, who knew that he was dying when he gave the interview and who has since died. He had worked with the problem of heating and warmth for the elderly all his life. He gave figures of the numbers of elderly people who were likely to die in the winter due to the cold. I have never seen the figures that he gave in any publication. He argued that in a severe winter 15,000 elderly people would probably die due to inadequate heating in their homes. He stated that 10,000 elderly people would probably die in a mild winter. I do not know whether those figures are authentic, but elderly people certainly die in the winter because of inadequate heating.
      The Government have a responsibility to examine the statements that have been made and the figures that have been presented by reputable pressure groups, which are able by their own research—much of it is voluntary and is no worse for being so—to identify the tremendous problems that are created not only because of lack of adequate heating in the home but because of disconnection. The code of practice needs to be examined.
      New clause 5 is relevant to what I have said about new clause 4. I hope the Government are not going to go mad with privatisation. The private generator of electricity will not have to undertake all the statutory functions and practices that a public owned industry must statutorily undertake. Parliament has a responsibility to ensure that the private generator does not escape his responsibilities. The ideology of private generation must not be treated any differently whether one is considering disconnection, the statutory code or whatever. The Government have a responsibility to ensure that private generators are governed in the same way as the publicly owned industry.
      My hon. Friends and I feel strongly about this matter. The Government as well as the Opposition have had time for reflection. The Government have a responsibility to tell the House, on reflection, how they feel about the code of practice and disconnections.
      The hon. Member for Bedford advocated the introduction of mandatory codes and rules. He had a good point. He drew an analogy with what happened in other countries, especially the United States of America. His contribution masked the fact that the existing practice of disconnection and the code of practice are outdated. The Government have spent a great deal of time on this 36-clause Bill, and are entitled to write into it the modernisation of practices that would mean so much to many people. They may even be able to stop the
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      purgatorial misery that the elderly go through year after year and some of the misery that the unemployed are suffering.
      The Government have a responsibility to introduce a change and the Opposition will listen carefully to what the Minister has to say in reply.
      Mr. T. H. H. Skeet: I moved new clause 4 in Committee. I had the support of the hon. Member for Midlothian (Mr. Eadie). New clause 4 is being moved by him on Report and I support him. The right hon. Member for Lanarkshire, North (Mr. Smith), speaking on new clause 2, mentioned what a great privilege it was to be within 50 yards of a distribution main. If one is within 50 yards of such a main, an electricity board is obliged to connect one's premises to the main system of supply. Many people may overlook the fact that a monopoly has power to charge what it likes. The charges of the local electricity board for connection to the electricity supply system may well be exorbitant. A public body with monopolistic powers will not necessarily give justice to the people. The boards have power to cut people off at will for non-payment. There may be cases where a reasonable man when examining the circumstances would say that the suppliers should not have acted as they did.
      New clause 4 is simple in structure. The electricity boards should not have power to disconnect where a sum may be due except in accordance with the disconnection rules that have been laid down in regulations. There is a code of practice that should be implemented throughout the United Kingdom but, unhappily, many electricity boards have diverse ways of examining this matter. Some boards may be humane but others may be comparitively ruthless. Some may say that their responsibility is to ensure that the money comes in and that they are not particularly concerned with some of the welfare principles that should be observed.
      In 1976, the Commons Select Committee on Nationalised Industries reported:
      "the hardships of disconnection are such that if the incidence cannot be very considerably reduced we believe that the powers of the electricity and gas authorities may need to be circumscribed."
      That was fairly realistic. The Select Committee had received evidence and adjudged the issue. Hon. Members may have contacted the managers of their local electricity board asking, for instance, that a pensioner, someone who is ill, or someone who may be in personal difficulties should have an extended period of time in which to pay. I have recommended that, when a considerable sum of money was outstanding, there should be no disconnection and the outstanding sum should be written off. I am grateful for some of the facts that have been given to me: by the Right to Fuel campaign. It states that there are examples of the working of the voluntary code that are unsatisfactory. The code says that any repayment arrangement will take into account the consumer's circumstances and income.
      I want the House to consider the case of a married couple aged 71 with a total income of £51 a week. The electricity arrears were £18 and the current bill was £36, making a total outstanding of £54. The couple were putting aside £3 a week for electricity. The Eastern electricity board—which is my board—wanted £10 a week to ensure that the debt would be rapidly cleared. The couple spend, additionally £10 a week on coal. In total £23 a week was spent on fuel. Is it in accordance with the code that the

      727
      couple should be spending almost 50 per cent. of their income on fuel? The voluntary code of practice is not enforceable in the courts and the Minister would doubtless say that the code has been breached. I agree that in the private enterprise system there should be many voluntary codes of practice.
      However, I wonder whether statutory boards with monopolistic powers should exert such authority and power when dealing with two old age pensioners aged 71 who spend 50 per cent. of their income on fuel. Is it easy to say that I have cited only one case out of many, and that I should be fair to the various boards in the United Kingdom? However, the code states that the board shall install a prepayment meter when it is safe and practical to do so. I supported the Minister in incorporating the day schedule into the Bill. I must tell him that a lady ordered a slot meter, which was installed on 30 June 1982. It was calibrated at 12p per unit, because it was alleged that the previous bill had not been paid. However, the bill was received on 28 June 1982 and was paid immediately by Giro. The electricity board was informed and it said that the meter would be changed. However, 11 days later the lady was still paying 12p per unit, instead of 6p, because of the board's error. Of course, that is just another case out of many, but misery was endured by someone who could not fight the almighty body of a state corporation with its monopolistic powers.
      5 pm
      One family was disconnected six days after the fuel bill had been paid. The Yorkshire electricity board disconnected a single-parent family with one child on 3 December 1981, although the mother had paid the bill on 27 November 1981. The board refused to waive the £7·50 re-connection charge, stating that because of computerised accounting it was impossible to check whether payment was still outstanding before disconnection. We may have electronics and all the modern office equipment at our disposal, but what a tyranny they exercise over the homes and hamlets of our country if an electricity board is prepared to say that, unfortunately, the system has let it down and that that poor woman must pay, although she cannot afford to do so.
      If implemented, the code of practice would mean that someone should contact the DHSS in a case of genuine hardship. I make a plea on behalf of the blind, the sick, the disabled, those with young children, single-parent families, the unemployed, pensioners and all those facing genuine hardship. As a statutory body is involved, there should be some check on it. Is it not time that my right hon. Friend laid down a mandatory code of practice? I am sure that he would be prepared to accept, or think about, something along those lines. Those people want and require protection. If the electricity boards will not provide it, this House must do so. If the Minister prepared a statutory code, we would pass it. It would be standardised for all boards and there would be no discrepancies. If the boards administered it badly, the High Court could straighten things out on proceedings laid before it.
      There is a mandatory code in the United States of America, and that country is much bigger that the United Kingdom and has many private operators. However, it was thought to be a good idea to have a mandatory code to standardise procedures. I moved this new clause in
      728
      Committee and had thought that there would be some response from the Government, but, they were adamant that nothing could be done. The Opposition have now put the case forward and the Minister has had time to consider whether something could be done. I hope that he will listen carefully to the observations that are made and that he will take some of the advice of his Department. He should consider the humanitarian factors. It is people who count, not systems. Some people cannot afford to pay their bills. It is they who should be helped and not those who have millions of pounds and can afford to pay.
      Mr. Arthur Lewis: I pay a sincere tribute to the hon. Member for Bedford (Mr. Skeet) for his work and effort. Does the hon. Gentleman recall that for many years Governments of either party said that it was impossible to do away with the standing charge or to make reductions in it? However, due to pressure from those such as the hon. Member for Bedford, some improvement was eventually made. Therefore, if the will is there and if the Minister tells his higher paid civil servants—who are, by the way, all right—that they must get something done or else, something can be done.
      Mr. Skeet: I pay tribute to the Government, who are doing something about the standing charge for those who cannot afford to pay. The Secretary of State has done some extremely good work. However, we are discussing disconnections. If I provide services, I will charge a fee. If I am not paid, I will take the person involved to court. I shall hope to receive eventual payment, but I cannot put him in prison. However, those who supply electricity do not bother to take people to court—they just cut them off. Although a man may have four or five children, the board will see that they all use candles. The local office of the DHSS may then have to act to collect money on behalf of the electricity board.
      I say with some feeling that state bodies with monopolistic powers are accountable to the House and we should have some say, through the Minister, to ensure that the mandatory regulations that are laid down are appropriate.
      Mr. Gray: I have listened carefully to the debate, for which we had a rehearsal in Committee. I immediately acknowledge the points made by the hon. Member for Midlothian (Mr. Eadie) and particularly the case that he instanced. I fully accept his reasons for being unable to give me the details but unfortunately I can do nothing about it, because I do not know the person involved. The hon. Gentleman said that the person is not his constituent, so I cannot take the matter any further. However, if the hon. Gentleman can persuade the Member of Parliament who represents that individual to write to me, I shall certainly take up the matter with the area board concerned. The details that the hon. Gentleman gave the House cause all of us great concern. If the hon. Gentleman makes the necessary moves, I shall certainly pursue the matter further.
      My hon. Friend the Member for Bedford (Mr. Skeet) also gave a number of examples of cases where area boards appear to have been at fault. Again, if my hon. Friend will give me particulars of the cases, I assure him that the area boards concerned will be called to account.
      It is well understood by the House, and accepted generally, that electricity boards need the ultimate sanction of disconnection. They have a statutory

      729
      obligation to provide a supply of electricity. They cannot refuse a customer, no matter what doubts they may have about his creditworthiness. The majority of people pay on time. Less than half of 1 per cent. of nearly 20 million domestic consumers are disconnected annually. That relatively small number is a measure of the supply industry's concern to use disconnection only as a last resort to avoid as far as possible the hardship that it causes. It is a measure also of the effectiveness of the industry's code of practice, which governs the way in which it uses its disconnection powers.
      Much has been said today about the code of practice, and its operation in some circumstances has been criticised by hon. Members. Whatever the number of disconnections, I accept that it would be best if they could be avoided, and the considerable reduction sought by those who have moved the new clauses is a worthy objective. However, I very much doubt their ability to achieve that objective by the method proposed in the new clause.
      The purpose of the industry's code of practice was not to eliminate disconnections entirely. That is an unattainable objective. There will always be a hard core of bad payers among any group of consumers. The code is intended to help those who might suffer real hardship to avoid disconnection. It specifies those categories considered to be most at risk, such as the elderly, families with young children, the blind, sick and disabled, and people receiving supplementary or unemployment benefit. People in those categories are either protected directly—for example, pensioner households are not disconnected during the winter months—or referred to welfare agencies, which may be able to help them. Electricity boards liaise closely with the Department of Health and Social Security and the social services departments of local authorities to ensure that cases where hardship may arise receive all the help to which they may be entitled. They also hold back from disconnection while the welfare agencies pursue their inquiries.
      However, the boards and their staffs cannot reasonably be expected to act on their own judgments about the hardship that is likely to arise from particular consumers from disconnection. Of course they do their best, but as the code of practice points out, they do not seek to pry into their consumers' affairs. It would be rightly resented if they attempted to do so.
      When the code was independently reviewed by the Policy Studies Institute in 1981 one of its main findings was that a high proportion of those disconnected were among the potential hardship categories that it was designed to help. That was a valid criticism, and it was taken to heart by the industry. Essentially, it represented a communication failure. The code's message was not reaching the consumers that it was particularly aimed at. The industry is now contacting directly all consumers who are threatened with disconnection, offering them a specific repayment arrangement to help them to clear their debts. Where it is safe and practical, the industry will provide a slot meter.
      5.15 pm
      The hon. Member for Midlothian said quite a lot about pre-payment meters. He was sceptical about their advantages. Moreover, he illustrated some of the hardships that can arise from their use. I remind him that the Electricity Consumer Council has pressed for some
      730
      considerable time for boards to make greater use of prepayment meters. That was also recommended by the Policy Studies Institute in its independent review of the industry's code of practice.
      I believe that these measures are having beneficial effects, although it is too early to make a firm judgment. The downward trend in disconnections—they have fallen by nearly 25 per cent. over the past two years—appears to have increased. Moreover, the number of pre-payment meters installed has risen dramatically, by more than 40,000 in 1982. These changes to the code of practice are the latest in a series of improvements made over the years since the code was introduced in 1976. They reflect a growing awareness, not only of the potential hardship arising from disconnection, but of the difficulty for the industry in reconciling its genuine wish to avoid such hardship with its duty in the interests of all its consumers to ensure that bills are paid on time.
      That is the crux of the industry's problem, and the proposals in the new clauses to convert the code into statutory rules provide no real answer. Indeed, in many ways, they would add to the industry's difficulties without further helping those consumers whom the code is designed to protect.
      Mr. Skeet: Could my hon. Friend give me the figures for bad debts in the industry? What percentage are they of the total takings?
      Mr. Gray: I cannot give my hon. Friend those figures now, but I shall do my utmost to let him have them in due course.
      In some ways, the proposals in the new clauses would be a backward step. The original 1976 code was much criticised as being too formal and inflexible a document, written in language that was difficult for those it was designed to help to understand. The successive revisions have improved and greatly simplified the code's language and clarified and extended the groups that it is intended to help. As the report demonstrated, effective communication is essential if the code is to operate successfully, and to that extent statutory rules which would have to be written in formal unambiguous language would be a retrograde step.
      Beyond that, the code gives the boards' staffs considerable discretion in considering the circumstances of each case. No doubt it would be simple enough to prescribe in statutory rules which categories of consumers were to be assisted by the code. However, it would be exceedingly difficult to set out precisely how they were to be treated so as to cover all conceivable circumstances that might arise. In other words, such rules would make for a less flexible approach by the industry's staffs. They would find it difficult to apply the maximum individual sympathetic consideration to each case, according to the circumstances, particularly if the rules did not fit the circumstances.
      I told the Committee that I would reiterate most strongly in the House Ministers' concern about the problem of disconnections. The revised code of practice is being monitored by the Electricity Consumer Council, which will report later this year.
      We shall wish to consider carefully with the industry the results of the report. The whole question of disconnections and the effectiveness of the code will thus continue to be under scrutiny. If further action is warranted

      731
      it will certainly be taken. I believe that the recently revised code should be given an opportunity to prove itself before further steps such as legislation are contemplated. The practical effects of the new clauses would be unhelpful to those in whose interests they are tabled and I ask the House to reject them.
      Before I finish, I want to say a final word about the cases that have been referred to by my hon. Friend the Member for Bedford and the hon. Member for Midlothian. It is most distressing that such cases should be quoted and I am anxious to see that, where such practices have occurred, they should be rectified. I am sure that they are rare and that the general work of the boards is efficient. Those who work for them carry out a difficult job with a high degree of sensitivity. It would be wrong that the impression that we are dissatisfied with the way in which they handle their duties should go out from the House because that is simply not so. They have a difficult job to do and they do it well. However, where cases of unsympathetic and insensitive action by the boards do arise, I hope that I shall be made aware of them so that we can take them up with the boards and try to ensure that they are as infrequent as possible.
      Dr. J. Dickson Mabon: We have just listened to a mixture of ministerial compassion and an excellent Civil Service brief. No one can deny that over the years there has been progress as both sides have struggled to try to deal with the problem of disconnection. The Minister did not really refer to new clause 5 on private suppliers, who, after all, are the essence of parts of the Bill inasmuch as they are being introduced into the system. I have no doubt that, with the permission of the House, he could supplement his speech and say how he would deal with private suppliers but that he would refuse to introduce new clause 5 or any statutory mechanism to deal with private suppliers, just as he has refused to do in relation to public suppliers.
      That curious mixture does not answer the basic complaint that many innocent, poor people are suddenly faced with disconnection. They may be not sinful or wicked, but so alone in life that they are helpless. The Minister contradicts himself when he says that, on the one hand, we must not pry into an individual's affairs and, on the other, that the boards will contact each individual, although I understand that that is post hoc—after the event. That is not good enough because it is the event to which we are objecting.
      It is true that many people would exploit their fellow consumers by not paying their debts if there were no provision for disconnection. The intervention of the hon. Member for Bedford (Mr. Skeet) was pertinent. How much do such people represent in bad debts? I imagine that the figure is infinitesimal compared with the bills that are regularly paid by well-meaning, honest customers. Therefore, there is no economic argument that somehow or other the boards will be embarrassed by not disconnecting such people and seeing the exploitation of their supplies by a small number of individuals. The Minister has given the number and he boasts, rightly, that under the new system it has been reduced by 25 per cent.
      The hon. Member for Bedford was the first to table new clause 4 in Committee, and all honour to him for having done so, although he has not attached his name to new
      732
      clause 5. However, they both stand together. The Minister has not answered the hon. Gentleman's plea today. We know the origin of new clause 4. It was put forward by a perfectly respectable organisation and those hon. Members who supported it in Committee and here today have rehearsed its objectives. With respect to the Minister, who is a very able man, I have not heard, either in Committee or today, any real rebuttal of the essentially good part of new clause 4. Subsection (3)(a) says that regulations shall specify
      "the circumstances in which a supplier of electricity

      (i) shall not

      (ii) may

      disconnect any domestic premises."
      Why should not there be such a provision? Subsections (3)(b)and (3)(c) are impeccable. In reciting what he had to say, the Minister was repeating the essence of subsection (3)(b)(i) and (ii)—that the boards will take steps
      "to try to recover sums of money owed to him … by instalments or otherwise and to assist that customer to be able to meet the cost of his electricity supply".
      In other words, the Minister is accepting subsection (3)(b) (i) and (ii), and I assume that he would not object to subsection (3)(c). Why then does he resent putting subsection (3)(a) into the statute? Subsection (3)(a) is not saying that in no circumstances will there be disconnection, although, frankly, I would go along with that. I accept that there are those who would abuse the system, but they would be few compared with the harm done to so many relatively innocent people. That is a price worth paying. However, new clause 4 does not say that. All that the new clause is saying is that the reasons for disconnection should be spelt out.
      The Minister works hard but his officials cannot see how to make regulations which, inter alia, specify the provisions of subsection (3)(a)(i) and (ii). That is the essence of the Government's refusal to accept the new clause. I am sure that were the Minister to be advised that that was possible, he could be convinced that was desirable and adopt it. However, the Government have been convinced by the civil servants that it is not possible, although I cannot understand why. It is not an affront to the electricity boards or to the private suppliers that such regulations should exist. I cannot think of any other public utility the withdrawal of whose service has more disastrous consequences than the electricity supply. Water is not shut off if people do not pay their water rates, nor are they denied access to the sewerage system. That would be nonsense. Why should there be this somewhat primitive power—reminiscent of older days and different circumstances—to shut off somebody's electricity supply because he has not paid for it? As I say, we are talking of a tiny minority.
      The Government have failed, as previous Governments have, to grasp the nettle and to have such regulations. As I said, I would go further and bar the boards from disconnecting the electricity supply in any circumstances. I willingly concede that one would have to take other measures to recover the money owed by those abusing the system, but that is the other side of the coin. I would go along with the unpleasantness of that, but not with the unpleasantness of disconnection. The Minister has conceded that—any compassionate Minister would—by asking to be told of any cases of persons being unfairly treated or shamelessly disregarded by society. Of course, the Minister and the boards will intervene, but many such people are not known to Members of Parliament or to the

      733
      boards. The essence of new clauses 4 and 5 is to deprive electricity boards in any circumstances of the power to disconnect unless the circumstances under which they can do so are prescribed by regulation.
      Unless the Minister accepts the new clauses, we shall have to vote on them and hope that we can carry them. Let us hope that we carry the new clauses. If not, we have the Minister at his word. He will ask us to let the new code of practice be monitored. At some stage later today he will tell us what has happened. In the last analysis, some Minister at some time will have to put this reasonable request into statute.
      5.30 pm
      Mr. Dennis Canavan: My hon. Friend the Member for Midlothian (Mr. Eadie) referred to the private Member's Bill that I was given leave to introduce on 26 January. The People's Right to Fuel Bill is now published and available to hon. Members in the Vote Office, and is due for a Second Reading on 22 April. If my Bill were on the statute book there would be no need for new clauses 4 and 5 because it would prohibit disconnections unless there were a court order, and would ensure that there was a statutory code of practice and help to eliminate one of the root causes of disconnections—fuel poverty.
      I detected some complacency in what the Minister said. I do not know whether he deliberately under-estimated the magnitude of the problem. My hon. Friend the Member for Midlothian gave the statistic showing that in the 12 months ending September 1982, the latest period for which we have up-to-date statistics, nearly 100,000 households were disconnected. That is a disgrace. For any hon. Member to come to the Dispatch Box and say, "Everything in the garden is rosy. We have a code of practice as it is, it must be working fairly well but we shall monitor it", and so on, is not good enough, and neither is the total of nearly 100,000 homes disconnected in 12 months.
      We must not forget that 100,000 households affects several hundred thousand people because within these homes sometimes there are several people, and some of these people are the most deserving cases, people who should never be cut off in any circumstances, and categories of people specifically mentioned in the existing code of practice.
      The Policy Studies Institute recently estimated that 90 per cent. of the people who suffer disconnections fall into the categories specifically mentioned in the existing code of practice. These include, people receiving supplementary benefit or unemployment benefit, old age pensioners, people who are blind, severely sick or disabled, families with children under the age of 11 and families receiving family income supplement. If 90 per cent. of the disconnections involve such people, that shows that the code is not working and there should be no complacency in the Minister's speech. What is required is the implementation of a statutory code rather than a merely voluntary code which may be of some use, but which is inadequate.
      The Minister asked us to give him some cases. I do not want to name names on the Floor of the House because it is embarrassing for constituents and others whose cases have been referred to me, and whose supplies have been disconnected. Not all that long ago I had a constituent, a single parent with a baby—a category specifically
      734
      mentioned in the code of practice—who was out of the house when the electricity board employees called to disconnect the supply. She got back to the house and found herself with no electricity supply, and therefore no electric lighting, heating or cooking facilities.
      I managed to get the supply reconnected that afternoon through my intervention, because my constituent came to me, but people should not have to come to their Members of Parliament to get their supplies reconnected. The supply should not have been disconnected in the first place. Had there been a statutory code of practice in that case, the young woman would not have had her electricity supply disconnected.
      Another case concerned a landlord with four subtenants operating pre-payment meters for their electricity supply. This case was documented by Strathclyde regional council. In this instance, a bill of £770 had accrued., but it was the landlord's bill, not a bill for the tenants. The supply was disconnected, in clear breach of the code, leaving three pensioners and a student without lighting or electricity. This case had a very tragic ending because one pensioner died before the supply could be reconnected on the Tuesday following the disconnection on the preceding Friday, when the attention of the South of Scotland electricity board was drawn to the fact that the house should not have been disconnected under the terms of the code of practice because the debt had been incurred not by those suffering the disconnection, but by the landlord.
      The present voluntary code of practice is grossly inadequate and therefore these deserving cases require statutory protection. Under the terms of my Bill, there will be no disconnection without a court order. These new clauses do not go as far as that but they suggest rules for disconnection. I ask the Minister to give serious consideration to this.
      As the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) pointed out, one does not hear of anybody having their water supply cut off because of debt. Whoever heard of somebody being evicted from their house without a court order? If somebody is behind with their rent payments it is not open to a landlord, whether in the public or private sector, to say, "Out you go; you are in debt to me and you and your family must go out on the street." Landlords have to get a court order for an eviction.
      Particularly in dead of winter, an adequate fuel supply can be just as important as a roof over one's head and that is why a statutory form of protection is required.
      Mr. Arthur Lewis: I want to help my hon. Friend by telling him of a case about which I read over the weekend. It concerned a self-confessed millionaire tax dodger who had exiled himself but who came back when he owed £500,000 in tax. He should not have been here under the rules of the Inland Revenue. The Inland Revenue knew that he was here but did not take any action against him. It could and should have taken immediate action against him, but he was not an old-age pensioner or sick or disabled, but a deliberate tax evader. There are dozens of such people but we do not hear of actions against them.
      Mr. Canavan: My hon. Friend is right. Some of the biggest debtors and crooks, people cheating the Inland Revenue and other Government Departments out of money, seem to get off scot-free. However, Conservative Members seem to be obsessed with hounding and

      735
      harassing the small debtors, many of whom fall into debt through no fault of their own but because of unemployment in the family, or sickness or poverty of one kind or another.
      The Minister rightly referred to the liaison that is proposed in the existing code, and it is fair that we reply to that point. However, liaison seems to be inadequate because sometimes it does not take place, and sometimes even though it takes place, the people are still disconnected.
      Under my Bill I propose a scheme. If the House passes these new clauses, as I hope it will, when the Minister comes to publish the regulations proposed in the amendment I hope that he will include within them statutory liaison so that it will be mandatory on the part of the electricity boards to inform the DHSS and the appropriate social work authority, or the social services authority as it is called south of the border, to ascertain whether the people threatened with disconnection fall into any of the categories mentioned in the code: in other words, as my Bill says, to ascertain
      "(1) whether the consumer is receiving—

      (a) Supplementary Benefit or

      (b) Family Income Supplement or

      (c) Unemployment Benefit; and

      (2) whether the consumer is—

      (a) blind or

      (b) severely sick or

      (c) disabled; and

      (3) whether all the people residing in the house to which the supply refers are old pensioners; and
      (4) whether there are any children under the age of 11 years residing in the house to which the supply refers."
      The Minister seemed to imply in his earlier remarks that such action might mean undue interference, or even prying, into the private affairs of consumers. However, what is even worse and what is an intrusion into the private affairs of the consumer is that when cutting off the supply, some of the electricity boards seem to adopt a particularly draconian attitude. The South of Scotland electricity board seems to be worse that the average electricity board in the rest of the United Kingdom. It is an intrusion into people's privacy when the electricity board cuts off their electricity supply, sometimes even entering the house to cut off the supply without the express permission of the tenant or consumer. That is an unwanted intrusion into the privacy and liberty of the individual. I hope that the Minister will take that point on board.
      Mr. James Hamilton: This is an important point. Motherwell district council has written to my right hon. Friend the Member for Lanarkshire, North (Mr. Smith), my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) and myself about the South of Scotland electricity board breaking into people's houses. The local authority has to pay for the repairs to doors and so on, which is disgraceful.
      Mr. Canavan: I am glad that my hon. Friend intervened with that point. That should not be allowed to continue. I know that my hon. Friend looks after his constituents very well. However, it should not be left to individual Members of Parliament to make representations on behalf of individual constituents to the appropriate authorities.
      Ministers should lean on nationalised, publicly owned industries, which should listen to what the Ministers are
      736
      saying. They are supposed to be accountable to Ministers and Parliament. I hope, therefore, that the Minister of State and the Secretary of State, who, unfortunately, is not here, will lean on the electricity boards and tell them that enough is enough and that until we get a statutory code of practice, they should lay off some of the bully-boy tactics to which they are resorting.
      Mr. Bob Cryer: Does my hon. friend accept that the Government lean on the public sector industries only by forcing them to increase their charges? It was announced in January 1980 that the fuel supply industries would have to increase their charges. The Government are probably not averse to bully-boy tactics by the publicly owned industries as it brings such industries into disrepute. What we need is more of a service mentality from both the Government and the publicly owned industries.
      Mr. Canavan: My hon. Friend is absolutely correct. It seems that the only way in which the Government are willing to intervene in the running of the nationalised industries is to cut public investment in nationalised industries and also to tell them to put up their prices, which hurts the consumer and is one of the principal reasons why we are debating the tragic issue of disconnections. Many disconnections would not take place if the price of domestic fuel were a bit more reasonable.
      One of the root causes of disconnections is fuel poverty. The new clauses that we are discussing do not deal directly with that, but it is worth saying in passing that the additional heating allowance that is given to some, but not all, recipients of supplementary benefit amounts to the handsome sum of £1·90 per week. What can one do with £1·90 per week? One could not even buy half a bag of coal. It would not go far towards meeting the average electricity or gas bill for the average household. I hope that in the longer term the Department of Energy and the Department of Health and Social Security will get together and take up my suggestion of a more realistic fuel allowance, especially for the families and other consumers who are most in need.
      5.45 pm
      I shall make a brief reference to new clause 5. The ethos behind the Bill seems to be further privatisation or to give to people in the private sector the opportunity to generate and supply electricity. If that comes about to any degree—I hope that it does not, and I support those in the House and outside who will try to stop the mad, obsessive privatisation policy of the Government—and the domestic consumer is dependent upon the private supply, I hope that the Minister will extend the existing code of practice to the private supplier. It would be even better to implement a statutory code of practice here and now by accepting new clause 4, and to accept new clause 5, which extends that statutory code of practice to people who, unfortunately, may be completely dependent on a private supplier.
      Despite what I said about some people in the public sector, notably the draconian attitude of the South of Scotland electricity board, I have no doubt that if electricity generation and supply were completely privatised and the average domestic consumer were completely at the mercy of a private racketeer who wanted to make a fast buck without thinking of the social consequences, the number of disconnections would be several hundred thousand a year and not just 100,000 a year.

      737
      The Minister has a nice smile on his face. I should like to give him a complimentary copy of my People's Right to Fuel Bill. I remind him that it is due to have a Second Reading on 22 April. I hope that the Government will make a helpful response and say either that they will provide time for the Second Reading debate on my Bill by giving it Government support or that the Bill is so well drafted and good in principle that it does not even need a Second Reading debate. I hope that on 22 April, instead of the Government Whip shouting, "Object," it will receive an unopposed Second Reading and go straight to Committee.
      In the meantime, I urge the House to support my hon. Friends who have tabled new clauses 4 and 5, because they will go some way towards solving the problem, which will be more comprehensively dealt with in my private Member's Bill.
      Mr. Palmer: As I spoke at great length on other clauses, I do not propose to add much more than has been said already from both sides of the House in support of the new clause. When the Bill was in Committee, I claimed to be the only member of the Committee who had disconnected the supply of a consumer. It was a long time ago. The circumstances were somewhat bizarre, to say the least.
      We have all had the experience in our constituencies of some terribly hard cases, such as when the supply to elderly people or single-parent families is cut off, which is the last straw. Therefore, I endorse what has been said from both sides of the House, particularly by my right hon. Friend the Member for Lanarkshire, North (Mr. Smith), in support of the new clause. My reason for mentioning in Committee that there was an employee point of view on this matter was that it is an extraordinarily unpleasant task for electricity employees to enforce disconnections.
      My argument for new clause 4 is somewhat different from other arguments which have already been deployed, although I endorse them. I do not know whether there is some special harshness about the Scottish character that means that the electricity boards there act in a draconian way. I take cases to the South-West electricity board in Bristol, and I applaud the humanity with which it deals with them. Things may be different in Scotland.
      Electricity boards are business undertakings and it is difficult for them, with the best will in the world and the assistance of a statutory code, to act as welfare organisations. The boards and their employees would be assisted by a definite statutory code. They would then know where they stood. It is not the chairmen, but the employees of electricity boards who must carry out the unpleasant task of disconnection and they would be able to quote the authority of the House in support of their action. There is, therefore, a strong case for a statutory code from the boards' point of view. That point has not been made.
      Mr. Arthur Lewis: I had not intended to speak until I heard the speeches of the hon. Member for Bedford (Mr. Skeet) and the right hon. Member for Greenock and Port Glasgow (Dr. Mabon). Although I support the statutory approach, I wonder whether it is all worth while. The right hon. Member for Greenock and Port Glasgow was right when he said that we must consider the cost of all the paper, printing, advisory pamphlets and the rest. There must be an infinitesimal number of people who are
      738
      disconnected because they are dodging payment, either deliberately or accidentally. The costs involved cannot be worth the candle.
      I do not know what happens generally, but disconnection can be frightening for an old age pensioner who is not dodging. A pensioner may spend a few months during the winter with a son or daughter in the country and not be at home to receive the first bill or the reminder, only to arrive home and find that he is threatened with disconnection. If such a person has been away during the winter, he will not think of such a bill. It may be that that person is not up to date with his payments, but he may have previously paid bills regularly. However, on his return he may find a letter saying that the electricity board is obliged to cut him off unless he pays forthwith. Such a letter would frighten the life out of an old age pensioner.
      I do not know why that should be the case with energy bills—it does not happen with water rates. People are not threatened with the disconnection of their water supply because they have not paid the water rate. Why should anyone have the right to enter someone's house and cut off essential services?
      We give public bodies, such as electricity boards, opportunities that do not exist anywhere else. An ordinary person may have a mortgage and be in arrears with payments of that mortgage. Is a building society allowed to tell such a person that, because he is in arrears with mortgage payments, he will be evicted tomorrow —indeed, that it intends forcibly to enter his house and kick him out? It is ridiculous to believe that a building society could tell a person, "You have paid your mortgage religiously for the past 30 years but, because you are one month in arrears, by law, we are allowed to enter your home forcibly and kick you out." If that happened, the House would be up in arms and create hell. We should tell electricity boards, "Stop it. There will be no cut-offs for any reason." By all means let an electricity board take a genuine dodger to court and explain the case there and let the court decide.
      What happens to the man who is in arrears with income tax? Does the Inland Revenue go along to his firm and say, "He is a month in arrears with his income tax, so stop his wages next week."? Would the Inland Revenue do that, and would we stand for it? Of course not, so let us stop it. Let us say that no board or body is allowed to cut off an essential service unless it goes through the normal and proper channels of court action like everyone else. I am not referring specifically to either public or private electricity undertakings. We should treat them all in the same way. We should insist that the customer has the right to be treated decently. That is not happening at the moment.
      Mr. Cryer: I apologise for not being in the Chamber earlier, but, as Chairman of the Joint Committee on Statutory Instruments, one has other duties to perform.
      This issue is important. All Opposition Members deal with disconnections that cause much pain and suffering. Only recently, I arranged for the reconnection of a supply to a house where a family with three small children, one aged two, live. The two-year-old child had never seen that house lit by electricity. It had been cut off for so long because the family were unable to obtain the reconnection fee and a sufficient payment for the outstanding debt to satisfy the electricity board.

