Commons Sitting of 9 November 1983

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

    United States
    Mr. Flanneryasked the Secretary of State for Foreign and Commonwealth Affairs what subjects he intends to discuss with representatives of the United States Government at his next meeting with them; and whether he intends to visit Washington for this purpose.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Ray Whitney): The subjects for discussion at my right hon. and learned Friend's next meeting with representatives of the United States Government will depend on the circumstances at the time. There is a wide range of international and bilateral questions of common interest. My right hon. and learned Friend has no plans to visit Washington in the near future.
    Mr. Flannery: Does the Minister accept that there is no dearth of subjects for discussion with either the American Secretary of State or the President? Does he also accept that the belligerent attitude being adopted on a world scale by the United States is regarded by millions of people throughout the globe as very dangerous for all mankind? Will the Foreign Secretary discuss with the President the position in the Lebanon and Central America? Will he try to persuade the President, through his Secretary of State, to adopt a less belligerent posture and on no account to attack those countries, because many people will he dragged into the maelstrom if the United States does anything so silly?
    Mr. Whitney: I am happy to agree with the hon. Gentleman that there is no dearth of common interests and subjects for discussion with the United States.
    President Reagan and the United States Administration have made it clear that their objectives are to establish peace and economic progress in Central America.
    The main objective of the United States forces in the Lebanon is to obtain peace. Those forces have a right to self-defence. Britain shares those objectives and they are being pursued in conjunction with our United States allies.
    Several Hon. Members rose—
    Mr. Speaker: Order. I appeal to hon. Members to ask shorter supplementary questions.
    Sir Peter Blaker: In spite of the regrettable differences of opinion that we have had with the United States
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    Administration on several matters in recent days, will my hon. Friend confirm that Her Majesty's Government still attach first importance to developing and maintaining our very close relationship with the United States within the NATO Alliance?
    Mr. Whitney: I am pleased to confirm that that is the Government's position. I am certain that that view is shared on the other side of the Atlantic. Most hon. Members are ready to recognise the immense contribution that the Alliance has made to maintaining peace and security in western Europe. I am convinced that it will continue to do so.
    Mr. Donald Stewart: Whatever may be the necessity for our close alliance with the United States, does the Minister accept that many people are extremely alarmed by the recent trigger-happy response of the American President? Does the hon. Gentleman agree that if action is taken against any South American countries or the Lebanon the United Kingdom Government should not be seen to support such adventures? Does the Minister also agree that President Reagan should be informed that international diplomacy requires a more sophisticated approach than telling the Russians to be out of town before sundown?
    Mr. Whitney: I can only repeat the gist of the answer that I gave to the hon. Member for Sheffield, Hillsborough (Mr. Flannery). The clear objective of the United States in Central America is to establish economic progress and peace. The same objectives apply to the Lebanon. The United States is aware that Britain shares those objectives. Our views on the conduct of international diplomacy have been well expressed to the United States Government.
    Mr. Bowen Wells: When my right hon. and learned Friend is having discussions with the American Administration, will he join the people of Grenada in welcoming their liberation from the oppressive regime under which they suffered? Will he, at the same time, make plans with the United States Administration to support and aid economically the establishment of a democratic Government in Grenada, which will serve its people in a democratic way?
    Mr. Whitney: We certainly recognise that the effect of the situation in Grenada is to provide an opportunity for the re-establishment of constitutional democracy. Her Majesty's Government stand ready to help in that process.
    Mr. Healey: I congratulate the hon. Gentleman on reciting so eloquently the products of the Foreign Office word processor which, in an earlier incarnation, he helped to construct.
    First, do the Government approve the shift to an anti-Arab policy in the middle east by the United States in the past few days? Secondly, will they try to persuade the United States Administration not to use the arguments that they used for the invasion of Grenada to invade other countries in Central America, such as Nicaragua?
    Mr. Whitney: I regret that the right hon. Gentleman has turned his word processor back and no longer advances the views about the importance of the American contribution to which we were accustomed when he was in government.
    The right hon. Gentleman is premature, as he has been on other occasions in recent days, in referring to an anti-Arab stance by the United States Government. The

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    objective of the United States Government and of the British Government is to establish peace both in the middle east and in Central America. I advise the right hon. Gentleman to switch on his word processor, to read the American statements and to consider the fact that United States economic aid to Central America is three times greater than its military aid.
    Mr. Healey: I congratulate the hon. Gentleman on his attempt to turn my phrase, but licking the United States' boots is no recipe for good relations between the United Kingdom and America, which I support as much as, I hope, he does.
    The hon. Gentleman said that I was premature in referring to the American shift to an anti-Arab stance. Does that mean that we may expect it to occur this week or next week?
    Mr. Whitney: Licking United States' boots was not a phrase used by the right hon. Gentleman last week when we were under attack for failing not only to lick boots but to agree with the American action in Grenada. The Government are very clear on that. Distinguished though he is, the right hon. Gentleman cannot have it both ways. In earlier years he expressed great loyalty and support for the United States. His new manifestation is a matter for regret.

    Middle East (Ministerial Visit)
    Mr. Bellasked the Secretary of State for Foreign and Commonwealth Affairs what was discussed on the Minister of State's recent visit to Jordan, Egypt and Israel.
    The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): I returned yesterday from a visit to Israel, Jordan and Egypt. I met Mr. Shamir, King Hussein and President Mubarak and other leaders in all three countries and in the occupied territories. My discussions covered a wide range of topics, above all the situation in the middle east and our bilateral relations.
    Mr. Bell: Did those Governments have the impression that we were following United States policy, or European policy, in the Middle East? If they had the impression that we were following American policy, with all its twists, turns and contortions, what did the Minister do to disabuse them?
    Mr. Luce: I am resolutely following a British policy. In my discussions I was concerned to assess how the various parties felt that we could best give renewed vigour to make progress in the Arab-Israeli dispute and the Lebanese problem and to learn how this country could be most constructive. I believe that the discussions were most useful.
    Mr. Walters: Does my hon. Friend agree that the situation in the middle east is so dangerous that no short-term measures are adequate? If so, does he accept that the time has come to try to sponsor a meeting to discuss a comprehensive long-term settlement based on the principle of the Venice declaration?
    Mr. Luce: I agree about the great dangers of the situation in the Middle East. I believe that the Arab-Israeli problem is stagnating. Stagnation breeds despair and despair breeds violence. Therefore, there are great dangers in the long term not just for the Israelis but for the Arab countries and, above all, for the Palestinians. Both Israel
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    and the Palestinians have so much at stake that it is important for us, so far as possible in conjunction with our European partners and with the other parties to the dispute in the middle east, to do all that we positively can to help.
    Mr. Janner: Did the Minister and the three leaders that he met agree that, unless and until Syria is prepared to leave the Lebanon, there is no hope for peace in that country? Did he discuss the prospects of Syria agreeing to leave in the same way as Israel has agreed to go and the United States, France and Britain would be only too delighted to go?
    Mr. Luce: I discussed the problems of the Lebanon with all the parties. I must strongly restate that there is no shadow of doubt but that for peace and stability in the Lebanon it is essential that all forces withdraw. The Israeli Government gave an assurance that it was their priority to do that. I hope that they will fulfil that obligation and withdraw as soon as possible. However, the view of all contributors to the multinational force is that it is essential for all forces to withdraw from the Lebanon as soon as possible.
    Mr. Nelson: Did my hon. Friend's discussions with King Hussein lead him to the view that the prospects for progress on the West Bank issue have deteriorated in recent months? If so, does he agree that the subjection of the PLO by the Syrian Government effectively revokes the Rabat agreement so that the way is now much clearer for King Hussein to play a more active and positive role in finding a solution to that vexed and continuing problem?
    Mr. Luce: I sensed considerable despair in Jordan and elsewhere about the present stagnation in the middle east. We all noted the violence taking place between Syria and elements of the PLO. We acknowledge that the position is uncertain, and we do not know what will be the result. Above all, we agreed that, in addition to the important consideration of the security of Israel, a primary consideration is the position of the Palestinians, their future and their right to self-determination.
    Mr. Healey: I congratulate the Minister on his answer to the first supplementary question on this topic. I hope that it will inspire Government policy from now on. I also congratulate the hon. Member for Chichester (Mr. Nelson) on reciting a planted question with brilliant aplomb.
    Did the Minister protest to the Israeli Government about their refusal to let him meet representatives of the Arab majority on the West Bank, and does he still maintain that self-determination for the Palestine population is an essential element in any possible solution to the middle east problem?
    Mr. Luce: During my visit to Israel and the West Bank, I had a most useful dialogue with the leaders of the Israeli Government. I attach the highest importance to routine dialogue at ministerial level.
    If the Government are to contribute, however modestly, to middle east affairs, it is important to know the views of the people on the West Bank, as well as the views of the people in Israel itself. It was therefore a matter of regret that some—only some—of the leaders were not able to see me. I can only say that I regard it as singularly important in a country as strongly committed to democracy as Israel that every one should have the right to talk to one another in these circumstances.

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    I reaffirm that we are firmly committed not only to the Venice declaration and to the first principle of the right to security of the state of Israel, but to the right to self-determination of the Palestinian people.

    Falkland Islands
    Mr. Dalyellasked the Secretary of State for Foreign and Commonwealth Affairs in what terms the United States Government have pressed Her Majesty's Government to enter into negotiations with Argentina over the Falkland Islands.
    Mr. Whitney: We regularly discuss the Falkland Islands and Argentina with the United States Government. The details of such exchanges must remain confidential.
    Mr. Dalyell: If the Americans sell arms to Buenos Aires, what will the Government do?
    Mr. Whitney: My right hon. Friend the Prime Minister has frequently made clear our views about the prospect of arms sales to Argentina. Should that step be taken, which is subject to Congress approval, it would be viewed with the greatest concern in Britain.
    Mr. Beaumont-Dark: Does my hon. Friend agree that it might be sensible if we said to America, "If you do not sell arms to Argentina, we shall not sell arms to Cuba"?
    Mr. Whitney: No, Sir.
    Mr. Kenneth Carlisle: Now that there is a democratic Government in Argentina, will the Government seek to normalise our relations with that country? Does my hon. Friend agree that that would be the first step in seeking a permanent solution to the Falklands problem?
    Mr. Whitney: It is certainly our wish to normalise relations with Argentina and we must hope that, as democratic representatives, those who are about to assume power in that country will acknowledge the right of the Falkland Islanders to live in peace and security under a Government of their choosing.
    Mr. Anderson: Mr. Alfonsin has explicitly ruled out the use of force to recover the Falklands. Does that not mean a completely new turn, with new opportunities in our relations with Argentina? Is there not a real danger, if the Government do not respond positively to the new civilian Government who will take office on 10 December, that we shall become totally isolated in the face of world opinion if we stubbornly continue with the policy of fortress Falklands, when this new opportunity for a positive dialogue has been presented by the elections in Argentina?
    Mr. Whitney: The hon. Gentleman's observations are premature. Mr. Alfonsin is not yet President of Argentina, and several conflicting reports have been heard from the leadership of the Radical party. We must wait to see the developments in the new Argentine Government.

    Gibraltar
    Sir William van Straubenzeeasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on his conversations with the Spanish Foreign Minister on the subject of Gibraltar in New York on 26 September.
    Mr. Whitney: Both at this meeting and at a previous meeting in Madrid on 6 September each side explained its position on Gibraltar. My right hon. and learned Friend the
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    Secretary of State and Senor Moran agreed to maintain contact through diplomatic channels, and to aim for a further meeting in early December, when they both expect to attend the North Atlantic Council in Brussels. The British Government wish to see the earliest possible normalisation of relations between Gibraltar and Spain. We believe that the 1980 Lisbon agreement is the best way to achieve this, and we remain ready to implement it.
    Sir William van Straubenzee: Based on the Lisbon agreement, and as a result of the two conversations mentioned by my hon. Friend, does he see any prospect of a little further progress in bringing normality to the border, consistent always with the firm intention that nothing will be imposed upon the Gibraltarians that is contrary to their wishes?
    Mr. Whitney: As my hon. Friend recognises, we do not intend to do anything against the wishes of the Gibraltarians. We regret the continued delay, but we hope to eliminate the obstacles to progress and the implementation of the Lisbon agreement.
    Mr. McQuarrie: When my right hon. and learned Friend met the Spanish Foreign Minister on the previous occasion, did he discuss the proposal by the Spanish Government to complete the dockyard at La Linea de la Concepcion in the bay of Gibraltar? If so, did he tell the Foreign Minister that that would have a devastating effect on the proposed commercialisation of the dockyard in Gibraltar?
    Mr. Whitney: I hope that my hon. Friend will accept that such discussions between my right hon. and learned Friend and Senor Moran must remain confidential. The Government and the management of the company in charge of the Gibraltar project are aware of the La Linea proposal, but it does not affect the appraisal of the dockyard's commercial viability.

    Poland (Martial Law)
    Mr. Greenwayasked the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to the Polish Government on the effect on the Polish people of martial law; and if he will make a statement.
    The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): We welcomed the lifting of martial law in Poland on 22 July and the passage of an amnesty law. We expressed the hope then that the Polish authorities would use that opportunity to meet the aspirations for renewal and reform repeatedly and clearly expressed by the Polish people.
    Mr. Greenway: I thank my hon. Friend for that reply. I am sure he is aware of the warm welcome expressed on both sides of the House for the award of the Nobel peace prize to Lech Walesa, but will he join me in regretting the heavy harassment to which he continues to be subjected, as are all those who are unpopular with the regime in Poland despite the ending of martial law, notably the two priests, Father Jankowski of Gdansk and Father Popieluszko of Warsaw? Can the Government do anything about that?
    Mr. Rifkind: The House recognises that the award presented to Mr. Walesa reflects the respect and admiration that the world holds for his contribution to

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    Poland. I have no doubt that the future of Poland cannot be resolved without a role being made available for Mr. Walesa, since he represents such a substantial body of Polish opinion.
    Mr. Corbett: The Labour party also welcomes the lifting of martial law in Poland. Does the Minister find no embarrassment in his support, not only for the banned trade union Solidarity, but for the Trade Union Bill in Britain which will shackle the trade union movement?
    Mr. Rifkind: I am sure the hon. Gentleman will agree that not only does the Government's Trade Union Bill have the support of the vast majority of trade unionists, but that millions of Polish trade unionists would be delighted to have a fraction of the freedoms that British trade unions have had for more than a century.