      739
      I recommend that a code of practice be instituted. Although boards have codes of practice which, by and large, they follow, the fact remains that such a code of practice is less satisfactory than one which has the backing of the House.
      New clause 4 suggests regulations and statutory instruments and, therefore, statutory enforcement. It is worth pointing out that the Government have applied their mind to a code of practice for closed shops. Not only have they produced a code of practice, which is at present before the House as a statutory instrument which must be approved by both Houses, but they have altered it. The Government have sought consultation on that code, received representations and, as a result, introduced an amended code of practice.
      An enormous quantity of administrative effort has been spent on something that is much less vital than the cutting off of electricity supplies. Some of that human and administrative energy should have been diverted towards allowing people to keep their electricity supply more often and stopping the disconnections.
      There is a problem about recipients of invalidity benefit which the private Member's Bill of my hon. Friend the Member for West Stirlingshire (Mr. Canavan) covers well. They are not allowed to have deductions made at source. Therefore, they get into financial difficulties and face disconnection.
      The Social Security and Housing Benefits Act, which will come into effect soon, will create more problems as it changes the administration of social security payments. I should have thought that a statutory code of practice for disconnections would make officials who operate on behalf of electricity boards think twice before continuing with disconnections because it has the stamp of Parliament. Ordinary people would therefore be afforded greater protection. That is not an unreasonable request.
      The Government can be accused of adopting the attitude that it does not matter if publicly owned industries are criticised. It is, after all, in the Government's interests to bring the publicly owned sector into disrepute. Therefore, if the Government do little about them and if some people who work in publicly owned industries behave high-handedly, the Government will have more propaganda for their case. If the Government are more worried about a public service and providing people with a decent service than about enjoining the public fuel supply sector, such as the electricity and gas boards, to increase their charges—as they have done in the past—they should accept new clauses 4 and 5.
      Parliamentary backing for a code of practice for those with the lowest incomes should be accepted by the Government. If they do not accept it, they are extremely hard-hearted.
      6 pm
      Mr. John Smith: The speeches that we have heard today show how important Parliament considers this matter to be. The Labour party was justified in moving the new clauses to focus the attention of the House on a serious and important social problem. The clauses also show a sensible and effective means of progress.
      Fuel poverty is a serious problem. Many people, especially poor families, have serious problems paying for their fuel. A recent important social change is that the cost
      740
      of energy in the average home is higher than the cost of either rent or a mortgage. Therefore, energy costs are perhaps the most important part of the family budget, apart from food.
      If Parliament is to be truly representative of the needs of many British people, as the Opposition wish, it must concentrate its attention on such serious social problems. As my hon. Friend the Member for West Stirlingshire (Mr. Canavan) said, the problem cannot be regarded as insignificant, because more than 100,000 households in Britain are disconnected during a year. The problem is not made easier by the recent large increases in energy prices. The Government are responsible for increasing the price of electricity by more than 84 per cent. in three years. That adds strain to the problems of families in financial difficulties.
      The present code of practice has been improved during the years. Sensible amendments have been made to it and experience has been gained, and no doubt the voluntary code of practice works better now than it did several years ago. It has been expanded to take account of circumstances and has been subject to criticism by the Policy Studies Institute and other bodies that have tried to improve it. With the new clauses we are trying to take the matter a step further. The time is right to put the voluntary code into statute form. It has been tested in the real and harsh circumstances of life, and has been amended, improved and refined. It is time to take it that important step further and to make it part of the legal rules by incorporating it in a statutory instrument.
      In Committee, the Minister gave the usual reply of Ministers in such circumstances—he has given it again today—that to move towards a statutory form would be inflexible. The new clauses seek to put the voluntary code into statute, but there is nothing rigid about that because flexibility is built into the scheme. The important difference has nothing to do with flexibility or rigidity; it has to do with giving people a legal right if they are disconnected. They would not then depend upon a voluntary code of practice that is not backed by law, but would be defended and have legal protection.
      That would be a more important step forward than the Minister recognised. It would mean that the community and Parliament recognised that disconnection was such a serious problem that those affected by it must have some legal protection. It would also be easier for the public authorities to administer the distasteful task, as my hon. Friend the Member for Bristol, North-East (Mr. Palmer) so sagely pointed out. If local authorities work within rules approved by Parliament, and revised occasionally in the light of changing social circumstaces and attitudes, they are in a much stronger position. They can say that they are carrying out a code approved by Parliament.
      If the code becomes enshrined in statute, I hope the House will not think that it has completed its job, but will take the opportunity, as circumstances change, to update it and to ensure that it is working. Much could be said for having a debate once a year or every two or three years to consider changes and whether disconnections should continue to be carried out in some circumstances. I have much sympathy for the proposition that no old age pensioner should be disconnected either in winter or in summer, which has much support in the country and the House.
      It is most important to give the code a statutory framework. My hon. Friend the Member for Bothwell

      741
      (Mr. Hamilton) mentioned an incident that shows the difficulties that occur. Motherwell district council, which covers both our constituencies, is currently in dispute with the South of Scotland electricity board about who should pay for doors broken down when the board arrives to disconnect tenants. If the board cannot gain entry to a council house, it knocks down the door and the tenant refuses to pay for the repair because he was not responsible for breaking it down. The local authority sees the force of the tenant's remarks, and asks the board to pay for the repairs. So far, the board has declined to take up that responsibility and has suggested, ingeniously, that the problem could be avoided if the district council provided a joiner when the board must knock down the door so that it can be done with the minimum of damage.
      An impasse has developed between Motherwell district council and the SSEB, and they have enrolled the assistance of myself, my hon. Friend the Member for Bothwell and other hon. Members. The next idea might well be that a Member of Parliament should be in attendance when the door is knocked down. My hon. Friend and I are not sure what to do next. The story may sound like low farce, but I have the letter that details the steps in this developing drama.
      As such silly incidents occur, we cannot claim, as the Minister did, to have refined the code of practice to the point where it works smoothly and effectively. The voluntary code is not perfect, but it is a good start and it has been improved. It is now time to take it an important step forward. We should not lose sight of new clause 5, because if we must suffer the private generation of electricity—I doubt whether it will ever make a major contribution to domestic consumption—it would be wrong if the private sector escaped the obligations that we heap upon public authorities. Private companies should be treated in the same way as public authorities.
      The Opposition are strongly against the main principles of the Bill, and although we secured some improvements at various stages we shall remain hostile to it. There is probably an irreconcilable difference of philosophy and opinion between both sides of the House, but the support of the hon. Member for Bedford (Mr. Skeet) in Committee and in the House today shows that there is wide support for the new clauses in the country and the House. Therefore, I hope that this will be one of the opportunities that Parliament takes from time to time to make a genuine, humane, modern and sensible improvement to the statute, and that we shall recognise the problems of disconnection, and the need to give those who suffer from it legal rights. They are the poor and dispossessed, and no Member of Parliament who does his job well is unfamiliar with the agonising problems of poor families, has not visited their houses and seen children huddled round a table by candle light, or visited a house that is heated by dangerous paraffin appliances because the family cannot pay for electric under-floor heating or other more expensive forms of heating. Many children are growing up in a twilight world because the family cannot afford the fuel, heating and lighting that are an essential background to proper family life. The lonely and many other groups are also suffering.
      The Government do not have to change their policy. The voluntary code does not have to change. The House must take the important step of giving these people the legal right, which they have not had before, and I hope the House will have the courage to do so this evening.
      Mr. Gray: I have already made a substantial contribution to the debate, so I do not intend to weary the House by reiterating what I have already said. However, a number of hon. Members have spoken since I sat down, so I will try to say something which may interest the hon. Member for Isle of Ely (Mr. Freud), even though he has not been present for very long.
      The hon. Members for Newham, North-West (Mr. Lewis) and for Keighley (Mr. Cryer) who were not members of the Standing Committee, were concerned about the methods used by some boards to gain entry to houses for the purpose of disconnection. I refer them to what I said in Committee:
      "I would further say that, under the Rights of Entry (Gas and Electricity Boards) Act 1954, the board concerned would have had to obtain a warrant from a magistrate and to have given the householder 24 hours' notice."—[Official Report, Standing Committee G, 15 February 1983; c.497.]
      So it is not just a case of giving 24 hours' notice. The board is supposed to have obtained a warrant. If that was not done, an investigation would be required.
      Mr. Arthur Lewis: Mr. X may go away perhaps a week or a month before Christmas without paying a heavy bill. He is away and the house is empty. The board could deliver anything it liked, including the 24 hours' notice, but Mr. X would be away. When he comes back he finds that the board has entered his house because he is in arrears. The board may have sent him one or two bills. He may have received the rates bill. This is unfair because he may not have paid his mortgage, but he does not return to find that he has been evicted because he has not paid his mortgage.
      Mr. Cryer: He may be in hospital.
      Mr. Lewis: Yes.
      Mr. Gray: The hon. Member for Newham, North-West makes a fair point, but he does not highlight the fact that this is the last stage. A lengthy procedure for the rendering of accounts must be gone through before this last stage is initiated. I hear what the hon. Gentleman says, but I cannot agree with him that hardship is involved. The case is answered.
      The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) has become extremely concerned about the code of practice and, indeed, about the whole situation. I remind the right hon. Gentleman that he was Minister of State, Department of Energy for more than three years during which his Government did nothing to improve the code of practice. It is worth recalling that.
      The right hon. Member for Lanarkshire, North (Mr. Smith), who, with the exception of his reference to electricity prices, was fair in his comments, pointed out that between 1979 and 1982 domestic electricity prices had risen by 84 per cent. The right hon. Gentleman was Minister of State, Department of Energy before the right hon. Member for Greenock and Port Glasgow. May I remind him that between 1974 and 1979 domestic electricity prices rose, not by 84 per cent. but by 147 per cent. while, at the same time, industrial electricity prices, which between 1979 and 1982 have risen by 49 per cent., rose by 115 per cent. It is easy to quote figures in the House, but first it is worth conducting some research.
      Dr. Mabon: Is it not the case that in different Administrations we try gradually to improve the codes? Have we not reached the stage when we must accept a statutory right in this regard and have no disconnections?
      Mr. Gray: I do not think that we have reached that stage. I said earlier that the recently revised code should be given an opportunity to prove itself before further steps, such as legislation, are contemplated. I believe that the practical effects of these clauses would be unhelpful to those in whose interests they are tabled.
      Mr. Clement Freud: For how long should the revised code prove itself?
      Mr. Gray: We must give it a reasonable chance. I shall not commit myself to a specific period at this time, but I think that a few years would be a reasonable time.
      The hon. Member for West Stirlingshire (Mr. Canavan) was kind enough to give me a copy of his private Member's Bill, which I shall study with interest. I shall not take up many of his remarks because I dealt with them earlier when the hon. Gentleman had to leave the Chamber. He will no doubt read them. He referred to 100,000 disconnections. The problem is serious but should not be exaggerated. I remind the hon. Gentleman that about 50 per cent. are reconnected within two or three days. It is a short period of disconnection. The problem is serious, but we should not get it out of proportion. To say that 100,000 people are disconnected and to give the impression that the disconnections last for a long time is not right. But I take the hon. Gentleman's point and he will no doubt pursue it further in his Bill.
      I do not wish to waste the time of the House. We have dealt thoroughly with the two new clauses. In Committee I was asked to consider the matter again. I gave no assurance whatever because I genuinely believed that it would be much better to allow the new code of practice to have a trial period. I am still of that opinion, and I must ask the House to reject the new clause.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 180, Noes 209.

      Division No. 85]

      [6.16 pm

      AYES

      Abse, Leo

      Cowans, Harry

      Adams, Allen

      Craigen, J. M. (G'gow, M'hill)

      Allaun, Frank

      Crawshaw, Richard

      Alton, David

      Crowther, Stan

      Anderson, Donald

      Cryer, Bob

      Archer, Rt Hon Peter

      Cunliffe, Lawrence

      Ashton, Joe

      Dalyell, Tam

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

      Davidson, Arthur

      Atkinson, N. (H'gey,)

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

      Bagier, Gordon A.T.

      Deakins, Eric

      Barnett, Guy (Greenwich)

      Dean, Joseph (Leeds West)

      Barnett, Rt Hon Joel (H'wd)

      Dewar, Donald

      Beith, A. J.

      Dixon, Donald

      Bennett, Andrew (St'kp't N)

      Dormand, Jack

      Bidwell, Sydney

      Dubs, Alfred

      Booth, Rt Hon Albert

      Duffy, A. E. P.

      Bradley, Tom

      Dunwoody, Hon Mrs G.

      Bray, Dr Jeremy

      Eadie, Alex

      Brown, Hugh D. (Provan)

      Eastham, Ken

      Callaghan, Rt Hon J.

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

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

      Ellis, Tom (Wrexham)

      Campbell, Ian

      English, Michael

      Campbell-Savours, Dale

      Evans, Ioan (Aberdare)

      Canavan, Dennis

      Faulds, Andrew

      Carmichael, Neil

      Flannery, Martin

      Carter-Jones, Lewis

      Foot, Rt Hon Michael

      Cartwright, John

      Ford, Ben

      Clark, Dr David (S Shields)

      Forrester, John

      Clarke, Thomas (C'b'dge, A'rie)

      Foster, Derek

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

      Foulkes, George

      Cohen, Stanley

      Freeson, Rt Hon Reginald

      Coleman, Donald

      Freud, Clement

      Concannon, Rt Hon J. D.

      Garrett, John (Norwich S)

      744

      George, Bruce

      Palmer, Arthur

      Golding, John

      Park, George

      Gourlay, Harry

      Pavitt, Laurie

      Graham, Ted

      Penhaligon, David

      Grimond, Rt Hon J.

      Powell, Raymond (Ogmore)

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

      Prescott, John

      Harrison, Rt Hon Walter

      Race, Reg

      Hart, Rt Hon Dame Judith

      Radice, Giles

      Haynes, Frank

      Richardson, Jo

      Heffer, Eric S.

      Roberts, Albert (Normanton)

      Home Robertson, John

      Roberts, Ernest (Hackney N)

      Homewood, William

      Robinson, G. (Coventry NW)

      Hooley, Frank

      Rooker, J. W.

      Howell, Rt Hon D.

      Roper, John

      Hoyle, Douglas

      Ross, Ernest (Dundee West)

      Hughes, Mark (Durham)

      Rowlands, Ted

      Hughes, Roy (Newport)

      Sever, John

      Hughes, Simon (Bermondsey)

      Short, Mrs Renée

      Jay, Rt Hon Douglas

      Silkin, Rt Hon J. (Deptford)

      Jenkins, Rt Hon Roy (Hillh'd)

      Silverman, Julius

      Johnson, James (Hull West)

      Skinner, Dennis

      Johnston, Russell (Inverness)

      Smith, Rt Hon J. (N Lanark)

      Jones, Rt Hon Alec (Rh'dda)

      Snape, Peter

      Jones, Barry (East Flint)

      Soley, Clive

      Jones, Dan (Burnley)

      Spearing, Nigel

      Kaufman, Rt Hon Gerald

      Spellar, John Francis (B'ham)

      Kerr, Russell

      Spriggs, Leslie

      Kilroy-Silk, Robert

      Steel, Rt Hon David

      Lambie, David

      Stoddart, David

      Leighton, Ronald

      Stott, Roger

      Lestor, Miss Joan

      Strang, Gavin

      Lewis, Arthur (N'ham NW)

      Summerskill, Hon Dr Shirley

      Litherland, Robert

      Taylor, Mrs Ann (Bolton W)

      Lofthouse, Geoffrey

      Thomas, Jeffrey (Abertillery)

      Lyon, Alexander (York)

      Thorne, Stan (Preston South)

      Mabon, Rt Hon Dr J. Dickson

      Torney, Tom

      McDonald, Dr Oonagh

      Wainwright, E.(Dearne V)

      McElhone, Mrs Helen

      Walker, Rt Hon H.(D'caster)

      McGuire, Michael (Ince)

      Watkins, David

      MacKenzie, Rt Hon Gregor

      Weetch, Ken

      Maclennan, Robert

      Welsh, Michael

      McNamara, Kevin

      White, Frank R.

      McTaggart, Robert

      White, J. (G'gow Pollok)

      Marshall, D(G'gow S'ton)

      Whitlock, William

      Marshall, Dr Edmund (Goole)

      Wigley, Dafydd

      Marshall, Jim (Leicester S)

      Willey, Rt Hon Frederick

      Martin, M (G'gow S'burn)

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

      Mason, Rt Hon Roy

      Williams, Rt Hon Mrs (Crosby)

      Maxton, John

      Wilson, Gordon (Dundee E)

      Maynard, Miss Joan

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

      Millan, Rt Hon Bruce

      Wilson, William (C'try SE)

      Mitchell, R. C. (Soton Itchen)

      Winnick, David

      Morris, Rt Hon A. (W'shawe)

      Woolmer, Kenneth

      Morris, Rt Hon C. (O'shaw)

      Wright, Sheila

      Morton, George

      Young, David (Bolton E)

      Newens, Stanley

      Oakes, Rt Hon Gordon

      Tellers for the Ayes:

      O'Halloran, Michael

      Mr. James Hamilton and

      O'Neill, Martin

      Mr. Allen McKay.

      Orme, Rt Hon Stanley

      NOES

      Alexander, Richard

      Bottomley, Peter (W'wich W)

      Alison, Rt Hon Michael

      Braine, Sir Bernard

      Ancram, Michael

      Brinton, Tim

      Arnold, Tom

      Brittan, Rt. Hon. Leon

      Atkins, Rt Hon H.(S'thorne)

      Brooke, Hon Peter

      Atkins, Robert (Preston N)

      Brotherton, Michael

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

      Brown, Michael (Brigg & Sc'n)

      Baker, Kenneth (St.M'bone)

      Bruce-Gardyne, John

      Baker, Nicholas (N Dorset)

      Buck, Antony

      Beaumont-Dark, Anthony

      Budgen, Nick

      Bendall, Vivian

      Burden, Sir Frederick

      Benyon, Thomas (A'don)

      Butcher, John

      Berry, Hon Anthony

      Butler, Hon Adam

      Bevan, David Gilroy

      Carlisle, John (Luton West)

      Biffen, Rt Hon John

      Carlisle, Kenneth (Lincoln)

      Biggs-Davison, Sir John

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

      Blackburn, John

      Chalker, Mrs. Lynda

      Boscawen, Hon Robert

      Chapman, Sydney

      745

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

      McCrindle, Robert

      Clark, Sir W. (Croydon S)

      Macfarlane, Neil

      Clarke, Kenneth (Rushcliffe)

      MacKay, John (Argyll)

      Clegg, Sir Walter

      McQuarrie, Albert

      Cockeram, Eric

      Major, John

      Colvin, Michael

      Marland, Paul

      Cope, John

      Marlow, Antony

      Costain, Sir Albert

      Marten, Rt Hon Neil

      Cranborne, Viscount

      Mates, Michael

      Critchley, Julian

      Mather, Carol

      Crouch, David

      Maude, Rt Hon Sir Angus

      Dickens, Geoffrey

      Mawby, Ray

      Dorrell, Stephen

      Maxwell-Hyslop, Robin

      Dover, Denshore

      Mellor, David

      du Cann, Rt Hon Edward

      Meyer, Sir Anthony

      Dunn, Robert (Dartford)

      Miller, Hal (B'grove)

      Durant, Tony

      Miscampbell, Norman

      Dykes, Hugh

      Moate, Roger

      Eden, Rt Hon Sir John

      Monro, Sir Hector

      Eggar, Tim

      Montgomery, Fergus

      Elliott, Sir William

      Moore, John

      Fairgrieve, Sir Russell

      Morrison, Hon C. (Devizes)

      Fell, Sir Anthony

      Murphy, Christopher

      Fenner, Mrs Peggy

      Myles, David

      Fisher, Sir Nigel

      Neale, Gerrard

      Fletcher, A. (Ed'nb'gh N)

      Needham, Richard

      Fletcher-Cooke, Sir Charles

      Nelson, Anthony

      Fookes, Miss Janet

      Neubert, Michael

      Forman, Nigel

      Newton, Tony

      Fraser, Rt Hon Sir Hugh

      Onslow, Cranley

      Fraser, Peter (South Angus)

      Osborn, John

      Fry, Peter

      Page, John (Harrow, West)

      Gardiner, George (Reigate)

      Page, Richard (SW Herts)

      Gardner, Sir Edward

      Parris, Matthew

      Goodhart, Sir Philip

      Patten, John (Oxford)

      Goodhew, Sir Victor

      Pawsey, James

      Goodlad, Alastair

      Percival, Sir Ian

      Gorst, John

      Pink, R. Bonner

      Gow, Ian

      Pollock, Alexander

      Gray, Rt Hon Hamish

      Prentice, Rt Hon Reg

      Greenway, Harry

      Price, Sir David (Eastleigh)

      Griffiths, Peter (Portsm'th N)

      Proctor, K. Harvey

      Grist, Ian

      Raison, Rt Hon Timothy

      Gummer, John Selwyn

      Rees-Davies, W. R.

      Hamilton, Hon A.

      Renton, Tim

      Hamilton, Michael (Salisbury)

      Rhodes James, Robert

      Hampson, Dr Keith

      Ridley, Hon Nicholas

      Hannam, John

      Roberts, Wyn (Conway)

      Haselhurst, Alan

      Rossi, Hugh

      Hawksley, Warren

      Rost, Peter

      Hayhoe, Barney

      Royle, Sir Anthony

      Heddle, John

      Rumbold, Mrs A. C. R.

      Hicks, Robert

      Sainsbury, Hon Timothy

      Higgins, Rt Hon Terence L.

      Shaw, Giles (Pudsey)

      Hill, James

      Shaw, Sir Michael (Scarb')

      Holland, Philip (Carlton)

      Shelton, William (Streatham)

      Hordern, Peter

      Shepherd, Colin (Hereford)

      Hunt, David (Wirral)

      Shepherd, Richard

      Hunt, John (Ravensbourne)

      Sims, Roger

      Irvine, RtHon Bryant Godman

      Smith, Tim (Beaconsfield)

      Irving, Charles (Cheltenham)

      Speed, Keith

      Jessel, Toby

      Speller, Tony

      Johnson Smith, Sir Geoffrey

      Spence, John

      Jopling, Rt Hon Michael

      Spicer, Michael (S Worcs)

      Kaberry, Sir Donald

      Sproat, Iain

      Knight, Mrs Jill

      Stanbrook, Ivor

      Knox, David

      Stanley, John

      Lamont, Norman

      Steen, Anthony

      Lang, Ian

      Stokes, John

      Latham, Michael

      Stradling Thomas, J.

      Lawrence, Ivan

      Taylor, Teddy (S'end E)

      Lawson, Rt Hon Nigel

      Thomas, Rt Hon Peter

      Lennox-Boyd, Hon Mark

      Thompson, Donald

      Lester, Jim (Beeston)

      Thorne, Neil (Ilford South)

      Lewis, Sir Kenneth (Rutland)

      Thornton, Malcolm

      Lloyd, Ian (Havant & W'Ioo)

      Townend, John (Bridlington)

      Lloyd, Peter (Fareham)

      Townsend, Cyril D, (B'heath)

      Loveridge, John

      Trippier, David

      Luce, Richard

      van Straubenzee, Sir W.

      Lyell, Nicholas

      Waddington, David

      746

      Wakeham, John

      Williams, D,(Montgomery)

      Walker, B. (Perth)

      Wolfson, Mark

      Waller, Gary

      Young, Sir George (Acton)

      Warren, Kenneth

      Younger, Rt Hon George

      Watson, John

      Wells, Bowen

      Tellers for the Noes:

      Wheeler, John

      Mr. Tristan Garel-Jones and

      Wiggin, Jerry

      Mr. Douglas Hogg.

      Wilkinson, John

      Question accordingly negatived.

    New Clause 6

      OPERATIONAL CONTROL
      `Notwithstanding any other section, the Secretary of State shall make such regulations as he thinks fit for the purpose of ensuring that operational control of the system of supply of all electricity using the integrated national network remains vested in, and exercised by the electricity boards in order that they may carry out an efficient, safe and economical distribution of the supply of electricity.'.—[Mr. John Smith.]
      Brought up, and read the First time.
      Mr. John Smith: I beg to move, That the clause be read a Second time.
      Mr. Deputy SpeakerWith this it will be convenient to take the following: new clause 10—Operational control of the System of Supply—
      `Notwithstanding the provisions of any other section of this Act, the Secretary of State shall make regulations for the purpose of ensuring that operational control of the system of supply of all electricity using the integrated national network remains vested in and exercised by the Electricity Boards to ensure that they carry out an efficient and economical distribution of the supply of electricity to persons in their area who require it.'.
      Government amendment No. 3.
      6.30 pm
      Mr. Smith: Because of the importance of Government amendment No. 3, which is grouped with the new clause, I do not think that the debate will take long.
      When this Bill was first considered in the House on Second Reading, and during the Committee stage, it was pointed out repeatedly by members of the Opposition that to introduce private sector generation electricity into the public electricity supply system could create severe problems for that system, which had been built up over the years and was highly sophisticated. Anyone who has watched it in operation or has gone to see the national grid centre will realise the sophistication that is applied to its administration. To bring in, as this Bill does, the capacity for private sector generation, to give the private sector generator the right to come in to the public system and to put an obligation on the public system to take from him the electricity that he generates and transmit it for him, seems to us to create very severe problems. These were discussed in detail, almost relentlessly, in Committee, and eventually the Government were forced to come to terms with the reality of the circumstances of the industry.
      The idea behind this Bill was to privatise electricity production if at all possible, but they have come up against the great difficulty that it is extremely hard to do so. They have had to go in for all sorts of devices, including making the public sector boards the guaranteed market for the private sector generator. Eventually, however, after a lot of argument and a lot of pressure in Committee, the Government seemed to us to concede quite an important principle.

      747
      We sought to put that principle into new clauses 6 and 10, but it appears to me to be largely, if not totally, covered by Government amendment No. 3. This means, as I understand it, that when electricity boards are discussing with the private generator the arrangement that is to exist between them they can include terms and conditions to secure control by the electricity board of the operation of the electricity supply system. There is written into the statute protection against impairment of the integrity of the electricity supply system. That is something that we fought very hard for in the Committee and I am very glad that it has been achieved through the concession that the Government have made in the amendment.
      It is a great pity that a similar sense of realism was not introduced into the proceedings on the Oil and Gas (Enterprise) Act, in which my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) took a notable and prominent part. Had we got a realistic acceptance of the facts of life such as is contained in Government amendment No. 3, incorporated into the Oil and Gas (Enterprise) Act, we would have made a better job of it.
      I am sorry that we need to have this Bill and the prospect of private sector generation of electricity, which is pretty farcical at the best of times.
      The Secretary of State for Energy (Mr. Nigel Lawson): It has been there for years.
      Mr. Smith: It has been there in a very modified form for years. I am seeking to reply to the Secretary of State, who has wandered in at last to listen to the proceedings on this Bill, which stands in his name. He has managed to avoid most of the proceedings, but I suppose I am obliged to comment on his sedentary interruptions and my comment on that last one is that it was very minimal in character and the Government have never given a very good reason why circumstances have so changed that now private sector generation of electricity is a desirable thing. I fear that the motivation is highly political and ideological and has a lot to do with the Secretary of State's desire to be in favour with the Prime Minister and to have on his report card "Very good" under the section of privatisation. He has privatised everything that he can lay his hands on.
      The difficulty with all these privatisation schemes is that they collide with the realities of life. I am very glad that one reality has been collided with in the sense that the Government have accepted the importance of maintaining the integrity of the electricity supply system. Although we do not think that amendment No. 3 is perfect, I certainly claim it as a very important victory for the Opposition in bringing the Government to terms with the realities of life.
      Dr. J. Dickson Mabon: I naturally associate myself with what the right hon. Gentleman has just said about the efforts of all of us in the Committee dealing with this matter. We have the testimony of the columns and columns of contributions on this matter.
      Let us look at Government amendment No. 3, because that is what we are going to accept even though technically we are discussing these two new clauses. I imagine that they will not be persisted with and that Government amendment No. 3 will be the one pressed upon us. It is a very good one and I think that the Government ought to get the credit for seeing the sense of putting something like
      748
      this on the amendment paper and including it in the Bill. I know that Ministers have protested that it was never otherwise and that this amendment is a clarification of their intentions. Many people outside the Committee were quite distressed that the Bill might be left as it was without this clarification.
      After all, however, this issue is only about the operation of the supply system. It is not, as I understand it—I am open to correction—dealing here with the argument referred to by the right hon. Member for Lanarkshire, North (Mr. Smith) on the parallel with the provisions of the Oil and Gas (Enterprise) Act. We were talking about the parallel with the participation agreements and the example given to us in the Oil and Gas (Enterprise) Act. If we had this new clause and some explanation on the question of the additional costs, if any—we are told that there are none, in effect, on balance—to the public system through the attachment of these private generators, we might go back and look at the Oil and Gas (Enterprise) Act and consider whether we should have better systems of tariffs for the gas being carried from the North sea within the gas grid system. Perhaps that is not strictly in order, however, although I see that the Secretary of State is anxious to intervene and argue this all over again.
      This amendment is about the operation of the system. We had a very elaborate and enlightening explanation from the CEGB as to how the system is worked and how it brings in stations on a merit order. That was explained outside the Committee. This amendment, I understand, is addressing itself to that point. We remember the letter from John Lyons, which was of considerable length and was read out in the Committee. He argued the case that the system could be seriously embarrassed. This is clarified by amendment No. 3.
      When the Minister is refuting the new clause—which will be easy—or commending the Government amendment—although I suspect that he will just formally move that, and perhaps he ought to take the opportunity now—I should like to know what happened to the argument about the tariffs, the no-profit, no-loss argument. The Minister went to considerable lengths in the Committee to assure us about this but I do not recognise on the amendment paper anything that is a companion to Government amendment 3 in this regard. I take it that that is the end of the story. Perhaps the Minister will confirm that. We will simply rest on ministerial assurances with regard to the financial side of this as distinct from the operational side.
      The amendment is a tribute to the House of Commons and the way hon. Members argue their case in Committee, to the persistence of individual Members in representing the interests of people outside, and to the reasonableness of Ministers in recognising that there is genuine concern here that ought to be met in some way in the statute. I think that this is what the Government are trying to do and I commend them for it.
      Mr. Deputy Speaker: Perhaps I should just make it clear, in view of what the right hon. Member has said, that we are discussing new clause 6, new clause 10 and Government amendment No. 3. They can all be discussed together. In due course we shall get to Government amendment 3 and I shall invite the Minister to move it formally.
      Mr. John Spellar: I listened with interest to the comments of the right hon. Member for Greenock and Port

      749
      Glasgow (Dr. Mabon) about the many columns in the Official Report of the Committee proceedings, although I doubt whether many of them report contributions from the right hon. Gentleman, which would be difficult in view of his great distance from this place when he chose not to participate in the Committee proceedings.
      Dr. Mabon: That is thoroughly unfair. I missed one morning sitting of the Committee and it did not relate to this matter. The hon. Gentleman must do me justice.
      Mr. Spellar: We shall have to examine the record to see whether the injustice is as great as the right hon. Gentleman suggests.
      My right hon. Friend the Member for Lanarkshire, North (Mr. Smith) spoke of the differences between the Bill and the Oil and Gas (Enterprise) Act. Interestingly, we heard a great deal about that Act in the early part of the Committee but much less in the later part. That may have been due to the change of Minister and the more positive attitude of the Government to our representations thereafter. I hope that I have not done the Minister a disservice by mentioning that.
      Like my right hon. Friend the Member for Lanarkshire, North, I am pleased that the Government have made this move with amendment No. 3. There was a significant change in attitude after most of the members of the Committee had visited the Bankside national grid switching centre and seen the great complexity of the operations and the dedication and technical sophistication of the staff. I believe that that experience had a major impact on the views of hon. Members on both sides of the Committee about the practicability of operating the scheme without taking into account the operation at Bankside and the work of the national grid.
      Two aspects of amendment No. 3 require amplification. The first is the technical integrity of the grid system—the balancing of power supplies, the maintenance of the correct cycles and the health and safety aspects. Correct power loads must be maintained at all times so that machinery is not damaged and works at the highest efficiency. That area is clear and is almost certainly covered by amendment No. 3, although further clarification would be helpful.
      The second aspect is that of merit order—bringing in stations according to the relative cost of the electricity that they produce, and the central control in bringing those stations on stream and into the system at a particular time. It is possible to run the national grid system by balancing supply without the considerations of merit order set out in John Lyons' letter about the financial contributions involved and the cost of the electricity. The question of merit order is important for the morale of the staff who year by year have managed to push up the thermal efficiency of the overall electricity supply system and to run a very effective and efficient system. I hope that the Minister will amplify this and confirm that amendment No. 3 will apply not only to maintenance of the technical integrity of the system but to the merit order system that has had such highly beneficial results not just for the industry but for the consumer.
      Mr. Palmer: I shall be brief, as the Government have made an extremely important concession which goes to the heart of the Bill. I am glad that the Secretary of State for Energy is here for a while. He said from a sedentary position that there had been private electricity generation
      750
      for a very long time. That is perfectly true. The original nationalisation Act of 1947 did not attempt to interfere with private generation when it was part of a normal industrial process.
      6.45 pm
      Interestingly, however, there is considerably less private generation today than there was 10 years ago Indeed, I dealt with this in an article. The amount of private generation has been shrinking constantly. If private generation as part of a general industrial process were that much more efficient, one would expect the proportion to increase, but the reverse has been the case. There is no mystery about that. It is not a matter of ideology. The electricity boards and the CEGB are specialists in generation, so they can produce electricity more cheaply than the average private generator. There is nothing new about the savings that come from specialisation. The latest example is the decision of London Transport to close its two stations at Lots road and Greenwich because it is cheaper to obtain its electricity supply entirely from the national grid. That is surely the correct test and adequately answers the Secretary of State's muttering from a seated position.
      Two main changes are being brought about in the Bill. First, the boards must link the private generators to the system. That decision is no longer a commercial matter. Secondly, private generators have a right to use the public network to supply private industrial consumers or others. The efficiency of achieving that at minimum cost has always depended on the operating circumstances. In other words, the boards should not have to take a high-cost supply at a time inconvenient to them from the merit order point of view. As a result of the Government's acceptance of merit order as the determinant, as I hope it will be, the tariff arrangements will be very different. This is part of the answer to the point made by the right hon. Member for Greenock and Port Glasgow. Electricity is not sold like little apples. Very often, it is sold according to the time of day. At peak times, electricity units are almost worth their weight in gold, but they are a glut on the market at 3 am on a warm June night. Thus, the operation order is the key not just to the integrity of the system but to pricing. Nevertheless, it would be less than generous of me if I did not thank the Government for making the change. Reality seems to be breaking through at every stage of the Bill, and that is all to the good.
      Mr. Gray: I announced in Committee our intention
      "to introduce a Government amendment to ensure that electricity boards retain operational control of their supply systems"—[Official Report, Standing Committee G, 1 February 1983; c. 345.]
      when responding to requests from private generators. We have now had detailed discussions with the Electricity Council about the exact wording and I am satisfied that amendment No. 3 affords the necessary protection. Due to the time taken in consulting the industry, we were not able to table our amendment before the Opposition new clauses were tabled but I am glad that, having seen our amendment, which has been agreed with the Electricity Council, the Opposition feel that we have met their very, reasonable concerns, although we have used a different approach to the mechanism for doing so.
      I readily respond to the comments of the right hon. Members for Greenock and Port Glasgow (Dr. Mabon) and for Lanarkshire, North (Mr. Smith) that this was an

      751
      example of the House of Commons doing its work properly. This has been achieved by argument and persuasion and does the Committee credit. I pay my respects to the Opposition for the constructive way in which they approached this part of the Bill. I shall not flatter them too much because on other parts of the Bill they were not perhaps so constructive. However, slowly and surely persuasion may bring them to our way of thinking.
      The amendment makes an addition to clause 5 and requires that an offer made by a board in response to a request from a private generator should include any reasonable terms and conditions which the board may consider necessary for it to retain control of the electricity supply system. The amendment is directed at the boards' ability to operate minute-by-minute control so that they can maintain constant supplies to consumers. It does not affect the boards' duty to respond to a private generator's request under clause 5 to provide supplies of electricity or permit him to use the transmission and distribution system, except on this minute-by-minute basis, nor does it affect the financial terms that will be offered to a private generator for the purchase of his electricity, which are governed by clause 7.
      The private generator or supplier will be required to conform with reasonable terms and conditions made by the board to ensure the continued safe and efficient operation of the system and thereby the regular supply of electricity to consumers generally. The boards have, of course, statutory obligations to give a constant supply and maintain frequency and voltage. The amendment will help avoid any conflict between these obligations and those towards private generators.
      Mr. Palmer: Surely the boards will have some say about the time within the 24 hours that the private generator comes on to the system. The board will not be obliged to take high-cost units when it can get cheaper units from its own sources of generation.
      Mr. Gray: I should have continued a little longer before I gave way, because I am about to deal with the point that worries the hon. Gentleman.
      The terms and conditions which a board may impose could include the timing of taking a private generator's supply into the board's system. In the case of a purchase from a large private station by the CEGB, the private generator may have to take his place in the merit order of generating stations. That is the point that concerned the hon. Members for Bristol, North-West (Mr. Palmer) and for Birmingham, Northfield (Mr. Spellar).
      We believe that the amendment offers boards necessary protection and, unlike the amendment proposed by the Opposition, allows the boards to decide what terms and conditions are desirable in each case. We believe that to be important. It should not serve as a deterrent to private generators. The clause already allows boards to impose reasonable terms and conditions. The amendment removes any doubt about whether the terms and conditions could include those relating to operational control. If a private generator considered that any term or condition was unreasonable, he would have access to arbitration under clause 9.
      I am sure that all right hon. and hon. Members will welcome the amendment, and I commend it to the House.
      Dr. Mabon: When the amendment mentions terms, does that include tariffs?
      Mr. Gray: No.
      Mr. John Smith: In view of the turn of events and the concession made by the Government, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 7

      GENERAL PLANS AND ARRANGEMENTS
      `(1) It shall be the duty of the Electricity Council and the Boards to inform, collectively or separately, those organisations recognised by them for the negotiation of terms and conditions of employment of the general plans and arrangements of the Electricity Council and the Boards for performing their functions in relation to the supply of electricity.
      (2) The Electricity Council and the Boards shall consider any representation or report made to them by the organisations as defined in subsection (1) above.'.—[Mr. Palmer.]
      Brought up, and read the First time.
      Mr. Palmer: I beg to move, That the clause be read a Second time.
      When the Bill was in Committee a useful new clause was tabled. It dealt with consumers' councils. There have always been statutory area consultative councils, but the Electricity Consumers Council is voluntary. The amendment was agreed in Committee. The proposal is that the Electricity Consumers Council should have statutory force. I believe that both sides of the House are in favour of that.
      I am not a syndicalist in these matters. I believe in the principle that if industries are brought into national ownership it should be for the good of the community. There may be those in other industries who would prefer to see their industries run on the syndicalist principle. I am not one of them. The British people are the owners of the electricity supply industry and it should be run in the consumers interests.
      There should, therefore, be a statutory consumers council to deal with grievances and to ensure that the electricity boards pay attention to those grievances and make any necessary changes. Where charges are thought to be unreasonable, consumers should have an opportunity, both nationally and locally, of making representations through consumers councils and perhaps finally of having the matter considered by the Minister. The principle is that the consumer should be brought intimately into association with the working of the industry.
      I do not believe that statutory bodies are enough. Electricity boards are often judged by the man and woman in the street by whether they get good service in electricity showrooms. Nevertheless, statutory machinery is important. We are not against the changes made in Committee which turned the voluntary, more informal Electricity Consumers Council into a statutory body, but the new clause proposes to extend the principle of giving maximum information to consumers to employees of the industry. Surely they should have just as much information about the working of the boards, costs, prices and policies as consumers. There should be a proper balance between the two. The new clause provides:
      "(1) It shall be the duty of the Electricity Council and the Boards to inform, collectively or separately, those organisations recognised by them for the negotiation of terms and conditions of employment"—

      753
      that is a way of describing trade unions, and is a form of words that has been used in previous legislation relating to the electricity supply industry—
      "of the general plans and arrangements of the Electricity Council and the Boards for performing their functions in relation to the supply of electricity."
      I believe that the principle which has ben applied to consumers should apply to employees through their representatives and trade unions. Therefore, the clause continues:
      "(2) The Electricity Council and the Boards shall consider any representation or report made to them by the organisations as defined in subsection (1) above.'."
      This is a perfectly reasonable new clause. We are told, and we read in all the books and pamphlets on management, that it is the first duty of modern management to consult employees through their elected representatives. I cannot see why there should be any difference of principle between the two sides of the House. All hon. Members are consistent in their belief in the need for maximum information and that where there are disagreements over policy the causes should be examined.
      7 pm
      It may be argued—I rather suspect that this will be the case—by Ministers that the right of employees to consultation through their trade unions is already enshrined in legislation which is common, I believe, to all nationalised industries, stating that the boards must consult the unions on the establishment of machinery for negotiation of wages, salaries and conditions. There is also the joint consultation provision which means in this case that the electricity boards must consult trade unions and bodies and organisations representing employees on health, safety and welfare and also, I believe, on the efficiency of the boards' services.
      A complaint of the unions often put to the boards is that the boards sometimes interpret the obligation as a duty laid upon them to consult on policy once that policy has been decided. It is not often that the boards say to the unions, "We are proposing to do this or that. What do you think?" The boards make up their minds and tell the unions what they propose, asking the unions whether they wish to modify or change the proposals and seeking their cooperation.
      That approach is usually defended under the old title of managerial prerogative. It does not amount, in my view, to full and modern consultation. Under the new clause, there would be a duty on the Electricity Council and the boards to inform collectively or separately. The boards would presumably inform the national consultative council and the regional consultative councils representing consumers of their plans in advance of decisions being made. I cannot imagine that many consumer representatives would be satisfied with a procedure under which the boards decided what to do before asking for views on that decision. I am using a parallel argument in justification of the new clause. I hope that I receive a favourable response.
      Mr. John Spellar: My hon. Friend the Member for Bristol, North-East (Mr. Palmer) has talked about consumer councils. Like my hon. Friend, I have no wish to underplay their role in monitoring and feeding into the work of the electricity supply industry the views of consumers. Inevitably, however, the link between 20 million consumers and those who sit on the body is slightly tenuous in spite of the good work that is done. The link between 150,000 electricity supply workers and their trade
      754
      union representatives is considerably stronger. There is a feeling that the consultative procedure for the unions in the industry should not merely be post hoc notification of decisions already taken but that greater involvement of representatives of the work force is needed.
      I am aware that arrangements already exist in the industry for consultation. Those arrangements are not always operated in the spirit that we hope would occur. There has only recently been the case of the cross-channel cable link and the ship that will be used to implement it. Those in the electricity supply industry feel keenly that it was only when this matter became the subject of strong debate that they were even informed that the CEGB was proposing to lease a cable-laying ship that would be bought in South Korea and that the building of the ship would effectively be financed by the CEGB.
      Many unions with an interest in the electricity supply industry feel strongly that the future market of the industry depends on the help of major basic industries such as shipbuilding and steel. It is fair to say that, following some initial problems, station closures are being handled better in the electricity supply industry than closures in other industries. Future investment and fuel policy have also been handled quite well. There is still obviously a need for improvement and refinement of the system. It would be appropriate, when discussing legislation that will give greater statutory teeth to the consultative council, to beef up the consultation between the industry and the representatives of employees in the industry.
      Mr. Gray: The Government are committed to the principle of managements informing and consulting employees about matters that affect them. They have constantly urged companies to develop the procedures which are appropriate to their particular circumstances. Section 12 of the Electricity Act 1957 already requires the Electricity Council and the Scottish electricity boards to consult employees' organisations with a view to concluding agreements about conditions of employment, safety, health, welfare, education, training of employees and other matters of mutual interest, including efficiency in the operation of the services of the council and the boards.
      I should like to say a few words about safety, a subject to which hon. Members attach special importance. We have had uppermost in our minds, in allowing for an expansion of private electricity generation, the need to maintain the highest standards of safety. We have had a full discussion on this subject, which the House always rightly treats with the greatest seriousness. I should like to emphasise the attention that we pay to the matter. We intend to replace the existing regulations with updated ones, to apply regulations both to the public and private sectors and to make new regulations as necessary.
      We shall consult the Health and Safety Commission before making any regulations on health and safety matters. We shall not make any regulations that conflict with the Health and Safety at Work etc. Act 1974 or its relevant statutory provisions. We shall be keen to ensure that all aspects of the supply and use of electricity are fully covered by the regulations. Naturally, we keep under review the adequacy of the regulations. In this process, we shall be looking carefully to see whether there is need to strengthen them. I hope that the House will accept my assurance on that matter. Various joint bodies consisting

      755
      of employees' and employers' representatives have been established and are adequate to deal with any problems that might arise.
      The duty of the Electricity Council and the CEGB to inform the Electricity Consumers Council of their general plans and arrangements follows on a national basis the existing duty already imposed by the 1947 Act on area boards which requires them to inform their area consultative councils of their general plans and arrangements. It also parallels provisions already contained in other Acts governing nationalised industries. None of these Acts provides a similar provision for consultation with the trade unions.
      The points made by the hon. Members for Bristol, North-East (Mr. Palmer) and for Birmingham, Northfield (Mr. Spellar) were made to me at a meeting that I had with trade unionists at which the respective unions were represented. It was a useful meeting. We discussed many aspects of the Bill. The trade unions expressed appreciation of the fact that their points of view had been considered by the Government. I warned the trade unionists whom I met at that time that I was not prepared to give any commitment about their wishes. They said they would be making arrangements to have their view aired in the House. They said they would return to that point at some future date, which no doubt they will.
      However, as I was saying, I see no reason to make an exception in the case of the electricity supply industry. Having registered their points, the Opposition might consider withdrawing the new clause.
      Mr. Palmer: We cannot withdraw this new clause.
      Mr. Skeet: Why?
      Mr. Palmer: In reply to my argument, the Minister said that this provision does not exist in the other statutes. That is not much of an argument. Time has passed. The new clause represents an advance. It can be argued that it means an additional instalment of consultations with employees in the electricity supply industry. That could well be extended to other industries. So the Minister's argument is as broad as it is long.
      The right hon. Gentleman acknowledged that he had listened to the views of the unions, which he thought were quite reasonable; that they are entitled to as much information as electricity consumers. The unions are arguing not for syndicalism, that they should run the industry, but for the interests of those who work in it. They feel a responsibility to the community as a whole. The chairmen of the board do not operate the industry in an everyday sense. All the employees from the managerial side, both technical and administrative, through the financial mechanism to highly skilled technicians, skilled employees and unskilled employees make up the living industry.
      When the unions met the Minister responsible, they argued that they should know just as much as the consumers so that they could serve them better. The right hon. Gentleman rejects that argument. He has not told the House why he rejects it. Perhaps he does not think it is necessary because such a clause is not in statutes affecting the other nationalised industries. When someone has listened to a good argument, he should accept that it is a good argument and consider it. I am sorry that the right
      756
      hon. Gentleman does not propose to support the new clause, and on behalf of my right hon. and hon. Friends I propose to divide the House.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 173, Noes 195.

      Division No. 86]

      [7.15 pm

      AYES

      Adams, Allen

      Haynes, Frank

      Allaun, Frank

      Heffer, Eric S.

      Alton, David

      Home Robertson, John

      Anderson, Donald

      Homewood, William

      Archer, Rt Hon Peter

      Hooley, Frank

      Ashton, Joe

      Howell, Rt Hon D.

      Atkinson, N.(H'gey,)

      Howells, Geraint

      Bagier, Gordon AT.

      Hoyle, Douglas

      Barnett, Guy (Greenwich)

      Hughes, Mark (Durham)

      Barnett, Rt Hon Joel (H'wd)

      Hughes, Roy (Newport)

      Beith, A. J.

      Hughes, Simon (Bermondsey)

      Bennett, Andrew (St'kp't N)

      Jay, Rt Hon Douglas

      Bidwell, Sydney

      Jenkins, Rt Hon Roy (Hillh'd)

      Booth, Rt Hon Albert

      Johnson, James (Hull West)

      Bray, Dr Jeremy

      Johnston, Russell (Inverness)

      Brocklebank-Fowler, C.

      Jones, Rt Hon Alec (Rh'dda)

      Brown, Hugh D. (Provan)

      Jones, Barry (East Flint)

      Callaghan, Rt Hon J.

      Jones, Dan (Burnley)

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

      Kaufman, Rt Hon Gerald

      Campbell, Ian

      Kerr, Russell

      Campbell-Savours, Dale

      Lambie, David

      Canavan, Dennis

      Leighton, Ronald

      Carmichael, Neil

      Lestor, Miss Joan

      Carter-Jones, Lewis

      Lewis, Arthur (N'ham NW)

      Cartwright, John

      Litherland, Robert

      Clark, Dr David (S Shields)

      Lofthouse, Geoffrey

      Clarke, Thomas (C'b'dge, A'rie)

      Lyon, Alexander (York)

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

      Mabon, Rt Hon Dr J. Dickson

      Cohen, Stanley

      McDonald, Dr Oonagh

      Coleman, Donald

      McGuire, Michael (Ince)

      Concannon, Rt Hon J. D.

      McKay, Allen (Penistone)

      Cowans, Harry

      McKelvey, William

      Craigen, J. M. (G'gow, M'hill)

      MacKenzie, Rt Hon Gregor

      Crowther, Stan

      Maclennan, Robert

      Cryer, Bob

      McNamara, Kevin

      Cunliffe, Lawrence

      McTaggart, Robert

      Cunningham, G. (Islington S)

      Marshall, D(G'gow S'ton)

      Dalyell, Tam

      Marshall, Jim (Leicester S)

      Davidson, Arthur

      Martin, M (G'gow S'burn)

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

      Mason, Rt Hon Roy

      Dean, Joseph (Leeds West)

      Maxton, John

      Dewar, Donald

      Millan, Rt Hon Bruce

      Dixon, Donald

      Mitchell, R. C. (Soton Itchen)

      Dormand, Jack

      Morris, Rt Hon A. (W'shawe)

      Dubs, Alfred

      Morris, Rt Hon C. (O'shaw)

      Duffy, A. E. P.

      Morris, Rt Hon J. (Aberavon)

      Dunwoody, Hon Mrs G.

      Morton, George

      Eadie, Alex

      Newens, Stanley

      Eastham, Ken

      Oakes, Rt Hon Gordon

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

      O'Halloran, Michael

      Ellis, Tom (Wrexham)

      O'Neill, Martin

      English, Michael

      Orme, Rt Hon Stanley

      Evans, Ioan (Aberdare)

      Palmer, Arthur

      Evans, John (Newton)

      Park, George

      Ewing, Harry

      Pavitt, Laurie

      Faulds, Andrew

      Powell, Raymond (Ogmore)

      Flannery, Martin

      Race, Reg

      Ford, Ben

      Richardson, Jo

      Forrester, John

      Roberts, Albert (Normanton)

      Foster, Derek

      Roberts, Ernest (Hackney N)

      Foulkes, George

      Robinson, G. (Coventry NW)

      Freeson, Rt Hon Reginald

      Rooker, J. W.

      Freud, Clement

      Roper, John

      Garrett, John (Norwich S)

      Ross, Ernest (Dundee West)

      Ginsburg, David

      Sever, John

      Golding, John

      Short, Mrs Renée

      Gourlay, Harry

      Silkin, Rt Hon J. (Deptford)

      Graham, Ted

      Silverman, Julius

      Grimond, Rt Hon J.

      Skinner, Dennis

      Harrison, Rt Hon Walter

      Smith, Rt Hon J. (N Lanark)

      Hart, Rt Hon Dame Judith

      Snape, Peter

      757

      Soley, Clive

      Welsh, Michael

      Spearing, Nigel

      White, Frank R.

      Spellar, John Francis (B'ham)

      White, J. (G'gow Pollok)

      Spriggs, Leslie

      Whitlock, William

      Steel, Rt Hon David

      Wigley, Dafydd

      Stoddart, David

      Willey, Rt Hon Frederick

      Stott, Roger

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

      Strang, Gavin

      Williams, Rt Hon Mrs (Crosby)

      Summerskill, Hon Dr Shirley

      Wilson, Gordon (Dundee E)

      Taylor, Mrs Ann (Bolton W)

      Winnick, David

      Thomas, Jeffrey (Abertillery)

      Woolmer, Kenneth

      Thorne, Stan (Preston South)

      Wright, Sheila

      Torney, Tom

      Young, David (Bolton E)

      Wainwright, E.(Dearne V)

      Wainwright, R.(Colne V)

      Tellers for the Ayes:

      Walker, Rt Hon H.(D'caster)

      Mr. James Hamilton and

      Watkins, David

      Dr. Edmund Marshall

      Weetch, Ken

      NOES

      Alexander, Richard

      Fookes, Miss Janet

      Alison, Rt Hon Michael

      Fraser, Rt Hon Sir Hugh

      Ancram, Michael

      Fraser, Peter (South Angus)

      Atkins, Rt Hon H.(S'thorne)

      Fry, Peter

      Atkins, Robert(Preston N)

      Gardiner, George (Reigate)

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

      Gardner, Sir Edward

      Baker, Kenneth (St.M'bone,)

      Garel-Jones, Tristan

      Baker, Nicholas (N Dorset)

      Goodhart, Sir Philip

      Beaumont-Dark, Anthony

      Goodhew, Sir Victor

      Bendall, Vivian

      Goodlad, Alastair

      Benyon, Thomas (A'don)

      Gow, Ian

      Benyon, W. (Buckingham)

      Gray, Rt Hon Hamish

      Berry, Hon Anthony

      Greenway, Harry

      Bevan, David Gilroy

      Griffiths, Peter (Portsm'th N)

      Biggs-Davison, Sir John

      Grist, Ian

      Blackburn, John

      Gummer, John Selwyn

      Boscawen, Hon Robert

      Hamilton, Hon A.

      Bottomley, Peter (W'wich W)

      Hamilton, Michael (Salisbury)

      Braine, Sir Bernard

      Hampson, Dr Keith

      Brinton, Tim

      Hannam, John

      Brittan, Rt. Hon. Leon

      Haselhurst, Alan

      Brooke, Hon Peter

      Hawksley, Warren

      Brotherton, Michael

      Hayhoe, Barney

      Brown, Michael(Brigg & Sc'n)

      Heddle, John

      Bruce-Gardyne, John

      Hicks, Robert

      Budgen, Nick

      Higgins, Rt Hon Terence L.

      Burden, Sir Frederick

      Hill, James

      Butcher, John

      Holland, Philip (Carlton)

      Butler, Hon Adam

      Hunt, David (Wirral)

      Carlisle, John (Luton West)

      Hunt, John (Ravensbourne)

      Carlisle, Kenneth (Lincoln)

      Irvine, RtHon Bryant Godman

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

      Irving, Charles (Cheltenham)

      Chalker, Mrs. Lynda

      Jessel, Toby

      Chapman, Sydney

      Johnson Smith, Sir Geoffrey

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

      Jopling, Rt Hon Michael

      Clark, Sir W. (Croydon S)

      Kaberry, Sir Donald

      Clarke, Kenneth (Rushcliffe)

      Kimball, Sir Marcus

      Clegg, Sir Walter

      Kitson, Sir Timothy

      Cockeram, Eric

      Knight, Mrs Jill

      Colvin, Michael

      Knox, David

      Cope, John

      Latham, Michael

      Costain, Sir Albert

      Lawrence, Ivan

      Critchley, Julian

      Lawson, Rt Hon Nigel

      Crouch, David

      Lennox-Boyd, Hon Mark

      Dickens, Geoffrey

      Lester, Jim (Beeston)

      Dorrell, Stephen

      Lewis, Sir Kenneth (Rutland)

      Douglas-Hamilton, Lord J.

      Lloyd, Ian (Havant & W'Ioo)

      Dover, Denshore

      Lloyd, Peter (Fareham)

      du Cann, Rt Hon Edward

      Loveridge, John

      Dunn, Robert (Dartford)

      Luce, Richard

      Durant, Tony

      Lyell, Nicholas

      Eden, Rt Hon Sir John

      McCrindle, Robert

      Eggar, Tim

      Macfarlane, Neil

      Elliott, Sir William

      MacKay, John (Argyll)

      Fairgrieve, Sir Russell

      McQuarrie, Albert

      Fell, Sir Anthony

      Major, John

      Fenner, Mrs Peggy

      Marlow, Antony

      Fisher, Sir Nigel

      Marten, Rt Hon Neil

      Fletcher, A. (Ed'nb'gh N)

      Mather, Carol

      Fletcher-Cooke, Sir Charles

      Maude, Rt Hon Sir Angus

      758

      Mawby, Ray

      Shepherd, Colin (Hereford)

      Maxwell-Hyslop, Robin

      Shepherd, Richard

      Mellor, David

      Sims, Roger

      Meyer, Sir Anthony

      Skeet, T. H. H.

      Miller, Hal (B'grove)

      Smith, Tim (Beaconsfield)

      Miscampbell, Norman

      Speed, Keith

      Moate, Roger

      Speller, Tony

      Monro, Sir Hector

      Spence, John

      Moore, John

      Spicer, Michael (S Worcs)

      Morrison, Hon C. (Devizes)

      Stanbrook, Ivor

      Murphy, Christopher

      Stanley, John

      Myles, David

      Stokes, John

      Neale, Gerrard

      Taylor, Teddy (S'end E)

      Nelson, Anthony

      Thomas, Rt Hon Peter

      Newton, Tony

      Thompson, Donald

      Onslow, Cranley

      Thornton, Malcolm

      Osborn, John

      Townend, John (Bridlington)

      Page, John (Harrow, West)

      Townsend, Cyril D, (B'heath)

      Page, Richard (SW Herts)

      Trippier, David

      Parris, Matthew

      van Straubenzee, Sir W.

      Patten, John (Oxford)

      Waddington, David

      Pawsey, James

      Wakeham, John

      Pink, R. Bonner

      Walker, B. (Perth)

      Pollock, Alexander

      Waller, Gary

      Prentice, Rt Hon Reg

      Warren, Kenneth

      Price, Sir David (Eastleigh)

      Watson, John

      Proctor, K. Harvey

      Wells, Bowen

      Raison, Rt Hon Timothy

      Wells, John (Maidstone)

      Rees-Davies, W. R.

      Wheeler, John

      Renton, Tim

      Wiggin, Jerry

      Rhodes James, Robert

      Wilkinson, John

      Ridley, Hon Nicholas

      Williams, D.(Montgomery)

      Rippon, Rt Hon Geoffrey

      Wolfson, Mark

      Roberts, Wyn (Conway)

      Young, Sir George (Acton)

      Rost, Peter

      Younger, Rt Hon George

      Rumbold, Mrs A. C. R.

      Sainsbury, Hon Timothy

      Tellers for the Noes:

      Shaw, Giles (Pudsey)

      Mr. Ian Lang and

      Shaw, Sir Michael (Scarb')

      Mr. Douglas Hogg.

      Shelton, William (Streatham)

      Question accordingly negatived.