    Middle East
    Mr. Ernie Rossasked the Secretary of State for Foreign and Commonwealth Affairs what progress Her Majesty's Government are making towards the achievement of peace in the middle east.
    Mr. Luce: We are deeply concerned at the lack of progress in solving the acute problems of the middle east. It must be for the parties themselves to take the lead in finding solutions, but we are doing all that we can to help. We will continue to work for a just and comprehensive settlement to the Arab-Israeli dispute. We are supporting all efforts to bring about national reconciliation and the withdrawal of all foreign forces from the Lebanon, and we are ready to play a constructive role in bringing an end to the Iran-Iraq war.
    Mr. Ernie Ross: The entire House hopes for the success of the Geneva peace talks. Nevertheless, although they are vital to the future of the Lebanon, they do not address themselves to the core of the middle east problem, which is the right of the Palestinians to self-determination. What positive action do the Government intend to take, at United Nations level, European level or any other level, to tackle the core of the middle east problem?
    Mr. Luce: As I said, it is for the parties involved to take the lead in resolving the Arab-Israeli dispute. They must live with it day by day, but we stand ready as a Government, and in conjunction with the Community, to do whatever we can to help. We strongly support the Venice declaration of 1980, and we believe that the Reagan plan is the best basis upon which to move forward. I found considerable support for that proposal. We shall be as active as possible in trying to obtain some progress in the matter.
    Mr. Latham: When my hon. Friend met the three middle eastern leaders, did he make it clear that the Government support the 17 May agreement between Israel and the Lebanon which was negotiated by our American allies?
    Mr. Luce: We accept that this agreement was entered into by two independent Governments—the Lebanese and the Israeli Governments—and the security of the state of Israel is a fundamental and critical point for them. These matters will be discussed at Geneva. It would not be helpful to say anything else now.
    Mr. J. Enoch Powell: Do the Government understand that self-determination is meaningless apart from territory?
    Mr. Luce: If the right to self-determination for the Palestinians is not fulfilled, in whatever way the parties involved agree, the Arab-Israeli dispute will continue. There will be more violence, and that will be contrary to the interests of not only Israel and the Arab countries, but Western countries.
    Mr. Cyril D. Townsend: Does my hon. Friend agree that neither retribution nor revenge is part of the role of the peacekeeping force? If so, does it not follow that if one element of a multinational force indulges in such activities the British contingent should be withdrawn?
    Mr. Luce: I do not believe that it is right to contemplate the withdrawal of the British contingent. A separate question on the Lebanon will follow shortly, and it may be of more help if I reserve my comments on that matter until then. I do not think that retribution is the objective. Our objective is to seek, by whatever means possible, support for reconciliation in the Lebanese and other disputes, and all our efforts should be concentrated on that.
    Mr. Douglas: Will the Minister concede that the activities of the multinational force should be restricted to the Beirut area? Therefore, any activity by the United States to seek retribution should be strongly resisted by the British Government, who should tell the Americans that we are not in harmony with that desire?
    Mr. Luce: As my right hon. Friend the Prime Minister said yesterday, multinational forces have an absolute right to self-defence. No one would deny that. As the hon. Gentleman may know, the mandate confines the terms of reference of the British contribution of 100 soldiers to Beirut city, the patrolling of that area and the guarding of the ceasefire commission.
    Mr. Amery: I strongly support the general line outlined by my hon. Friend, but he said that we would stand by the Venice declaration. Does he recall that that suggested involving the PLO in future negotiations? Does that not seem somewhat unrealistic in present circumstances?
    Mr. Luce: My right hon. Friend's question gives me the opportunity to state that the two cardinal principles in that declaration are what matter. The first is the absolute right of the state of Israel to exist within secure boundaries—something to which we are strongly committed. The second is our belief that a peaceful solution will not be achieved unless the Palestinian people have a right to self-determination. Those two points are of cardinal importance.
    Mr. George Robertson: The Minister said that the best hope for resolving the Arab-Israeli conflict lay within the Reagan plan. That view would be shared by the Israeli Labour Opposition. However, did any of the Israeli Government officials whom he met also subscribe to that view?
    Mr. Luce: I discussed fully with the Israeli Government and the leaders of the Labour party in Israel their respective views about the position in the middle east and how we could move forward. It is not for me to interpret their views. However, I picked up a distinct

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    variety of views within Israel as to how things should move forward. I attach the highest priority to a continuous and regular dialogue with the Israeli Government—and there is much that we have in common as well as that which divides us—but we have a strong difference of opinion about their settlement policy on the West Bank. I stated that strongly to the Israeli Government.

    Grenada
    Mr. Andrew MacKayasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on the Government's relationship with Grenada.
    Mr. Whitney: Our views on recent events in Grenada have been set out fully in my right hon. and learned Friend's statements of 24 and 25 October, in the debates in the House on 26 October and 3 November and by my noble Friend the Minister of State in the debate in another place on 1 November.
    Mr. MacKay: Bearing in mind the history of the tragic oppression of party democracy in Grenada since it was given independence, does my hon. Friend agree that the best role for the British Government in the difficult times ahead for that island is to encourage a return to genuine democracy and genuine elections and that we should do all we can to help those occur?
    Mr. Whitney: I am happy to agree with my hon. Friend. We stand ready to help the internal Administration as it emerges, and hope that we can offer aid. We shall certainly consider any recommendations on the supervision of elections, police advice, training and any other help.
    Mr. Pavitt: When considering Grenada, will the Minister give full weight to our grave concern that the situation there is akin to a small war in which the two super-powers are playing a game of chess, in which one could take Grenada and the other Afghanistan? If this situation continues, we shall have precisely the situation as happened in 1962, when the special relationship with Prime Minister Macmillan was proved not to exist at all.
    Mr. Whitney: This is not a game between two super-powers. I remind the hon. Gentleman that the deep concern of the other eastern Caribbean states was also a factor. It is now important that all of us who are in any position to help should do so, so that we can restore democracy and peace to Grenada.
    Mr. Ian Lloyd: My hon. Friend has referred to various formal statements by the Government up to 3 November. Have the Government received, and will he comment on, some of the remarkable documents that have been published by the United States Government in evidence to the United States Congress? I refer particularly to one on 8 November, which I received this morning, which discloses an eight-page list of Soviet weaponry supplied to Cuba under a secret agreement reached at Managua.
    Mr. Whitney: As I have not seen the document, I am sure that my hon. Friend will understand that it is difficult for me to comment. There is now a great deal for all of us to discover about what was going on in Grenada in recent times.
    Mr. Nicholas Winterton: With hindsight, does not my hon. Friend agree that it was wrong for the Government
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    to sit on the fence over the intervention by the United States and the six eastern Caribbean countries? Is it not clear that the United States acted in the nick of time? Does not the number of armed, trained Cuban military personnel in Grenada at the time clearly show that they were there for a different purpose than the building of an airport? Furthermore, does not the amount of sophisticated arms indicate that Grenada was being turned into a colony of the Soviet Union for the subversion of Central and South America?
    Mr. Whitney: My hon. Friend's characterisation of the Government's position is unfair and I hope that on reflection he will agree. Our position was clear and was in line with that of other Governments in the Caribbean. We should now concentrate on building a democratic Grenada for the future.
    Mr. Allan Roberts: Does the Minister accept that our relationships with Grenada cannot be normalised until the American troops withdraw from that Commonwealth country? Will he take action to require the American troops to withdraw before Congress invokes the War Powers Act to force them to withdraw? Does he also agree that, since the American invasion of Grenada, Ronald Reagan is the first United States President to be engaged in war activities in four places and on three continents—in Chad, Central America—
    Mr. Speaker: Order. The hon. Gentleman has continued long enough.
    Mr. Roberts rose—
    Mr. Speaker: Order. The hon. Gentleman has asked a long supplementary question and must therefore resume his seat.
    Mr. Roberts rose—
    Mr. Speaker: Order.
    Mr. Whitney: I suggest that the hon. Gentleman considers the fact that it is now the duty of the Governor General and the interim Administration which emerges to deal with the subjects he has raised, including the departure of the American troops. I understand that the United States Government, the other Caribbean Governments and the Governor General share our concern that there should be a speedy re-establishment of freedom and stability in Grenada. I hope that the hon. Gentleman also agrees.
    Mr. Healey: In considering American statements, will the hon. Gentleman recognise the extent to which they have contradicted themselves in the last few days, particularly on the discovery of mass graves and the number of Cubans on the island? Does he agree that if Grenada is to achieve representative democracy, which we all wish, it is important that the American troops should first withdraw? If foreign troops are required to maintain law and order in the interim, should they not be provided by countries that have not already declared an interest in the outcome of any possible elections? Therefore, is it not important that a Commonwealth force should be allowed to participate?
    Mr. Whitney: Given the right hon. Gentleman's military experience, of which we heard the other day, he will understand that the fog of war gives rise to a number of conflicting statements, and all is not clear about what

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    has happened in Grenada in recent days and weeks. However, it is clear that a constitutional Administration can now be established in Grenada. The Governor General is working on that, as are many others, and the Governor General has made it clear that he will invite the overseas troops to leave as soon as he considers that the circumstances are acceptable.
    Mr. Speaker: Question No. 8.
    Mr. Healey rose—
    Mr. Speaker: Order. In fairness, I have already called another question.

    Indonesia
    Mr. Wareingasked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to make plans to meet the ambassador of Indonesia to discuss relations with that country.
    Mr. Luce: Our relations with Indonesia are good. I have no plans at present to meet the ambassador.
    Mr. Wareing: In view of the genocide, torture and repression being perpetrated on the people of East Timor by the Indonesian armed forces, would it not be more appropriate for the Foreign Secretary to call in the ambassador, tell him that the Government have no intention of delivering the five Hawk aircraft, which can be used in a ground-attack role, and that we shall not abstain next time there is a proposal in the United Nations for self-determination for the people of East Timor?
    Mr. Luce: The British Government do not recognise and have not recognised the annexation of East Timor. The hon. Gentleman has used language that implies a wide degree of violence and repression in East Timor. We have taken some soundings on this, and although it is difficult to get accurate information, we do not believe from the evidence that the problem is on the scale that he is suggesting. The hon. Gentleman should remember that the Governor of East Timor has suggested that, while the ceasefire has broken down and there is some violence, essentially order has been restored. As to the sale of defence equipment, at all times when we decide whether to grant an export licence we have uppermost in our minds whether the equipment will be used for the abuse of human rights. That is the factor of predominant concern to us.

  EUROPEAN COMMUNITY

    Athens Summit
    Mr. Gouldasked the Secretary of State for Foreign and Commonwealth Affairs what are Her Majesty's Government's major priorities in preparing for the Athens summit.
    Mr. Rifkind: We have two major priorities. First, to reach agreement on an effective control of agricultural and other expenditure, and secondly, to agree an arrangement to ensure a fair sharing of the financial burden of the Community so that no country has to pay a share disproportionate to its relative national wealth. The resolution of these long-standing problems will enable the Community to concentrate fully on the crucial question of its future development.
    Mr. Gould: Is it not clear from the Commission budget proposals of yesterday that talking tough without backing-up the talk with resolute action is getting us nowhere? Does the Minister accept that the only chance that we have of bringing the budget and the common agricultural policy under proper control is to refuse the EC any further contributions from own resources?
    Mr. Rifkind: The Commission's proposals yesterday, to which the hon. Gentleman has referred, depart from the basis on which net contributions have been assessed for the past four years, a system agreed by the Council of Ministers as a whole and which was the basis of the refunds paid both to the United Kingdom and to the Federal Republic of Germany. For reasons that the hon. Gentleman will understand, we find these proposals unacceptable.
    Mr. Jackson: My right hon. and learned Friend the Foreign Secretary was hooted at the other day when he said that our partners were beginning to understand the problem of the budget. Does not this event show that, although we have made progress, there is still further to go? Does my hon. Friend concede that all shades of opinion in the House condemn this eleventh hour change in a definition that has been accepted over the past four years?
    Mr. Rifkind: There is virtual unanimity among member Governments of the Community that there is justification for a change in the system to ensure that Britain does not bear a disproportionate burden. As to the Commission's proposal, the so-called new interpretation of the existing burdens, I suggest that it smacks more of alchemy than accountancy and cannot be acceptable either to the House or to any reasonable person who has looked at these matters.
    Mr. Kirkwood: Having regard to the continued uncertainty in the fishing industry about the common fisheries policy, does not the Minister think that this issue deserves a high enough priority to be considered by the Athens summit so that the uncertainties can be resolved?
    Mr. Rifkind: I should not wish to underestimate the importance of fishing to the Community, but the hon. Gentleman will be aware that the Athens summit is concerned only with the matters in the Stuttgart declaration, and fishing is not part of that declaration.
    Mr. Hordern: Does my hon. Friend agree that not only are the Community proposals unacceptable, as he rightly said, but that there can be no question of increasing the Community's own resources unless some equitable agreement is reached?
    Mr. Rifkind: My right hon. Friend the Prime Minister has made it clear that Her Majesty's Government will not consider an increase in the own resources of the Community unless a satisfactory agreement is reached, both on the burden that Britain faces in its contribution to the budget and over the control of the agricultural expenditure. If agreement can be reached on these matters, we shall be prepared to consider the reasons why the other member states believe that an increase in own resources is justified.
    Mr. Robin Cook: Does the Minister recollect that when the Prime Minister returned from Stuttgart she told the House that she had obtained a tight timetable and an effective procedure for resolving the budget problem by