    New Clause 8

      DIRECTIONS BY THE SECRETARY OF STATE
      'The Secretary of State shall give to any person (other than the Electricity Boards) who has established or acquired an electricity generating station, such directions as he may give to the Electricity Boards under section 8(1) of the Electricity Act 1957 which may restrict their access to particular types or sources of fuel supplies.'.—[Mr. Eadie.]
      Brought up, and read the First time.
      Mr. Eadie: I beg to move, that the clause he read a Second time.
      We approached this issue on Second Reading, and to some extent in Committee, although for a time I was absent from Committee, because I was in hospital. Nevertheless, we attach great importance and significance to this new clause. It seeks to ensure that private generators will not be given blatant preference over the public sector in the use of fuels. As we have discussed this issue before, it is no secret that the main factor is coal.
      The issue is somewhat complicated by the fact that the Government have continually spelt out that the Bill is necessary because they are wedded to the cause of privatisation. The Bill's implications are another matter. Indeed, my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) made some very caustic remarks about the Bill. Nevertheless, the Government will have to tell us whether the privatisation to which new clause 8 refers will be implemented come hell or high water. It is possible to obtain cheaper coal from other countries. Indeed, on

      759
      Second Reading, the Liberals were very enthusiastic about the importation of foreign coal. I understand that the right hon. Member for Greenock and Port Glasgow (Dr. Mabon)—a member of the Social Democratic party—was a bit more cautious. He accused me of being rather hard on him. I think that I apologised to him at the Committee's first sitting, because he said that, with his anti-apartheid record he was not in favour of South African coal. My hon. Friends and I longed to see an amendment in Committee—or even now—saying that Liberal and SDP Members were in favour of importing foreign coal although the right hon. Member for Greenock and Port Glasgow was not in favour of importing coal from South Africa. The right hon. Gentleman has not clarified the issue. We are as perplexed as ever. I apologised to him during the first sitting of the Committee, but I do not know why I bothered. I seem to have been wasting my time.
      7.30 pm
      I used the phrase "come hell or high water" in connection with the importation of foreign coal. The Minister will recall the tripartite meetings that we held. At one time he was very much sold on the idea of tripartite meetings. In one of those meetings, the then Government agreed to stick to our indigenous coal industry, despite the short-term fluctuations of the market. In my view, it is a mistake to allow private generators to import foreign coal, bearing in mind the promises made by successive Governments to the miners and the general philosophy which seems to ignore the role that coal must play in our future energy needs.
      Mr. Skeet: If it is possible for public and private operators to have free access to oil from any part of the world, in spite of the fact that we produce it, and the same applies to gas which we import and also produce, why should not the same rule apply to coal?
      Mr. Eadie: I shall answer that question as I develop my argument. I am astonished at the hon. Member for Bedford (Mr. Skeet), whose knowledge of energy matters I greatly respect. He is a most diligent Member in this connection. However, I thought he understood that we are wasting our gas and oil assets. I thought he understood that coal is a fuel that we have in abundance. The reason that we should not allow the market to decide is that it would be disastrous to the nation.
      I was talking about our future energy needs. Of all the fossil fuels, coal is the most abundant in this country. It will still be available when gas and oil have all but disappeared. At one time it was recognised that an industrial nation must have secure and safe energy supplies—preferably indigenous energy supplies. It means economic strength. It can even mean economic prosperity for a nation that aspires to be in the industrial league of nations.
      That leads me to the strategic necessity for the country to preserve its energy supplies—particularly coal, which we have in abundance. I could develop the argument. I do not know what is happening at present in the OPEC negotiations. I do not want to talk too much about the middle east, but that is where most of the oil is and will be for some considerable time. Can we really say that there is political stability in the middle east on which we and the world can depend for our oil supplies? I could talk about
      760
      the history of the Yom Kippur war and the next energy crisis. The middle east is a boiling cauldron when it comes to political stability. I put it no higher than that.
      I am tempted to develop the speeches that I and my hon. Friends made from these Benches in the 1960s, when the contraction of the coal mining industry took place. We were voices crying in the wilderness. We tried to warn the House of the tremendous price that would be paid if the contraction continued. I suggest that we have been proved right. Our nation paid a terrible price for what, in my view, was the unnecessary contraction of the mining industry.
      It could be argued that the Government are complacent because at present we are self-sufficient in energy. The Government may be hooked on their complacency about self-sufficiency in energy, and to some extent they are hooked on privatisation. That is why they are prepared to imperil the future indigenous energy supplies of our nation. If we pursue that complacency and dismiss it, saying, "No, it is because we are hooked on privatisation," we shall betray the future comfort and economic prosperity of our children and grandchildren.
      The great fallacy that is perpetuated in the House—I have newspaper reports dealing with the present coal crisis—is that we can easily contract the coal industry. That is not true. Coal mines are not like factories where we can change production overnight. When a coal mine is closed it is closed for all time. There is no going back. The water comes in, the roof collapses, and there is no second chance.
      We must bear in mind that there are long lead times in the sinking of new pits. My major criticism of the Government is that they are pursuing a policy of inevitable contraction in the coal mining industry. I should describe their policy as a black site policy. They are developing new seams and reserves in existing coal mines. I do not criticise them for that. When I was a Minister I said that we should develop existing pits, look for new coal seams and apply new technology. Indeed, it is a worthwhile investment for the nation to develop existing pits. My major criticism of the Government is that their policy will inevitably lead to contraction because they have all but abolished the green field site policy for coal mining.
      How many new pits have the Government been responsible for sinking since they came to office? They have not sunk one new pit. There was the scandal about the vale of Belvoir. There are areas throughout Britain where new pits could be sunk, yet the Government have no energy or enthusiasm to pursue the green field site policy. My charge against the Government is that their black site policy inevitably means the contraction of the mining industry. Ministers come to the Dispatch Box and say that pits become exhausted in time; but, by not sinking new mines, the Government's policy means the inevitable contraction of the coal mining industry. I indict the Government for that policy.
      I say with some feeling that the Government have smashed to smithereens the oil from coal scheme. I know that the Minister will tell us about the modified scheme at Point of Ayr. However, he knows that I do not think much of that. I have already said in the House that I have grave doubts whether Britain will ever begin to make oil from coal. I hope that I am wrong and that we will, but, even if I am wrong, it is a modified scheme that will take place at Point of Ayr.
      The strongest indictment of the Government is that, since their election, they have failed even to begin the oil

      761
      from coal scheme. The Secretary of State and the Under-Secretary know that I signed the agreement in 1978 to start the oil from coal scheme. I obtained £20 million from the Labour Government to start that scheme. However, this Government have procrastinated and made excuses. They have produced report after report and the scheme has never been started. Other countries are going ahead, but Britain, as usual, is laggard in approaching the new technologies.
      The hon. Member for Bedford mentioned new technologies. We are years behind many countries in developing new technologies. We should be discussing the two pilot schemes, which are to be developed and finished in 1982, for the making of oil from coal. We should then go on to consider the commerial use of oil from coal plants. We have missed a wonderful opportunity.
      New clause 8 is an indictment of the Government. It is monstrous to discuss the importation of foreign coal to suit their friends—the private generators—in order to pursue their ideological system of privatisation. We shall listen carefully to what the Government have to say in reply, but it is deplorable that, at a time when the Government are telling us of all the problems of the British coal mining industry, their solution is to import foreign coal. We indict the Government for that and look forward to the Minister's reply.
      7.45 pm
      Mr. Skeet: The hon. Member for Midlothian (Mr. Eadie) normally makes a good speech, but his argument was a little thin tonight. I could not help reflecting that this morning Mr. Siddall said that we had to restructure the coal industry to adapt output to what our customers will buy from us and at what price. He indicted others, but he also commented on the National Coal Board's inability to close more than 1 million tonnes of uneconomic capacity over the past eight years against 3 billion to 4 billion tonnes called for in Plan for Coal. He went on to argue that the 1975 plan is as dead as a dodo. I do not want to do Mr. Siddall an injustice. That is my interpretation rather than what he said.
      I have considered new clause 8 carefully. The hon. Member for Midlothian wanted to give a specific directive to the industry generally about complying with certain conditions as to access to overseas supplies of coal. I understand that he is making use of section 8(1), (2) and (3) of the Electricity Act 1957 which gives the Secretary of State power to give directions of a general character. There is no clause in the Act that enables him to give a specific directive. He may give directives as to
      "the use or disposal of any assets vested in the Board which are not connected with the generation, transmission or distribution of electricity."
      The Act goes on to deal with consultation with the Electricity Council.
      There is no point in using that provision. It is miles away from what is required. It is desirable for everybody in the United Kingdom, including the CEGB, to go to the most desirable market for their fuel. The Government want to keep an eye on what their customers require. Clause 7(3) of the Bill provides that purchases by the board
      "should be on terms which will neither increase nor reduce the prices payable by customers of the Board for electricity supplied to them by the Board."
      Amendment No. 10 provides:
      "An Electricity Board, in fixing tariffs … shall not show undue preference to any person or class of persons and shall not exercise any undue discrimination against any person or class of persons."
      762
      That is to ensure that the people who are dealt with get the fairest and the best possible deal. We are seeking to look after the customer.
      New clause 8 wants a special directive to be issued to the National Coal Board and others saying that they shall not buy foreign coal even though it may have many advantages. For example, if we can buy coal abroad at a cheap price, is it unreasonable to customers in the United Kingdom that it should be imported?
      The value of imported coal from the United States between January and September 1982 worked out at $39 a tonne. Approximately the same figure applies to Australia. The National Coal Board's average cost per tonne of deep mined coal was about $57 per tonne Assuming that somebody is about to set up a private power station, will he arrange to use fuel that is so expensive that he cannot afford to run the power station, or will he run it profitably and for the benefit of the people in industry that he is intending to serve? It seems absurd that we should say to private industry that it cannot do this.
      I make it clear to the hon. Member for Midlothian that the Secretary of State has not given a specific directive to the CEGB that it should not buy Australian coal. He can twist the arm of the CEGB and say that, even though it has contracts to buy from 2 million tonnes to 4 million tonnes of Australian coal over the next two years, it must use its discretion and accumulate half on the European market and take the other half to the United Kingdom. However, he cannot give a directive to the CEGB. Therefore, why should he be in a position to give a directive to anybody else?
      It is important that the National Coal Board monopoly should be breached, particularly as the CEGB is forced to buy 80 per cent. of its fuel from that one source. Imported coal is less costly than that of the coal board. I shall not quote the figures, but I refer to the CEGB's statement of case given to the Sizewell inquiry. On page 53, note 10.12, the case shows National Coal Board coal in one column and imported coal in the other, and gives projections for 1980–81 of 2,000 and 2,030. The point to be made from these figures is that whereas the price of coal from the National Coal Board goes up, the price of imported coal always keeps a differential on the cheaper side from coal mined in the United Kingdom. Therefore, it would be advisable in the longer term if the CEGB bought some coal from abroad.
      Mr. Eadie: The hon. Gentleman is playing a rather doubtful game with statistics in estimated costs. Would he care to guess what the price of a house, of a motor car or of petrol would be within his time scale? One can suggest a whole range of items. The hon. Gentleman is indulging in some doubtful playing with statistics.
      Mr. Skeet: I do not think so, if people such as Scargill are going about the country suggesting further strikes over closures when the chairman is trying to make the National Coal Board profitable. If the coal board is to be profitable, it must reduce its prices to its customers and make it possible for the consumer to buy cheaper electricity. If the miners are to strike all the time—we have one threatened strike after another from Scargill—I forecast that the price of coal will escalate and inevitably the price of electricity will rise.
      I have already mentioned the availability of coal by the end of the century. I know that this year the CEGB has

      763
      agreed to buy 70 million tonnes, which is a substantial part of the coal board's output. The CEGB is going to buy a further quantity of 3 million tonnes at a different price. It can go above that if it has the requirement. Mr. Colin Robinson has given evidence on this matter. He is a well-known professor of economics at Surrey university. His calculation is that by 2000 AD the sales to power stations will drop to between 40 million and 60 million tonnes. These are not my figures, but they are possibilities that are taken seriously in the industry. If this is right, and if the National Coal Board cannot supply, it must be open to individuals to buy the best coal where they can find it in a market that can supply it.
      I know that the hon. Member for Midlothian is extremely optimistic, in spite of all the circumstances, but he will have noticed the decline in the oil price. The price is coming down steadily. It may settle at between $28 and $30 a barrel initially, but it could go down to perhaps $25. If it comes down to that, fuel oil will begin to become competitive with coal. With those energy trends, the CEGB would burn more fuel oil and perhaps a little less coal.
      Taking all this into account, one can see the absurdity of having a specific directive cajoling people to buy coal from stocks in the United Kingdom. If there is free availability from overseas suppliers who would put the coal on the shores of the United Kingdom at advantageous prices for burning in power stations, those stocks should be used.
      The suggestion in the new clause would conflict with an EC directive of 14 April 1975
      "concerning the restriction of the use of petroleum products in power stations".
      Petroleum products can be used in power stations in the following cases, and
      "Authorisation may be granted only in the following cases:—if the power station has a capacity of less than 10 MWe".
      We are now being told that this must be contradicted by the Secretary of State, who must tell the industry involved that it cannot use petroleum products, as has been laid down by the directive, but must use coal that has been stacked up in some part of the United Kingdom, simply for the convenience of the miners who want to ensure that their coal is used, whatever the price.
      We must not fall into this trap. I have the greatest regard for the miners and for an extremely healthy coal industry in the United Kingdom, but the mining industry may have to be trimmed to a suitable size, because we cannot go on subsidising the industry, with capital investment or whatever to the tune of £1,000 million per year, which is a considerable sum. We must enable people to buy, if they can, and give them freedom of choice. This is what competition is all about.
      I appreciate the argument of the hon. Member for Midlothian. The hon. Gentleman, as an ex-miner, puts forward his case with great feeling. Having said that, we have to appreciate that we represent our constituents who are the users of electricity. My constituents complain to me about the high price of electricity, and that is because of the high price of coal. If we are to have a private sector, we must ensure that it has the opportunity to buy the cheapest fuel in the market.
      Dr. J. Dickson Mabon: The burden of the argument of the hon. Member for Bedford (Mr. Skeet) is that the
      764
      new clause is not valid and that section 8(1) of the Electricity Act 1957 does not restrict access to particular types and sources of fuels by direction of the Secretary of State. Given that that is not so and the clause is valid, it strikes me as being a reasonable one. It is even-handed. If it is true that the Secretary of State has or should have these powers with regard to the public sector, and if it is in the national interest to direct the public sector to behave in a certain way with regard to certain fuels and certain sources of fuel, it is only reasonable and even apt that that power should be at his hand with regard to the private sector.
      The only thing that is wrong with the clause is that it does not seek to achieve what its author wishes to achieve. He wishes the Secretary of State to direct that only British coal be consumed.
      Mr. Skeet: The right hon. Gentleman has got it wrong. He will remember that with regard to BNOC there is a clause that enables a general and a specific directive to be given. Section 8 of the Electricity Act 1957 allows only directions of a general character, and gives no power to make a specific direction, which will be necessary if this amendment were to be carried.
      Dr. Mabon: I always said that the hon. Member for Bedford should be a Minister. I am willing to accept on second hand that he may be right, and perhaps the Minister will confirm that there is no necessity for specific directions.
      If there is some way in which the Secretary of State can influence these matters—let us not be confined in thought to this legislative action—it is conceivable that other instruments of government and statutes are available by which this can be achieved. I should be surprised if the Government could not find a way in certain empirical circumstances to prescribe a specific fuel from a specific source for a specific reason. That is possible. It may not be done in this way.
      8 pm
      A valid case is being made to treat the private sector, which is being introduced into the public industry, in an even-handed way. What is unreasonable about that? If Ministers want to object to the new clause, they can object on the ground that it is badly drafted. That is not my fault. I have found it difficult to enter into the debate on the new clause. The hon. Member for Midlothian (Mr. Eadie) excelled himself in introducing the new clause. However, it has nothing to do with the case that he is making. His case has nothing to do with the importation of Polish coal, South African coal and so on. It has nothing to do with oil. Oil is not supposed to be included in the Bill. The new clause is about the consumption of British coal. It is wrong. It means that one can choose to import oil from Venezuela or take in gas from Norway. In other words, the clause is so open-ended that one can do anything one likes, but one does not have to do what the hon. Member for Midlothian is dedicated to doing. It is extraordinary. The hon. Gentleman is riding a bicycle that is taking him in the opposite direction.
      I am prepared to vote for the new clause to please the hon. Gentleman. He apologised, which was a generous thing to do. He demands payment for an apology. I shall repay him by voting for the new clause, but as it stands it is meaningless.
      Mr. John Spellar: The hon. Member for Bedford (Mr. Skeet) argued that the increase in the coal price was forcing up the price of electricity. That was an interesting argument, especially if one looks at the figures that were presented to the Select Committee on Energy. On 21 July the hon. Member for Melton (Mr. Latham) asked the Secretary of State for Energy:
      "Can we turn to areas of 'Where there is no genuine market—as in electricity …' The Chief Secretary to the Treasury on 14 July gave the following information in Hansard. He said that for the period of July 1980–1981 the RPI went up 10·9 per cent., coal went up by 9 per cent. and electricity went up by 22 per cent."
      Therefore, the increase in the coal price was less than the increase in the RPI and the increase in the electricity price was dramatically greater. The argument of the hon. Member for Bedford that the price of British coal is forcing up the price of electricity is not valid. The Select Committee report also says:
      "For the period May 1981–1982 … the RPI went up by 9·5 per cent.; coal went up by 8 per cent. and electricity went up by 10 per cent. That is to say that in both years electricity exceeded the RPI and in the first year it exceeded it by double but in each case coal was below the level of the RPI."
      Therefore, coal has not been driving up the price of electricity. We would argue that that has been deliberate Government policy, but it has been aided by the Government-led recession. The Secretary of State said in the Select Committee:
      "Electricity is a very highly capital intensive industry. It follows that when there is a fall-off in demand as a result of the recession, this has a particularly serious effect on the electricity industry with its very high fixed costs."
      Therefore, the hon. Member for Bedford's argument against the hon. Member for Midlothian looks a little thinner. He argued that the coal industry was driving up the price of electricity. Now, as in Committee, the hon. Gentleman is missing all the arguments about the way in which the Government plan their energy policy. It takes about 10 years from the taking of a decision to when the coal is got out of the pit, with long planning inquiries, as with the vale of Belvoir. Inevitably those periods extend. The Government, of necessity, have to make an estimate of demand and the amount of investment that they will have to put in. We are now saying that a sector of the market will be able, irrespective of long-term strategy issues and the need for long-term investment, to buy on the free market.
      I was interested in the hon. Gentleman's arguments about buying into oil. We have seen the immense instability in the oil price and the problems that it has created for the CEGB. Even now stations are being completed, which we started to build when oil was cheap on the basis of the then prevailing price of oil, which are still uneconomic on the declining price of oil. Therefore, to make decisions in industries, such as the energy industry, with long lead times merely on the basis of spot pricing and to disrupt those markets on the basis of spot pricing is neither good economics in the long run nor good strategic planning for the future of the country.
      We cannot have the major industries with the substantial public investment in the energy sector being dependent on the vagaries of fringe producers who will be able to bring in at any time coal from other areas but who do not have a long-term obligation to provide electricity for their consumers. Although the consumers might be in a slightly more difficult position as a result of the passing of a previous clause, they will not have a right to perpetual
      766
      supply from the private producer. If economics change, perhaps the private producer will switch back or go out of business. The CEGB is not in that position, nor is it in the same position as the private producer in relation to the National Coal Board. There are different relationships between bodies the size of the CEGB and the South of Scotland electricity board and Ministers and Ministers' potential relationships with a considerable number of private electricity producers. The continuing relationship between the Department of Energy and the CEGB leads to informal discussions and pressure of a gentle or not so gentle nature. That pressure is exerted so that there is stability in the industry and in the investment programme and to try to achieve stability in production.
      It would be extremely undesirable in this as in a number of other areas if the public sector were to be the investor and provider of last resort, but subject to the vagaries of the decisions made by independent and fringe producers. Not just with oil but with coal there is political instability in many areas of production. Not long ago we saw the effect on the spot price of coal of the uncertainty in Poland. South Africa, another major coal producer, is not necessarily stable in that respect.
      We must also look towards the turn of the century when oil supplies will not be so plentiful, the battle for coal supplies will become much more intensive and coal prices will become much more volatile not just because of production but because of the lack of facilities for loading and offloading all round the world.
      Finally, we should consider natural gas, which has certain advantages for power production as it is easy to bring on stream rapidly. However, it is also extremely useful for space heating and as a chemical feedstock. It would be undesirable if the general dissuasion from using natural gas except as an emergency fuel were extended to its being used as a base load fuel in view of its long-term future.
      Mr. John Moore: We have had a most interesting and enjoyable debate. I shall start, as one always must, by commenting on the speech of my hon. Friend the Member for Bedford (Mr. Skeet)ֵ. The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) was quite right to commend him. All Conservative Members know the diligence with which he brings his attention to energy matters. He has also applied it to constitutional detail. I am almost certain that he is right in that he is probably one of the few hon. Members who seems to have read new clause 8. In a Freudian way, new clause 8 does not refer to imports at all. It merely says
      "which may restrict their access to particular types or sources of fuel supplies."
      My hon. Friend the Member for Bedford was right about the definition of the limitations of the clause and the ways in which the general powers of direction might be used. Powers of direction have never been used and if we tried to use them, it is extremely unlikely that they could be used in the proposed way.
      As an ardent pro-European, the right hon. Member for Greenock and Port Glasgow will, I am sure, be delighted to know that, even if we attempted to use such powers., we cannot discriminate against European coal under European Coal and Steel Communities rules. We should remind ourselves that we have relationships there. Last year we imported about 431,000 tonnes of coal from the EC, although, of course, we are exporting many millions of tonnes to the Community.

      767
      I was intrigued by the Social Democratic party's approach to the subject. I listened with a sense of growing bewilderment when I tried to understand what its views were. I listened to the right hon. Member for Greenock and Port Glasgow talk about being even-handed—in other words, being pernicious in both directions or applying pressure negatively in both directions. I assumed, as he continued, that he was about to tell us that the alliance, or whatever it calls itself these days, embraces import controls. But no, he happily slipped away from that subject and went into what we must all remember from today's debate as a classic phrase that we shall carry to every part of the country. He said—I must quote him as his words will go down in parliamentary history, "I shall vote for this because it is meaningless." That must be the most perfect definition of a party that tries to be so even-handed as not to have a view on any subject under the sun.
      Mr. Arthur Lewis: Is the Minister aware that there are four potential leaders in that set-up and that they are dithering about who shall be the Prime Minister designate when there is no such animal and cannot be any such animal? I have never heard of such a thing.
      Mr. Moore: Like all hon. Members, I am a diligent reader of the Order Paper and I have noticed the early-day motion in the name of the hon. Member for Newham, North-West (Mr. Lewis). He needs do no more than remember always that they will vote for this new clause because it is meaningless. That covers all manner of sins, irrespective of which candidate stands for which office.
      Dr. J. Dickson Mabon: I am sure that Hansard is more fair than the Minister. He will see that preceding the remarks to which he refers, I referred to the apology that the hon. Member for Midlothian (Mr. Eadie) insisted that he generously made to me and demanded that, in return, I support a clause of this type at this stage of the Bill. I said that I would do that and I am doing it.
      Mr. Eadie: This is the first time that the Opposition have supported a meaningless clause.
      Mr. Moore: It is interesting to give way to such extraordinary interruptions. The whole country will be interested in this exchange. In the absence of detailed discussion on the new clause, the right hon. Gentleman can address himself not to any argument in logic but, apparently, to some sentimental connection that he might still have with the Labour party. I respect the relationships that might still linger on the other side of the Chamber, but his conclusion on behalf of his party was that he would vote for the new clause because it is meaningless.
      Much of the debate has concerned the coal industry, which deserves much more serious consideration. New clause 8 would help to entrench the coal industry in its past. I am the first to agree with the hon. Member for Midlothian, who knows the industry well from his own experience, that the coal industry has a distinguished past. Its contribution to Britain's industrial growth as a cornerstone of the industrial revolution is well documented. The coal industry can no more live in the past than can the rest of Britain and our economy and industry as a whole.
      8.15 pm
      Opposition Members, in supporting new clause 8, are motivated by a negative and defensive attitude to the
      768
      coal industry. They appear to believe that the industry can and should remain isolated from its wider economic environment, with limited markets that are protected and subsidised, because they believe that our coal can never compete freely in Britain and the world. Surely our coal industry deserves greater confidence in its future and its potential than is evidenced by Opposition Members who support this new clause. The Government do not believe that the Opposition's way is the best way forward for the coal industry. Indeed, their way is backwards, which would mean retrenchment and retreat rather than progress.
      The assumptions that underlie new clause 8 about British coal's competitiveness with oil and non-United Kingdom coal is not only defeatist and negative but fundamentally misconceived. At present, coal enjoys a significant price advantage over oil for industrial steam-raising, industrial power generation and a wide range of industrial processes. The Government's coal-firing scheme, which has already created an additional 631,000 tonnes of industrial coal demand from the 110 schemes that have so far accepted £11·2 million in grants, is helping private industry, at a time of tight capital availability, to overcome the capital cost penalties of switching to coal.
      Not only is NCB coal highly competitive with oil for industrial use, but it is generally competitive with the price at which imported coal can be delivered to industrial customers in the United Kingdom. That is why they buy NCB coal. They do not buy it because there is constraint on the source of the coal. Thousands of industrial customers willingly buy NCB coal. Private generators of electricity will have to take their own decision about which fuel to use.
      The aim of this legislation is to lift restrictions on private generators, who should be free to make their own decisions about which fuel to use on commercial and economic grounds. We do not wish to impose more restrictions. The hon. Member for Birmingham, Northfield (Mr. Spellar) referred to gas. He knows that controls already exist under the Energy Act 1976. The Secretary of State must be notified of any proposals for the construction or conversion of power stations to burn oil or gas or to enter into or renew a contract to supply gas. Moreover, he may direct that such a proposal should not be carried out or may attach conditions to that proposal.
      The challenge for the coal industry is to make and keep itself efficient and competitive. Only then will it retain existing markets and win new ones. The chairman of the NCB recently drew attention to some important and encouraging indicators of the industry's potential. He announced that the first Selby coal would come on stream in two to three weeks, building up to a full output of 10 million tonnes a year at an average output per manshift that is about five times the present national average. He also announced that, recently, overall productivity in the coal industry had created all-time records. Productivity per face worker is consistently exceeding 10 tonnes per manshift.
      I do not believe that the coal industry can or should live in the past, but it has the potential to stand on its own feet and win a good future for itself. The Bill can create new opportunities for the coal industry. Therefore, it has the potential to help the future development of its industrial market, provided that coal can be supplied competitively and reliably. The board already supplies about 8 million

      769
      tonnes a year to the private sector industrial market, some of which is already being burnt for private sector industrial power generation and combined heat and power schemes.
      More companies, including household names such as Dunlop, Ford UK and ICI, are converting their major plants to coal with the help of the Government's coal-firing scheme. The assumptions about the coal industry on which the proposed new clause is based are misguided. The coal industry continues to work hard to make itself more competitive and productive, and it must maintain that approach to capture new and to hold existing markets, and to move forward to the viable world that we see for it. Neither it nor the country can afford it to remain static and to rely on defending its existing markets and its uneconomic capacity by recourse to the taxpayer, who is already investing heavily in the industry to help it progress.
      As to competition with other fuels, the paper published last week by the CEGB on comparative generation costs shows that in 1981–82, taking into account capital as well as operating costs, the CEGB's modern coal-fired stations had no less than a 70 per cent. cost advantage over its modern oil stations. It is hardly surprising that the CEGB relies on coal for more than 80 per cent. of its fuel, almost all of which comes from the National Coal Board.
      As to competition with foreign coal, the NCB must look to the world market in setting its prices. It is in that market as an exporter. Far from being insulated from external pressures, the coal industry is well used to seizing opportunities to develop its markets. If the Bill opens markets in private electricity generation, I am sure that the NCB will seize that opportunity. Its present position in the market for power station coal is hardly weak. Despite the world recession and depressed world coal prices, the NCB competes successfully with other producers at most power stations in its delivered price. The coal imported by the NCB under its present contracts is an economic proposition only at coastal power stations.
      The CEGB has agreed to limit its imports for the time being. However, no direction was issued to it by the Government. The NCB and the CEGB have negotiated commercial arrangements for the supply and price of NCB coal. The CEGB is being compensated for its additional costs by the taxpayer, so that in this interim period no extra burden falls on the electricity consumers.
      Dr. J. Dickson Mabon: The Minister contradicts himself. He said at the beginning of his 'speech that specific powers in the new clause do not exist. Now he suggests that he can achieve the objective in some other way and can compensate the CEGB for any loss that it incurs in doing what the Government wish. That is a substantial change in argument. The new clause seeks to treat both private and public generators in the same way. If the Minister says that he can do that by means other than new clause 8, will he also say that he will do it for the private supplier? That is the essential point of the debate.
      Mr. Moore: One cannot distinguish between the capacity of a company such as the CEGB, that absorbs more than 70 million tonnes of one main producer's supply, and individual producers who enter the market on normal terms. It is unrealistic for the right hon. Gentleman not to recognise that the relationship between the Government and a nationalised industry must, even without powers of direction—as the hon. Member for
      770
      Northfield, with his experience, recognised—be different. We are debating whether statutory powers should be used to enforce conditions when there seems to be no need for statutory directions.
      The new clause is negative and backward and its assumptions about the coal industry's potential to stand on its own feet and to win markets competitively are misguided. I hope that the House will reject the new clause.
      Mr. Eadie: The Minister made a stuffy defence of coal with which I would not quarrel, but it is a bit much to suggest that I was looking backwards. In my speech, I looked to the future, but the Minister tended to ignore that. He did not say that he had smashed the oil from coal system to smithereens. That is new technology and a new use for coal. He knows that Opposition Members advocated the introduction of new technology to the mining industry and considered other uses for coal. Whatever arguments the Minister may wish to advance, he cannot say that our arguments were backward. We tried to push the industry towards new technologies and ideas for developing coal.
      Although the coal industry receives grants from the Government, I hope that the Minister was not trying to deceive the House by suggesting that all the money that the coal board gets for investment is by way of Government grant. It receives money, but it must pay interest on what it borrows and that is an additional financial burden on the industry. It is nonsense to suggest that the Government only give to the coal industry.
      The Minister's arguments were unconvincing. The Opposition have looked to the future, but the Government have looked back and have tried to constrict the industry. I advise my right hon. and hon. Friends to vote for the new clause.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 162, Noes 196.

      Division No. 87]

      [8.26 pm

      AYES

      Adams, Allen

      Cunliffe, Lawrence

      Allaun, Frank

      Dalyell, Tam

      Alton, David

      Davidson, Arthur

      Anderson, Donald

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

      Archer, Rt Hon Peter

      Deakins, Eric

      Ashton, Joe

      Dean, Joseph (Leeds West)

      Atkinson, N. (H'gey,)

      Dewar, Donald

      Barnett, Guy (Greenwich)

      Dixon, Donald

      Beith, A. J.

      Dormand, Jack

      Bennett, Andrew(St'kp't N)

      Dubs, Alfred

      Bidwell, Sydney

      Duffy, A. E. P.

      Booth, Rt Hon Albert

      Dunwoody, Hon Mrs G.

      Boothroyd, Miss Betty

      Eadie, Alex

      Bray, Dr Jeremy

      Eastham, Ken

      Brown, Hugh D. (Provan)

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

      Callaghan, Rt Hon J.

      Ellis, Tom (Wrexham)

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

      English, Michael

      Campbell, Ian

      Evans, loan (Aberdare)

      Campbell-Savours, Dale

      Evans, John (Newton)

      Canavan, Dennis

      Ewing, Harry

      Carmichael, Neil

      Faulds, Andrew

      CarterJones, Lewis

      Flannery, Martin

      Clark, Dr David (S Shields)

      Ford, Ben

      Clarke.Thomas (C'b'dge, A'rie)

      Forrester, John

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

      Foster, Derek

      Cohen, Stanley

      Foulkes, George

      Coleman, Donald

      Freeson, Rt Hon Reginald

      Concannon, Rt Hon J. D.

      Freud, Clement

      Cowans, Harry

      Ginsburg, David

      Craigen, J. M. (G'gow, M'hill)

      Golding, John

      Crowther, Stan

      Gourlay, Harry

      Cryer, Bob

      Graham, Ted

      771

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

      Race, Reg

      Hart, Rt Hon Dame Judith

      Richardson, Jo

      Haynes, Frank

      Roberts, Albert (Normanton)

      Heffer, Eric S.

      Roberts, Ernest (Hackney N)

      Home Robertson, John

      Robinson, G. (Coventry NW)

      Homewood, William

      Rooker, J. W.

      Hooley, Frank

      Roper, John

      Howell, Rt Hon D.

      Ross, Ernest (Dundee West)

      Howells, Geraint

      Rowlands, Ted

      Hoyle, Douglas

      Sever, John

      Hughes, Mark (Durham)

      Silkin, Rt Hon J. (Deptford)

      Hughes, Robert (Aberdeen N)

      Silverman, Julius

      Hughes, Roy (Newport)

      Skinner, Dennis

      Jay, Rt Hon Douglas

      Smith, Rt Hon J. (N Lanark)

      Johnston, Russell (Inverness)

      Snape, Peter

      Jones, Rt Hon Alec (Rh'dda)

      Soley, Clive

      Jones, Barry (East Flint)

      Spearing, Nigel

      Jones, Dan (Burnley)

      Spellar, John Francis (B'ham)

      Kaufman, Rt Hon Gerald

      Spriggs, Leslie

      Kerr, Russell

      Steel, Rt Hon David

      Kilroy-Silk, Robert

      Stewart, Rt Hon D. (W Isles)

      Lambie, David

      Stoddart, David

      Leighton, Ronald

      Stott, Roger

      Litherland, Robert

      Strang, Gavin

      Lofthouse, Geoffrey

      Summerskill, Hon Dr Shirley

      Mabon, Rt Hon Dr J. Dickson

      Taylor, Mrs Ann (Bolton W)

      McGuire, Michael (Ince)

      Thomas, Jeffrey (Abertillery)

      McKay, Allen (Penistone)

      Thorne, Stan (Preston South)

      McKelvey, William

      Torney, Tom

      MacKenzie, Rt Hon Gregor

      Wainwright, E. (Dearne V)

      McTaggart, Robert

      Wainwright, H.(Colne V)

      Marshall, Dr Edmund (Goole)

      Walker, Rt Hon H.(D'caster)

      Marshall, Jim (Leicester S)

      Wardell, Gareth

      Martin, M (G'gow S'burn)

      Weetch, Ken

      Mason, Rt Hon Roy

      Welsh, Michael

      Maxton, John

      White, Frank R.

      Maynard, Miss Joan

      White, J. (G'gow Pollok)

      Mitchell, R. C. (Soton Itchen)

      Whitlock, William

      Morris, Rt Hon A. (W'shawe)

      Wigley, Dafydd

      Morris, Rt Hon C. (O'shaw)

      Willey, Rt Hon Frederick

      Morris, Rt Hon J. (Aberavon)

      Williams, Rt Hon Mrs(Crosby)

      Morton, George

      Wilson, Gordon (Dundee E)

      Newens, Stanley

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

      Oakes, Rt Hon Gordon

      Winnick, David

      O'Halloran, Michael

      Woolmer, Kenneth

      O'Neill, Martin

      Wright, Sheila

      Orme, Rt Hon Stanley

      Young, David (Bolton E)

      Palmer, Arthur

      Park, George

      Tellers for the Ayes:

      Pavitt, Laurie

      Mr. Walter Harrison and

      Powell, Raymond (Ogmore)

      Mr. James Hamilton.

      NOES

      Alexander, Richard

      Butcher, John

      Alison, Rt Hon Michael

      Butler, Hon Adam

      Ancram, Michael

      Carlisle, John (Luton West)

      Arnold, Tom

      Carlisle, Kenneth (Lincoln)

      Atkins, Rt Hon H.(S'thorne)

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

      Atkins, Robert (Preston N)

      Chalker, Mrs. Lynda

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

      Chapman, Sydney

      Baker, Nicholas (N Dorset)

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

      Beaumont-Dark, Anthony

      Clark, Sir W. (Croydon S)

      Bendall, Vivian

      Clarke, Kenneth (Rushcliffe)

      Benyon, Thomas (A'don)

      Clegg, Sir Walter

      Benyon, W. (Buckingham)

      Cockeram, Eric

      Berry, Hon Anthony

      Colvin, Michael

      Bevan, David Gilroy

      Costain, Sir Albert

      Biggs-Davison, Sir John

      Cranborne, Viscount

      Blackburn, John

      Critchley, Julian

      Boscawen, Hon Robert

      Crouch, David

      Bottomley, Peter (W'wich W)

      Dickens, Geoffrey

      Braine, Sir Bernard

      Dorrell, Stephen

      Brinton, Tim

      Douglas-Hamilton, Lord J.

      Brittan, Rt. Hon. Leon

      Dover, Denshore

      Brooke, Hon Peter

      du Cann, Rt Hon Edward

      Brown, Michael(Brigg & Sc'n)

      Dunn, Robert (Dartford)

      Bruce-Gardyne, John

      Durant, Tony

      Buck, Antony

      Eggar, Tim

      Budgen, Nick

      Elliott, Sir William

      Burden, Sir Frederick

      Fairgrieve, Sir Russell

      772

      Fell, Sir Anthony

      Morrison, Hon C. (Devizes)

      Fenner, Mrs Peggy

      Murphy, Christopher

      Fisher, Sir Nigel

      Myles, David

      Fletcher, A. (Ed'nb'gh N)

      Needham, Richard

      Fletcher-Cooke, Sir Charles

      Nelson, Anthony

      Fookes, Miss Janet

      Newton, Tony

      Forman, Nigel

      Onslow, Cranley

      Fraser, Peter (South Angus)

      Osborn, John

      Fry, Peter

      Page, John (Harrow, West)

      Gardiner, George (Reigate)

      Page, Richard (SW Herts)

      Gardner, Sir Edward

      Parris, Matthew

      Garel-Jones, Tristan

      Patten, John (Oxford)

      Goodhart, Sir Philip

      Pattie, Geoffrey

      Goodhew, Sir Victor

      Pawsey, James

      Goodlad, Alastair

      Percival, Sir Ian

      Gow, Ian

      Pink, R. Bonner

      Gray, Rt Hon Hamish

      Pollock, Alexander

      Greenway, Harry

      Prentice, Rt Hon Reg

      Griffiths, Peter (Portsm'th N)

      Price, Sir David (Eastleigh)

      Grist, Ian

      Proctor, K. Harvey

      Gummer, John Selwyn

      Raison, Rt Hon Timothy

      Hamilton, Hon A.

      Renton, Tim

      Hamilton, Michael (Salisbury)

      Rhodes James, Robert

      Hampson, Dr Keith

      Ridley, Hon Nicholas

      Hannam,John

      Ridsdale, Sir Julian

      Haselhurst, Alan

      Rippon, Rt Hon Geoffrey

      Hawksley, Warren

      Roberts, Wyn (Conway)

      Hayhoe, Barney

      Rost, Peter

      Heddle, John

      Rumbold, Mrs A. C. R.

      Hicks, Robert

      Sainsbury, Hon Timothy

      Hill, James

      St. John-Stevas, Rt Hon N.

      Hogg, Hon Douglas (Gr'th'm)

      Shaw, Giles (Pudsey)

      Holland, Philip (Carlton)

      Shaw, Sir Michael (Scarb')

      Hunt, David (Wirral)

      Shelton, William (Streatham)

      Hunt, John (Ravensbourne)

      Shepherd, Colin (Hereford)

      Irvine, Rt Hon Bryant

      Shepherd, Richard

      Godman

      Sims, Roger

      Irving, Charles (Cheltenham)

      Skeet, T. H. H.

      Jessel, Toby

      Smith, Tim (Beaconsfield)

      Johnson Smith, Sir Geoffrey

      Speed, Keith

      Jopling, Rt Hon Michael

      Speller, Tony

      Kaberry, Sir Donald

      Spence, John

      Kimball, Sir Marcus

      Spicer, Michael (S Worcs)

      Knight, Mrs Jill

      Sproat, Iain

      Knox, David

      Stanbrook, Ivor

      Latham, Michael

      Stanley, John

      Lawrence, Ivan

      Stokes, John

      Lawson, Rt Hon Nigel

      Stradling Thomas, J.

      Lennox-Boyd, Hon Mark

      Taylor, Teddy (S'end E)

      Lester, Jim (Beeston)

      Thomas, Rt Hon Peter

      Lewis, Sir Kenneth (Rutland)

      Thompson, Donald

      Lloyd, Ian (Havant & W'loo)

      Thornton, Malcolm

      Lloyd, Peter (Fareham)

      Townend, John (Bridlington)

      Loveridge, John

      Townsend, Cyril D, (B'heath)

      Luce, Richard

      Trippier, David

      Lyell, Nicholas

      van Straubenzee, Sir W.

      McCrindle, Robert

      Waddington, David

      Macfarlane, Neil

      Wakeham, John

      McQuarrie, Albert

      Walker, B. (Perth)

      Major, John

      Waller, Gary

      Marlow, Antony

      Warren, Kenneth

      Marten, Rt Hon Neil

      Wells, Bowen

      Mates, Michael

      Wells, John (Maidstone)

      Mather, Carol

      Wheeler, John

      Maude, Rt Hon Sir Angus

      Wickenden, Keith

      Mawby, Ray

      Wilkinson, John

      Maxwell-Hyslop, Robin

      Wolfson, Mark

      Meyer, Sir Anthony

      Young, Sir George (Acton)

      Miller, Hal (B'grove)

      Younger, Rt Hon George

      Miscampbell, Norman

      Moate, Roger

      Tellers for the Noes:

      Monro, Sir Hector

      Mr. John Cope and

      Montgomery, Fergus

      Mr. Ian Lang.

      Moore, John

      Question accordingly negatived.

    New Clause 9

      PARLIAMENTARY REPORTS UNDER SECTION 3 OF THE ACT
      'It shall be the duty of the Secretary of State, before giving any consent in terms of section 3 of this Act, to cause any proposal to construct or extend a nuclear powered generating station to lay a Report before Parliament containing the details of any such proposal within one month of receiving it.'.—[Mr. John Smith.]
      Brought up, and read the First time.
      Mr. John Smith: I beg to move, That the clause be read a Second time.
      The new clause relates to one of the important features of the Bill, clause 3, which deals with the permission that the Minister must give for any project to build a private nuclear power station. Some will find the notion of a private nuclear power station a quite alarming prospect. The Opposition put themselves in that category.
      So far the development of nuclear power in Britain has been wholly within the public sector, although internationally that has not always been the case. However, most countries are dominated by public sector projects.
      The Government have said that they are freeing the private sector from some legal inhibitions so that there can be private sector power stations. They take the argument further, and say that if there is to be a private nuclear power station it needs special ministerial consent under clause 3. At one stage, the Government sought to argue, a little disingenuously, that it was possible for a person to apply to build a nuclear power station and that they were imposing some control by requiring ministerial consent. But until the Bill was introduced it was not possible to generate electricity for use as a main business on any basis—neither nuclear nor non-nuclear. Because that inhibition is removed by the Bill, it opens the door to the possibility of the building of a private sector nuclear power station for the generation of electricity as a main business. [Interruption.] I hear the Secretary of State for Energy yet again muttering from a sedentary position. I think that he keeps muttering "Ridiculous" as I explain what his Bill means. He may be quite right. I think the Bill is ridiculous. I have not been arguing, I have merely been describing, and it is odd that even at this late stage the Secretary of State finds the description of his own Bill ridiculous. I wholeheartedly agree with his very wise assessment of the proposition before the House.
      Surely one thing we can be clear about is that very few people would think it desirable to have a private nuclear power project. It is not likely to happen. The lead times are enormous in all major energy projects. They are particularly long, and necessarily so, in nuclear power generation. The inquiry at Sizewell into the PWR plant which is proposed there is considering some very longterm-projections of energy supply. It would be a very bold person indeed who would contemplate the massive investment that is involved in a private nuclear power project and calculate and assess energy demand 10 years or so from now. Frankly, it is beyond the capacity of the private sector to embark upon a major private nuclear power project.
      That makes it all the less sensible for the Government to contemplate the possibility. It is not likely to happen, but we ought to make it clear that it should not happen.
      774
      We ought to take a decision that we will keep nuclear power firmly within the public sector. The containment of nuclear power within the public sector is a guarantee to the public that the necessary safety factors will be observed. I think that the public generally would be surprised to find that there was thought of moving in any other direction.
      I believe in the balanced development of nuclear power. I do not think that this country has to rush its fences in the development of nuclear power, unlike some other countries which do not have the supplies of gas, oil and coal that fortunately we are blessed with in this country. Therefore, we can provide with some caution and care for the safety factors which the public demand in respect of nuclear power. To introduce a new joker into the pack—the possibility of a private nuclear power station—is to raise public concern and to cause doubts to enter the minds of the public about the observation of safety factors.
      I know that it will be said that there is an inspectorate and a very competent inspectorate, which enforces the highest standards, and no doubt these should be applied to any project. Since we know, however, that it is not really a practical possibility to have a private nuclear power station, and since I think we can agree that it has the possibility at least of causing unnecessary public concern. there is very little point in contemplating it. It would be wisest to make it quite clear, and to do it as a matter of political consensus, that there should not be a private nuclear power station project.
      Mr. Skeet: I ask the hon. Gentleman to assume that a company decided to build a very small nuclear power station. If it did that and if, by accident, his party was elected in the next general election, would he nationalise that power station?
      Mr. Smith: I do not 'think that will happen between now and then, but I would most certainly make sure that it came back into the public sector. I have stated a principle to which I wish to adhere and to which I am sure my party wishes to adhere, which is that nuclear power generation should be wholly within the public sector, and we should maintain that as a principle for the development of our energy policy. So the answer to the hon. Gentleman is, "Yes, we would take it back into the public sector if that were to happen."
      The proposition in the new clause is that we ought to have a report to Parliament in respect of any applications made to the Minister under clause 3. This would allow some parliamentary control to be brought to bear on the situation and, if we did gel: such an approach, there would be an opportunity for Parliament to consider it and to debate the report laid before it. That seems to me to be a desirable extension of parliamentary control over the executive in an area which is particularly sensitive to public opinion. I hope, therefore, that the House will approve the new clause.
      8.45 pm
      Dr. J. Dickson Mabon: I agree with the intention and wording of new clause 9, and I am sure that my right hon. and hon. Friends will support it if the Government are foolish enough to cause a Division by refusing to incorporate it in the Bill.
      As we made clear on Second Reading and at great length in Committee, however, the proposal in the new

      775
      clause does not go far enough. We believe that a new Bill should be required if private sector nuclear generation were to be allowed. I agree wholeheartedly with the right hon. Member for Lanarkshire, North (Mr. Smith) on that. The official Opposition however, made it clear in Committee and reiterated beyond peradventure today that private industry should not be allowed to generate electricity through nuclear energy. We do not take that position.
      We take the view that the Bill should in no way allow the Secretary of State to permit any kind of nuclear generation in the private sector. We believe that such a development would be so important as to warrant separate legislation, even if it were a one-clause Bill. I do not know why the Secretary of State is laughing. A Bill would at least require a Second Reading, Committee, Report and Third Reading, as well as the comments of the other place. In other words, it would require an extensive public debate on the proposal for the first private company to generate nuclear energy which, in our view, would be a major new step in relation to nuclear energy in the past quarter of a century.
      We do not regard the nuclear debate lightly. I am surprised that some hon. Members think that the general public are not interested. In our view, the new clause does not go far enough. We all know what happens to reports submitted to Parliament by Secretaries of State. Sometimes it does not suit the Opposition to debate them. Well-intentioned though it is, the new clause is not an adequate instrument to deal with the situation, but it is the only instrument to hand today.
      In view of what was said in Committee, it is impossible to amend the Bill at this stage to take our fundamental point into account. If there had been a different Minister on Second Reading, or if the Minister had reacted differently in Committee, the Government might have been persuaded to concede that the Bill should not touch the licensing of private companies to generate electricity by nuclear energy. In the early stages, that might have been possible. Certainly we argued strongly on Second Reading, and some but not all Ministers took us seriously, that the subject should be a matter for parliamentary debate in extenso.
      The right hon. Member for Lanarkshire, North has done us a favour in proposing one more step. The then Under-Secretary of State boasted that the Bill was an improvement on the previous statute in that the Secretary of State would now have to licence any private nuclear power stations. I agree that the Bill is an improvement in that respect. The new clause would further improve the situation, but it does not meet our fundamental criticism. The British people want substantial public inquiries for Sizewell and any similar proposal and they want full parliamentary consideration of the matter. The new clause is good, but it is not enough. Perhaps it is too late for Ministers to change their minds, but I still hope that they may.
      Mr. Skeet: Is the right hon. Gentleman suggesting that the private Bill procedure should be used if a private operator wishes to set up a nuclear power station, or is he saying that a full inquiry of the Sizewell type would be required to satisfy his constituents?
      Dr. Mabon: As the hon. Gentleman should know, if the Bill is passed in its present form—with or without the new clause—a full planning inquiry and the full panoply of the nuclear installations inspectorate would be involved in any case. Enormous hoops would have to be jumped through by the private company concerned. That is why it is incredible to make out that there would not be time to introduce new legislation. It would not be a private Bill. I hope that the Minister will discourage any attempt at private legislation in this regard and insist on a public Bill sponsored enthusiastically by the Government. The Government would have to be convinced that it was the right time for private industry to enter nuclear power generation. The Government would then ensure that all the safeguards were observed. That is the essential point that we are making.
      I want to be fair to the Government—though they are not always fair to us—and say that, even if they are persuaded by the right hon. Member for Lanarkshire, North to accept new clause 9, for which I and my hon. Friends will vote, it would not be enough to make the Bill acceptable. This fundamental step can be taken only by Parliament.
      Mr. Palmer: If I remember correctly, the Social Democratic party, small though it is, did not vote against the Bill.
      Dr. Mabon: It is a great sadness to me that we are often criticised by people who have not read the record. The record is there to be seen. If hon. Members read the debate on Second Reading closely they will see what we said. The official Opposition were distressed that we voted for the Bill on Second Reading. I must be fair to Ministers. We were not given any encouragement on Second Reading to believe that Ministers would change their minds. We did not understand, either from private conversations or in Committee, that Ministers would concede our point. We warned the Government that consequently we could not vote on Third Reading for a Bill that allows this proposal without further parliamentary process in the form of a public Bill.
      Mr. John Smith: If clause 3 is as crucial to the alliance as the right hon. Gentleman says, why was there the extraordinary circumstance that neither the Liberal Member nor the right hon. Gentleman were in Committee during the debate on clause 3 and did not vote?
      Dr. Mabon: In fairness to the right hon. Gentleman, I believe that he was not present during the first few sittings of the Committee because he was not a member of it.
      Mr. Smith: Who, me?
      Dr. Mabon: As far as I remember, the right hon. Gentleman was not there.
      Mr. Smith: I was.
      Dr. Mabon: Very well, the right hon. Gentleman was on the Committee. I ask him, therefore, to refresh his memory about the debate on clause 1. The debate on this matter was taken with clause 1. During the debates on clause 3, the right hon. Gentleman complained that the matter should have been taken then. However, the voting had taken place on clause 1.
      I shall not read the speeches again. It would take another two hours to recite all the comments and

      777
      complaints that we were taking too long. I made it clear then, and I am making it clear again tonight, that I support the right hon. Gentleman, but he is doing his best to persuade me not to support him. Unless the Government make a fundamental change in another place and remove any reference to private industry being allowed to generate nuclear electricity, we should not be able to support the Bill. If those changes were made, we should want to support it.
      The Bill has many advantages. However, even with this new clause, it does not satisfy us. We are not taking sides. We believe that the full parliamentary process should be undertaken before we assent to private industry taking part in nuclear generation. The right hon. Member for Lanarkshire, North and his hon. Friends say that they would not support such a Bill in any circumstances. We argued at great length that there may be circumstances where it would be valid for private industry to embark on nuclear generation. We were only willing to agree to that in certain circumstances—who, when, what, where and why. We even asked questions in Committee about the possible sponsoring industry, boiling it down to three or four options. All these matters, we felt, should be brought within legislation. It should not be a matter of debating reports, questioning the Secretary of State about licensing decisions, hoping that the nuclear installations inspectorate will stop it or seeing that planning inquiries are conducted. That is the case that we have been making.
      I welcome the new clause, but it is still not adequate. I plead with the Government to examine the matter again. Is it not possible for the Government, even at this late stage, to change their mind and to say that private industry generating nuclear electricity should be licensed by a separate Bill, not by this back-door method.
      Mr. John Moore: I am sure that the right hon. Member for Lanarkshire, North (Mr. Smith) will not mind if I refresh his memory of Second Reading, when the hon. Member for Truro (Mr. Penhaligon), who has not graced us with a Liberal party presence today, said:
      "It is clear that the Social Democratic and Liberal parties are united. We are in favour of the Bill but opposed fundamentally to clause 3".—[Official Report, 24 November 1982; Vol. 32, c. 903.]
      The right hon. Member for Lanarkshire, North may also wish to be reminded of the vote in Committee at the seventh sitting—when we were not blessed with the company of the Liberal and Social Democratic parties—on the fundamental clause 3 that we had been told would determine their attitude towards the whole Bill. It was a key clause but they were not present with the official Opposition to vote.
      Dr. J. Dickson Mabon: Will the Minister now read those parts of the Second Reading debate when I suggested that it would be possible to amend clauses 1, 2, and 3—[Interruption]. I was present on Second Reading. I am referring to my speech on Second Reading. I am asking the Minister to give the quotation and also the references to sittings in Committee on clauses 1 and 2 concerning this matter.
      Mr. Moore: I apologise to the right hon. Gentleman, who is clearly getting into difficult water. We had been led to believe—I can quote only the Second Reading—that there was an alliance and that the alliance had made it clear that clause 3 was the key. It was therefore not surprising that hon. Members serving on the Committee found those
      778
      absences so odd when it came to the actual vote. I recognise that the right hon. Gentleman was present during discussions on clauses 1 and 2. It was, however, on clause 3, when the Opposition honourably sought to divide the Committee, that the alliance parties were absent.
      Our discussion has confirmed the Labour party' s obsession with public ownership. I am bewildered, however, by the role and views of the official SDI) spokesman for the alliance. It seems that alliance members cannot make up their minds on the principles whether private or public ownership is viable. They are legitimately concerned about their own inability to get together on nuclear power. Out of it all has emerged art unusual ducking of decisions and principles. Instead they have embraced the new principle of introducing a Bill. There is no view. Somewhere between now and never, there is the undertaking to introduce a Bill. This is apparently a policy argument upon which the alliance feels able to associate itself with the official Opposition.
      The new clause shows a complete failure by its movers to understand the system of licensing and the protection that exists in the United Kingdom to ensure safe nuclear power. As we have often stated in Committee and on Second Reading, it is not the ownership of plant that governs this but the regulatory control system. It is crucial to get this on the record. The evident strength of that control system in the United Kingdom gives us safe nuclear power.
      9 pm
      First, any proposal for a private nuclear station would come before the Secretary of State for consent under the new procedure in the If the Secretary of State considered it desirable, he could cause an inquiry to be held. I shall come back to that later. If consent is granted the Secretary of State could impose any necessary conditions regarding, for example, the safeguarding of nuclear fuel and security generally.
      Secondly, the proposal for any nuclear power station—this is crucial as the right hon. Member for Lanarkshire, North rightly observed—would come be fore the nuclear installations inspectorate, which would have to grant a nuclear site licence. The proposal would receive detailed and thorough scrutiny from the inspectorate, which is experienced in all matters relating to nuclear safety. No nuclear power reactor may be constructed or operated without a nuclear site licence granted by the NH, which carries out a monitoring process that starts at the initial planning stage, continues throughout the design, engineering and commissioning stages, covers the operation of the plant throughout its lifetime and ends only when, after decommissioning, there is no longer considered to be any radiation hazard at the site. Staff, members of the public and the environment generally, are protected against the risks associated with nuclear material.
      I have spoken before of the crucial role that the NII plays in this process, but it may be useful if I remind the House of the way in which the inspectorate operates, and in particular of the independent nature of the inspectorate. The NII forms part of the Health and Safety Executive. The HSE is a unique organisation independent, not only of all other Government Departments but of Ministers in its day-to-day operation. The commission provides,

      779
      through its executive, independent advice to the Government on all aspects of industrial safety including nuclear safety.
      Thirdly, the private generator would have to apply for planning permission and would be subject to all the planning procedures of the local authority and the Department of the Environment. A local authority may impose conditions on the granting of planning permission. If there are sufficient objections to a proposal, a public inquiry is usually called. If planning permission is refused, the developer can appeal to the Secretary of State for the Environment who may also call in for decision by him an application made to the local authority. In this case, a public inquiry will be held and the Secretary of State will usually impose conditions.
      The most important scrutiny of a private nuclear proposal will, of course, take place when a nuclear site licence application is being considered, and the framework governing nuclear safety applies equally to the public and private sectors. Given this background, what role could Parliament be expected to play? What expertise does it have in comparison with fully trained personnel whose role is to monitor every step of the development of a nuclear power station?
      Mr. Palmer: I gather that the Minister was saying that the nuclear inspectorate would look at the site licence and make an assessment of the proposal before the local planning inquiry started. Is he aware that the nuclear inspectorate is not ready with its assessment on Sizewell?
      Mr. Moore: I could go into detail on that. The hon. Gentleman, from his extensive knowledge, will know that the licensing process is a continuing process through to decommissioning. There is no point at which the NII has concluded its work. This is a crucial feature of the safety relationship.
      If Parliament is to scrutinise nuclear power station proposals, should it not also examine in depth all other power station proposals and, perhaps, other developments too, which already require ministerial consent and are subject to similar monitoring and safety requirements? On what basis would it come to a decision? I am not denying the constitutional ability of Parliament, but in the assumption of a parliamentary role there is presumably the belief that Parliament could decide favourably or unfavourably on the construction or operation of a nuclear power station. I question whether Parliament could or should have the opportunity to overrule a decision of the NII—a decision that would have been taken in full knowledge and understanding of all the technical and safety factors involved. There is no suggestion of any new constitutional theory.
      All I am seeking to do is to illustrate the opportunity that is being sought for Parliament potentially to overrule the very important, established NII procedures. To suggest that Parliament could properly perform that role is patently absurd. I am satisfied that there is ample opportunity for proper examination of any proposal for a private nuclear station and would ask Opposition Members to withdraw the motion and clause.
      Mr. John Smith: I was surprised to hear the Minister say in the latter part of his speech that, since the experts were to be let loose on any project, that was good enough
      780
      and that Parliament should therefore stand aside and let them decide. In substance, that is what was being argued. I do not doubt for a moment the expertise of the nuclear inspectorate. We are fortunate to have it in this country and it is excellent. However, Parliament will increasingly insist on playing a role in decisions, and that is precisely what the new clause offers us.
      The new clause requires a report to be made to Parliament and allows it to be discussed. In the last Parliament it was important to discuss Windscale and decisions were taken after proper and full parliamentary debate. The Minister fell below his usual high standards of debate in his latter remarks, and if for no other reason than to maintain the robust independence of Parliament we shall press the new clause to a Division.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 167, Noes 204.

      Division No. 88]

      [9.5 pm

      AYES

      Adams, Allen

      Ford, Ben

      Allaun, Frank

      Forrester, John

      Alton, David

      Foster, Derek

      Anderson, Donald

      Foulkes, George

      Archer, Rt Hon Peter

      Freeson, Rt Hon Reginald

      Ashton, Joe

      Freud, Clement

      Atkinson, N.(H'gey,)

      Garrett, John (Norwich S)

      Barnett, Guy (Greenwich)

      Ginsburg, David

      Beith, A. J.

      Golding, John

      Bennett, Andrew(St'Kp't N)

      Gourlay, Harry

      Bidwell, Sydney

      Graham, Ted

      Booth, Rt Hon Albert

      Hamilton, James (Bothwell)

      Boothroyd, Miss Betty

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

      Bray, Dr Jeremy

      Harrison, Rt Hon Walter

      Brown, Hugh D. (Provan)

      Hart, Rt Hon Dame Judith

      Callaghan, Rt Hon J.

      Haynes, Frank

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

      Heffer, Eric S.

      Campbell, Ian

      Home Robertson, John

      Campbell-Savours, Dale

      Homewood, William

      Canavan, Dennis

      Hooley, Frank

      Carmichael, Neil

      Howell, Rt Hon D.

      Carter-Jones, Lewis

      Howells, Geraint

      Clark, Dr David (S Shields)

      Hoyle, Douglas

      Clarke Thomas (C'b'dge, A'rie)

      Hughes, Mark (Durham)

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

      Hughes, Robert (Aberdeen N)

      Cohen, Stanley

      Hughes, Roy (Newport)

      Coleman, Donald

      Jay, Rt Hon Douglas

      Concannon, Rt Hon J. D.

      Johnston, Russell (Inverness)

      Cook, Robin F.

      Jones, Rt Hon Alec (Rh'dda)

      Cowans, Harry

      Jones, Barry (East Flint)

      Craigen, J. M. (G'gow, M'hill)

      Jones, Dan (Burnley)

      Crowther, Stan

      Kaufman, Rt Hon Gerald

      Cryer, Bob

      Kerr, Russell

      Cunliffe, Lawrence

      Kilroy-Silk, Robert

      Cunningham, G. (Islington S)

      Lambie, David

      Dalyell, Tarn

      Leighton, Ronald

      Davidson, Arthur

      Lewis, Arthur (N'ham NW)

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

      Lewis, Ron (Carlisle)

      Deakins, Eric

      Lofthouse, Geoffrey

      Dean, Joseph (Leeds West)

      Lyon, Alexander (York)

      Dewar, Donald

      Mabon, Rt Hon Dr J. Dickson

      Dixon, Donald

      McGuire, Michael (Ince)

      Dormand, Jack

      McKay, Allen (Penistone)

      Dubs, Alfred

      McKeivey, William

      Duffy, A. E. P.

      MacKenzie, Rt Hon Gregor

      Dunwoody, Hon Mrs G.

      McNamara, Kevin

      Eadie, Alex

      Marks, Kenneth

      Eastham, Ken

      Martin, M(G'gow S'burn)

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

      Mason, Rt Hon Roy

      Ellis, Tom (Wrexham)

      Maxton, John

      English, Michael

      Maynard, Miss Joan

      Evans, loan (Aberdare)

      Millan, Rt Hon Bruce

      Evans, John (Newton)

      Mitchell, R. C. (Soton Itchen)

      Ewing, Harry

      Morris, Rt Hon A. (W'shawe)

      Faulds, Andrew

      Morris, Rt Hon C. (O'shaw)

      Flannery, Martin

      Morris, Rt Hon J. (Aberavon)

      Foot, Rt Hon Michael

      Newens, Stanley

      781

      Oakes, Rt Hon Gordon

      Stoddart, David

      O'Neill, Martin

      Stott, Roger

      Orme, Rt Hon Stanley

      Strang, Gavin

      Palmer, Arthur

      Summerskill, Hon Dr Shirley

      Park, George

      Taylor, Mrs Ann (Bolton W)

      Pavitt, Laurie

      Thomas, Jeffrey (Abertillery)

      Powell, Raymond (Ogmore)

      Thorne, Stan (Preston South)

      Race, Reg

      Torney, Tom

      Richardson, Jo

      Wainwright, R.(Co1ne V)

      Roberts, Albert (Normanton)

      Walker, Rt Hon H.(D'caster)

      Roberts, Ernest (Hackney N)

      Wardell, Gareth

      Roberts, Gwilym (Cannock)

      Weetch, Ken

      Robinson, G. (Coventry NW)

      Welsh, Michael

      Rooker, J. W.

      White, Frank R.

      Roper, John

      White, J. (G'gow Pollok)

      Ross, Ernest (Dundee West)

      Whitlock, William

      Rowlands, Ted

      Wigley, Dafydd

      Ryman, John

      Willey, Rt Hon Frederick

      Sever, John

      Wilson, Gordon (Dundee E)

      Silkin, Rt Hon J. (Deptford)

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

      Silverman, Julius

      Winnick, David

      Skinner, Dennis

      Woolmer, Kenneth

      Smith, Rt Hon J. (N Lanark)

      Wright, Sheila

      Snape, Peter

      Young, David (Bolton E)

      Soley, Clive

      Spearing, Nigel

      Tellers for the Ayes:

      Spellar, John Francis (B'ham)

      Mr. George Morton and

      Spriggs, Leslie

      Dr. Edmund Marshall.

      Stewart, Rt Hon D. (W Isles)

      NOES

      Aitken, Jonathan

      Dover, Denshore

      Alexander, Richard

      du Cann, Rt Hon Edward

      Alison, Rt Hon Michael

      Dunn, Robert (Dartford)

      Ancram, Michael

      Durant, Tony

      Arnold, Tom

      Eggar, Tim

      Atkins, Rt Hon H.(S'thorne)

      Elliott, Sir William

      Atkins, Robert (Presron N)

      Emery, Sir Peter

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

      Fairgrieve, Sir Russell

      Baker, Nicholas (N Dorset)

      Farr, John

      Beaumont-Dark, Anthony

      Fell, Sir Anthony

      Bendall, Vivian

      Fenner, Mrs Peggy

      Benyon, Thomas (A'don)

      Fisher, Sir Nigel

      Benyon, W. (Buckingham)

      Fletcher, A. (Ed'nb'gh N)

      Berry, Hon Anthony

      Fletcher-Cooke, Sir Charles

      Bevan, David Gilroy

      Fookes, Miss Janet

      Biggs-Davison, Sir John

      Forman, Nigel

      Blackburn, John

      Fraser, Peter (South Angus)

      Boscawen, Hon Robert

      Fry, Peter

      Bottomley, Peter (W'wich W)

      Gardiner, George (Reigate)

      Braine, Sir Bernard

      Gardner, Sir Edward

      Brinton, Tim

      Garel-Jones, Tristan

      Brittan, Rt. Hon. Leon

      Goodhart, Sir Philip

      Brooke, Hon Peter

      Goodhew, Sir Victor

      Brotherton, Michael

      Goodlad, Alastair

      Brown, Michael(Brigg & Sc'n)

      Gow, Ian

      Bruce-Gardyne, John

      Gray, Rt Hon Hamish

      Budgen, Nick

      Greenway, Harry

      Burden, Sir Frederick

      Griffiths, Peter (Portsm'th N)

      Butcher, John

      Grist, Ian

      Butler, Hon Adam

      Gummer, John Selwyn

      Carlisle, John (Luton West)

      Hamilton, Michael (Salisbury)

      Carlisle, Kenneth (Lincoln)

      Hampson, Dr Keith

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

      Hannam, John

      Chalker, Mrs. Lynda

      Haselhurst, Alan

      Chapman, Sydney

      Hawksley, Warren

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

      Hayhoe, Barney

      Clark, Sir W. (Croydon S)

      Heddle, John

      Clarke, Kenneth (Rushcliffe)

      Hicks, Robert

      Clegg, Sir Walter

      Hill, James

      Cockeram, Eric

      Holland, Philip (Carlton)

      Colvin, Michael

      Hunt, David (Wirral)

      Cope, John

      Hunt, John (Ravensbourne)

      Costain, Sir Albert

      Irvine, RtHon Bryant Godman

      Cranborne, Viscount

      Irving, Charles (Cheltenham)

      Critchley, Julian

      Jessel, Toby

      Crouch, David

      Johnson Smith, Sir Geoffrey

      Dickens, Geoffrey

      Jopling, Rt Hon Michael

      Dorrell, Stephen

      Kaberry, Sir Donald

      Douglas-Hamilton, Lord J.

      Kimball, Sir Marcus

      782

      Knight, Mrs Jill

      Raison, Rt Hon Timothy

      Knox, David

      Rhodes James, Robert

      Lang, Ian

      Ridley, Hon Nicholas

      Latham, Michael

      Ridsdale, Sir Julian

      Lawrence, Ivan

      Rippon, Rt Hon Geoffrey

      Lawson, Rt Hon Nigel

      Roberts, Wyn (Conway)

      Lennox-Boyd, Hon Mark

      Rost, Peter

      Lester, Jim (Beeston)

      Rumbold, Mrs A. C. R.

      Lewis, Sir Kenneth (Rutland)

      Sainsbury, Hon Timothy

      Lloyd, Ian (Havant & Who)

      St. John-Stevas, Rt Hon N.

      Lloyd, Peter (Fareham)

      Shaw, Giles (Pudsey)

      Loveridge, John

      Shaw, Sir Michael (Scarb')

      Luce, Richard

      Shelton, William (Streatham)

      Lyell, Nicholas

      Shepherd, Colin (Hereford)

      McCrindle, Robert

      Shepherd, Richard

      Macfarlane, Neil

      Sims, Roger

      McQuarrie, Albert

      Skeet, T. H. H.