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    the Athens summit? Will the Minister now echo the summit optimism of his leader, or is it not the case that yesterday's document exposed as bogus that promise, just as it showed that the Commission is as adept at manipulating the budget figures as the Minister's Government are at fiddling the unemployment figures?
    Mr. Rifkind: I congratulate the hon. Gentleman on his appointment to his office. Her Majesty's Government continue to hope that these problems will be resolved by the Athens summit. The Council of Ministers entered into obligations at the time of the Stuttgart declaration and we are ready and willing to reach agreement on these matters at Athens. We hope that our partners in the Community will agree.
    Mr. Leightonasked the Secretary of State for Foreign and Commonwealth Affairs what results Her Majesty's Government expect from the European Community summit in Athens.
    Mr. Rifkind: The European Council in Athens will consider the results of the negotiations launched at Stuttgart in June. We hope that the Council will be in a position to take all decisions called for in the Stuttgart declaration.
    Mr. Leighton: Does the Minister accept that the Common Market quagmire is going from bad to disastrous, that the Dublin and Stuttgart summits were failures and abortive and that, although our hopes are on Athens, we shall experience an even more humiliating debacle? As Commissioner Tugendhat said, the books are being cooked against us and we are being cheated. Is not the only way to solve the problem to scrap the bizarre group of taxes that constitute the own resources, and the only way to reform the CAP to allow each nation the freedom to run its own agriculture?
    Mr. Rifkind: The hon. Gentleman is calling for Britain to withdraw from the Community. He will be aware that that policy was not only soundly rejected by the electorate at the election but has since been dropped by his party's leadership. We are interested in reforming the CAP and ensuring that there should be, as the Government have said, strict financial guidelines on expenditure on agriculture.
    Mr. Budgen: Will my hon. Friend confirm that the Government's objective on the CAP is to reduce the rate of increase, and that as the rate of increase is now proceeding at about 40 per cent. per annum that objective should be easy to achieve?
    Mr. Rifkind: My hon. Friend is not quite correct. The Government have said that any rate of increase in agricultural expenditure should be less than the rate of increase in the resources of the Community, because even under the existing system of own resources, without any addition being made to the VAT limit, the buoyancy of the VAT system allows for a natural growth in resources going to the Community. We have said that any increase in agricultural expenditure should be less than that increase.
    Mr. Russell Johnston: Does the Minister agree that progress is hardly likely to be advanced by hurling alliterative abuse at the Commission? Was any advance notice or information given to the Government about the Commission's new method of calculation?
    Mr. Rifkind: We were aware that the Commission intended to present a paper to the Council outlining its ideas not only on the matters that have caused controversy but on the wider issues to be discussed at Athens. No doubt some parts of the proposals are constructive and helpful, but we have made it clear that the proposals to which the hon. Gentleman has referred are unacceptable, because they go back on the system that has been applied during the past four years. They would result in an attempt to confuse the burden that now exists for the United Kingdom. We are concerned with the transfer of resources across the exchanges. That is a substantial burden, and nothing that seeks to disguise that fact in the Commission's new proposals can be accepted.
    Sir Hugh Fraser: As my hon. Friend represents a Government who are committed to the reduction of public expenditure, will he give a categoric assurance that any advance at Athens will depend on the reduction of expenditure by the Community rather than on increasing the levies raised on this country or any other? Until my hon. Friend can give that assurance, he will find it difficult to obtain national support.
    Mr. Rifkind: The Government have made it abundantly clear that at a time when all Community states are trying to reduce their expenditure it is unacceptable for the Community as a whole to be exempt from that discipline. Agriculture is the single most important area in which economies are required. I think that there is now broad agreement among all the member states of the Community about the need to control agricultural expenditure. The difference between member states is that the British Government have put forward proposals that would ensure the realisation of that aspiration. As yet we have not obtained the agreement of other member states on realistic ways of achieving that.

    Finance
    Mr. Knoxasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress towards reaching agreement on European Community finances.
    Mr. Rifkind: It is now generally recognised by our partners that the Community must agree measures that will end the budget inequity suffered by certain member states, notably the United Kingdom. [Interruption.] We have put forward a specific proposal for a safety net scheme that would limit the budgetary burdens that any member state would be expected to bear. Negotiations on this issue are continuing today in Athens, at a Special Council attended by my right hon. and learned Friend the Foreign Secretary.
    Mr. Knox: Does my hon. Friend agree that a decision to join the exchange rate mechanism of the EMS might be very helpful in enabling us to resolve our budget problems, quite apart from the other advantages that it would bring?
    Mr. Rifkind: There was a somewhat incredulous response from the Opposition when I initially replied to the question. However, I should point out that there is, indeed, unanimity among all member states of the Community about the fact that reform is needed to deal with Britain's budgetary imbalance—[HON. MEMBERS: "When?"] The commitment of the Council of Ministers, which was arrived at at the time of the Stuttgart declaration, pointed to that fact. The Government have always made it clear

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    that there may be circumstances that would make it possible for Britain to accede to the EMS. However, that is a matter for my right hon. Friend the Chancellor of the Exchequer, and I must ask my hon. Friend to direct his question to him.
    Mr. Mikardo: Could not the Community save quite a lot of money on the rent and operation of cold stores by giving away some of the hideous agricultural surpluses to the world's famine areas?
    Mr. Rifkind: As the hon. Gentleman will know, there is a significant food aid scheme that is administered by the Community. We believe that the best way of dealing with the agricultural surpluses that have arisen is by a sensible policy of price restraint. That would do far more to deal with the surpluses than many of the other measures suggested by certain quarters.
    Mr. Dykes: Does my hon. Friend agree that the fact that the Commission has merely made a very controversial and unacceptable proposal does not mean that it will automatically be accepted by the Council of Ministers or the summit? Given constructive good will and co-operation among all member states, there is a very good chance of a successful Athens summit.
    Mr. Rifkind: My hon. Friend is correct. The Commission has often made proposals which, in the event, have been rejected or substantially amended by the Council of Ministers. I have no doubt that this proposal will be another example of that phenomenon.
    Mr. Cook: Is not the Minister concerned that the Assembly has not only held up the 1983 refund but has clearly stated that its approval depends on success at Athens, about which the Minister — although he had hopes—was rather less than certain? If the Conservatives are anxious to obtain that refund, why did a dozen of them at Strasbourg vote against the payment?
    Mr. Rifkind: At the time of the Stuttgart declaration the Council of Ministers made it clear that the payment of the refund to which the hon. Gentleman referred was not in any way dependent on the outcome of the Athens negotiations. The European Parliament has in the past sought to block refunds due to the United Kingdom, but in the event it has eventually agreed that refunds should be released. It is essential that those refunds are released by the appropriate time. I remain hopeful that the European Parliament will accept its responsibilities in this matter.
    Mr. Maclennan: Do the Government recognise that generalised proposals for price restraints in agriculture will fail, just as they have failed before? Are the Government at last moving towards recognition of the fact that quantitive restrictions on price support in certain commodities — notably cereals — are more likely to achieve the Government's objectives?
    Mr. Rifkind: We have said that there should be not only a strict financial guideline for the totality of agriculture expenditure but specific proposals for each of the commodity regimes covered by the CAP. Price restraint is the most important component in controlling surpluses or unnecessary costs in each of those areas, but we do not rule out other measures that are relevant to particular commodities.

    Benefits and Services
    Mr. Nellistasked the Secretary of State for Foreign and Commonwealth Affairs what is Her Majesty's Government policy on standardisation of benefits and services available throughout the European Community.
    Mr. Rifkind: If, as I assume, this question relates to social services and social security benefits, there is no policy of standardisation in the Community; nor would such a policy be realistic, given the range of different benefits available in member states.
    Mr. Nellist: Is the Minister aware of a recent United Nations study of European countries, which showed that Britain, of all the Common Market countries, pays by far the lowest unemployment benefit as a percentage of average earnings of a worker with three children? Does not the Minister agree that the Common Market, which has cost £1·6 million per day for the past decade, was sold to the British taxpayer on the basis of an increase in living standards? Despite that, British membership during the past 10 years has produced nothing other than the lowest rate of unemployment benefit.
    Mr. Rifkind: The hon. Gentleman must be well aware that the tradition of other countries in the Community paying higher social security benefits goes back far more than 10 years. The social security benefits that can be paid by any Government depend on the national wealth of the country involved. This Government's whole economic strategy is devoted to increasing that national wealth.
    Mr. Marlow: Does my hon. Friend agree that among the benefits that are available to Community members there should be a fair deal on finance, and that 70 or 80 per cent. of the money should not be spent purely on agricultural policy? As the benefits are not fairly distributed, does my hon. Friend agree that there is no evidence whatever that this House would agree, in any circumstances, to an increase in own resources?
    Mr. Rifkind: The Government's policy is directed towards ensuring that agriculture represents a progressively smaller share of total Community expenditure. I assure my hon. Friend that that will continue to be the basis of Government policy.
    Mr. Foulkes: Why did the British Government support the removal of funds for the anti-poverty programme from the Community budget? Was it because those funds were intended to support welfare rights programmes and to encourage the take-up of such benefits as still exist under this Government?
    Mr. Rifkind: I congratulate the hon. Gentleman on his new appointment. I cannot give him a detailed answer to that question at present, but I assure him that the basis of Government policy on such matters is to ensure the best possible use of the resources available.

    Council of Ministers
    Mr. Hardyasked the Secretary of State for Foreign and Commonwealth Affairs what matters were discussed at the last meeting of the Council of Ministers which he attended.
    Mr. Rifkind: I represented the United Kingdom at the Foreign Affairs Council held on 17 and 18 of October. A

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    report on the outcome of this meeting was contained in my reply of 25 October to my hon. Friend the Member for East Lindsey (Mr. Tapsell).
    Mr. Hardy: Does the Minister agree that in recent months he and his European colleagues have given grossly inadequate consideration to energy questions? Will he ensure that greater consideration is given to securing the fulfilment of the repeated commitments given to the coal industry by the Community? Does the hon. Gentleman accept that coal imports to Europe, which now exceed 70 million tonnes a year, are disadvantageous to the European coal industry and may create an economic dependency which — as I hope he will agree — would be very unwise?
    Mr. Rifkind: The hon. Gentleman will be pleased to know that the United Kingdom Government have been in the forefront in pressing for a Community energy policy. A document on new policies for the Community was tabled by the Government some time ago, which said that a new Community initiative was required over energy needs. We emphasised the role that the Community's coal resources could play in such an energy policy.
    Sir Anthony Meyer: I welcome what my hon. Friend has said about a common energy policy, but may I ask him to persist in reminding the House that, whatever quarrel we may have with the Community over the budget. it is
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    lunacy to think in terms either of paralysing the Community or of threatening non-co-operation at a time when the threat to this country from the East has never been greater because of possible quarrels over the Soviet succession and at a time when we appear to be finding it extraordinarily difficult to work with our American allies?
    Mr. Rifkind: My hon. Friend is correct. It is in the interests of every member state of the Community that an early and satisfactory resolution to the problems on finance should be reached, not only for their own sake, but so that the Community can devote its attention to the many other areas of development in Community policy chat are urgently required.
    Mr. Bermingham: If the Government are in the forefront of energy policy, should they not also be in the forefront of energy conservation policy? What steps do the Minister and his colleagues propose to take to persuade the Government to bring our energy conservation standards into line with some of those in Europe? Are the Government prepared to make it worth while for people to pursue an energy conservation policy?
    Mr. Rifkind: I assure the hon. Gentleman that my right hon. Friend the Secretary of State for Energy is as concerned as he is on such matters. I suggest that the hon. Gentleman puts any questions on detailed matters affecting energy to my right hon. Friend.

Minister of State, Department of Employment
3.30 pm
Mr. David Winnick: On a point of order, Mr. Speaker. The report of the Royal Commission on standards of conduct in public life, published in July 1976 and chaired by Lord Salmon, said, as I am sure you, Mr. Speaker, are aware, that membership of Parliament is a great honour and carries with it a special duty to maintain the highest standards of probity. In view of Lord Salmon's remarks, I wish to ask whether it can be maintained that such conduct was observed yesterday.
The Minister of State, Department of Employment, the hon. Member for Suffolk, Coastal (Mr. Gummer), replied for the Government on a Bill which dealt in part with the finances of the main Opposition party. Yet that same Minister is chairman of the Conservative party and spends a great deal of his time helping to raise money for that organisation. Therefore, in my submission, the Minister of State has a particular interest in doing what he can to undermine the finances of the Labour party.
Can this matter be referred to the Committee of Privileges? I submit that an important House of Commons point—not a party point—is involved and that had the roles been reversed Conservative Members in opposition would be as indignant as we are, if not more so.
I am not raising this matter as a party point. We are constantly on our guard against any practice that borders on the corrupt. Yet a Minister of State who is paid £5,000 a year from public funds to carry out his duties as chairman of the Conservative party replied for the Government on a Bill dealing directly with the finances of the Labour party.
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Therefore, Mr. Speaker, will you give careful consideration to this matter — it could be raised on future occasions and repeated on future occasions—and say whether it can be referred to the Committee of Privileges?
Mr. Speaker: The hon. Gentleman and the House will know that applications to refer matters to the Committee of Privileges have to be put in writing and can no longer be made on the Floor of the House. I have no jurisdiction over who speaks from either Front Bench. I made the position of the House of Commons entirely clear, I hope, in my statement last week in which I said that interests should always be declared if they were not already known. I think that the Minister of State's position as chairman of the Conservative party is well known, and that seemed to me to be very apparent last night.
Mr. Donald Stewart: Further to that point of order, Mr. Speaker. Although I concede that the hon. Member for Walsall, North (Mr. Winnick) raised his point of order after 3.30 pm, you, Mr. Speaker, had not intimated that Question Time was over. As you had not done so. Mr. Speaker, and as some of us were on our feet, the hon. Gentleman prevented us from asking questions.
Mr. Speaker: I watch the digital clocks extremely carefully. I accept that questions on foreign affairs ran on a little, and we stopped EC questions at 3.30 pm precisely.

BILL PRESENTED
  GREEN BELT (PRESERVATION FROM DEVELOPMENT)
  Mr. Christopher Murphy presented a Bill to amend section 10(1) of the Green Belt (London and Home Counties) Act 1938: And the same was read the First time; and ordered to be read a Second time upon Friday 11 November and to be printed. [Bill 49.]