      Major, John

      Smith, Tim (Beaconsfield)

      Marlow, Antony

      Speed, Keith

      Marten, Rt Hon' Neil

      Speller, Tony

      Mates, Michael

      Spence, John

      Mather, Carol

      Spicer, Michael (S Worcs)

      Maude, Rt Hon Sir Angus

      Sproat, Iain

      Mawby, Ray

      Stanbrook, Ivor

      Mawhinney, Dr Brian

      Stanley, John

      Maxwell-Hyslop, Robin

      Stokes, John

      Meyer, Sir Anthony

      Stradling Thomas, J

      Miller, Hal (B'grove)

      Tapsell, Peter

      Mills, Iain (Meriden)

      Taylor, Teddy (S'end E)

      Miscampbell, Norman

      Thomas, Rt Hon Peter

      Moate, Roger

      Thompson, Donald

      Monro, Sir Hector

      Thornton, Malcolm

      Montgomery, Fergus

      Townend, John (Bridlington)

      Moore, John

      Townsend, Cyril D, (B'heath)

      Morrison, Hon C. (Devizes)

      Trippier, David

      Murphy, Christopher

      van Straubenzee, Sir W.

      Myles, David

      Waddington, David

      Needham, Richard

      Wakeham, John

      Nelson, Anthony

      Walker, B. (Perth)

      Newton, Tony

      Waller, Gary

      Onslow, Cranley

      Warren, Kenneth

      Osborn, John

      Wells, Bowen

      Page, John (Harrow, West)

      Wells, John (Maidstone)

      Page, Richard (SW Herts)

      Whitney, Raymond

      Parris, Matthew

      Wickenden, Keith

      Patten, Christopher (Bath)

      Wilkinson, John

      Patten, John (Oxford)

      Williams, D.(Montgomery)

      Pattie, Geoffrey

      Winterton, Nicholas

      Pawsey, James

      Wolfson, Mark

      Percival, Sir Ian

      Young, Sir George (Acton)

      Pink, R. Bonner

      Younger, Rt Hon George

      Pollock, Alexander

      Prentice, Rt Hon Reg

      Tellers for the Noes:

      Price, Sir David (Eastleigh)

      Mr. Archie Hamilton and

      Proctor, K. Harvey

      Mr. Douglas Hogg.

      Question accordingly negatived.

    Clause 3

      NUCLEAR-POWERED GENERATING STATIONS
      9.15 pm
      Mr. John Moore: I beg to move amendment NO. 1, in page 2, line 28 leave out 'or extend' and insert
      ', extend or become the operator of.
      Mr. Speaker: With this we may take Government amendment No. 2.
      Mr. Moore: I am pleased to introduce amendment No. 1, which demonstrates the value of discussing a Bill in detail in Committee. In response to a point raised by the right hon. Member for Lanarkshire, North (Mr. Smith) and the hon. Member for Truro (Mr. Penhaligon), we considered whether there might be a case for a private sector company requiring ministerial consent to become

      783
      the operator of a nuclear power station. We have decided that it would be desirable to bring this into line with the existing provisions on the construction or extension of a private nuclear station.
      The amendments have the effect of requiring anyone other than the CEGB to obtain ministerial consent before becoming the operator of a nuclear power station. Failure to do so would be an offence.
      Amendment agreed to.
      Amendment made: No. 2, in page 2, line 40, leave out `or extension' and insert extension or operation'.—[Mr. John Moore.]

    Clause 5

      PRIVATE GENERATORS AND ELECTRICITY BOARDS
      Amendment made: No. 3, in page 4, line 3, at end add—
      '(3A) Every offer under this section shall include such reasonable terms and conditions as the Board may consider necessary to secure that the control by Electricity Boards of the operation of the electricity supply system is not impaired. '.—[Mr. John Moore.]

    Clause 7

      CHARGES FOR PURCHASES BY ELECTRICITY BOARDS
      Mr. John Moore: I beg to move amendment No. 4, in page 5, line 3, leave out 'purchases' and insert 'a purchase'.
      Mr. Speaker: With this we may take Government amendments Nos. 5 to 9.
      Mr. Moore: These are amendments to clauses 7 and 8 which deal with prices and charges. Clause 7 is concerned with tariffs and prices for the purchase of privately generated electricity. Clause 8 deals with tariffs and charges for the use of electricity boards' transmission and distribution systems. Those are the key financial clauses of the Bill.
      We had a thorough discussion of the rather complicated issues in Committee and I promised to table amendments on Report to clarify and refine the expression in the Bill of the relevant economic principles. The fundamental principle is that electricity boards' dealings with private generators should not result in higher electricity prices to consumers generally.
      I shall briefly explain the intention of the present amendments and deal first with tariffs and prices for the purchase of privately generated electricity. The key principle here is that the prices paid should be based on an electricity board's avoidable costs at the margin. Three of the detailed amendments are intended to clarify this principle. The most important is amendment No. 7, which introduces a new paragraph (b) to clause 7(3). This stipulates that the purchase by an electricity board of privately generated electricity should be on terms that reflect the costs that would be incurred by the board but for the purchase.
      Two other amendments, Nos. 4 and 5, effect drafting changes that help emphasise that the approach is to be concerned with what happens on the margin. A further change that we believe to be necessary on purchase terms for privately generated electricity is related to the effect
      784
      that such purchases may have upon electricity prices generally. We envisage the possibility that purchasing privately generated electricity may, over time, enable the board to lower prices to consumers because it has been able to scrap old, high-cost plant earlier than would otherwise have been the case. It is, therefore, appropriate, in recognising this potential benefit, to delete the condition in the existing clause 7(3) that a purchase of privately generated electricity should not reduce prices to consumers, which is the basis for amendment No. 6. Nevertheless, private generators will receive the full value of their electricity sold to the board because of the provision that prices paid must reflect the cost that would have been incurred by the board but for the purchase, as I have explained.
      The second element that needs to be refined is the return that the electricity board may seek from its assets used to meet a private generator's request either for the board to purchase his electricity or to use the board's transmission and distribution system. At present the Bill provides for boards to seek a payment for the use of these assets no greater than sufficient to provide a return comparable to the return received by the board on its assets generally.
      Electricity boards have a variety of assets used for different purposes. Some of these yield a return higher than the board's past average return on its assets overall while others, although essential to maintain services to the consumers, in practice yield a lower rate of return. We believe that it would be right to relate the return that boards may seek to obtain from assets used to meet a private generator's requirements to the return that the board would expect to receive if it were employing the assets wholly for its own purposes. The intention, therefore, is to make a like-to-like comparison.
      Amendments Nos. 8 and 9 to clauses 7 and 8 respectively are intended to achieve this aim. Instead of comparison being made with the return received by the board's assets generally, comparisons will be made with the return that the board expects to receive on comparable assets. These amendments to clauses 7 and 8 are intended to clarify the principles on which prices and charges are to be set by electricity boards in their dealings with private generators. It will help to ensure fairness to private generators as well as to consumers generally and I commend the amendments to the House.
      Amendment agreed to.
      Amendments made: No. 5, in page 5, line 4, leave out `requests' and insert 'a request'.
      No. 6, in page 5, line 5, leave out from beginning to `the' and insert—
      '(a) will not increase'.
      No. 7, in page 5, line 6, at end add
      `and
      No. 8, in page 5, line 18, leave out from 'return' to end of line 19 and insert
      'that the Board expects to receive on comparable assets'.—[Mr. John Moore.]

    Clause 8

      CHARGES FOR USE OF TRANSMISSION AND DISTRIBUTION SYSTEMS
      Amendments made: No. 9, in page 5, line 36, leave out from 'assets' to end of line 37 and insert
      `(taking into account any payments of the kind referred to in section 5(4) above) comparable to any return that the Board expects to receive on comparable assets'.—[Mr. John Moore.]

    Clause 10

      FURTHER PROVISIONS AS TO CHARGES UNDER SECTIONS 7 AND 8
      Mr. John Moore: I beg to move amendment No. 10, in page 7, line 22, at end insert—
      '(6) An Electricity Board, in fixing tariffs and proposing prices or charges in accordance with section 7 or 8 above, shall not show undue preference to any person or class of persons and shall not exercise any undue discrimination against any person or class of persons.'.
      Mr. Speaker: With this it will be convenient to take Government amendments Nos. 16, 17, 20 and 21.
      Mr. Moore: The amendments that we seek to make to clause 10 will prohibit electricity boards from showing undue preference to, or exercising undue discrimination against, any person or class of persons: this will apply to both the actual provision of the services that boards will be obliged to offer to private generators under the Bill and to the prices and charges that they offer to or seek from private generators in respect of these services.
      We wish to see no unfairness of treatment as between the public and private sectors, but it is also important that any individual or class within the private sector should be treated precisely as any other individual or class whose circumstances are the same. I believe that the electricity supply industry welcomes this extension of the concept that justice should not only be done but be seen to be done. It has always been applied by the industry to the provision of supplies of electricity to other consumers and to the prices charged for those supplies.
      Amendment agreed to.

    Clause 13

      INSPECTION AND TESTING OF LINES ETC.
      Amendment made: No. 11 in page 8, line 17, at beginning insert—
      '(1) In section 24 of the Electric Lighting Act 1882 (which empowers Electricity Boards to enter premises to which electricity is supplied by them) for the words "by the undertakers" in the second place where they occur there shall be substituted the words "(whether by the undertakers or by any other person) directly through electric lines belonging to the undertakers": —[Mr. John Moore.]

    Clause 16

      COMBINED HEAT AND POWER
      Mr. Gray: I beg to move amendment No. 12, in page 10, line 45, at end add—
      "Production and use of heat and electricity.
      '(3) For section 15 of the Electricity (Scotland) Act 1979 (research into heating from electricity) there shall be substituted—
      15.—(1) It shall be the duty of each Board to adopt and support schemes—
      786

      (a) for the combined production of heat and electricity, and

      (b) for the use of heat produced in combination with electricity, or incidentally from its generation, for the heating of buildings or for other useful purposes.

      (2) For the purposes of a scheme under subsection (1), a Board may, in accordance with a scheme submitted by them to the Secretary of State and appoved by order made with or without modification by him, exercise the powers conferred by section 13(8) for the purposes of that section, and section 13(9) shall apply in relation to the manner in which the powers are exercisable.
      (3) Nothing in subsection (1) shall require a Board to undertake expenditure in conection with a scheme which does not meet the financial criteria applied by the Board in relation to other expenditure of the Board.".'.
      We were pleased to accept in Committee an amendment tabled by my hon. Friend the Member for Derbyshire South-East (Mr. Rost), which imposed duties on electricity boards to adopt and support schemes for combined heat and power and the use of heat generally. This is now clause 16 of the Bill and it amends section 50 of the Electricity Act 1947, which applies only in England and Wales. In accepting the amendment we also undertook to table an amendment which would bring the duties of the Scottish boards into line with those in England and Wales.
      The amendment adds a new subsection to clause 16 and amends section 15 of the Electricity (Scotland) Act 1979. The working is slightly different from that in subsection (1) since it is necessary to apply the powers to break up streets contained in section 1.3 of the 1979 Act to these new duties. The effect is the same.
      I am sure that both sides of the House will welcome the inclusion in the Bill of those duties which remove any existing doubt about the attitude that boards should adopt towards CHP schemes and the use of heat from ordinary power stations.
      I invite the House to accept the amendment.
      Amendment agreed to.

    Clause 20

      ANNUAL REPORTS
      Mr. John Moore: I beg to move amendment No. 1.3, in page 13, line 7, leave out clause 20.
      Mr. Speaker: With this it is convenient to take Government amendment No. 25.
      Mr. Moore: In response to the moving speech and appeals by the right hon. Member for Lanarkshire, North (Mr Smith) in Committee, this amendment and the consequential amendment to the schedule remove clause 20 from the Bill, thus retaining the requirement in section 10(6) of the Electricity Act 1957 for the Secretary of State to lay before Parliament an annual report in respect of the performance of his functions under the electricity legislation.
      Mr. John Smith: I appreciate the fact that the Minister has moved amendment No. 13 to restore clause 20—
      Mr. Lawson: It does not.
      Mr. Smith: —which obliges the Secretary of State make an annual report to Parliament.' shall resist the temptation to go into the matter in depth. We never had any doubt that the Minister would carry out the undertaking that he gave in Committee. That proves that

      787
      persuasion on the part of the Opposition is not yet dead and comprehension on the part of Ministers is still faintly alive.
      Amendment agreed to.

    Clause 36

      SHORT TITLE AND EXTENT
      Mr. Gray: I beg to move amendment No. 14, in page 20, line 7, leave out from beginning to 'do' and insert—
      '(2) The following provisions of this Act, namely—

      (a) Part I (except paragraph 11 of Schedule 1), and

      (b) Part I of Schedule 3,'.

      This is a minor, consequential amendment which has become necessary because of the inclusion in Committee of clauses 18 and 19 and schedule 1 giving statutory status to the Electricity Consumers Council. The provisions in those clauses and the schedule do not extend to Northern Ireland because the ECC has no locus there. However, paragraph 11 of the schedule amends the House of Commons Disqualification Act 1975, which applies in Northern Ireland. A limited exception is therefore necessary to extend paragraph 11 to Northern Ireland.
      I commend the amendment to the House.
      Amendment agreed to.

    Schedule 2

      ELECTRICITY: MINOR AND CONSEQUENTIAL AMENDMENTS
      Amendments made: No. 15, in page 23, line 2, at end insert—
      'The Electric Lighting Act 1882
      In section 25 of the Electric Lighting Act 1882, for the words from "supplying" to "special Act" there shall be substituted the words "a supply of electricity (whether by the undertakers or any other person) directly through electric lines belonging to them".'.
      No. 16, in page 23, leave out line 21 and insert—
      '2.—(1) Section 1 of the Electricity Act 1947 shall be amended as follows.
      (2) In subsection (4)—'
      No. 17, in page 23, line 28, at end insert—
      (3) At the end of subsection (6)(c) there shall be inserted the words "and in complying with requests under section 5 of the Energy Act 1983"'.—[Mr. John Moore.]
      Mr. Gray: I beg to move amendment No. 18, in page 24, line 26, at end insert—
      'The Clean Air Act 1956
      7A. In section 10(4) of the Clean Air Act 1956, for the Words from "a generating" to the end there shall be substituted the words "an electricity generating station by an Electricity Board (as defined in section 24 of the Energy Act 1983)"'.
      Mr. Speaker: With this it will be convenient to take Government amendment No. 19.
      Mr. Gray: Section 10(4) of the Clean Air Act 1956 and section 6(10) of the Clean Air Act 1968 exempt electricity board generating stations and private stations whose output is mainly for sale to others from the requirements of those sections which relate to the height of chimneys.
      Those stations were exempted from those requirements since control could be exercised in connection with the consent of the Secretary of State, either under section 2 of the Electric Lighting Act 1909 for electricity boards or section 11 of the Electricity (Supply) Act 1919 for private operators. Since clause 1 of the Bill proposes to abolish
      788
      the need for private operators to obtain the Secretary of State's consent, this amendment is proposed so that all privately operated generating stations will have to meet the requirements of those sections of the Clean Air Acts.
      I am sure that the House will accept this safeguard against pollution, and I commend the amendment to the House.
      Amendment agreed to.
      Amendments made: No. 19, in page 24, line 29, at end insert—
      'The Clean Air Act 1968
      8A. In section 6(10) of the Clean Air Act 1968, for the words from "a generating" to the end there shall be substituted the words "an electricity generating station occupied by an Electricity Board (as defined in section 24 of the Energy Act 1983)".'.
      No. 20, in page 24, line 30, at end insert—
      '8A. In section 4 of the Electricity (Scotland) Act 1979, at the end of paragraph (c) there shall be added the words "and in complying with requests under section 5 of the Energy Act 1983".'.
      No. 21, in page 24, line 31, leave out the words
      'the Electricity (Scotland) Act 1979' and insert the words 'that Act'.—[Mr. Gray.]

    Schedule 3

      ENACTMENTS REPEALED
      No. 22, in page 26, line 10, column 3, at end insert—

      'in section 2, the words from "forty-nine" to "fifty-eight".'.

      No. 23, in page 26, line 42, at end insert—

      '26 Geo. 5 & 1 Edw. 8 c. 20.

      The Electricity Supply (Meters) Act 1936.

      In section 1(1), the words "by authorised under-takers".In section 1(3), the words "by any consumer or the undertakers as the case may be".'.

      No. 24, in page 27, line 15, leave out 'section' and insert 'sections 49 and'.
      No. 25, in page 27, leave out lines 28 and 29.
      No. 26, in page 27, line 29, column 3, at end insert—

      'Section 30(5) to (8).'. —[Mr. Gray.]

    New Schedule

      ELECTRICITY: AMENDMENTS RELATING TO METERS
      The Electricity Lighting (Clauses) Act 1899
      1. The Schedule to the Electric Lighting (Clauses) Act 1899 (as incorporated with the Electricity Act 1947) shall be amended in accordance with paragraphs 2 to 14 below.
      2. At the end of section 1 (interpretation) there shall be added—
      "The expression 'private supplier' means a person other than an Electricity Board who supplies electricity generated otherwise than by an Electricity Board.".
      3. In section 2 (definition of "the Undertakers") the words from "forty-nine" to "fifty-eight" shall cease to have effect.
      4. For section 49 there shall be substituted—
      "Meters to be used except by agreement
      49.—(1) This section applies to—
      (a) a supply by the Undertakers to an ordinary consumer, and
      (b) a supply by a private supplier to a person (other than the Undertakers) who takes the supply directly from electric lines belonging to the Undertakers,

      789
      unless otherwise agreed between the Undertakers and (in a case within paragraph (a) above) the consumer or (in a case within paragraph (b) above) the private supplier.
      (2) The value of a supply to which this section applies shall be ascertained by means of an appropriate meter duly certified under the provisions of this Schedule, and fixed and connected with the Undertakers' lines in some manner approved by the Secretary of State.
      (3) References in this section and the following sections to the value of a supply are references to the amount of energy supplied or (according to the method of charging) the electrical quantity contained in the supply.".
      5. In section 50 (certification of meters) for the words "electric inspector appointed under this Schedule" there shall be substituted the words "authorised person".
      6. After section 50 there shall he inserted—
      "Persons authorised to certify meters
      50A.—(1) The reference in section 50 above to an authorised person is a reference to—

      (a) a meter examiner appointed under the Electricity Supply (Meters) Act 1936, or

      (b) a person authorised by the Secretary of State under this section.

      (2) The Secretary of State may authorise a person who manufactures or repairs meters to certify, in accordance with section 50 above, meters manufactured or repaired by him.
      (3) An authorisation under this section may be given subject to such conditions as the Secretary of State thinks fit and may be withdrawn before the end of the period for which it is given if any of those conditions is not satisfied.
      (4) The Secretary of State may make regulations prescribing fees to be paid to him by applicants for or holders of authorisations under this section towards administrative expenses incurred by him by virtue of this section; and different fees may be prescribed in relation to different areas and different cases.
      Uncertified meters—offences
      50B. —(1) If the Undertakers or a private supplier install a meter for the purpose of ascertaining the value of a supply to which section 49 above applies and that meter, at the time when it is installed, is not a certified meter, the Undertakers or the supplier shall be guilty of an offence.
      (2) Where a meter used for the purpose of ascertaining the value of a supply to which section 49 above applies ceases to be a certified meter, the person providing the supply shall as soon as practicable take all reasonable steps either for causing the meter to be recertified or for causing it to be removed or (if its removal is not reasonably practicable) for ceasing to supply energy through it.
      (3) A person who fails to take the steps required of him by subsection (2) above shall be guilty of an offence unless he shows that the meter ceased to be a duly certified meter by reason only of its being altered or moved without his knowledge.
      (4) A person guilty of an offence under this section shall be liable on summary conviction to a fine not exceeding level 2 on the standard scale (within the meaning of section 75 of the Criminal Justice Act 1982).
      (5) Proceedings for an offence under this section shall not, in England and Wales, be instituted except by or with the consent of the Secretary of State or the Director of Public Prosecutions.".
      7. In section 51 (meter examiners to certify meters)—

      (a) for the words "or by any consumer" there shall be substituted the words ", the person supplied with energy or, where the supply is by a private supplier, that supplier";

      (b) for the words "the supply" there shall be substituted the words "a supply to which section 49 above applies"; and

      (c) for the word "service" in both places where it occurs there shall be substituted the word "Undertakers—.

      8. In section 52 (Undertakers to supply meters if required to do so) for the words "the supply" there shall be substituted the words "a supply by the Undertakers".
      9. For section 53 there shall be substituted—
      "Meters not to be connected or disconnected without notice
      53.—(1) No meter used or to be used for ascertaining
      790
      the value of a supply to which section 49 above applies shall be connected with, or disconnected from any electric line belonging to the Undertakers by the Undertakers, the person supplied (or to be supplied) with energy or, where the supply is by a private supplier, that supplier unless the person intending to connect or disconnect the meter has given to the other pe:':son or persons mentioned above not less than forty-eight hours' notice in writing of the intention to do so.
      (2) A person who contravenes this section shall be guilty of an offence ar.d liable on summary conviction to a fine not exceeding level 2 on the standard scale (within the meaning of section 75 of the Criminal Justice Act 1982).".
      10. In section 54(1) (consumer to keep meters in order) for the words, "the supply" there shall be substituted the words "a supply by the Undertakers".
      11. In section 55 (power of Undertakers to let meters) for the words "the supply" there shall be substituted the words "a supply of energy".
      12. In section 56 (Undertakers to keep meters let for hire in repair) for the words "the supply" there shall be substituted the words "a supply by the Undertakers".
      13. For section 57 there shall be substituted—
      "Questions as to correctness of meter to be determined by meter examiner
      57.—(1) Any question—

      (a) whether a meter, by which there is ascertained the value of a supply to which section 49 above applies, is in proper order for correctly registering that value, or

      (b) whether the value of such a supply has been correctly registered by any meter,

      may be referred by any of the persons concerned to a meter examiner appointed under the Electricity Supply (Meters) Act 1936 for determination by him; and in this section 'the persons concerned' means the Undertakers, the person supplied and, where the supply is by a private supplier, that supplier.
      (2) Before determining a question referred to him under this section, the meter examiner shall give notice to the other person or persons concerned; and his decision shall be final and binding upon all the persons concerned.
      (3) A meter examiner determining a question referred to him under this section may make awards of costs or expenses as between the persons concerned.
      (4) In the case of a supply by the Undertakers the register of the meter used to ascertain the value of the supply shall, except as provided by this section, be conclusive evidence in the absence of fraud of that value.
      (5) The Secretary of State may by regulations—

      (a) prescribe a fee to be paid to the Secretary of State by a person other than the Undertakers referring a question for determination under this section;

      (b) specify circumstances in which the fee may be refunded; and

      (c) make provision requiring the Undertakers to pay sums determined by the Secretary of State towards any administrative expenses incurred by him (and not recovered as mentioned in paragraph (a) above) in connection with the determination of questions under this section.".

      14. For section 59 there shall be substituted—
      "Undertakers may place meters to measure supply or to check measurement
      59.—(1) Subject to subsection (2) below, the Undertakers may place upon the premises of any person supplied with energy directly from electric lines belonging to them such meter or other apparatus (in addition to any meter to ascertain the value of the supply) as they may desire for the purpose of ascertaining or regulating the amount of energy supplied to him, the number of hours during which the supply is given, the maximum power taken by him or any the]. quantity or time connected with the supply.
      (2) A meter or apparatus placed upon premises under this section—

      791

      (a) shall be of a construction and pattern approved by the Secretary of State and shall be fixed and connected with the Undertakers' lines in a manner so approved;

      (b) shall, where the supply of energy is by the Undertakers, be supplied and maintained entirely at the cost of the Undertakers; and

      (c) shall be placed between the Undertakers' mains and the ends of the Undertakers' lines at which the supply of energy is delivered unless otherwise agreed between the Undertakers, the person supplied with energy and, where the supply is by a private supplier, that supplier.".

      The Electricity Supply (Meters) Act 1936
      15.—(1) Section 1 of the Electricity Supply (Meters) Act 1936 shall be amended as follows:
      (2) In subsection (1)—

      (a) after the words "charged with", there shall be inserted the words "such duties as the Secretary of State may determine in connection with"; and

      (b) the words "by authorised undertakers" shall cease to have effect.

      (3) In subsection (3), the words "by any consumer or the undertakers as the case may be" shall cease to have effect.
      16.—(1) Section 2 of that Act shall be amended as follows.
      (2) In subsection (1), for the words "by those undertakers" there shall be substituted the words "(whether by the undertakers or by another person) directly through lines belonging to the undertakers".
      (3) In subsection (2), for the words "by the other parties" (in both places where those words occur) there shall be substituted the words "through lines belonging to the other parties".
      (4) In subsection (3), for the words "by the undertakers" there shall be substituted the words "through lines belonging to the undertakers".
      The Electricity Act 1957
      17.—(1) Section 30 of the Electricity Act 1957 shall be amended as follows:
      (2) In subsection (1)(c), for the words "the supply" there shall be substituted the words "a supply".
      (3) After subsection (4) there shall be inserted—
      "(4A) Where a person other than an Electricity Board submits a meter to a meter examiner for certification under the provisions of the Schedule of 1899, the meter examiner may certify the meter, notwithstanding that he has not himself examined or tested it, if—

      (a) the meter was manufactured or repaired by the person submitting it;

      (b) that person has obtained the consent of the Secretary of State to the submission; and

      (c) any conditions subject to which the consent was given have been satisfied."

      (4) Subsections (5) to (8) shall cease to have effect.
      (5) In subsection (9), for the words "the supply" there shall be substituted the words "a supply".'—[Mr. Gray.]
      Brought up, read the First and Second time, and added to the Bill.
      9.29 pm
      Mr. Lawson: I beg to move, That the Bill be now read the Third time.
      The Bill is complex and has been skilfully steered through its Committee and Report stages by my right hon. Friend the Minister of State and my hon. Friend the Under-Secretary of State. I commend them both for that. Although the Bill is complex, its purpose is simple—to encourage the private generation of electricity in Britain. As I reminded the right hon. Member for Lanarkshire, North (Mr. Smith), private generation is not new in Britain. At present, industry generates about 15 per cent.
      792
      of its own electricity requirements. However, that is less than in many other countries and the proportion has been declining in recent years.
      The purpose of the Bill is to reverse that trend by enabling the private sector to compete on fair terms and so help to reduce the extent of the nationalised electricity supply industry's monopoly power. The greater the amount of competition, the greater the spur to efficiency and the greater the benefit to the consumer.
      Many of my hon. Friends are disappointed that the Bill does not go further and reorganise the entire electricity supply industry. That is an important subject that has received much attention in the past and will no doubt continue to do so. But meanwhile, whatever the eventual shape of the electricity industry, the Bill is needed. It opens up the national transmission and distribution network as a common carrier for the first time and private electricity generators will have access through the network to any customers, including plants that they own, for the first time. The state-owned industry will have a clear duty to accept privately generated electricity at a fair price and to provide a standby supply. The arbitrary and unnecessary ban on the private generation of electricity as a main business will be removed.
      One important consequence of the encouragement of private generation will be the boost that it gives to combined heat and power schemes that are normally the most economic and energy-efficient form of generation for industry. In many cases it will be only by putting to good use the otherwise waste heat produced as a by-product of electricity generation that industry can secure a worthwhile return from generating its own power.
      Although about two thirds of existing private industrial electricity generation takes the form of CHP schemes, the nationalised industry, at least outside the midlands, has shown little enthusiasm for the idea. Accordingly, the Government were happy to accept in Committee a new clause moved by my hon. Friend the Member for Derbyshire, South-East (Mr. Rost)—I congratulate him on the way in which he has consistently ploughed that furrow for many years—extending the statutory duties of the electricity supply industry to encompass economic—I stress the word "economic"—CHP schemes.
      The Government further demonstrated their open-mindedness in Committee—I am glad that the right hon. Member for Lanarkshire, North, who is a little grudging in his acceptance of the way in which we responded to his points, had the grace to say that we had been open-minded throughout the passage of the Bill—
      Mr. John Smith: I did not say that.
      Mr. Lawson: —by accepting a new clause moved by my hon. Friend the Member for Exeter (Mr. Hannam) to place the Electricity Consumers Council on a statutory basis for the first time.
      Mr. Smith: The Secretary of State's recollection of today's events is imperfect because he has not been here much. I congratulated Ministers in one instance on their acceptance of reality. I did not give them the extensive congratulations suggested by the Secretary of State, because I am sorry to see most of the Bill still intact.
      Mr. Lawson: I am sorry to say that my characterisation of the right hon. Gentleman as grudging is truer than I envisaged.