Occupational Pension Schemes
3.34 pm
Mr. Roger Freeman: I beg to move,
That leave be given to bring in a Bill to require trustees of occupational pension schemes to treat deferred pension rights on an equal basis with pensions in payment whenever increases are made.
The purpose of the Bill is to provide some justice to those members of private sector occupational pension schemes who leave prior to retirement and who have earned a pension under that scheme. If they leave prior to retirement, that pension entitlement — a deferred or frozen pension—is not normally increased and is paid only on retirement.
Only about half of those employed in the private sector are fortunate enough to belong to a private sector pension scheme. However, if a member of that pension scheme leaves employment before retirement age, his pension is calculated on the basis of the number of years that he has been a member of that scheme, normally divided by 60 and multiplied by the salary when he leaves employment. Normally, in the private sector, that pension entitlement is frozen.
If employees change jobs and have perhaps two or three jobs in a working life, a man or woman can easily reach retirement age and be entitled only to about half of the pension of someone who has worked all his life in a particular company and within one pension scheme. Pensions in payments on retirement are often increased by the trustees in the private sector.
This Bill will provide equality of treatment between the long stayer, who can look forward to regular increases in his pension, and the early leaver, the man who leaves employment and has his pension entitlement frozen. In the public sector, those who transfer from ore job to another normally carry their full pension entitlement with them and when they retire their pensions are indexed. Neither of those features applies in the private sector.
Two objections are raised to the Bill. I believe that both are fallacious. The first is that the Government have no right to interfere with the terms and conditions of private sector pension schemes. The taxpayer provides a substantial subsidy to pension schemes because the contributions from employees and employers are tax deductible and the investments made by the trustees of a private sector occupational pension scheme are themselves free of tax, both income tax and capital gains tax. Therefore, the taxpayer, through this House, has every right to interfere with the terms and conditions of private sector pension schemes in order to provide justice.
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The second objection that is sometimes raised is that the Bill would impose additional costs on companies That is not the case because my Bill is financially neutral It is up to the specific pension scheme, and the trustees of that scheme, to decide whether there will be a shift in benefits from the stayer to the leaver, whether the employees will be asked to contribute voluntarily more to the pension scheme or whether the employer will provide more to the pension scheme.
I do not agree with the recommendations of the Occupational Pensions Board that the Minister is now considering. It specified as a target for pensions in payment an annual increase up to a ceiling of 5 per cent., but specified precisely how much should be awarded to the deferred pensioner as a matter of law. It was too precise and involved costs for the private sector.
The Bill would bring two advantages to the many hundreds of thousands of people who suffer from having their deferred pensions frozen. First, it would pave the way for greater transferability of pensions. In order to have something to transfer, we must first give the early leaver some actuarial value. The Bill will ensure that when his pension entitlement is calculated — which he may or may not transfer—the early leaver has something more than the present frozen sum.
Secondly, the Bill will enhance job mobility. More and more people are paying close attention to their future pension entitlements when they consider changing their jobs. I am sure that the House will appreciate that any proposal that enhances job mobility, through shifting the balance of advantage from the long stayer to the early leaver, will be welcomed.
In September my right hon. Friend the Secretary of State for Social Services asked for practical solutions to the problem of early leavers. This Bill is a practical and simple solution. More importantly, if passed. the House would see justice done.
Question put and agreed to.
Bill ordered to be brought in by Mr. Roger Freeman, Mr. Reg Prentice, Sir Brandon Rhys Williams, Mr. Robert McCrindle, Mr. Anthony Nelson, Mr. Harry Greenway, Mr. Richard Ryder, Mr. Neil Hamilton, Mr. Michael Stern, and Mr. Michael Howard.

Occupational Pension Schemes
  OCCUPATIONAL PENSION SCHEMES
  Mr. Roger Freeman accordingly presented a Bill to require trustees of occupational pension schemes to treat deferred pension rights on an equal basis with pensions in payment whenever increases are made: And the same was read the First time; and ordered to be read a Second time upon Friday 9 December and to be printed [Bill 53.]
Orders of the Day

  Oil Taxation Bill
  Order for Second Reading read. 3
  3.41 pm
  The Financial Secretary to the Treasury (Mr. John Moore): I beg to move, That the Bill be now read a Second time.
  I congratulate and welcome the hon. Member for Birmingham, Perry Barr (Mr. Rooker) on his move to the hard nails of the shadow Treasury Bench. I do not imagine that this will be the most contentious Bill that we shall consider together.
  The Bill completes this year's Budget package on the oil industry. The package is designed to encourage future exploration and development. The main tax provisions were the double oil allowance for future fields, the new PRT relief for exploration and appraisal and the phasing out of APRT. Those were enacted in the first of this year's Finance Acts. The other main element of the package, the abolition of royalties for future fields, is contained in the Petroleum Royalties (Relief) Bill, which received its Third reading last Wednesday.
  Last year, to assess the impact of the fiscal regime on future developments, the Government undertook a thorough analysis of the profitability of future fields. That showed that the next generation of fields were likely to be much smaller and geologically more complex than the current generation. A study of their prospective profitability revealed that some relaxation of the fiscal regime was required to encourage the industry to develop the new prospects.
  The Budget package was, therefore, designed to provide incentives to develop future free-standing fields and to encourage further exploration and appraisal. The industry has welcomed the measures and there has been clear evidence that companies are reconsidering projects that they had previously put aside as uneconomic. We have been further encouraged by the number of development applications approved or under consideration. That justifies our confidence that if the fiscal environment takes account of changing oilfield economics, private enterprise will continue to ensure the successful development of the nation's oil and gas resources.
  Criticism is sometimes expressed at the number of changes in recent years in the oil taxation regime. In the debate on the resolution introducing this Bill, the hon. Member for Blackburn (Mr. Straw) expressed the hope that it would
  "bring more coherence and permanence into oil taxation." —[Official Report, 26 October 1983; Vol. 47, c. 402.]
  I recognise that it has not been possible in the past two or three years to provide the degree of stability in the fiscal regime which is, in theory, desirable. But we have to be realistic about this. The regime has had to be adapted to meet major changes in circumstances in the outside world, such as oil price changes. It has had also to respond to changes in the prospects and profitability of likely North sea developments in the years ahead, as compared with the first generation fields. This year's package of changes was drawn up in the light of a thorough analysis of the
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  economics of existing and future fields. It was a carefully balanced package which followed very full discussion with the industry, and should give it confidence for the future. I certainly hope that we shall now have a period of stability in the main structure of the PRT system; but the House would not expect me to guarantee that there will be no changes in the way we tax oil production where those seem right.
  The Bill, in completing the package of measures we have introduced this year, relaxes the rules for PRT relief for expenditure on assets with shared use such as pipelines, and charges related receipts, such as pipeline tariffs, to PRT, subject to an exempt allowance. The provisions are highly technical; and although we introduced most of the clauses in chapter II of part IV of the spring Finance Bill, they were of great length, not quite complete, and were capable of further refinement in discussion with the industry. We thought it wrong to ask the House to consider them for enactment in that form in the short time available for the truncated Finance Bill in the spring, or the short summer Finance Bill. The Chancellor of the Exchequer therefore announced last summer that they would be the subject of an Oil Taxation Bill to be introduced in the autumn. This is the promised Bill.
  Mr. Donald Stewart: Should not a higher priority be given to a depletion policy and some arrangement with OPEC, than to taxation?
  Mr. Moore: The right hon. Gentleman knows that the Select Committee on Energy examined the Government's depletion policy and, overall, recognised that it met the interests of the nation.
  It has for some time been recognised that the present system of relief, especially for expenditure, had not been designed for the position that was beginning to emerge in the North sea, and was not well suited to it. To rewrite the rules would clearly be a complex matter, as it has indeed turned out to be, but after due consideration the then Chancellor announced in his 1982 Budget speech a commitment to introduce legislation. Then, in May 1982, the Government issued a consultative document setting out at some length the changing scene in the North sea that had made it necessary to review the way in which PRT relief was given for expenditure on long-term assets. It described the existing system of relief and explained why it was no longer suited to the changing position. It discussed possible solutions and outlined positive proposals.
  We are now seeking to implement the proposals we outlined there, but that follows representations from the industry and discussions with it, first about the general outline, and later about the very many details which had still to be considered in order to create a set of rules that fitted the many and complex permutations of circumstances that exist in the North sea.
  Hon. Members will recall the background to the proposals. North sea projects have typically involved very large front-end outlays before any significant income is generated. Each field development has generally involved a more-or-less complete dedicated production system—comprising offshore production and treatment, transport to shore, onshore storage treatment and loading facilities, or the facilities have been shared between fields from the outset on an equity basis. The pattern of development was reflected quite directly in the existing PRT structure. PRT is charged on a field basis, and allows for each field full front-end loaded relief for the assets dedicated to that field.

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  However, the indications were that the pattern of development would change significantly over the next few years. Two separate but linked trends point in that direction. First, there is by now a substantial infrastructure of North sea assets already in place — platforms, pipelines and shore facilities. Those facilities are sized to serve the relatively large first-generation United Kingdom fields. Thanks to the characteristic peaked profile of field production many of those assets are, or will shortly be, under-used in the service of the fields for which they were built and will have spare capacity to take on other non-field uses.
  Secondly, it is generally expected that the next generation of North sea fields will be smaller than fields to date. They will also in many cases be located in the vicinity of infrastructure already in place. Some new fields may be uneconomic to develop if they cannot tie in to existing assets rather than use purpose-built provision of their own, and others may be significantly more productive in resource terms if developed in that way. The likely result will be a significant growth in arrangements to share existing North sea assets. Indeed, that has already started in the case of agreements to share existing pipeline systems. Even where no existing assets are available to be shared, there may be increasing resource gains to be had from developing new assets so as to maximise the potential for new uses later in asset life. For example, it may be sensible to size a new pipeline somewhat larger or lay the line on a more expensive route than is immediately required so as to create scope for future tie-ins. Those trends in development are clear, and it has been becoming increasingly important that the fiscal system should adapt to and support the trends rather than conflict with them.
  The existing rules for giving relief for expenditure on the assets involved were clearly no longer appropriate. As the law stands, relief for the necessarily costly expenditure on long-term assets is restricted—or, if already given, clawed back—by the proportion referable to use by a third party when that can be estimated. Nor can it even always be estimated. For example, it may have become an unrealistic assumption that a pipeline will be used only for the owner's own field. But while it may be clear that the asset is likely also to be used by other fields, it could be very difficult or impossible to estimate what proportion of the use will relate to that and what to the owner's own field. In short, it may happen that while there is a clear possibility of shared use, no one can say how much will eventuate. The existing law then requires the expenditure to be spread over the life of the asset and a proportion allowed period by period. Where that uncertainty applies from day one of a new development, only this slow-train method could be used. That would discourage such a venture from the start.
  No expenditure had, at the time we issued the consultative document, yet been treated under this second rule. As a holding matter we authorised the Inland Revenue not to restrict or claw back relief under existing law where no restriction would be due under the proposals in the document. That was announced in paragraph 53 of that document. It was becoming increasingly probable that relief already given should be clawed back and new relief restricted under the second rule. For example, if relief for a pipeline and terminal system costing £500 million had to be put onto that basis after half its life, relief on £250 million would be clawed back. A switch to this basis could cost the industry hundreds of millions of pounds on
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  existing assets alone, only part of which would be restored later and then possibly over a long period. We could not leave the industry with that potential liability and disincentive hanging over it. In most cases the provisions in the Bill will remove both the existing rules so that third party use is no longer a ground for restricting relief. Full relief will be available from the start with no possibility of its being lost.
  At the same time, it is right—as the consultative document proposed—to charge incidental receipts, such as tariff income or sales proceeds, attributable to the assets which are being given this more favourable relief treatment. That is partly as a corollary of giving full relief for an asset even where it is, or is going to be, or is likely to be used in part not for the owner's field, but for another's field. Now that we are giving full relief for an asset partly used by a third party, it is reasonable to take receipts from that party into account. There is already a provision with that intention, but it applies only to hire receipts, and most of the sharing arrangements do not constitute hire. It is also in any case anomalous that tariffs received by the owner of an asset for the use of his pipeline are not liable to PRT in his hands, although they are an allowable PRT expense for the field which pays for them.
  On Third Reading on the Petroleum Royalties (Relief) Bill, my hon. Friend the Member for Bedfordshire, North (Mr. Skeet), who with his enormous expertise in this field has consistently worked to support the development of our North sea resources, asked whether the proposal to charge tariffs was not inconsistent with the general thrust of this year's oil taxation package. I hope that the explanation that I have given will show why it would have been quite wrong to give full front end loaded relief for an asset which had shared use but to ignore the receipts arising from that use. I realise that my hon. Friend had none the less a particular and practical concern. He suggested that the new charge might drive up tariffs, so making certain small fields uneconomic to work. The level of tariffs, is not, of course, set only by the tax system, but I know that my hon. Friend's worry is also a concern to the oil industry. It was partly for that reason that, following the consultation process, in addition to the increased relief for the relevant expenditure on the tariffed assets, we introduced the tariff receipts allowance, and set it at a generous level. That allowance will be available in full to the owner of a pipeline to set against his tariff receipts from each new user field. It will offset pressure for an upward trend in tariffs, particularly as they affect the smaller marginal fields.
  Mr. Dick Douglas: Is the Minister under the firm impression that the smaller fields to be developed would have to use pipelines in order to qualify for the type of relief about which he is speaking?
  Mr. Moore: Not necessarily, because there are other methods of development. It is my belief — I shall confirm it when I have checked the point—that the other methods of extraction and movement will also be covered by this measure. The hon. Gentleman is right to remind the House that it is not related only to pipelines and that other forms of assets are covered.
  I do not expect the revenue effect to differ significantly from that given in the spring Financial Statement and Budget Report— a cost of £15 million in the current year and a yield of about the same amount on average over the next two or three years. Hon. Members will realise that

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  the further into the future we get, the more difficult it is to make any estimate, since that depends not only on which fields are developed, when and in what ways but on the extent to which relief under the existing system would have been restricted because of shared use, which is only probable or not quantifiable at all. The figures that I have quoted do not reflect the unquantifiable amount. As I have already said, and as was said in the footnote to the FSBR, those could run to some hundreds of millions of pounds over a period of years. Therefore, those figures do not show the full benefit to the industry, or the nation, from the development of fields which otherwise might not take place.
  I have made available to the House notes on the clauses and schedules which explain in some detail what each is doing, and I hope that the House has found them helpful. I propose now to indicate the general purpose of the provisions and to comment on one or two particular matters.
  The first five clauses with schedule 1 spell out the new rules for giving PRT relief for expenditure on long-term assets. The key provision is in clause 3(4) which provides for the whole of the expenditure to which the clause applies to be allowable to capital expenditure on long-term assets used for an oilfield, except the small class of assets of the kind which is not used for any great length of time in any particular field but moved about. We have introduced a new concept here — the non-dedicated mobile asset—to describe that residual class of asset.
  The distinction that we are making is between two kinds of mobile assets. The main class of such assets consists of those which will be used over most or all of their life, or the field's life if shorter, for the owner's field or fields. An example is the shuttle tanker used for a field which loads directly into a tanker offshore. Another example is a purpose-built support vessel which provides fire-fighting and diving facilities for an oil platform. A floating platform would also come into this class. But there can be mobile assets which will never be used for long in any one field. The only obvious example is a drilling rig, which might be used for exploration or appraisal in a mature field, then in a new area and then perhaps outside the United Kingdom sector altogether. There are few such assets owned by oil companies, but it would clearly be wrong to give them 100 per cent. relief.
  Clauses 6 to 8 with schedule 2 provide for the incidental receipts in respect of fixed or dedicated mobile assets to count as part of the income to which PRT applies, with ancillary provisions in clauses 10 and 11; and the tariff receipts are subject to the allowance provided for in clause 9 and schedule 3. This is one change made from the proposals in the consultative document, but it is one which was announced by the then Chancellor in this year's Budget speech. We decided that it would be right not to bring into charge the whole of the tariff receipts, as had originally been proposed.
  Sharing one's facilities involves some largely unquantifiable risks — for example, corrosion to the assets or loss of production—and it seems reasonable to make some allowance for that. As I explained, we wanted to make it possible for the owner of the asset to charge a lower tariff than he might otherwise have felt constrained to do had we simply taxed the whole of the tariffs without any allowance. For this reason, the full allowance is
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  available to a pipeline owner for each user field. The way in which the allowance works is especially helpful in this respect where the quantity of oil being transported is small. In that way it is geared to the case where the user is the owner of a smaller, marginally profitable field.
  A matter which was announced in the May 1982 consultative document was the extension of the charge on receipts to those relating to fixed assets in our territory or in our sector of the continental shelf which are owned by licensees of overseas oilfields. The obvious example is a pipeline used for a Norwegian field but which runs through our waters to the United Kingdom. Where such an asset generates receipts attributable to United Kingdom use—for example, a pipeline also picks up oil from a United Kingdom field on the way — we propose to bring the receipts within the PRT charge. Clause 12 and schedule 4 provide for this and for giving appropriate relief for related expenditure.
  These provisions were not ready in time to be included in the March Finance Bill, but we gave general notice of our intentions in a parliamentary answer by the then Minister of State last April. Unless we could be sure that they would be subject to an equivalent tax in their own country, foreign oil producers who owned pipelines to the United Kingdom would otherwise have been left in a better competitive position than our own people; they would have been able to offer the use of their assets for a lower tariff.
  That apart, foreign oil producers are on a similar footing to our oil producers, and it is clearly right that any receipts generated by the United Kingdom use accruing to assets in United Kingdom waters should come within the same taxing scope for PRT as applies to our producers, as they already do for corporation tax. There have been discussions at official level with the country which could be affected in the near future — Norway — and I am happy to tell the House that we expect no difficulty in reaching agreement to ensure that any double taxation is relieved.
  Clauses 13 to 15 with schedule 5 contain transitional and supplementary provisions. In the consultative document we had recognised that asset owners who happened already to have entered into agreements for third party use and suffered restrictions or clawbacks would have had a less favourable PRT treatment than will be secured under the new rules. The industry at first urged that we should exempt all future receipts arising under such agreements, but we did not think that would be right. We had intended, and now propose, that the new rules should give back relief which had already been restricted because of shared use, so putting all relevant assets on the same footing. In addition, where agreements were already in existence at 8 May 1982, when the consultative document was published, the tariff receipts allowance will be increased for five years from 250,000 to 375,000 tonnes for each chargeable period.
  I recognise that the provisions of the Bill are highly technical. That is because the situations for which they have to provide the right answer can themselves be complex and take many forms; but, in essence, the main effect and purpose of the Bill are relatively straightforward. There has for some time been general agreement that the new situation in the North sea required the rules in question to be rewritten. We have had extensive

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  consultations both on the outline and on many of the more detailed provisions, and I know that this consultative process has been much appreciated.
  We have taken the opportunity of postponement from the spring to improve and complete the measures. We now need to introduce these provisions with all due speed so that negotiations for sharing assets can continue without uncertainty as to what the tax effects will be. That is why we are introducing these measures now rather than leaving them to form part of a longer Finance Bill next spring.
  Mr. David Crouch: The tax effect on the Revenue of activity in the North sea last year was about £8 billion. Can my hon. Friend say what the minus effect of this concession on expenditure will be in the first year of its operation?
  Mr. Moore: I have referred to the revenue impact, which is a cost of minus £15 million in the first year, with a modest net addition later. I was saying more particularly that, although that was minimal, it did not take into account the ways in which relief had been allowed since the May consultative document, or — and my hon. Friend is right to draw our attention to it—in the long-term development of the North sea, where fields which would not otherwise have been developed would produce major new sources of revenue to the state. These are unquantifiable benefits, but we all welcome them.
  With those comments, I commend the Bill to the House.
  4.6 pm
  Mr. Jeff Rooker: I thank the Minister for his opening remarks welcoming me to my new post on the Opposition Treasury team. I suspect that he is right to say that there will not be as much of a clash on this as there will be on other Bills.
  The situation concerning oil taxation seems to contain exactly the same ingredients as were present in my previous role dealing with social security; massive amounts of money are involved, running into billions of pounds, with the need for a good deal of arithmetic, and consequently an empty House. I suspect, too, having spent a few days looking into the subject, that in this sphere one must learn a new jargon, and there is no lack of jargon in social security. There must be people in the Treasury so involved with these issues that their language becomes totally consumed in jargon. Their eyes glaze over when they discuss the subject. Although that happens in other Departments, it is more prevalent in Departments dealing with billions of pounds.
  When we consider the cost of getting oil and gas out of the North sea, we must not forget that, while the Bill is extremely technical, human beings are involved, and it is a dangerous operation for them. Between 1973 and 7 November, a couple of days ago, 130 lives were lost in accidents involved in oil and gas extraction. That is a heavy cost in human terms.
  As the Minister said, the Bill was announced as long ago as 1982, at the time of the Budget of that year, and it was referred to again in this year's Budget speech. The consultative document of May 1982 stated that the measures in the Bill would take effect from July 1982. In other words, we are legislating retrospectively.
  It makes sense to encourage the exploitation and development of the resources in the North sea. To put it
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  another way, it makes sense to ensure that there are no barriers in the fiscal system that would discourage exploitation and development, and I agree with the Minister that the Bill is designed to provide encouragement.
  As for our depletion policy, while it may be thought we are taking oil out of the North sea too quickly, that is an energy, not a tax, matter. Depletion policy is crucial but, as it is not the main subject to be discussed when considering whether the Bill should be given a Second Reading, it is not an avenue that I propose to follow.
  We have reached a stage in the development of North sea resources when increasing effort is required in neglected territories, some of which may have been involved in the early rounds of licensing. It was realised that they were marginal fields and it was decided to leave them until the larger fields had been exploited. The time has come when encouragement needs to be given to placing more assets in existing fields or to change the use of assets so that we may obtain resources from what were considered to be small marginal fields.
  One of the consequences of the Bill, along with the other measures to which the Minister referred, including the second Finance Bill of 1983, may be a requirement for new assets at the margin to take full advantage of the extra reliefs. The assets would create crucial new jobs, but I suspect that that factor is unquantifiable now.
  A Bill which is essentially an instrument to provide tax relief on shared asset expenditure by different operators deserves the support of the House. I suspect that it will be claimed that some of the new reliefs do not go far enough. If we want to secure a fair share of North sea wealth for the British people and if we are to grant extra relief that is designed to encourage new development and existing developments, it is consistent with the Government's aim —it was the aim of the previous Labour Government—to accept that somewhere there has to be a cut-off point. Therefore, the Government are right to limit the relief and to incorporate in the Bill some anti-avoidance measures such as the one involving the definition of remote associated assets. That is a piece of jargon that appears in schedule 1(2). Its purpose is to ensure that the oil industry does not obtain reliefs for work that it is already doing or would have done without the benefit of the Bill.
  There have to be controls on the private sector oil companies in the North sea operations. It is a generally held view that the companies cannot be allowed to operate in an uninhibited fashion to maximise their incomes. Whatever the exponents of crude capitalism—I suspect that there are a few of those in the Treasury — might claim, it does not follow that maximised company incomes lead necessarily to maximised incomes for the Inland Revenue.
  I understand that oilfield experience throughout the world has shown that too rapid a rate of depletion in the early years of a field's life can reduce the amount of oil ultimately recovered from it. In these circumstances, it is not necessarily true that what is good for the companies is good for the nation. That was the view that was expressed by the former Chancellor of the Exchequer in July 1982 in a memorandum written in reply to a Select Committee that was considering depletion policy. It is a sentiment with which I wholeheartedly agree.
  Petroleum revenue tax, with its front-end loaded relief emphasis, gives companies relief at an earlier stage than that which is provided for in the Norwegian system,

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  although the final marginal rate of take by the Government appears to be very similar, being between 85 per cent. and 89 per cent. The legislative provisions for the tax passed through the House during 1974–75, during the first two Sessions of my membership of the House. In the previous Labour Government's lifetime it brought hardly a penny piece to the Revenue. I can remember many Members who specialised in these matters complaining that the Revenue was not collecting any money from the tax. It was said prior to the 1979 general election that the following period of government, whichever party was in power, would start to scoop the pool from the North sea. How right that assessment was.
  In 1978–79 the revenue obtained from PRT was £183 million. In 1982–83, only four years later, the revenue had increased to £3,280 million. There had been a 20-fold increase in only three years. In November 1974 the hon. and learned Member for Dover (Mr. Rees), who is now Chief Secretary to the Treasury, spoke about expectations of revenue from North sea oil development during a debate on the then Oil Taxation Bill. He said:
  "The Hudson Institute—not that I have a great regard for either its analysis or its conclusions— has pointed out that there is at least a possibility that we shall find ourselves tied to a source of high-cost oil when prices are declining in the Middle East. We must consider this carefully before launching into any grandiose projects … In all candour, I think that the real danger is, not that the proceeds will go to the British Treasury, but that they will go to service the inordinate borrowing to which we shall be committed in the intervening years." —[Official Report, 27 November 1974; Vol. 882, c. 529.]
  Total take from the North sea last 'year was greater than the public sector borrowing requirement.
  The oil companies did not put the oil and gas in the North sea, and I have already said that the cost of extracting it has been heavy in terms of human lives. The idea is to increase the gains that can be derived from North sea oil development because of the limited measure of relief that is contained in the Bill. If we consider total oil tax from 1978–79 to 1982–83, including royalties, special petroleum duty, PRT and the relevant element of corporation tax, it has increased from £562 million to about £8 billion. The figure fluctuates because the Government estimated the 1982–83 take in their 1982 Budget as £6·2 billion but in the 1983 Budget the estimate was £7·8 billion. There are enormous fluctuations for various reasons that are not related entirely to the rate of tax.
  North sea production is either at its peak or close to it. The tax take lags behind production by five, six, seven or eight years due to the front-end loading of reliefs that is implicit in the system. It is clear that the income of £8 billion that the Government or Revenue obtained in 1982–83 will increase. Some estimates suggest that it will increase to as much as £12 billion to £13 billion over the next few years.
  I am sure that everyone accepts that £8 billion is a large sum. I shall give the House four examples before posing a question which is crucial for the well-being of the nation. The take of £8 billion would pay all the wages and salaries of those employed in the National Health Service in England and Wales as well as the wages and salaries of those who are engaged in the provision of personal social services. The latest public expenditure White Paper tells us that the total salary bill is £7·8 billion for every nurse,
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  ancillary worker and doctor in the NHS. The salary bill of the Ministry of Defence and the law and order and protective services comes to £8·6 billion, which is almost the same as the oil take. I do not say that a choice has to be made between the two but that is the scale of the income that the nation is receiving from the North sea.
  To put it another way, if we wished to maintain the services we have and we had not got the income from North sea oil, income tax would have to rise by 9p in the pound from 30p to 39p, which would mean that the average worker would have to pay another £20 per week in income tax. That is the scale of what the Government are getting from the North sea. The last example is that VAT would have to go from 15 per cent. to 27 per cent. to bring in the £8 billion.
  What is being done to plan decades in advance for the day when oil and gas run out? There will be a catastrophe if there is not adequate and new investment. We are getting this massive wealth from the North sea, but what are we doing with it to create a fabric of society that can be sustained after the oil and the gas have run out? Those four examples show the scale of the task.
  Mr. John Townend: Would the hon. Gentleman not agree, in view of the remarks which he has just made—and I accept that there is logic in them—that the Government were wise to take off exchange controls and allow our overseas portfolio of investments to build up because that will provide increasing income for the country as oil revenues are reduced?
  Mr. Rooker: But it will not provide a single job for people based in this country.
  Mr. Douglas: Would my hon. Friend accept that someone who is very knowledgeable about overseas investment and who is not a representative of this party, Professor Andrew Bain of the University of Strathclyde, has placed increased strictures on the Government because the oil revenues have gone mainly on consumption and to subvent unemployment?
  Mr. Rooker: My hon. Friend is right. I gave two examples of consumption: all the pay and salaries of the National Health Service, although I am not advocating that they be cut, and all the pay and salaries of defence, the armed forces, the police and the prison officers. That is all consumption. There is no new investment for the future in it.
  Oil tax is affected by many factors. This is why long-term planning is difficult. The price of oil, the exchange rate and production levels are just three factors that can affect the revenue. There is no one magic formula. As the Minister said, the system is extremely complex. However, it is serving the nation well, even if the resources from the North sea are being misused, which is a charge we make against the Government.
  The taxpayers concerned in this are few in number and highly sophisticated. They are supported by massive resources of computer skills. They have no difficulty, nor has the Revenue, in calculating the effects of the fiscal regime in the North sea, or the interactions of its different elements on the basis of any given set of assumptions. The framework and the problems are known. Assumptions can be made and the results considered. Therefore, there is no excuse for not planning for the day when the resources run out.