      793
      Clause 3, and the possibility of privately owned nuclear power stations, has also generated a great deal of heat. Contrary to what the right hon. Member for Lanarkshire, North (Mr. Smith) said, I have been present for much of today. His argument—I flatter him by so describing it—was completely demolished by my hon. Friend the Under-Secretary of State. So well did my hon. Friend demolish that argument that the right hon. Gentleman was hard put to it to find any reason for voting for his own new clause. However, I shall return to the main theme of the Bill, which is the encouragement of private generation.
      The Bill does not confer any privileges on private generators, but ensures a fair deal for them from the state-owned monopoly. Too often that has not been the case—I have had several representations to that effect. Great care has been taken to ensure that the electricity supply industry's customers suffer no net disadvantage. The industry has been consulted exhaustively and it is satisfied that the proposed regime is both workable and fair.
      The electricity supply industry does not fear the spur of competition. The irrational fear of competition is, alas, a chronic condition from which the Opposition suffer and, I suspect, one of the many reasons why they stand in such low esteem with the electorate.
      However, the Opposition's protestations will not divert us from our purpose. The Government were elected to increase the consumer's freedom of choice, to reduce the role of the state in the economy, to curb monopoly power and to open state-owned industries, as far as is possible, to the discipline of the market place. The Bill offers useful progress in that direction in the crucial business of electricity supply.
      As I have already acknowledged, the Bill does not go as far as some of my right hon. and hon. Friends would like, but it breaks important ground. It establishes the fact that, where a private supplier can match the state-owned monopoly on quality, price, safety standards and the like, he should have every opportunity to compete on fair and equal terms. Unregulated monopolies will always exploit their market power to prevent competition, and an element of regulation is the price that they must pay for monopoly privileges. The Bill strikes a proper balance between the rights and obligations both of the electricity supply industry and of the private generators of electricity. I commend it to the House.
      9.37 pm
      Dr. J. Dickson Mabon: The trouble with the Bill is that it is an exaggeration for the Secretary of State to claim that it does all that he says it does, even though there is a suggestion that his right hon. and hon. Friends do not believe that it goes far enough.
      The Committee stage was not entirely agreeable, but it provided a great deal of information. The point that there is no substantial development in private generation in the near future—[HoN. MEMBERS: "Rubbish".] I am sorry, but that is what the Minister told us. If called upon to do so, I can quote the exact column of the sixth sitting of the Committee. It is an exaggeration to suggest, as have the official Opposition, that the Bill will open up such a supply of generation as will wreck the system. The two great parties are characterising the Bill in opposite ways to the point where it is almost unrecognisable.
      My party has no objection to the Bill in regard to the introduction of the private supply of electricity. To that extent, I agree with the Secretary of State that it is breaking
      794
      new ground, but the idea that the Bill will introduce a substantial factor is nonsense. It is nonsense for the Secretary of State to pretend that it will do that and it is nonsense for the Opposition to suggest that it will privatise or even nearly privatise the generation of electricity in Britain. It merely opens up competitiveness. If the Bill were entirely even-handed—it is not—that could be true.
      The Secretary of State and his Ministers have piloted the Bill through well. I freely acknowledge their industry, attentiveness and co-operation, with the exception of one, who is not here. Nevertheless, the fact remains that the Bill is not all that important in terms of its physical impact on the economy of our country. It may lead promisingly in the area of combined heat and power, but I do not believe that even the wildest expectations of the hon. Member for Derbyshire, South-East (Mr. Rost) will be fulfilled by what the Secretary of State proposes in the Bill. A more substantial measure is needed. I am only sorry that the Bill is not of the stature that the demands of the hour require.
      We made it clear on Second Reading that our fundamental objection at this stage was that the generation of nuclear power should be in private hands. We submitted our case on Second Reading. Members have tried hard to decry what we said and suggested that we did not believe it. We believe profoundly in what we said. It is for Parliament to decide whether or not we take this fateful step to allow private industry to go into nuclear power generation.
      We tried in Committee to amend not only clause 2 but clause 1. The votes in Committee taken on 21 December, in Divisions Nos. 5 and 6, show emphatically that the Government would not change their mind on the subject. We tried earlier to persuade them that they might change their mind in proceedings in the other place, but clearly the Secretary of State is immovable.
      We shall vote against the Bill as a protest. We shall vote against it because it seeks to deprive Parliament of its full role. In the last few minutes of the debate on Report the Under-Secretary of State uncharacteristically gave the show away by saying that Parliament would play a role. The Secretary of State nods his head vigorously. Parliament should play the role of allowing private industry to be involved in nuclear power generation. Surely we have learnt that over the past quarter of a century.
      On this fundamental point there is no reason why we should continue to support the Bill. For that reason, my right hon. and hon. Friends in the Social Democratic and Liberal parties will vote against the Bill on Third Reading.
      9.42 pm
      Mr. Peter Rost: I have sat silently and patiently throughout the day, so I hope that the House will allow me three minutes to lend my support to this excellent Bill.
      I believe that the Bill will prove to be far more important and will lead to more important reform than the House, and certainly the outside world, realise. Industry will come to see the advantages of being able to generate cheaper power and cheaper heat. I believe that the consumer, too, will come to see the advantages. This will provide a fair deal for the private generation of electricity and in doing so will offer the opportunity for competitive heat and power generation in this country. It will provide a grid for joint use and will encourage the private generator to sell electricity not only to himself but to anyone else to

      795
      whom he wishes to sell it. It will allow fair prices for surplus electricity going from the private sector to the public sector.
      I have no doubt that on the industrial side it will lead to the development of combined heat and power. I am particularly grateful to my right hon. Friend the Secretary of State for accepting the amendment to clause 16 which will do a great deal to set the scene for the development of larger scale district heating using the reject heat from our power stations, which is so shamelessly wasted in this country compared to the 3,000 cities in Europe that are provided with relatively cheap heat.
      The electricity industry is also adopting a new attitude. It is now beginning to see the advantages of trying to market heat as well as electricity. In the east midlands, in particular, there is a new mood of enthusiasm towards combined heat and power and district heating schemes.
      I wish to quote from a letter that lends support to the legislation in a more relevant and precise way than the Opposition are prepared to accept. There are already enterprises in Britain in the private sector that promote the production of heat and electricity. There is one publicly quoted company which is already in the business, and has been for a number of years—Associated Heat Services, a £20 million public company. The National Coal Board owns one third of the equity. It has already installed heating equipment and service, manages boiler houses and produces electricity in more than 1,000 installations. For example, it has installed a district heating scheme in Nottingham which produces heat from refuse and provides electricity. It has recently modernised the Battersea district heating scheme.
      The chairman of the company, in welcoming the legislation, said:
      "we look forward to the opportunities provided by the proposed new legislation contained within the Energy Bill. This will enable us to accelerate the application of CHP in the industrial sector and help reduce energy costs to the industrialist.
      During the last few years we have found that the 'buy-back' and standby tariffs indicated by the CEGB have been weighted to effectively prevent the development of CHP, whilst in other countries evidence of the greater competition created amongst power generation companies has resulted in lower increases in electricity costs. This, of course, means that goods produced in this country are often uncompetitive in consequence.
      We are ready and eager to play our part—indeed, we are already doing so in developing ways in which heat and steam can be produced from waste. I am confident that we can similarly offer lower energy costs to industry by building, financing and operating CHP schemes which will be made possible only provided the Energy Bill is adopted."
      That is a positive evidence from someone already in the business, who has achieved a great deal in providing cheaper heat and electricity in Britain. His company welcomes the legislation and, in due course, consumers will do so also.
      9.47 pm
      Mr. Palmer: The Secretary of State is proud of his child, but there are few apart from him who take that view. In my humble judgment, it is a poor little waif of a Bill. Who really wants it?—certainly not the electricity supply industry. For a time, Ministers tried to pretend that the Electricity Council was not actively opposed to the Bill. In fact, both the council and the boards detest it. The documents quoted in Committee by the Opposition proved that.
      796
      The trade unions in the electricity supply industry are as responsible a bunch as anyone is ever likely to meet. They have campaigned actively against the Bill and have taken their objections to the Minister's office many times, as he well knows.
      The hon. Member for Derbyshire, South-East (Mr. Rost) had to wait until this last moment to find one witness to support his thesis of demand from private industry. The Confederation of British Industry stated, briefly, that the Bill could do no harm, and left it at that. It is said that the Bill will encourage the production of combined heat and power. There was nothing in the original Bill to that effect. Indeed, the Secretary of State, who is no friend of the nationalised industries—he makes little secret of his enmity towards the electricity supply industry—has had to include extra powers to start combined heat and power schemes.
      The irony is that the Bill has been badly drafted, as was displayed clearly in Standing Committee, with no thought for economic realism or its technical consequences in practice. Indeed, the amendments accepted by the Government are so drastic that it is now doubtful whether the Bill has any life left in it at all. The right hon. Gentleman gave the game away very plainly in the remarks that he made tonight from the Dispatch Box. He said again what he had said already on Second Reading, that the aim is not to constrict private generation in any way but rather to make the electricity boards allow for private generation when planning their own investment.
      I have followed electricity legislation over many years and I believe that this Bill is a break in the normal evolutionary tradition of the industry in this country to which all parties and many individuals of varying opinions have contributed. Far from reducing the real price of electricity, it is, I am sure, going to increase it. Certainly the ordinary consumer will not get in future the reliability of supply which he has enjoyed in the past. I am sorry that the House is not in a position to reject the Bill.
      9.52 pm
      Mr. John Smith: Throughout the discussion of this Bill there has been a clash of approach towards our publicly owned industry. Perhaps the most interesting thing we have seen this evening is the attitude of the members of the SDP-Liberal alliance to this Bill. Having voted for the Second Reading of the Bill, they inform us that they are voting against the Third Reading because of clause 3 of the Bill, which has not been amended as they wanted. The amusing thing is that they were the only party to absent themselves and fail to vote on clause 3 when the matter was decided in the Committee. So the pivotal factor which made the difference between supporting the Bill and opposing the Bill was one on which they deliberately abstained. So they had not only a vote one way and a vote another way but a crucial abstention in the middle. It must make the SDP-Liberal alliance very happy to have covered every point in the political compass.
      Dr. J. Dickson Mabon: That is absolute nonsense, as usual.
      Mr. Smith: The right hon. Member for Greenock and Port Glasgow (Dr. Mabon) will not get very far shouting abusively from a sedentary position. These are the facts of the matter and I hope that they will be more widely known throughout the country than the right hon. Gentleman would wish.
      Dr. Mabon: Would the right hon. Gentleman do me the kindness of reading the report of the proceedings of the second sitting in Committee where he will see the reference to the Chairman's ruling that amendment No. 1 should be diverted from clause 3 to clause 1 or clause 2. The critical votes were taken at the sixth sitting. Will the right hon. Gentleman apologise now?
      Mr. Smith: I have defended many alleged criminals in my time, but never one with such a weak defence, and I hope that I never have the right hon. Gentleman for a client. The truth of the matter is that when we discussed clause 3 the right hon. Gentleman and the hon. Member for Truro (Mr. Penhaligon) were at junketings in Central Hall to do with the alleged revival of the SDP-Liberal alliance. They absented themselves from their duties in Parliament and therefore missed the vote on the crucial clause.
      It is much more important for the House to concern itself with the substance of the debate, which does not come from that quarter.
      The Secretary of State put the best face that he could on the justification for this Bill, but neither he nor any of his Ministers, nor indeed any of his hon. Friends who have taken part in this debate, have been able to prove that there is anybody in the private sector who wishes to generate electricity as a main business. Time and again we have asked where the proposals are and what companies are lurking in the wings waiting to generate private sector electricity. The answer is that there is none. So this is not a Bill to meet some demand, wise or unwise, for private sector electricity generation. This is a Bill—
      Mr. Rost rose—
      Mr. Smith: No, I shall not give way.
      This is a Bill to indulge the ideological impulses which drive the Secretary of State for Energy. I am sony that those ideological impulses have led him into grave error in other areas of our energy policy, into the disastrous Amersham sale, into the disastrous Britoil sale, into the forced disposal of Wytch farm—public asset stripping on a scale never seen before.
      We know that there is no demand for the Bill. The Secretary of State was motivated entirely by an ideological impulse. His description of the Bill suggested that its purpose was to introduce fair competition between the private sector and the public sector, but when I remind the House of exactly what the Bill does it will be clear that that description is false.
      First, the Bill provides that whenever anybody generates electricity in the private sector the public sector will be obliged to take the electricity. That is not fair competition. It is carving out a special guaranteed market for the favoured private sector. Secondly, private generators will have statutory access to the transmission system built up by the public sector. Thirdly, the public sector must guarantee private generators a standby supply of electricity if they run out of their own. If that is fair competition, Adam Smith must be revolving in his grave. It is carving a favoured position for the private sector out of the public sector.
      It may be thought that there must be some lack of generating capacity in this country, but in fact there is overcapacity, so any substantial addition from the private
      798
      sector is unnecessary and wasteful. It is not needed for any public purpose and the lack of demand suggests that it is not needed for any private purpose either.
      Why, then, has the Bill been introduced? It is irrelevant to the needs of the electricity supply industry and to the public need for an electricity supply. Its purpose is not to provide combined heat and power schemes, which the Opposition would welcome. If that were the purpose, a combined heat and power scheme Bill could have been introduced. It would have had a very speedy passage as it would have received widespread support from all parts of the House. Indeed, combined heat and power only came into the Bill as a result of amendment in Committee. There was no provision for it or Second Reading. Moreover, as that amendment changed only the public sector responsibility in relation to combined heat and power, it is not really connected with the private generation case.
      I fear that the Bill has been introduced because Ministers and especially the Secretary of State feel an obsessive need to ingratiate themselves with the Prime Minister by privatising anything within reach in their statutory domains. The present Secretary of State has been a disaster for energy policy. He has left our oil policy in ruins through the wicked, stupid and senseless destruction of the British National Oil Corporation and the asset stripping now taking place in the gas industry.
      I hope that the Bill will not amount to much in the short or the long term and that because there is no demand and no obvious use for private sector generation the provisions will not be used. Whether the Bill is used or not, however, it will remain a testimony to the absurd ideological obsessions of the Government—no better typified than by the present lamentable Secretary of State for Energy.
      9.58 pm
      Mr. Lawson: We have very little time, as there is business later this evening that is particularly close to the hearts of the official Opposition. Despite the posturing of the right hon. Member for Lanarkshire, North (Mr. Smith), the only real acrimony came when he engaged with his former right hon. Friend and successor as Labour Minister of State, Department of Energy, the right hon. Member for Greenock and Port Glasgow (Dr. Mabon). If, as I suspect, they carried on in that way when they were in the same party, it is no wonder that things have reached the pass that they now have in that party.
      The right hon. Member for Lanarkshire, North accused the Government of introducing an ideological Bill. He fails to understand that it is for him to show why there should be a statutory ban on the private generation of electricity as a main business. He has made no case whatever, although as long ago as 1980 my predecessor, now Secretary of State for Transport, committed the Government to removing that ban.
      The additional element in the Bill gives the autogenerator—someone who is generating in the private sector not for his own purposes but to supply other people on the grid—a fair crack of the whip. It is not ideological. I have received many representations about it. If the right hon. Member for Lanarkshire, North (Mr. Smith) knew anything about the matter, he would know that private sector generators feel that they have not been having a fair crack of the whip. The Bill will provide useful advantages, increased competition and opportunities for industry where they are badly needed.

      799
      I ask the House to support the Bill with a handsome majority.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Energy Bill and the Motion relating to Financial Assistance to Opposition Parties may be proceeded with, though opposed, until any hour.—[Mr. Cope]

Energy Bill
10 pm
Mr. David Penhaligon: The trouble with the right hon. Member for Lanarkshire, North (Mr. Smith) and many of his profession is that they confuse accuracy with confident assertion. The line taken by the Liberals and Social Democrats on the Bill has been clear from the beginning. The few hon. Members who have taken any interest in the Bill will be aware of that.
The Bill will encourage private generation and allow it to be a main business. I believe that is right and I am pleased that the Government have introduced that concept. It will be interesting to see what happens during the next 12 months, not least in my part of the county, where the CEGB is planning to close a number of power stations. One presumes that the private sector will be allowed to take them over and, one suspects, generate electricity economically. In Plymouth and north Devon there are a number of opportunities for the private sector to take over power stations, save jobs and provide the south-west with some much-needed electricity.
It is strange that the Secretary of State's full point in favour of the Bill was the amendment tabled by the hon. Member for Derbyshire, South-East (Mr. Rost). I congratulate him on his success. The amendment was broadly welcomed and I am pleased to see it in the Bill.
My party will vote against the Bill on Third Reading, although we voted for it on Second Reading. We said that would happen if the Government did not introduce amendments in Committee or on Report to make it illegal for someone to own a nuclear power station privately. We have made that clear throughout the Bill's passage. The day may arrive when the private ownership of nuclear power stations is safe and to be welcomed. We do not believe that that is the position today. We do not believe that it will happen in the immediate future. When it does happen the House should pass new legislation according to the circumstances at the time.
We welcome part of the Bill. We have made it quite clear which clause we are against. We cannot understand why the Government have been so stubborn about it. We cannot believe that the public would welcome private ownership of a nuclear power station and we shall vote against the Bill.
10.3 pm
Mr. Gordon Wilson: I also said on Second Reading that if the Government did not withdraw the lunatic provision contained in the Bill for the private ownership of nuclear power stations my right hon. Friend the Member for Western Isles (Mr. Stewart) and I would reconsider our vote. I regret that the Government have not taken any action to change the Bill. I do not think that it is a practical proposition for a nuclear power station to be
800
in the private sector. I regard it as a matter of principle. A private nuclear power station is a highly dangerous concept. I am not prepared to accept it for that reason. My right hon. Friend the Member for Western Isles and I will vote against the Bill on Third Reading.
Question put, That the Bill be now read the Third time:—
The House divided: Ayes, 279, Noes 227.

Division No. 89]

[10.5 pm

AYES

Aitken, Jonathan

Farr, John

Alexander, Richard

Fell, Sir Anthony

Alison, Rt Hon Michael

Fenner, Mrs Peggy

Amery, Rt Hon Julian

Finsberg, Geoffrey

Ancram, Michael

Fisher, Sir Nigel

Arnold, Tom

Fletcher, A. (Ed'nb'gh N)

Atkins, Rt Hon H.(S'thorne).

Fletcher-Cooke, Sir Charles

Atkins, Robert(Preston N)

Fookes, Miss Janet

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

Forman, Nigel

Baker, Kenneth(St.M'bone,)

Fowler, Rt Hon Norman

Baker, Nicholas (N Dorset)

Fraser, Rt Hon Sir Hugh

Beaumont-Dark, Anthony

Fraser, Peter (South Angus)

Bendall, Vivian

Fry, Peter

Benyon, Thomas (A'don)

Gardiner, George (Reigate)

Benyon, W. (Buckingham)

Gardner, Sir Edward

Berry, Hon Anthony

Gilmour, Rt Hon Sir Ian

Bevan, David Gilroy

Glyn, Dr Alan

Biffen, Rt Hon John

Goodhart, Sir Philip

Biggs-Davison, Sir John

Goodhew, Sir Victor

Blackburn, John

Goodlad, Alastair

Bonsor, Sir Nicholas

Gow, Ian

Boscawen, Hon Robert

Gower, Sir Raymond

Bottomley, Peter (W'wich W)

Grant, Sir Anthony

Boyson, Dr Rhodes

Gray, Rt Hon Hamish

Braine, Sir Bernard

Greenway, Harry

Brinton, Tim

Grieve, Percy

Brittan, Rt. Hon. Leon

Griffiths, Peter (Portsm'th N)

Brooke, Hon Peter

Grist, Ian

Brotherton, Michael

Grylls, Michael

Brown, Michael(Brigg & Sc'n)

Gummer, John Selwyn

Browne, John (Winchester)

Hamilton, Hon A.

Bruce-Gardyne, John

Hamilton, Michael (Salisbury)

Budgen, Nick

Hampson, Dr Keith

Burden, Sir Frederick

Hannam, John

Butcher, John

Haselhurst, Alan

Butler, Hon Adam

Hastings, Stephen

Carlisle, John (Luton West)

Havers, Rt Hon Sir Michael

Carlisle, Kenneth (Lincoln)

Hawksley, Warren

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

Hayhoe, Barney

Chalker, Mrs. Lynda

Heddle, John

Channon, Rt. Hon. Paul

Henderson, Barry

Chapman, Sydney

Heseltine, Rt Hon Michael

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

Hicks, Robert

Clark, Sir W. (Croydon S)

Higgins, Rt Hon Terence L.

Clarke, Kenneth (Rushcliffe)

Hill, James

Clegg, Sir Walter

Hogg, Hon Douglas (Gr'th'm)

Cockeram, Eric

Holland, Philip (Carlton)

Colvin, Michael

Hooson, Tom

Cope, John

Hordern, Peter

Costain, Sir Albert

Howe, Rt Hon Sir Geoffrey

Cranborne, Viscount

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

Critchley, Julian

Hunt, John (Ravensbourne)

Crouch, David

Hurd, Rt Hon Douglas

Dickens, Geoffrey

Irvine, RtHon Bryant Godman

Dorrell, Stephen

Irving, Charles (Cheltenham)

Douglas-Hamilton, Lord J.

Jenkin, Rt Hon Patrick

Dover, Denshore

Jessel, Toby

du Cann, Rt Hon Edward

Johnson Smith, Sir Geoffrey

Dunn, Robert (Dartford)

Jopling, Rt Hon Michael

Durant, Tony

Joseph, Rt Hon Sir Keith

Dykes, Hugh

Kaberry, Sir Donald

Eden, Rt Hon Sir John

Kimball, Sir Marcus

Edwards, Rt Hon N. (P'broke)

Knight, Mrs Jill

Eggar, Tim

Knox, David

Elliott, Sir William

Lang, Ian

Emery, Sir Peter

Langford-Holt, Sir John

Eyre, Reginald

Latham, Michael

Fairgrieve, Sir Russell

Lawrence, Ivan

801

Lawson, Rt Hon Nigel

Ridley, Hon Nicholas

Le Marchant, Spencer

Ridsdale, Sir Julian

Lennox-Boyd, Hon Mark

Rippon, Rt Hon Geoffrey

Lester, Jim (Beeston)

Roberts, Wyn (Conway)

Lewis, Sir Kenneth (Rutland)

Rossi, Hugh

Lloyd, Ian (Havant & W'loo)

Rost, Peter

Lloyd, Peter (Fareham)

Royle, Sir Anthony

Loveridge, John

Rumbold, Mrs A. C. R.

Luce, Richard

Sainsbury, Hon Timothy

Lyell, Nicholas

St. John-Stevas, Rt Hon N.

McCrindle, Robert

Shaw, Giles (Pudsey)

Macfarlane, Neil

Shaw, Sir Michael (Scarb')

MacKay, John (Argyll)

Shelton, William (Streatham)

Macmillan, Rt Hon M.

Shepherd, Colin (Hereford)

McNair-Wilson, M. (N'bury)

Shepherd, Richard

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

Shersby, Michael

McQuarrie, Albert

Sims, Roger

Madel, David

Skeet, T. H. H.

Major, John

Smith, Sir Dudley

Marland, Paul

Smith, Tim (Beaconsfield)

Marlow, Antony

Speed, Keith

Marshall, Michael (Arundel)

Speller, Tony

Marten, Rt Hon Neil

Spence, John

Mates, Michael

Spicer, Michael (S Worcs)

Mather, Carol

Sproat, Iain

Maude, Rt Hon Sir Angus

Squire, Robin

Mawby, Ray

Stanbrook, Ivor

Mawhinney, Dr Brian

Stanley, John

Maxwell-Hyslop, Robin

Steen, Anthony

Mayhew, Patrick

Stokes, John

Mellor, David

Stradling Thomas, J.

Meyer, Sir Anthony

Tapsell, Peter

Miller, Hal (B'grove)

Taylor, Teddy (S'end E)

Mills, Iain (Meriden)

Tebbit, Rt Hon Norman

Mills, Sir Peter (West Devon)

Temple-Morris, Peter

Miscampbell, Norman

Thatcher, Rt Hon Mrs M.

Moate, Roger

Thomas, Rt Hon Peter

Monro, Sir Hector

Thompson, Donald

Montgomery, Fergus

Thorne, Neil (llford South)

Moore, John

Thornton, Malcolm

Morrison, Hon C. (Devizes)

Townend, John (Bridlington)

Morrison, Hon P. (Chester)

Townsend, Cyril D, (B'heath)

Mudd, David

Trippier, David

Murphy, Christopher

van Straubenzee, Sir W.

Myles, David

Vaughan, Dr Gerard

Neale, Gerrard

Waddington, David

Needham, Richard

Wakeham, John

Nelson, Anthony

Waldegrave, Hon William

Neubert, Michael

Walker, Rt Hon P.(W'cester)

Newton, Tony

Walker, B. (Perth)

Onslow, Cranley

Wall, Sir Patrick

Oppenheim, Rt Hon Mrs S.

Waller, Gary

Osborn, John

Walters, Dennis

Page, John (Harrow, West)

Ward, John

Page, Richard (SW Herts)

Warren, Kenneth

Parris, Matthew

Watson, John

Patten, Christopher (Bath)

Wells, Bowen

Patten, John (Oxford)

Wells, John (Maidstone)

Pattie, Geoffrey

Wheeler, John

Pawsey, James

Whitelaw, Rt Hon William

Percival, Sir Ian

Whitney, Raymond

Pink, R. Bonner

Wickenden, Keith

Pollock, Alexander

Wiggin, Jerry

Porter, Barry

Wilkinson, John

Prentice, Rt Hon Reg

Williams, D.(Montgomery)

Price, Sir David (Eastleigh)

Winterton, Nicholas

Prior, Rt Hon James

Wolfson, Mark

Proctor, K. Harvey

Young, Sir George (Acton)

Raison, Rt Hon Timothy

Younger, Rt Hon George

Rathbone, Tim

Rees, Peter (Dover and Deal)

Tellers for the Ayes:

Rees-Davies, W. R.

Mr. David Hunt and

Renton, Tim

Mr. Tristan Garel-Jones.

Rhodes James, Robert

NOES

Abse, Leo

Anderson, Donald

Adams, Allen

Archer, Rt Hon Peter

Allaun, Frank

Ashley, Rt Hon Jack

Alton, David

Ashton, Joe

802

Atkinson, N.(H'gey.)

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

Bagier, Gordon A.T.

Harrison, Rt Hon Walter

Barnett, Guy (Greenwich)

Hart, Rt Hon Dame Judith

Barnett, Rt Hon Joel (H'wd)

Haynes, Frank

Beith, A. J.

Heffer, Eric S.

Bennett, Andrew(St'kp't N)

Holland, S. (L'bth, Vauxh'll)

Bidwell, Sydney

Home Robertson, John

Booth, Rt Hon Albert

Homewood, William

Boothroyd, Miss Betty

Hooley, Frank

Bray, Dr Jeremy

Howell, Rt Hon D.

Brocklebank-Fowler, C.

Howells, Geraint

Brown, Hugh D. (Provan)

Hoyle, Douglas

Brown, Ronald W. (H'ckn'y S)

Huckfield, Les

Brown, Ron (E'burgh, Leith)

Hughes, Mark (Durham)

Buchan, Norman

Hughes, Robert (Aberdeen N)

Callaghan, Rt Hon J.

Hughes, Roy (Newport)

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

Hughes, Simon (Bermondsey)

Campbell, Ian

Janner, Hon Grevilie

Campbell-Savours, Dale

Jay, Rt Hon Douglas

Canavan, Dennis

Johnson, James (Hull West)

Cant, R. B.

Johnson, Walter (Derby S)

Carmichael, Neil

Johnston, Russell (Inverness)

Carter-Jones, Lewis

Jones, Rt Hon Alec (Rh'dda)

Clark, Dr David (S Shields)

Jones, Barry(East Flint)

Clarke,Thomas(C'b'dge,A'rie)

Jones, Dan (Burnley)

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

Kaufman, Rt Hon Gerald

Cohen, Stanley

Kerr, Russell

Coleman, Donald

Kilroy-Silk, Robert

Concannon, Rt Hon J. D.

Lambie, David

Conlan, Bernard

Lamond, James

Cook, Robin F.

Leighton, Ronald

Cowans, Harry

Lestor, Miss Joan

Craigen, J. M. (G'gow, M'hill)

Lewis, Arthur (N'ham NW)

Crawshaw, Richard

Lewis, Ron (Carlisle)

Crowther, Stan

Litherland, Robert

Cryer, Bob

Lofthouse, Geoffrey

Cunliffe, Lawrence

Lyon, Alexander (York)

Cunningham, G. (Islington S)

Mabon, Rt Hon Dr J. Dickson

Dalyell, Tam

McDonald, Dr Oonagh

Davidson, Arthur

McGuire, Michael (Ince)

Davies, Rt Hon Denzil (L'lli)

McKelvey, William

Davis, Clinton (Hackney C)

MacKenzie, Rt Hon Gregor

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

Maclennan, Robert

Deakins, Eric

McNamara, Kevin

Dean, Joseph (Leeds West)

McTaggart, Robert

Dewar, Donald

McWilliam, John

Dixon, Donald

Marks, Kenneth

Dormand, Jack

Marshall, D(G'gow S'ton)

Douglas, Dick

Marshall, Dr Edmund (Goole)

Dubs, Alfred

Marshall, Jim (Leicester S)

Duffy, A. E. P.

Martin, M(G'gow S'burn)

Dunnett, Jack

Mason, Rt Hon Roy

Dunwoody, Hon Mrs G.

Maxton, John

Eadie, Alex

Maynard, Miss Joan

Eastham, Ken

Meacher, Michael

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

Mikardo, Ian

Ellis, Tom (Wrexham)

Millan, Rt Hon Bruce

English, Michael

Mitchell, R. C. (Soton Itchen)

Ennals, Rt Hon David

Morris, Rt Hon A. (W'shawe)

Evans, loan (Aberdare)

Morris, Rt Hon C. (O'shaw)

Evans, John (Newton)

Morris, Rt Hon J. (Aberavon)

Ewing, Harry

Moyle, Rt Hon Roland

Faulds, Andrew

Mulley, Rt Hon Frederick

Flannery, Martin

Newens, Stanley

Foot, Rt Hon Michael

Oakes, Rt Hon Gordon

Ford, Ben

O'Neill, Martin

Forrester, John

Orme, Rt Hon Stanley

Foster, Derek

Palmer, Arthur

Foulkes, George

Park, George

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

Parker, John

Freeson, Rt Hon Reginald

Pavitt, Laurie

Freud, Clement

Pendry, Tom

Garrett, John (Norwich S)

Penhaligon, David

George, Bruce

Powell, Raymond (Ogmore)

Gilbert, Rt Hon Dr John

Prescott, John

Ginsburg, David

Price, C. (Lewisham W)

Golding, John

Race, Reg

Gourlay, Harry

Radice, Giles

Graham, Ted

Richardson, Jo

Hamilton, James (Bothwell)

Roberts, Albert (Normanton)

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Roberts, Allan (Bootle)

Thorne, Stan (Preston South)

Roberts, Ernest (Hackney N)

Tilley, John

Roberts, Gwilym (Cannock)

Torney, Tom

Robinson, G. (Coventry NW)

Varley, Rt Hon Eric G.

Rooker, J. W.

Wainwright, E(Dearne V)

Roper, John

Wainwright,R.(Colne V)

Ross, Ernest (Dundee West)

Walker, Rt Hon H.(D'caster)

Rowlands, Ted

Wardell, Gareth

Ryman, John

Watkins, David

Sever, John

Weetch, Ken

Sheldon, Rt Hon R.

Welsh, Michael

Short, Mrs Renèe

White, Frank R.

Silkin, Rt Hon J. (Deptford)

White, J. (G'gow Pollok)

Silkin, Rt Hon S. C. (Dulwich)

Whitehead, Phillip

Silverman, Julius

Whitlock, William

Skinner, Dennis

Wigley, Dafydd

Smith, Rt Hon J. (N Lanark)

Willey, Rt Hon Frederick

Snape, Peter

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

Soley, Clive

Williams, Rt Hon Mrs(Crosby)

Spearing, Nigel

Wilson, Gordon (Dundee E)

Spellar, John Francis (B'ham)

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

Spriggs, Leslie

Wilson, William (C'try SE)

Steel, Rt Hon David

Winnick, David

Stewart, Rt Hon D.(W Isles)

Woodall, Alec

Stoddart, David

Woolmer, Kenneth

Stott, Roger

Wright, Sheila

Strang, Gavin

Young, David (Bolton E)

Straw, Jack

Summerskill, Hon Dr Shirley

Tellers for the Noes:

Taylor, Mrs Ann (Bolton W)

Mr. Allen McKay and

Thomas, Jeffrey (Abertillery)

Mr. George Morton.