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  The changes in the Bill will not add to the industry's costs. They are relatively modest compared with the massive global sums which are involved. The relatively modest reliefs in the Bill have to be weighed against the massive revenue that the companies and the nation gain from the North sea. That being the case, we are more than happy to facilitate the passage of the Bill.
  4.24 pm
  Mr. T. H. H. Skeet: I congratulate the hon. Member for Birmingham, Perry Barr (Mr. Rooker) on his appointment to the Opposition Front Bench. He paid a warm tribute to private enterprise for what it has done. Of course, the Government do not produce oil; it is private enterprise that does it. The hon. Gentleman said that the revenue from the North sea would pay the salaries of people working in the National Health Service or was equivalent to 9p in the pound on income tax. I am sorry that more plaudits have not come from the Opposition. Has the hon. Gentleman considered that, while unemployment in the United Kingdom is high, the number of jobs provided in the oil industry, not merely in England but in Scotland, is another glowing tribute to what private enterprise has done?
  I should pay tribute to the close co-operation between the United Kingdom oil industry taxation committee, the United Kingdom Offshore Operators Association and the Treasury. They have got together to iron out some of the problems. The clauses that appeared in the Finance Bill 1983 do not bear the closest resemblance to the clauses in the Bill. Substantial modifications have been made. I understand from the Minister that conversations are taking place. I hope that they will result in more changes in the Finance Bill of 1984.
  Mr. Robert Kilroy-Silk: The Minister does not look very happy.
  Mr. Skeet: I think that the Minister is much happier than Opposition Members, who have not opted for a Committee stage for the Bill. There are matters that I would have liked to raise in Committee, but I understand that the only way to deal with them is on Second Reading.
  We have had 11 major oil and gas tax changes since 1975, barely eight years. We have had two Oil Taxation Bills — that of 1975 and this one. There have been relevant sections in seven Finance Acts. There was the Petroleum Revenue Tax Act 1980, and the Petroleum Royalties (Relief) Bill is going through the House. That is a fair selection of legislation for any industry. The Bill is very complex because there is so mach cross-linking with the principal Act of 1975. I make a plea for consolidation.
  I congratulate the Inland Revenue on bringing out the book setting out the Oil Taxation Acts up to 1982. When I telephoned the Inland Revenue to find out when a new book of statutes was coming out, I was told that the Inland Revenue would have to consolidate a lot more before it appeared. It is extraordinary that one industry should be subjected to so much legislation. Now it is faced with many provisions in another mini-Bill which it will have to digest.
  The Bill is so closely drawn that it is impossible to amend it satisfactorily, but an opportunity has been missed in not including other major matters of interest to the industry. The Minister said that three pieces of legislation
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  —sections 35 to 41 of the Finance Act 1983, the Petroleum Royalties (Relief) Bill and the Oil Taxation Bill—are to be treated as a single package, but the question remains whether those measures have been fully integrated and aligned. Perhaps the aims outlined in the Finance Act 1983 have not and will not be fully realised in this Bill. Can the Minister tell me whether the preparation on this Bill preceded that of the 1983 Act? More was accomplished in the Finance Act 1983 than many people expected —perhaps less on this occasion.
  There are other provisions that I would recommend for inclusion in the Bill. First, there is a case for diminishing PRT, because the real price of oil has fallen. It will be recollected that Mr. Edmund Dell, when a Minister, stated in the House of Commons on 27 November 1974:
  "Our policy would, however, be to avoid frequent changes of the rate but to be prepared to review the rate of tax if substantial changes in the situation were to occur. One such change would be a significant shift in oil prices. We should certainly be prepared to look at the impact of the tax if that were to happen…if there is a substantial change in the circumstances relating to the extraction of oil on the Continental Shelf, the Government will be ready to review the rate of tax." —[Official Report, 27 November 1974; Vol. 882, c. 473.]
  Not only do we find that the real price of oil has declined, but we find that Professor O'Dell of Erasmus university in Holland said in the Financial Times on 2 November 1983 that a decline in the real price of oil was in prospect and likely to occur during the next 30 years.
  One should see the matter in perspective. According to the Inland Revenue, North sea oil provided— in PRT and supplementary petroleum duty—13 per cent. of all Inland Revenue net receipts in 1981–82, compared with less than 1 per cent. in 1979. We are dealing with big figures in a big industry, and, as the hon. Member for Perry Barr pointed out, this industry seems to be carrying the rest of the nation. He was not gallant enough to appreciate what has been done by private enterprise, or applaud its sophistication, or pay tribute to what it intends to do to help the nation in future.
  Mr. Rooker: The hon. Gentleman need not labour the point. Have the oil companies any plans for the time when the oil and gas run out? That was the question that I put.
  Mr. Skeet: One is aware that private enterprise never stays still. It is always on the move. It is trying to locate more oil and gas in the first place. In many parts of the world it is moving into coal. It cannot do so in the United Kingdom, because that is precluded by a statute passed in 1946 by the Labour Government. It has acted in other parts of the world. For example, British Petroleum has, through the Selection Trust group entered, mining. Moreover, in cable television there is the principal company Mercury, whch scored a great victory in the courts today, with which Barclays bank and others are associated. British Petroleum is involved there, too, making its contribution to the welfare of society.
  Mr. Kilroy-Silk: Shall we play the National Anthem now?
  Mr. Skeet: No, we can defer that. We shall play the National Anthem on the hon. Gentleman's demise.
  Second, uplift is covered by section 2 (9) (c) (ii) of the Oil Taxation Act 1975, when it was set at 75 per cent. of authorised expenditure. In 1979, it was reduced to 35 per cent. There is a case for it to be set at between 40 and 50 per cent. and more discrimination made in favour of

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  selected investment. An alternative case can now be made for the introduction of an allowance to cover interest on loan charges, particularly as the world has been passing through an era of higher interest rates and steadily advancing costs on the continental shelf. I hope, therefore, that my hon. Friend the Minister will say something about uplift.
  The third point concerns safeguards, as provided in section 9 of the 1975 Act. It restricts or eliminates the charge on PRT when the rate of return on investment falls below a specific limit. Difficulties for fields in decline, especially towards the end of their life, should be dealt with by legislation now, or the matter at least studied.
  The fourth point is the oil allowance. An increased oil allowance for marginal fields is prescribed in section 36 of the Finance Act 1983, and a parallel relief called the tariff receipts allowance is made available to offset non-oil receipts designed to favour smaller and less profitable fields. That is in clause 9. The oil allowance surplus to field production utilisation should also be made available for offset against such receipts, insofar as there is a surplus of current entitlement on the cessation of production. The tariff relief allowance goes some way to meet the point, although it is not on all fours with section 36.
  The fifth recommendation—one can see the clauses building up here; of course, they do not appear, because the Government have decided to keep the Bill short on this occasion and confine it to reliefs and receipts—is the closing down of oilfields and the removal of facilities. That is not covered by a satisfactory allowance. Section 3 (1) (i) of the 1975 Act covers only
  "purposes of safety or the prevention of pollution".
  There is also a difficulty with corporation tax at this stage.
  My final recommendation—I notice that Opposition Members are not jumping up with recommendations as to what further points should be made—is that there should be an incremental investment allowance, covering at least secondary and tertiary recovery to ensure that an oilfield is drained as far as modern technology will allow.
  Mr. Kilroy-Silk: Who wrote the history?
  Mr. Skeet: It was compiled by me. It is always interesting to find that other people come to help. I shall come to the Chamber some time and listen to the hon. Gentleman when he speaks, and I shall probably find that the national union of something or other will have prescribed the speech for him.
  Mr. Kilroy-Silk: The figures will be wrong.
  Mr. Skeet: We know, of course, that some unions produce extremely unreliable information, but if the information comes from the hon. Gentleman I am always prepared to give it a certain credit.
  The scope of the tax has moved a long way from its original base. Fundamentally, PRT was a tax on oil and gas. It has moved on. It is now a tax on non-oil receipts, for example, pipeline tariffs and hire charges for drilling rigs and so on. It is now a form of capital gains tax. It has moved even further.
  There is to be a tax in this Bill on the return from assets within the United Kingdom, but dedicated to oilfields outside the jurisdiction—for example, the Ekofisk, and the Norwegian Frigg facilities, making capacity available to fields on the United Kingdom side of the median line
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  —but what about the pipelines for the United Kingdom continental shelf platform, which may in the future move to Norway or West Germany, to carry natural gas? This Bill goes one way, but not the other way. Perhaps my hon. Friend will have some suggestions about that.
  The most intriguing suggestion of all has probably been eliminated for the time being. I saw a press release from the Inland Revenue on 12 April 1983, saying that it is prepared to eliminate inclusion in the Bill of companies that might be set up in future specifically to transport or treat other people's oil. A tax ultimately to be levied on services through the inclusion of non-licensed holders, for example, companies set up to transport or process oil, is apparently to be temporarily excluded. However, the reasons for that are not clear. A company that may be operating, and which is the holder of a licensed area in the North sea, going through another licensed area would be included, but if a company is established particularly and only for the purpose of removing oil it is regarded as a service enterprise and is not to be included. That seems extraordinary. What was the reason for the decision to exclude such a company? I dare say that the industry was adamant on the matter, but we shall have learn the reasons from the lips of the Minister.
  In the consultative document, the Inland Revenue made one or two useful suggestions. In paragraph 35, it made the following statement:
  "There are precedents—for example in the United States—for stringent regulatory' powers to enforce third-party access to 'shareable' assets, and to police the prices charged".
  The Inland Revenue said that it would be preferable to avoid wide new powers of discretion if an alternative could be found that it considered more suitable.
  I do not believe that the Minister has considered this properly. If one goes to the Treasury, one gets a Treasury answer; if one goes to the Department of Energy, one is given an answer that is in conformity with the experience and tradition of that Department. Provision has already been made in legislation to deal with pipelines. For the sake of convenience, reference should be made to section 9 of the Pipe-lines Act 1962 and section 23 of the Petroleum and Submarine Pipe-lines Act 1975. Those sections cover the acquisition of rights to use pipelines belonging to others. Section 23(3)(c) of the Petroleum and Submarine Pipe-lines Act 1975 states that notice may be served by the Secretary of State
  "for regulating the charges which may be made for the conveyance of things by virtue of the right".
  We know that the Bill's draftsmen have selected the Treasury solution, but should they not have selected legislation passed as recently as 1962 and 1975, which seems to be utilised, recognised and tested, and which would probably be the most practical solution? I am sorry to see the hon. Member for Knowsley, North (Mr. Kilroy-Silk) leaving the Chamber. He is the last of the Mohicans in his great party, but I cannot detain him if he wishes to leave.
  The reasons for the changes are these. The development of the North sea fields is undergoing a fundamental change that will lead inevitably to a myriad of sharing provisions in common ownership, and sharing arrangements with third parties that were not unfamiliar in Texas several decades ago.
  The legislation should be designed to encourage a trend that could ensure full recovery of North sea resources. I believe that that is accepted across the House. Pipeline

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  treatment plant and other assets are envisaged, which will cause a problem in the allocation of reliefs and receipts. The allocation of receipts, and the admixture of equitable apportionment between owners, with periodic review to take account of significant changes in circumstances, is commended. However, it may be desirable to leave the relief with the first field, permitting the owner to exercise an irrevocable election for a different method of apportionment.
  We must recognise that to become self-sufficient, and maintain our self-sufficiency, we shall require between 60 and 90 new oilfields by 1990. I cannot see those coming, even with the encouragement given by the Acts that I have mentioned.
  I am further disturbed because, as a long lead time is involved in the provision, it will not be possible for many of the fields to be brought into full operation until the mid-1990s. However, those who have done the analysis have decided that those fields will be required in 1990.
  I agree with the Minister that full and unconditional front-end loading relief for expenditure on North sea assets should be maintained. Accordingly, PRT will be applied to incidental receipts as a corollary to granting front-end loading for expenditure on shared assets. Apparently, that is acceptable to the industry. However, non-oil receipts should not he brought fully into charge. Many marginal fields could afford to pay only low tariffs, based on the assumption that the next generation of oilfields will be much more costly and less profitable. I stress this point. Companies may wish to recoup tax within the tariff structure. Hence tariffs could be doubled, and future development curtailed.
  I realise that since the ideas have been put forward the plan may have been scaled down because the Treasury has moved some way towards meeting the industry's proposals. However, there are still difficulties. I have three propositions. The benefit of full and unconditional front-end loading would be more than offset by the reduction of net income caused by PRT charges on tariffs. The tariff receipts allowance under clause 9 provides some relief, but the clause is still not on a par with section 36 of the 1983 Act.
  My second proposition is this. There is no matching relief for the payer. There will be a possibly lengthy period during which the owner pays taxes on receipts, with no matching relief to the payer, even when in due course the payer becomes a fully paid PRT-paying field.
  My third proposition is a step in the dark. I think that neither the Treasury nor anyone else knows it, but this is my impression. There will be no PRT leakage, but the legislation will result in another increase in the tax taken over a longer period. That is obvious. If there is encouragement for work to be done in the North sea and if there is a realisation of greater investment, with more oil, the result will be more revenue for the Government via the PRT tax take.
  Mr. Douglas: It will not be a greater take.
  Mr. Skeet: I am much obliged to the hon. Gentleman for not underlining what I regard as obvious. Sometimes it is not so apparent.
  How can the problem be best resolved? The Bill has laid down the tariff receipts allowance under clause 9, but I suggest that it should be fully aligned with section 36 of the 1983 Act. Alternatively, a new oil allowance could be
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  announced, designed to help to reduce the impact of PRT on marginal fields, constituting a fixed percentage of gross receipts—these are not new suggestions—or excluding from PRT a percentage of the gain element in receipts, or establishing a threshold below which tariffs would be exempt, or providing a safeguard to protect marginal and less profitable fields.
  Full and unconditional front-end loading relief from expenditure on North sea assets is to be maintained, as enshrined in the Oil Taxation Act 1975. We discover that in the consultative document, paragraph 37. However, that principle has been breached in schedule 1, part I in relation to tariff-generating assets associated with field assets, particularly where the association is remote. The Minister mentioned that. The relief is to be deferred until the tariff receipts arise.
  Schedule 1, part II is concerned with an asset that is acquired for use in connection with more than one field. Relief is apportioned on a just and reasonable basis. I do not know what that is, but I assume that it is equitable. That is a further deviation from the general principle. However, I am glad that at least the general principle has been maintained.
  I do not want to weary the House for too long. I realise that other speakers will make long speeches. I understand that we shall have a truncated Committee stage. Therefore, I shall ask some questions on several clauses, which may be useful.
  I can find in the Bill no reference to the definition of "assets". Many things are defined. Long-term assets are defined in clause 3(8) and clause 5(8). Mobile assets are defined. Dedicated mobile assets are defined in clause 2. Brought-in assets are defined in section 4(12)(a) of the principal Act. Qualifying assets are defined in clause 8(1). However, there is no definition of "assets". I dare say that the parliamentary draftsmen considered that in depth. There must be a special reason why the definition has been left out.
  The concept of remoteness in relation to associated assets is tantamount to a breach of the pledge in the consultative document on full and unconditional front-end loading relief. I appreciate that the Minister has attempted to deal with that matter, but I hope that we shall have a more detailed explanation. There is little justice in the 100m qualification as it could lead to an increase in tariffs, much to the chagrin of the small fields.
  Clauses 1 to 5 give a fragmentary presentation of the new law relating to fixed and mobile assets, as section 4(6) is left in the Oil Taxation Act 1975. Paragraph 37 of the United Kingdom OITC response to the consultative document states:
  "The present relief rules should be retained only for mobile assets which are, or are likely to be moved, in and out of field use … Section 4(6)" —
  this relates to the principal Act—
  "works efficiently for really mobile mobiles such as drilling rigs; it allocates to a field that part of the cost which actual field time use to date bears to the asset's useful life."
  I assume that the intention is to retain such provision in its entirety and to build on any deficiencies.
  I regard clause 3 as crucial. The concept of dedication may comprise a great number of variables. Equipment may be dedicated to one, two or three fields. What would be the result if an asset were dedicated to the entire North sea? Would not that cause problems for the Inland Revenue?

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  Clause 9, in conjunction with schedule 3, deals with tariff receipts allowance. Will that allowance be available for inter-oilfield facilities? Clause 9(2) and (3) refer to the determination of each "user field". Will the Minister tell the House what criteria will be used when referring to such matters? Can the Minister also say what criteria will be used for designating foreign oilfields under clause 9(5)(b), which is a matter at the discretion of the Secretary of State?
  It seems that an Order in Council will be required to determine the Minister's discretion or the criteria that he proposes to use. The House would be assisted if such criteria were available.
  I consider there to be little need for the gas banking provisions as proposed in clause 9(10). Regulations have been made on at least two occasions under section 108 of the Finance Act 1980. Occidental and Elf Total have been affected by such provisions.
  I understand that a defective provision appears in schedule 3(3) but I understand that the Minister is moving an amendment to that.
  I wish to deal with receipts for disposals. Should there not be a de minimis provision in the Bill for disposals and receipts below a certain figure to be exempted from charge?
  May I move to clause 12 in conjunction with schedule 4. What is the nature of the agreement between the United Kingdom and Norway governing the use of clause 12? Would the existing double taxation agreements cover a charge to PRT and corporation tax? I believe that the clause is best portrayed as an attempt to impose transit dues by the occupying state, and it may ultimately become the thin end of the wedge for imposing levies on non-licensed holders. Why should we attack foreign participators when companies specifically set up to operate pipelines or drilling rigs—such as Santa Fe of Kuwait—are exempt from levies? I appreciate that the Minister referred to that in opening, but I hope that he will say more about this important matter. If Britain is to receive tax revenues on such an arrangement, the Norwegians will lose the benefit. If, at a later date, oil flows to Norway or to western Europe, I assume that those countries would receive the tax revenue instead of Britain.
  I wish to raise two further matters. What assets, other than pipelines, will clause 12 cover? Could processing plants upstream and outside of the jurisdiction be affected?
  Paragraph 35 of the consultative document refers to several ways in which the untaxed profits of pipelines can be dealt with. Would a non-tax solution prove more acceptable? Should we not make use of the Pipe-lines Act 1962 and the Petroleum and Submarine Pipe-lines Act 1975?
  I appreciate that I have asked several questions. It is extremely awkward to deal with the matter in this way, and I should have preferred to deal with the matters in Committee. Perhaps I am asking too much in expecting the Minister to answer the questions straight away. If he is unable to answer them all, perhaps he will write to me in due course.
  4.55 pm
  Mr. James Wallace: The Minister acknowledged in opening that the hon. Member for Bedfordshire, North (Mr. Skeet) had great expertise in
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  this sphere. The hon. Gentleman has now demonstrated that fact to the House. I hope that he will forgive me if I do not refer to all the points that he made. The Minister and the hon. Member for Birmingham, Perry Barr (Mr. Rooker) said that the legislation was very complex, and it is difficult to follow many of the arguments to which the hon. Member for Bedfordshire, North referred. This provision is too complicated to deal with immediately.
  I agree with what the hon. Member for Perry Barr said, in that when the House discusses North sea oil revenues we tend to overlook the great risks taken and courage displayed by many of those who work offshore. Recent events will have brought home to all hon. Members the nature of the risks involved. The hon. Gentleman was right to stress how much Britain has been propped up by North sea revenues in recent years. Although not unique, it must be rare for a country to discover sizeable oil resources and yet, after 10 years of development, find its economy in a worse state than before the resources became profitable. The opportunities given to us by the oil revenues have, I regret to say, been misused. The revenues still offer Britain a great opportunity to invest in the public sector and in the national infrastructure including many of the suggestions put forward at the Confederation of British Industry conference. We should also be developing alternative sources of energy for the days when the oil and gas resources run dry.
  The Bill is the third in a series of measures relating to North sea oil taxation which have come before the House this year. The first was the Finance Act and the second was the Petroleum Royalties (Relief) Bill which received its Third Reading last week. The way in which these measures have been treated tends to reflect the piecemeal approach to North sea oil taxation in the past eight years. My predecessor, Lord Grimond, said in a debate on 28 April:
  "The taxation of oil revenues is a highly complicated subject and, as with the rest of our taxation, it is not becoming less complicated." — [Official Report, 28 April 1983; Vol. 41, c. 1060.]
  The Bill is ample testimony to that.
  In an article by Professor Anthony Clunies-Ross in the most recent quarterly economic commentary of the Fraser of Allander Institute it is said that PRT is
  "too clever by half and too complex by several orders of magnitude."
  When the Ways and Means resolution relating to the Bill came before the House, the hon. Member for Blackburn (Mr. Straw) complained about the number of changes in the rate of PRT and the number of measures of this kind. The tax was created by a Labour Government, and many of the complexities, especially those relating to definitions of receipts and outlays, arise because it is a cash flow tax rather than an income tax. As circumstances in the North sea and oil prices change, it becomes necessary to change the rate of taxation and to make provisions such as this to cope with the changing circumstances.
  Despite its complexity, the Bill can scarcely be described as revolutionary, but I believe that it will be beneficial. The Minister said that the expected loss of revenue this year and in the next two years will be small, but the Bill is generally welcomed by the oil companies because it provides a further incentive for them to develop and explore some of the more marginal fields.
  As companies move into fields in which major finds are not expected, mobile assets can be used in more than one

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  field and it makes good economic sense to share such assets. The Bill gives increased scope for allowable deductions for investment, removes certain disincentives and will stimulate new exploration. It should therefore command the support of the whole House, as I believe that it does.
  The right hon. Member for Western Isles (Mr. Stewart) referred at an earlier stage to depletion policy, but we can have a sensible depletion policy only if we are aware of a large proportion of the resources that will be available. That means that we must have a continuous exploration programme. The Bill, in its own small way, will contribute to that.
  In last week's debate on the Petroleum Royalties (Relief) Bill the Minister of State, Department of Energy said that Members with constituency interests in oil development and related industries generally supported the package of measures introduced this year to encourage future development. The operations at Flotta and Sullom Voe terminals are of great importance to the economy of my constituency and they are well placed to deal with new developments in the west Shetland arid west Orkney basins. Because the Bill will help such new developments and help to offset expenditure on any required expansion of those terminals, my right hon. and hon. Friends and I are pleased to support it.
  5.2 pm
  Sir William Clark: It is a pleasure to welcome the hon. Member for Birmingham, Perry Barr (Mr. Rooker) to the shadow Treasury team. When the Labour Government were in office the hon. Gentleman made a name for himself with the Rooker-Wise amendment — much to the dismay and disgust of the Labour Treasury team. I hope that he will continue to dismay the Labour Front Bench.
  I agree with the hon. Gentleman that North sea oil has brought great benefits to the economy, producing between £8 billion and £10 billion a year in revenue, and that if public expenditure remained at its present level without that revenue we should have to increase the standard rate of income tax from 30p to 39p, or VAT from 15 per cent. to 27 per cent.
  All parties in the House realise the benefits of North sea oil. The difference between the two sides relates to the way in which the revenue should be used. The hon. Member for Orkney and Shetland (Mr. Wallace) fell into the same trap as other hon. Members when he suggested that North sea oil revenue was different from any other revenue handled by the Exchequer. In fact, it is exactly the same kind of revenue as the Exchequer receives from income tax, corporation tax, or whatever. It is suggested, however, that the revenue from North sea oil should be spent in a different way and that the Government are wasting national assets by treating the money as revenue. It must be used to meet current expenditure if the public sector borrowing requirement is not to be increased, and in any case the total public expenditure of £126 billion contains an element of capital expenditure.
  Mr. Wallace: The hon. Gentleman is somewhat disingenuous when he says that North sea oil revenue is the same as any other tax. The oil assets are a windfall —we did not put the oil under the sea—and provided an opportunity that we were fortunate to have but which so far has been missed.
  Sir William Clark: I am sure that there is something in that for the Liberal type of philosophy, but there are many other such assets on which we have taxation — coal, for example. Any mineral which can be taken out of the ground is automatically a wasting asset. The Chancellor receives income from taxation. Whether it be Customs and Excise duties, income tax, corporation tax, North sea oil tax or petroleum revenue tax, he has the same pound notes to spend.
  I do not think that my argument is disingenuous. Many Oppostion Members seem not to realise that one cannot talk about North sea oil tax as though it were different from anything else and should be used in a different way. It is suggested that it should be spent on infrastructure. The benefits of that depend on the kind of infrastructure involved. It may produce a marginal reduction in unemployment, but on some infrastructure expenditure the return is nil or even negative. If we have enough money, of course we should replace our sewers and some of our roads and hospitals, but improvements to the infrastructure can be carried out only if we have the necessary cash. The cash comes from the taxpayer, whether it be from North sea oil tax, VAT or whatever. It is stupid to argue that North sea oil revenue should be used in a different way from other taxation revenue.
  The Government will no doubt be accused of wasting money on unemployment benefits, and so on, but the hon. Member for Perry Barr will be the first to admit that North sea oil taxation produces about £8 billion or £8·5 billion per year for the Exchequer, whereas the cost to the Exchequer of unemployment is £5·6 billion or £5·8 billion. If expenditure on roads and other infrastructure projects were increased, as the CBI requests, the public sector borrowing requirement would have to be increased unless we increased taxation. All hon. Members must agree that if taxation is not increased the PSBR must rise. The PSBR is the difference between the amount that the Government pay out in expenditure and the amount that they receive in taxation. This year the overspend will be about £8 billion or £8·5 billion, and that will be added to the national debt.
  We must put the national debt and the cost of unemployment into perspective. I deplore unemployment as much as any other hon. Member, but when one compares the cost of unemployment with the cost of servicing the national debt one finds that the national debt costs the taxpayer nearly three times as much as unemployment benefits cost. I do not suggest that the Government should do nothing about unemployment benefit—Opposition Members cannot accuse me of that —but we must get the matter into perspective. If we use North sea oil revenue to increase investment, which will not necessarily produce revenue to the Exchequer, we shall also increase the public sector borrowing requirement. It is ridiculous for the Opposition to suggest that the Government are wasting North sea oil. I accept that the oil was a bonanza for our economy, and the hon. Members for Perry Barr and for Orkney and Shetland will accept the fact that no British Government have put a farthing of investment into North sea oil. All the money has come from private enterprise.
  I have no vested interest in the oil industry, but I am sure that my hon. Friend the Minister will agree that we had reached a point where taxation on North sea oil exploration was far too high and was inhibiting extra