Thomas, Dr R. (Carmarthen)

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

Financial Assistance to Opposition Parties
10.16 pm
The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen): I beg to move, That the Resolution of the House of 20th March 1975 shall have effect from 1st January 1983 with the substitution of the following paragraph for paragraph 2 of that Resolution:—
'That for the purpose of determining the annual maxima of such assistance the following formular shall apply:
£1,080 for each seat won by the party concerned plus £2·16 for every 200 votes cast for it at the preceding General Election, provided that the maximum payable to any party shall not exceed £325,000.'.
Mr. SpeakerI have not selected the amendment on the Order Paper.
Mr. Biffen: It may be for the convenience of the House if I just, very briefly, outline the general background to the motion and its effect.
No new principle is being established. As hon. Members will recall, financial assistance to Opposition parties to help them in carrying out their parliamentary business was first confirmed by the House in 1975. Both the Conservative and Labour parties have been beneficiaries of such a provision. The maximum amount payable to an Opposition party was initially fixed at £150,000. Since 1975 there have been two rises in the annual amounts payable. The first was in February 1978,when the maximum was raised by 10 per cent. to £165,000, with corresponding changes in the cash amounts related to seats and votes won, by which entitlements falling short of the maximum are calculated.
The second and latest rise was approved by the House in November 1980, with retrospective effect to July 1980, when the maximum amount payable to any party was raised to £290,000, with similar proportionate rises for the smaller Opposition parties. These provide for the Liberal party to be entitled to about £52,000 a year and the other Opposition parties some £20,000 between them.
The effect of the present motion would be to raise, as from the beginning of this year, the maximum amount payable annually to any Opposition party from £290,000 to £325,000. This represents an increase since July 1980 of just over 12 per cent., together with similar proportionate rises in the formula by which the amounts payable to parties getting less than the maximum are calculated. The Liberal party would thus become entitled to something over £58,000, and the other Opposition parties together to about £23,000.
As the House is aware, this scheme is designed to help Opposition parties in carrying out their work here at Westminster. The purposes for which these sums may be used are accordingly confined by the original 1975 resolution to paying for expenses incurred with regard to a party's "parliamentary business". With that qualification, however, its allocation is entirely at the discretion of the parties themselves. I understand that the principal purpose to which the money is in fact allocated is for office expenses, staffing costs and research assistance.
The reason for the present proposal to raise the amounts payable by approximately 12 per cent. is the increased cost of support services since the present rates took effect in July 1980. One of the principal purposes of this scheme

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is to provide for Opposition parties some counterbalancing support to that provided for the Government by the Civil Service. It would, therefore, seem appropriate that the amount of the increase now proposed should be generally in line with increases in Civil Service Staff costs since 1980.
Mr. Ivor Stanbrook: Will my right hon. Friend tell the House in what way this expenditure is controlled and monitored, so that the money is actually spent for the purposes to which he referred, bearing in mind that a former treasurer of the Labour party said that the money should be paid direct to the Labour party itself, and not to the Labour party parliamentary section?
Mr. Biffen: It is available for investigation by the Comptroller and Auditor General and the Public Accounts Committee. I hope that the Comptroller and Auditor General will be considered by the House to be a reasonable authority as to the propriety with which the money is spent.
As the House will be aware, in order to qualify for this financial assistance, a party must have at least two Members elected to the House as members of that party at the preceding general election, or have one such member and have received at least 150,000 votes at that election.
Mr. K. Harvey Proctor: Will my right hon. Friend say whether he sees any purpose in that particular qualification?
Mr. Biffen: Yes. The reason for having it was to strike a balance in the demands that are made on the resources of a party, having regard to the number of seats that it had in the House and the number of votes that it had in the country. These points were argued when the moneys were first made available, and I see no reason to suppose that it is not a reasonable working arrangement to have a broad assessment of the demands that are made on the parties in this House.
Mr. Proctor: I wanted to know whether my right hon. Friend thought it possible that one Member of Parliament might gain financial assistance by getting the 150,000 votes.
Mr. J. W. Rooker: The right hon. Gentleman does not say that. Why does the hon. Gentleman not read it?
Mr. Biffen: It is perfectly possible for there to be one Member of Parliament and support for the party represented by that Member in excess of 150,000 votes. I am not sure, but I think that that was true of the SDLP in the last Parliament. If my hon. Friend is agonising about the matter, he need not peer into the crystal-if I might plagiarise-he can study the book.
These qualifications do not vary between Parliaments, nor do they take account of the formation of parties whose memberships did not contest the previous general election as members of that party. This basis has stood since the scheme was first approved by the House. I would not propose any change.
Nor, in conclusion, does this proposed uprating alter in any way the Government's stated opposition to the general financing of political parties that has been proposed in the past by Lord Houghton's committee and others. The present scheme does not provide state aid for the general activities of political parties in the country but only in this
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strictly limited area of Opposition parliamentary work here at Westminster. The cost of this necessary support has, however, undoubtedly risen substantially in recent years, and I believe the increase now proposed to be generally equitable.
10.24 pm
Mr. John Silkin: I should declare what may be termed a collective interest on behalf of the Opposition and perhaps also an indirect subjective interest, because, as a member of the parliamentary Labour party and as a Front Bench spokesman, clearly I am bound to benefit from the financial assistance given to the Opposition.
The Leader of the House has clearly told us the history and the principle of the measure. It may be for the convenience of the House, and perhaps of the hon. Member for Orpington (Mr. Stanbrook), if I explain how the allocation of funds in the Labour party is made. The Leader of the House is right to say that it must be related to the work of the parliamentary Labour party in the House of Commons. That is what it is about. The allocation of funds is made by four trustees—the chairman of the parliamentary Labour party, my hon. Friend the Member for Easington (Mr. Dormand), the leader of the Labour party, my right hon. Friend the Member for Ebbw Vale (Mr. Foot) and by two of my hon. Friends, elected as the occasion arises to the parliamentary Labour party. The secretary of the parliamentary Labour part} acts as secretary. That is all clear, open and available for discussion and consideration inside the parliamentary Labour party, and, as the Leader of the House has said, the accounts are also open and above board.
I believe that I am right in saying that when the Conservative party was in opposition the funds were solely at the discretion of the leader of the Conservative party—the Prime Minister. As far as I know, she no doubt acted in the best possible interests of work in the House. What she did with the money was a matter for her party but not, I suspect, for anybody else, provided that it was within the framework of work in Westminster.
The Leader of the House has told us that the funds available for the Labour party fall into the maximum provision, and therefore our funds go up from £290,000 to £325,000. My arithmetic was never very good, but I make that an increase of about 12·5 per cent. Borrowing, if I may, from the wise words that I took the precaution of looking up of the hon. Member for Islington, South and Finsbury (Mr. Cunningham) when he stood at the Dispatch Box on behalf of the parliamentary Labour party in the debate in July 1980, the uprating then was about 87 per cent. of the increase in costs. However, I understand that the increase in costs has been 17 per cent. I always follow the dictum of the late lain Macleod. I do not believe in shutting out a one-legged Father Christmas. I ant glad to have Father Christmas and I am not in any way complaining. That would be ungracious and wrong. What I am trying to say is that the uprating is not an absolute maximum.
As to the principle, the question of our performance in the House depends on our being as well informed as we can be and as able to take as independent and experienced point of view as we possibly can. That is why the salary of Members of Parliament was introduced 74 years ago. I believe that we were the first assembly in the world to do that. That step was taken by David Lloyd George when £400 a year was given to Members of Parliament. We have

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moved a long way since then. The Leader of the Opposition was paid and I do not think there has ever been any dispute or anxiety about that. Two Whips were paid, and so it has gone on. Hon. Members have their parliamentary salaries. We have our disputes and discussions about that, but all of us accept that there must be payment for research, secretarial assistance, and so on, so that we can do our job.
The Leader of the House is right. The Government, particularly in a very technical and complex society, invariably get greater advantage as time goes by. It is right that an Opposition should also be given the means by which they may carry out the duties that the constitution imposes on them, that of challenging, of opposing, and of representing the other point of view. I am glad to be able to second the motion.
10.30 pm
Mr. K. Harvey Proctor: The last occasion on which I rose to try to catch your eye, Mr. Speaker, on the subject of financial assistance to opposition parties was at 11.49 pm on the evening of 7 August 1980, and I resumed my seat at 5.35 pm on 12 November 1980. That was a lengthy contribution, with a parliamentary summer recess in between, because of an adjourned debate. I assure the House that I shall not try its patience for so long on this occasion.
However, I should like to place on record my opposition to aid for political parties, both in principle and in detail, whichever political parties may be involved. I did not sit in previous Parliaments, but had I done so, on each of the occasions when this subject came before the House, my view would have been the same, even if I were sitting on the Opposition side of the House.
I note that the debate tonight is about detail rather than principle. Therefore, I shall try to address most of my remarks to the detail of the increase. Notwithstanding the modest manner in which my right hon. Friend the Leader of the House proposed the motion, we are still considering quite considerable sums of taxpayers' money. My right hon. Friend very kindly gave me answers in yesterday's Hansard about the sums of money that have been paid in recent years to the various Opposition parties represented in the House.
The tables of the amounts show clearly the quantity of the increases. There is £35,000 for the Labour party, giving it an increase from £290,000 to £325,000, an extra £6,361 for the Liberal party, an extra £827 for the Scottish National party, an extra £886 for the Ulster Unionist party, for Plaid Cymru another £390, and for the Democratic Unionist party £435. In total, the increase proposed, if I understand it correctly, is an increase from the 1980 provision of £362,915 to an estimated £406,816. We are talking not in terms of small sums, but of reasonably substantial sums that the taxpayer is being asked to contribute towards the parliamentary business of Opposition parties.
Mr. Clement Freud: Will the hon. Gentleman translate the size of the increase into the number of assisted places that this would pay for?
Mr. Proctor: I have not made that estimate, but no doubt I can do so at a later date, although not without notice.
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The increases come in three sections. The maximum increase has been referred to by both my right hon. Friend the Leader of the House, and the right hon. Member for Deptford (Mr. Silkin). That went up since 1 January 1975 from £150,000 by 10 per cent. on 1 January 1978. One of the things that caused considerable concern on Conservative Benches was that on 1 July 1980 it went up by 75 per cent. to £290,000. Now it will go up to £325,000
The amount per seat that each Opposition party could receive has similarly increased over the years. On 1 January 1975 each party could receive £500 per seat. That was increased by 10 per cent. on 1 January 1978 to £550, and went up on 1 July 1980 to £962.50, an increase of 75 per cent. There is now a 12 per cent. increase from 1 January 1983 to £1,080. The amount per 200 votes cast was fixed at £1 on 1 January 1975. It went up by 10 per cent. on 1 January 1978 to £1·10. Again it went up on 1 July 1980 to £1·92, an increase of 75 per cent. It is now proposed to go up to £2·16, an increase of about 12 per cent.
Those increases are substantial. The House should not support or agree to them. Last time that we debated those increases I and other hon. Members questioned the extent to which indexation of the increases to inflation should take place. I am opposed in principle to indexation to inflation because I believe that as long as politicians continue to index things to inflation, the motive force for getting rid of inflation is taken away. I am glad that my right hon. Friend and the right hon. Member for Deptford said that the link with inflation has been broken.
It is because of the Conservative Government that we have such low rates of inflation. Inflation worried many Conservative Members in 1980. Therefore, the debate is taking place in a different atmosphere. However, the credit for the reduction in the rate of inflation lies not with the Opposition parties, which seem to be benefiting tonight, but with the Treasury Bench and Treasury economic policies.
Mr. Gordon Wilson: The hon. Gentleman said that he opposed the increases in principle partly because of indexation to inflation. If that is so, would it not be appropriate for him to vote against the resolution outright? Why is he seeking to promote an amendment to postpone it to another date?
Mr. Proctor: As the House will know, hon. Members frequently table amendments that get half or a quarter, but not the full, loaf. I in no way criticise you, Mr. Speaker, for not selecting my amendment. Had the amendment been called I would have spoken to it. I shall say a few words about it, if that is in order.
My argument is one of total opposition in principle to the idea of the taxpayer funding Opposition political parties in their work as Opposition political parties. It is different for the taxpayer to contribute sums of money to individual Members of Parliament for their constituency and parliamentary duties. If they wish to pool their collective funds to aid the political party that they represent, so be it. That is my suggestion for the way to go about it. Taxpayers' money should not be given to the political party. I am glad that my right hon. Friend underlined some of my suspicions that this might be the thin end of the wedge. He said that the Government had set their face against increasing the funding of political parties-those outside the country, for example.

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With regard to whether the funds are necessary, I understand what my right hon. Friend and the right hon. Member for Deptford (Mr. Silkin) said. However, one cannot consider the subject in isolation from what other sources of funds might be available to political parties. Funds are available from voluntary fund raising, industry, trade unions and so on. I wonder whether the Labour party is so short of funds. I am merely a disinterested spectator. I have noted that it has recently concluded a fairly expensive and lengthy legal action in the courts about boundary changes.
Mr. Rooker: Get your facts right.
Mr. Proctor: I understand what Opposition Members feel, and I shall qualify my statement shortly. The leaders of the Labour party have just concluded an expensive and lengthy legal battle.
Mr. Norman Atkinson: Not the Labour party leaders.
Mr. Proctor: Perhaps the leader of the Labour party does not represent the hon. Member for Tottenham (Mr. Atkinson) as our leader represents Conservative Members. The legal action cannot have cost much less than £80,000 to £90,000. I am sorry that some hon. Members are touchy about the issue.
Could not that money have been used more wisely on some other form of parliamentary activity by the Labour party than denying my constituents' wish for boundary reform? I represent one of those large constituencies that have more than 120,000 electors. Why do we need to give the Labour party an extra £35,000 when its leaders obviously have access to large sums of money? The House should consider that before it passes the motion.
I noted that nearly every time my right hon. Friend referred to the resolutions, there was an element of retrospective legislation in them. Some people want to give extra money to Opposition parties. Why cannot our affairs be organised more tidily so that we decide one year what will take effect the next? Better still, would it not be a good idea for Parliament to decide how much should be given to Opposition parties, if that is its decision, at the end of one Parliament, to take effect in the next? That would get away from the problem of which party will form the Opposition. Some of the minority parties will sit on those Benches for ever, but for the Labour and Conservative parties that may be a better way to proceed. Therefore, I tabled a small amendment suggesting that the increases should not come into effect until 1 January 1984, which will probably be after the next general election.
My right hon. Friend said that there were two qualifications in the original legislation—[Interruption.] I might be tempted to speak for a little longer if Opposition Members continue to heckle me from a sedentary position instead of contributing something meaningful to the debate. The qualifications mentioned by my right hon. Friend stem from the original resolution. The one in which I am interested is that which mentions two or more Members of Parliament. I should be grateful if my right hon. Friend would clarify the position regarding one Member of Parliament who receives more than 150,000 votes at the election. Is that qualification superfluous? Has consideration been given to the fact that this legislation is narrow with regard to increasing the amounts payable to Opposition parties? Have the Government considered
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whether the qualifications should be revised in the light of the past eight years and of the new political parties that have been established?
I could not allow this legislation and this evening to go by without putting on record my objection to what we are doing.
10.47 pm
Mr. David Stoddart: I am chairman of the trustees of the Labour party, who administer the funds for Opposition parties, so I have some knowledge of how those funds are distributed, and the difficulties that the Opposition face because of a shortage of funds.
I was most surprised by the opposition of the hon. Member for Basildon (Mr. Proctor) to the motion, because I believed that he was a great supporter of parliamentary democracy and wished to give every facility to its continuation and development. I remind him that the British constitution is based on Her Majesty's Government and Her Majesty's Opposition. Her Majesty is entitled to have an efficient, well-serviced Opposition as well as an efficient, well-serviced Government. Therefore, we must provide the Opposition parties with the wherewithal to provide that efficent and searching opposition.
Mr. Proctor: I do not disagree with what the hon. Gentleman has said, but does he believe that the Opposition were any less efficient before 1975?
Mr. Stoddart: I do not know about that. What I do know is that we are living in a highly complex industrial and technological society in which Opposition parties, in the same way as the Government, need information and research into developments. Without that information at their fingertips, they cannot properly carry out the role of Opposition.
Therefore, it is right that the Opposition parties should be financed by the people so that the Government of the country can properly proceed under the constitution. Until 1975, when funds for Opposition parties were introduced, the political parties subsidised our constitutional processes and the work of the House. That was corrected in 1975. I am glad that it was corrected and it is right that the House should ensure that the Opposition parties are properly financed so that they can assist in the efficient government of this country.
Before I sit down, I should like to say a few words about the disbursement of the funds. The amount available is little enough for the Front Bench spokesmen of Opposition parties to be able properly to carry out their work. Even now, with these funds available, Opposition Front Bench spokesmen have to subsidise their work from their own allowances and indeed, in some cases, from their own private pockets. The amount under discussion tonight is little enough. I hope, therefore, that in the light of all the circumstances, and because of the need for Opposition parties to be efficient and well serviced, the House will agree to the motion.
Question put and agreed to.
Resolved,
That the Resolution of the House of 20th March 1975 shall have effect from 1st January 1983 with the substitution of the following paragraph for paragraph 2 of that Resolution:—
`That for the purpose of determining the annual maxima of such assistance the following formula shall apply:

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£1,080 for each seat won by the party concerned plus £2·16 for every 200 votes cast for it at the preceding General Election, provided that the maximum payable to any party shall not exceed £325,000.'.

ESTIMATES
Ordered,
That this House agrees with the Report of the Liaison Committee [3rd March].—[Mr. David Hunt.]

Islington Borough Council
Motion made and Question proposed, That this House do now adjourn.—[Mr. Hunt.]
10.52 pm
Mr. George Cunningham: My purpose in this debate is to draw attention to the improper use of public funds by Islington borough council, to ask the Secretary of State for the Environment to use his powers under the Local Government Act 1972 to order an extraordinary audit of the accounts of the council, and, failing that, to invite him to refer the evidence that I shall present tonight to the district auditor and the new Audit Commission so that they can initiate proceedings to compel Islington councillors to pay the cost of some of these improper expenditures out of their own pockets, in accordance with the law of local authority spending.
Because of the shortage of time, I shall stick closely to my notes in order to include as much material as possible. Islington council prides itself on being in the forefront of the movement for a more hard Left-wing dominance of the Labour party. It has taken over from the Lambeth Labour party in that respect. One of the Labour councillors told his colleagues that good housekeeping should not be an Islington council priority. It is in the forefront, too, in the hard Left-wing Labour move to suppress and cease to recognise the distinction between party activity and state or local authority activity. To them the two are fused, as they are in east Europe. This has led the council to use public funds for Labour party purposes, as I shall show. The fact that it has 51 of the 52 seats on the council, and that there will be no election for three years, has led it to spend prodigiously in accordance with its political inclinations without regard to propriety, due economy or the interests of residents and other ratepayers.
The council received an application from a body called the Islington News Co-operative, whose purpose is to produce a free give-away newspaper for distribution on a large scale in the borough. The group applying for financial assistance included one Labour councillor, one employee of the council and others of known Labour party active connections. Documents in my possession say that the editorial advisory board of the paper must include a representative of the local Labour party. Money has now been voted by Islington council for that purpose. The amount is uncertain because the council is being secretive, even towards the one SDP councillor in Islington, but it appears to be about £20,000.
In putting a request to the Department of the Environment for part of that sum to be financed under urban aid, the council broke the rules on urban aid that forbid politically connected projects. The council concealed the political connection when the request was made. The intention is that the Labour paper should be funded in the end by about £80,000 from Islington council and the GLC.
When my constituents want repairs done in their council flats, they often have to wait weeks or months. When the application was put in for money, for the Labour newspaper, it was dealt with more rapidly. I have a copy of an internal memorandum dated 6 September last year, marked "urgent and confidential", saying
"The enclosed application was delivered to me this morning. Could you please process it for tomorrow's Grants Sub-committee."

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That was signed by one of the chairmen of committees. The urgency is that the Labour party thinks that a free newspaper following the Labour line will be extremely handy in the coming general election.
The leader of the council has defended the provision of the money on the grounds that nine people will be employed on the newspaper. On that basis, I could decide that I want 10 agents in Islington operating for the SDP, and could justify the provision of public finds for that purpose.
The council is using money to help finance the London leaders group—that is, meetings of the leaders of Labour-controlled local authorities, plus the GLC and ILEA. In common with a dozen other London authorities, Islington decided to help itself to £2,000 of rates to finance the purely Labour party meetings, which will have £2,000 from each of the boroughs. The other boroughs were to hand their £2,000 each to Islington as the ringleader of the gang. Islington's £2,000 appears formally in its expenditure plans for next year as item BPP 10 in these words:
"London Labour Leaders-contribution towards one post in Finance Department and one in Borough Secretary's Department to provide support to the London Labour Leaders Group."
The remainder or the cost of the two staff will I presume, come from the other Labour boroughs, but the House should note that the staff are to be employed on party work, financed by councils and to be based as officers in the councils. That appears in the expenditure papers for next year under the heading "Higher priority Extensions to Existing Services".
Islington's rate rise, decided this evening, is 30 per cent. Because of waste on other matters, to get the figure down to 30 per cent. from the earlier crazy notion of a 78 per cent. possible rise, the leading councillors proposed to cut out plans for improvements to homes for the elderly where there is a serious deficiency of staff, but the money for the Labour party meetings is included in the high priority category and gets through. In addition, Islington has acquired premises at 135 Upper Street to be made available to the Labour leaders group. Councillor Hyams of the SDP has asked for full information on funding this organisation but is having difficulty in getting it. There seem to be no minutes yet on the decisions taken.
Islington has expanded the staff in its press department, which is now, of course, called the campaigns department. To appreciate the significance of that we have only to read item 3 of the record of the secret meeting of Labour leaders on 7 December last year, when leaders agreed that they would
"ensure that press and publicity staff participate fully in the campaign"—
that is, a political campaign on rates run by the Labour party.
In Islington the campaigns department, which is headed at the moment by a council officer who is a prominent and active member of the London Labour briefing team, has taken to issuing dishonest press releases. One recently gave the impression that councillors were forgoing increases in their personal allowances when in fact they were considerably increasing them, including, it seems, allowing themselves to claim up to three times a week for just popping into the town hall for a discussion with an officer on this or that. Another suggested that the district
814
audtor had criticised the old SDP council when he had in fact criticised the new Labour council on the subject of the appropriate level of balances of local authorities.
Then there is the Baggshott Co-operative story. This is a group of ex-prisoners who set themselves up to do small building work. The council gave them £10,000. The business went bust, owing among other things £13,000 in unpaid PAYE money. The book-keeper, whose work was said to have been entirely unsupervised, walked off with £2,000. There had been other irregularities. Despite that, I have in my papers a record of a meeting, marked "strictly confidential", in which Councillor Chris Bromley, formerly chairman of the development committee—and, by the way, recently appointed to a high-level post in the GLC—is authorised to tell the co-op that they should liquidate themselves and
"reconstitute themselves as a new co-operative, preferably under another name",
whereupon consideration might be given to giving them more money "towards setting up and rent".
Then there is the trip to Grenada. The hard- left-wing council in Islington has decided that the post-revolutionary government in Grenada, well-known for not holding elections and for ignoring human rights, is one with whom it wants to identify. It has twinned with Grenada. A project in Islington called the Ujima project, already given council money, has been given £3,250 more to finance trips to the island on the anniversary of the revolution by a dozen of its members and two staff. The Department told Islington that urban aid money could not be used for that purpose and that it would also be improper for Islington to use its own resources for it. So Islington gave a grant to the Commonwealth Youth Exchange Council and fixed it with that body that the money would be used to finance the trip. Well might the chairman of finance scrible at the bottom of the submission made to him, as I have seen with my own eyes, "Have we the power to do this?" It was done.
There was the trip to Italy by children in council care and the social workers, of course, in charge of them. The trip greatly exceeded the council's own guidelines for the cost of such holidays. An internal audit showed that there had been irregularities in money control in the home in question. The deposit for the trip was paid in cash and in spite of a committee decision that it should not take place the decision was overturned when the staff took the matter to the Labour group. The staff accompanying the children had the gall to claim hundreds of pounds in sleeping away allowance because they were in Italy looking after the children.
Last year, under pressure from social workers, the Labour party reopened at a cost of about £20,000 a tiny, and therefore extremely uneconomic, home for children in council care in Highbury New Park. I am told that at present there are only four children in that home.
The old Labour council, in 1982, negotiated a settlement on staff ratios at children's homes. The new Left-wing council has negotiated a new one which imposes a burden of £800,000 on the rates. The deal was negotiated in part by Councillor Victor McGeer, chairman of the personnel committee, and on the other side of the table was another Mr. McGeer, the first one's brother, who is a NALGO shop steward himself employed at one of the homes. No declaration of interest was made in accordance with standard Department of the Environment guidelines for proper behaviour by councillors.

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Then there is the money being given to London Voice Limited, the company which publishes the magazine City Limits, based in Islington and supported by the council as well as by the GLC against its rival Time Out. London Voice has received at least £13,500 from Islington council and the DoE has been foolish enough, or careless enough, to accept this for financing under urban aid. The GLC has given about £180,000 in loans to the paper and the GLC's finance comptroller told the council formally:
"there is unlikely to be any repayment of the loan".
Then there is the IDEAL project to set up a company called the Islington Development and Economic Agency Limited with directors appointed by the council to do things that the council would not be able to do in its own name. This has been approved by the leader's policy committee, and seven directors have been appointed. I understand that the legality of this move has been questioned by advisers to the council.
Islington council likes to claim that it is improving services for people in need. This year it has in fact slightly underspent its budget on homes for the elderly. Its budget for homes for the elderly in 1983–84 is less than 20 per cent. higher that that of two years ago. That is to be contrasted with the planned rise in spending on the council's so-called campaigns unit, the purpose of which is to push the council's political views. In 1981–82 expenditure on the predecessor of the campaigns unit was £81,000, in the present year the expenditure was doubled to £166,000 and in 1983–84 it will go up by 50 per cent. to £245,000—just under a quarter of a million pounds and a threefold increase since Labour took power. In the same period, the cost of the members secretariat, commonly referred to by watchers of Islington council as the Labour party minders, will rise from £30,000 to £84,000.
Another worrying fact is that a large part of Islington council's expenditure these days is authorised not by the relevant committee but by the chairman, allowing the chief officer to use his delegated power on grounds of alleged urgency. Since the Labour council took over last May, twice as such expenditure has been authorised under the heading of urgency on capital account as in the regular way—£10·7 million as against £5 million. On revenue account, chairmen have authorised £2·1 million as against just £400,000 in the regular way.
I have in my dossier a paper in which Islington's borough solicitor advises councillors not at that time to take a certain decision because they did not have the requisite facts before them and therefore any decision could be unlawful. Councillors ignored that legal advice and took the decision.
There is, therefore, the use of public funds for overtly party political purposes, the use of public funds to create and sustain a free newspaper with overt Labour party connections, suppression of facts when application was made to the DoE when those facts would have disqualified the application, waste of funds on councillors' pet projects with little of no relevance to the borough, lack of financial control over social workers in parts of the council complex and excessive payments for the kinds of purpose that I have listed.
I wrote to the leader of the Labour party asking whether he approved of this kind of use of public funds by Islington council, the GLC and other Labour-controlled authorities. In a reply dated 28 February he simply draws my attention
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to the Local Government Act and says that ratepayers have a legal right to challenge expenditure. The Labour party has gone a long way down into the swamp of corruption when its national leader, on being given irrefutable proof of these abuses, refuses to use his authority to condemn them.
Ten years ago, talking about the Crown Agents, I told the House that there was a scandal in that organisation just waiting to blow. I was not believed, but we all know now that the outcome was hundreds of millions of pounds of public money down the drain, improperly spent. I hope that I shall be believed this time when I say that in Islington and in some other Labour-controlled authorities in London there is a new scandal waiting to blow, which needs immediate investigation, exposure and punishment.
My purpose is to secure that these matters are investigated. My view is that some of the expenditures that I have mentioned are irresponsible waste and that some are actually illegal. I do not want the hard-pressed residents of Islington, who face a 30 per cent. rate rise next month, to have to wait a year and more for the audit process to take its normally slow course. I therefore call on the district auditor and the new audit commission, to be set up next month, to investigate these cases without delay.
It is extremely unusual, I know, for the Secretary of State to order an extraordinary audit. It is right that he should be loth to use that power, but I believe that it is justified and I ask the Minister to say that he will give it serious consideration.
Islington councillors who have voted for these improper and wasteful expenditures should be made to pay for them out of their own pockets and should be debarred from holding office, in accordance with the provisions of the Local Government Act 1972.
The district auditor has the power to set those processes in motion and I look to both him and the Secretary of State to use their powers in the interests of my long-suffering constituents.
11.11 pm
The Under-Secretary of State for the Environment (Sir George Young): The House will have listened with care, and I suspect with a sinking heart, to all that the hon. Member for Islington, South and Finsbury (Mr. Cunningham) has said. It is clear that those ratepayers in his constituency who are unhappy with their lot have a hard-fighting champion; and even clearer that the majority group of Islington borough council has a stern opponent. It is hardly surprising, against the background of what the hon. Gentleman has told us, that all three Islington Members left the Labour party. Perhaps I might congratulate the hon. Gentleman on the cogency and force with which he has put his case tonight. Indeed, I would expect nothing less.
The subject of the debate is the case for a special audit of the accounts of the London borough of Islington. From what I have heard tonight, and from what I have learnt previously about Islington, it seems exactly the sort of behaviour that is driving people in droves from the Labour party. I shall lose no sleep over that, but I regret that it is not just the Labour party but local government as a whole whose reputation suffers from the sort of behaviour about which we have heard tonight. My sympathy goes to the hard-pressed ratepayers who have to finance it and who will be reeling from the 30 per cent. increase for which Islington has apparently just voted.

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Only last Friday I was reading in the London press about Left wingers on the council trying to bankrupt the borough, which apart from being ill advised is illegal. I understand that they were seeking a confrontation with Government. One councillor was reported as saying:
"These people are straight out of the Russian revolution."
They seemed heedless of the fact that they were using other people's money; money paid by ordinary people and local businesses-the sort of undertakings which provide employment and can do so much to provide real help to the unemployed in the borough.
I shall leave the general question of Islington's Left and deal with the particular question of a special audit. The technical legal term is "extraordinary audit", and it might be helpful if I explain the legal and practical considerations that apply.
First, I deal with the law. Section 165 of the Local Government Act 1972 says that the Secretary of State may direct a district auditor to hold an extraordinary audit either on the application of a local government elector, or if it appears to him from an auditor's report to be desirable, or if it appears to be desirable for any other reason. There is no doubt that the Secretary of State has considerable scope in deciding whether or not to call for an extraordinary audit.
In practical terms, I should make it clear that an extraordinary audit is really just an ordinary audit at an extraordinary time; that is to say, the auditor has no more than his usual powers, which of course are quite wide ranging enough for him to do a thorough job. It needs to be borne in mind that an extraordinary audit is not a magic weapon; it does not give the auditor a special form of X-ray audit eye. It is essentially a matter of timing. Indeed, it is open to the auditor to take action at any time during the course of an audit. The islington audit for 1982–83 will be under way in the next couple of months, with the public inspection period in the autumn. So an extraordinary audit, for all its apparent drama, may not necessarily be essential for prompt action. This debate will serve to draw the issues of which the hon. Gentleman is complaining to the auditor's attention.
An extraordinary audit, of course, costs money. My right hon. Friend the Secretary of State will consider a request for an extraordinary audit carefully. He will want to consider whether it will achieve what an ordinary one will not and whether the costs and disruption will be justified. I make no apology for reserving my right hon. Friend's position, but I can give the hon. Gentleman the undertaking for which he asked towards the end of his remarks. My right hon. Friend will certainly consider seriously whether it is in the public interest for all to see quickly what has been going on in Islington.
One issue that the auditor will be considering in due course is the legality of the expenditure which the hon. Gentleman has complained about. Indeed, in deciding on the request for an extraordinary audit, the Secretary of State is bound to ask himself whether there is at least a prima facie case of illegal spending. It is not for me to pronounce here on what is, or is not, legal. That is for the auditor and the courts. I do not wish to become embroiled in a debate on what is a party political piece of spending and what is genuinely aimed at getting a better deal for Islington. But local authorities must act in accordance with the law and they must satisfy the auditors that their spending is lawful.
Mr. George Cunningham: I hope that the Minister will not make the distinction between party political interest and something that is thought to be in the interests of residents. I believe that my political party is in the interest of residents. That would not justify me in using public funds for it.
Sir George Young: The point is that local authorities have a certain amount of discretion in their spending powers. They will undoubtedly argue that some of the things that the hon. Gentleman has mentioned were in the interests of a better deal for Islington. At the end of the day, it wll be for the auditor and the courts to decide who is right.
The district auditor is independent by law and has to form his own view of the merits of any particular case he comes across. The hon. Gentleman has a perfect right to ask me what I personally think about this sort of behaviour by a local authority. I hope that I have given that view in my opening comments. If the comments were not clear enough, I say once more that I deplore the attitude of Islington and other Labour authorities like them. It is not just a question of party politics. Everyone knows that Islington takes a different political line from the Westminster Government. It has that right. What we are talking about is waste of other people's money—waste on fatuous projects like "Save London from Heseltine week". Who except the committed Lefties ever knew that was happening? There is waste on contributions to trendy newspapers. I wish that Islington councillors had the sense to see that the real way to help the unemployed is to stop piling rates on industry.
As the hon. Gentleman knows, I replied to him on 28 February on the spending on the Labour council leaders' meetings. I told him that the Secretary of State would refer to the appropriate district auditors the decision of the leaders of the Labour councils and of the GLC to use council funds to finance the administrative costs to which he has referred. On the Baggshot building co-operative, I wrote to Councillor Hyams on 21 February asking him to consider sending the papers to the metropolitan district auditor who would then investigate any item of the local authority's accounts. In view of the possibility of police involvement, I said that it would not be appropriate for me to comment at that stage on the paper's contents.
The hon. Gentleman mentioned several topics relating to the Islington partnership and the way the council is operating the urban programme regime. As I think he knows, I am looking into the matters that he has raised with me and I am in touch with the council on some of their policies in this sphere. I shall be pursuing any aspects that seem to be misconceived or wrong in other ways. The very essence of partnership is that the Government, local authorities and other parties should work together to achieve agreed objectives to assist the deprived inner areas. The Government are providing money to schemes which we believe are supportive of the agreed partnership objectives and partnership money must be used only in that way.
From what the hon. Gentleman has said and, indeed, from other information which has come to my knowledge, it would appear that Islington is not fully accepting its duty to operate wholly within the guidelines laid down and the spirit of partnership. If that is, in fact, the case and governmental partnership money granted has been used for the support of schemes unacceptable to the Government,

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we shall take steps to redress the position. As chairman of that partnership, I am taking a close interest in the situation locally and I can assure the House that I shall not shrink from taking prompt and effective action if it should sadly prove to be necessary.
I am conscious that the hon. Gentleman will have wanted a quick decision from me tonight. I hope that I have explained why I do not think it would be right to make a snap judgment, but I can promise him that my colleagues and I will consider everything that he has said, and we will consider it all the more carefully because of the force with which he has said it and the evidence that he has produced to sustain it.
Before I conclude, I wish to acknowledge once again the efforts the hon. Gentleman is making on an issue where he clearly feels very strongly indeed; and I should also mention the hon. Member for Islington, Central (Mr.
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Grant) who has also been in touch with my colleagues and myself on a number of audit issues in recent months. They have done a lot to alert the public and the auditor.
Very recently my noble Friend the Minister of State for Local Government, Lord Bellwin, has undertaken to draw the auditor's attention to certain matters which the hon. Gentleman recently raised in this House in a rather noisy application for a debate under Standing Order No. 9. I can promise him that, whatever the Secretary of State's decision on an extraordinary audit, the matters which have been raised here and elsewhere will be put to the district auditor. Therefore, the spending to which the hon. Member for Islington, South and Finsbury so objects—and I sympathise—will indeed be carefully examined as part of the audit procedure.
Question put and agreed to.
Adjourned accordingly at twenty minutes past Eleven o' clock.