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  investment. That was the only reason why the Chancellor's Budget before the general election provided this relief, which the industry accepts gratefully.
  Mr. Rooker: If I have understood the position correctly, the hon. Gentleman's remarks are not true. The structure of the North sea oil extraction industry was, by definition, changing over the years, so the tax and fiscal regime that was set up to deal with the initial years of exploitation could not cope with the changes. There had to be a change in the tax arrangements when the first fields came to their peaks, because of the time lag. What the hon. Gentleman said bears no relation to the Bill or to the reasons given by the Minister.
  Sir William Clark: The hon. Gentleman did not understand what I said, or does not understand what happens in the oil industry. The oil companies have pumped million of pounds of investment into the North sea—
  Mr. Rooker: And they are getting it back.
  Sir William Clark: Of course they are getting it back, but in any commercial enterprise it is essential to obtain a profit after tax. It is only when one has sufficient profit after tax that one can continue to reinvest in new fields. We had reached a stage where the amount of money left to the oil companies after tax was too small for them to continue the development of other fields. The Chancellor realised, as did Opposition Members, that the Government were in danger of taxing the oil companies out of existence. I appreciate—I do not say this unkindly—that the hon. Gentleman has just taken over this new job, and no doubt he will read himself into it. When he does, he will see that many oil companies were reluctant to invest more money in North sea oil and were going instead to other countries. We wished to stop that, and the Bill is a step in the right direction.
  I shall not go into the technicalities of the Bill, but the industry has accepted that it is a step in the right direction. Of course, if the Government give relief to any industry, it always wants a little more. Industries are no different from politicians — whatever one gives a politician, he always wants more of it.
  In other industries, if a company sells an asset and reinvests the proceeds in another asset, it gets roll-over relief. However, the oil industry is unique in that a company can sell an asset and use the proceeds to develop other oilfields, but it will not receive roll-over relief. I make it clear again that I have no vested or direct interest in the oil industry—I use petrol in my motor car but that is the extent of my interest. Many oil companies have licences for many fields. A company might be developing one field, but it finds that its development costs are too much and its cash flow is insufficient. It then wishes to sell one of the licences that it does not intend to use. If it sells the licence and there is a capital profit on it the Exchequer takes capital gains tax from it. If it sells an asset and invests the money in another oilfield, it should get the same roll-over relief that is afforded to other industries.
  Many fields and licences lie dormant because the company that owns them does not have enough cash. If the Government did not take capital gains tax from the sale of an undeveloped licence, the company might sell that licence and develop another field.
  Mr. Douglas: Is the hon. Gentleman trying to persuade the House that the Department of Energy is falling down in its duties and responsibilities, and that some companies are standing over substantial North sea assets and are either failing to embark upon an agreed drilling programme or are not developing fields? Will he name one company or one such field?
  Sir William Clark: I shall not name any company. The hon. Gentleman knows as well as I do that oil exploration companies have licences that they are developing at present and other licences that they may wish to develop in three years' time. The same position applies with house building. No house builder buys only one plot of land and builds houses on it; he has four or five plots of land. It is all very well for the hon. Gentleman to laugh, but if he had experience of business he would realise that a business man must know where he will put his next development. It is not a question of the Department of Energy falling down on its job. However, I go some way towards meeting the criticism of the hon. Gentleman, because in many cases the Department of Energy is fairly ignorant about what the Treasury is doing and vice versa. However, that is a different matter and you will not allow me to pursue that point, Mr. Deputy Speaker, because it is not mentioned in the Bill.
  I welcome the Bill, but the Government should give thought to allowing roll-over relief to the oil industry. If an oil company can sell some of its licences to another company that wishes to develop them, the Exchequer would benefit. I hope that hon. Members on both sides of the House will welcome the Bill. I am delighted that the hon. Member for Perry Barr has joined our deliberations, and I am delighted that, despite his muted criticism of the Bill—it was hard for him to criticise it at all—he will support it.
  5.20 pm
  Mr. Dick Douglas: This extremely complicated measure deals with the Government's view as to how best to rearrange part of the tax structure for the North sea. A look at history reveals how cautious this and previous Governments have been in their attempts to ensure that we do not kill the goose that lays the golden eggs.
  During the passage of the Oil Taxation Act 1975, the then Labour Minister was extremely cautious, because he consulted the oil companies to ensure that so far as possible we did not endanger the development of fields by imposing too heavy a burden on front end loading. If I recall correctly, the Standing Committee on that Bill began its discussions at clause 10 and then returned to the fundamental clauses so that consultation could take place with the oil companies. At that time, I said that initially we had a wonderful measure for raising revenue, although it had very little to do with circumstances in the North sea.
  The basis for taxation of this type is found in the report of the Public Accounts Committee, which in 1973, for the first time, clearly said that if what was happening in the North sea was allowed to continue the major oil companies would reap "substantial" windfall profits and the nation would achieve very little revenue from the operation. It also warned that the offsetting arrangements with OPEC would mean that very little tax revenue would flow to the United Kingdom.
  No Government could tolerate that, and the oil companies recognised that Governments were entitled to

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  impose on them a tax regime that equated with the revenue going to the companies. In addition, the oil companies wished to resist any form of tax that resembled a barrelage tax, which has an aura of certainty about it that other forms of tax do not have.
  How much does this measure breach the ring fence? We must be told, because the fundamental principle of the 1975 Act was to impose a fairly strict ring fence which the oil companies did not like. For some time the oil companies have wanted to breach the ring fence. That is understandable, but it must be resisted to protect public revenue.
  The whole structure of tax and royalties that has been discussed in the past few weeks must De set against the background of the Government's North sea strategy—if they have one. As I said earlier this week, we are now producing 2·4 million barrels of oil a day and selling it at $29 to $30 a barrel.
  Although there have been certain modifications in the OPEC quotas, in effect OPEC members are saying, "Why should we as a cartel operate restrictions on our output when the United Kingdom has an extreme vested interest in maintaining its price of oil?"
  Metaphorically speaking, the hon. Member for Bedfordshire, North (Mr. Skeet) bounces off Professor O'Dell—an expert who is perhaps better on tap than on top. If the hon. Gentleman's projections are accepted, some North sea investments will look extremely sick. Therefore, whether they like it or not, any Government would have to do a deal with the members of OPEC in particular to maintain stability in the price of oil.
  Mr. Skeet: Dr. Otaiba has recommended that we restrain North sea production, but the Minister has already said that we have no intention of doing so as we are governed by other proposals. However, OPEC cannot even control its own people. Its production has increased from 17·5 million to nearly 18·5 million barrels a day. If OPEC cannot control its own folk, why should we control ours?
  Mr. Douglas: That is an interesting view, and I notice what the Minister of State, Department of Energy, said the other day. However, if we are to achieve understanding, we cannot hide behind the Varley assurances. The Minister now has the opportunity to say how many fields under production are subject to the Varley assurances. More than 20 fields in the North sea are now in production, but not all are subject to those assurances. Our domestic requirements are about 80 million tonnes, yet we are producing well in excess of 100 million tonnes. We are doing so for one reason only—the Government's need for revenue.
  As a Scot who has taken part in all these debates, I resent this misuse of a once-for-all asset. This is Mrs. Finchley's folly. We have a one-off opportunity to use this resource to alter and refurbish our industrial fabric, yet we are throwing it away. It is clear from what Professor Bain said in the Glasgow Herald earlier this week that the Government are using this revenue to bolster up consumption. Our level of investment is pitiable. We should be using these resources to bolster our investment.
  More factors will affect production in the North sea than taxes. There is the supply and demand for oil internationally, and the state of the art; and it is on this that I wish to probe the Minister about the Bill. Does the Bill
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  cater for such developments as BP's concept of SWOPS. I am speaking in shorthand terms. I am not maligning the device of a dedicated type of tanker that could be used not just for one field but for a number of fields. Will the Bill deal with such a development? How does the Bill deal with multi-purpose support vessels, which are used for emergencies over a large number of fields?
  Can the Minister give us some guidance? If we had the provisions in the Bill, would we in Scotland have had the gas-gathering system? Would the provisions have facilitated us in obtaining the gas-gathering system on which the Government were so niggardly in giving us some assurance?
  The state of the art is extremely important, as we know, for the marginal fields. The impression given is that we are now capable of discussing fields that may be marginal down to the 10 million barrel field. That will be important, as the hon. Member for Bedfordshire, North will. I hope, concede, for ensuring self-sufficiency as far into the future as we can.
  New techniques are being developed and sub-sea completions must be considered in relation to tethered buoyant structures. I do not expect the Minister to give us replies today, but what is not in the Bill—at least I cannot see it and I admit that I do not have the competence or understanding of tax matters to cover it fully—is how leasing of such devices is likely to be treated. It might be possible in North sea terms for a firm to build a number of tethered buoyant structures and to lease them. How would such leasing arrangements be treated in the Bill?
  Political factors also come into consideration when we are speaking of developing oil. This is one of the factors that the oil companies have considered over the life of North sea oil. We have an extremely stable political regime in the United Kingdom. Although we have changes of Government, there is an agreement that we change by democratic means. This Government have upset the oil companies by numerous changes in the tax regime. Are we to understand that the arrangement that has been concluded between the United Kingdom offshore operators and the Government is satisfactory and has some chance of sticking?
  I have already referred to Mr. George Williams, who was director-general of the United Kingdom Offshore Operators Association. I hope that hon. Members on both sides of the House will not take it amiss when I say that this country owes a debt of gratitude to Mr. Williams for the views that he has expressed. Although I disagree with some of them, I recognise that he wants to promote the oil for United Kingdom purposes. He has served well his masters in the oil companies, and the United Kingdom operators. I understand that he will be retiring shortly. Although I am not speaking on behalf of my party, as I have not consulted it on these matters—I do not usually —it is my wish, and I think that of the House, to place on record our thanks to Mr. Williams for the work that he has undertaken. We look forward to meeting his successor and having discussions with him. Shell men seem to have a remarkable facility in this business. I understand that Mr. Williams' successor, Mr. Band, is also a Shell man.
  The Government are correct in promoting the range of measures in the Bill and the royalties relief measure. Although I have expressed certain views about royalties relief, it is the timing to which I have objected. As the Government have not anticipated properly the effect of their policies, they have had to concede too much,

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  particularly on royalties relief. They have given carte blanche relief, regardless of the size of the field. That would have been unnecessary had the Government anticipated what they were doing.
  Exploratory drilling was being halted in the North sea because of uncertainty. Oil companies, like other institutions, need stability. I have a little knowledge of this matter—and I declare my interest—as I advise a certain oil drilling company. Therefore, I recognise that the oil companies need some stability. In these circumstances, the Government have an opportunity to make it clear that they will ensure a stable regime whereby exploration, development and production drilling can take place. This is where the United Kingdom is deficient, although we have 72 per cent. total activity. The object is not just to raise revenue. We are concerned about jobs, as about 100,000 jobs relate to the North sea. Theefore, the companies need stability of revenue and of work for oil platform production makers, for shipbuilding concerns and for other organisations related to the North sea.
  If the Government give concessions to the oil companies, what is in it for us for work, not revenue? There is no implication that the Government have pressed the oil companies to ensure that any work emanating from the tax concessions will be related to United Kingdom activities. It would be wrong for us to discuss this in detail in the House, but we hope that the rig order for Britoil will be maintained in Scott Lithgow on the lower Clyde. I hope that the Government will use their good offices to ensure that these negotiations are not frustrated by a company —Britoil—in which we still have a major interest.
  We are concerned about getting work, and continuing work. I know it is difficult, but, if we can, we want to ensure that the knowledge, experience and expertise gained in the North sea is used to get us export orders as well. However, I agree with my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) that it will be difficult for us to frustrate the passage of the Bill.
  The Government have reaped a bonanza from the North sea. No other western industrialised nation would have been so foolish with such an asset. We shall pay the penalty in the future. In 20 years—perhaps even fewer —people will look back and ask how a nation with so many advantages could have allowed its manufacturing industry to be thrown to the wall and its level of investment and output to decline when there were so many opportunities. Only a Tory mismanaged, misplaced Government could have done such a thing.
  5.39 pm
  Mr. David Crouch: The hon. Member for Dunfermline, West (Mr. Douglas) declared his interest, and obviously spoke from his specific knowledge about the working of oilfields and the fall-out that has occurred for industry. We have listened to him before, and he knows what he is talking about. The hon. Member for Orkney and Shetland (Mr. Wallace) also has an interest in oil, because his constituents have an interest in the North sea. Indeed, there are perhaps 100,000 people who have such an interest. However, we all have an interest in the North sea. The Government's interest amounts to £8 billion per annum, rising to perhaps £10 billion in the next two years. Every hon. Member has such an interest,
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  because the North sea is vital to our economy and to the development of industries that are associated with oil and its development.
  I also declare an interest in that I advise and act as consultant to an oil company, and have done so for some time. I very much appreciate the way in which my hon. Friend the Financial Secretary to the Treasury is now able to speak knowledgeably on oil matters, having been a former Under-Secretary of State for Energy. In a way, we are lucky that the Chancellor of the Exchequer was once Secretary of State for Energy. The Treasury now has a greater understanding of the Department of Energy's arguments than it used to have. This concession may be the result of the Chancellor of the Exchequer's appointment followed quickly by that of his younger colleague, the Financial Secretary.
  I welcome the Bill, and have long hoped for this concession. The measure has been prepared with a certain art which only the Treasury could devise. We have bandied around the figure of £7·8 billion as being the Government's take in 1982–83. Of that, the Treasury has given up an estimated £115 million. Small as the gift is, it is a valuable nest egg for the oil companies that are developing — for that is the word — the North sea's marginal fields. Therefore, as far as the Bill goes, I am delighted.
  However, this cannot be the last relief by any means. More concessions will have to follow if we want more oil, and at a good price. What is a good price? Today $30 per barrel may be a good price, but what will the price be tomorrow or five years from now? We live in an era of oil surpluses although production is restricted in Iraq and Iran. There is a cartel restriction by the OPEC countries on the delivery of oil that they produce. Some OPEC countries are dismayed by the restriction on their production. For example, Nigeria depends even more than us on oil for its cash crop. Nearly 100 million people in that country are dependent on a good price being sustained. Therefore, price is the key.
  There is a lot of oil still in the North sea. I believe that 40,000 million tonnes are available, which would ensure that we were self-sufficient well into the next century. However, the cost of extraction and delivery must be considered in addition to the price of oil on the world market. Such factors will determine whether we take those 40,000 million tonnes of oil out of the North sea during the next 20 to 25 years. As is well known, the Forties, Frigg and other big fields in the North sea are the last of their sort. As has been said, it is almost certain that the rest of the fields will be marginal and small. Of course it is possible that in difficult areas in the north-west approaches and elsewhere we shall once again find a large source of oil. However, if the oil is in a geologically difficult position, it will be hard to extract. Again, in asking whether it is worth doing so we must consider the ruling price at the time.
  We should not confine ourselves to oil when considering this Bill. An oil tax measure must be considered alongside the energy options available both to this country and the world. There is a surplus of coal in Britain. There is a surplus of 58 million tonnes lying on the surface that is not being used. We know that there is a surplus of coal in the world, and that in some parts even of the United Kingdom it is not being used because other fuels are being used to generate electricity.

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  Last week I visited Scotland and Torness, the home of the last of the advanced gas-cooled reactors. I learnt from the South of Scotland Electricity Board that 39 per cent. of electricity in Scotland was generated not by coal but by nuclear power. I believe that the figure for the United Kingdom is more like 15 per cent.
  Mr. Moore: I think that the figure is 12 per cent.
  Mr. Crouch: I could not have had better advice.
  However, it must be recognised that there is a surplus of fuels, particularly hydrocarbons. There is also a surplus of electricity. Indeed, something else happened last week that must he taken into account. One of the factors in energy today is conservation. The Secretary of State for Energy quite properly introduced a new, big campaign last week in order to conserve energy on a large scale both at home and in industry. Therefore, we may see an even greater reduction in the consumption of electricity and other fuels. I understand that the consumption of it in this country has fallen by about 35 per cent. in the past 10 years because of conservation, greater efficiency and, to some extent, a lack of utilisation on the part of industry, which has not been running all out recently.
  I value this concession, but we shall have to consider whether there should be more in future. I believe that we shall want the extra oil and will have to take exceptional measures to obtain it. Therefore, the Treasury will have to consider whether it wants to provide those extra concessions. I imagine that this concession has taken about three years in its passage through the Department of Energy and the Treasury to its embodiment in this welcome Bill. I hope that the forecasters at the Treasury and the Department of Energy consider the total energy option when deciding whether it is necessary to make further concessions in future. They must take into account coal, nuclear power and possible alternative sources of energy.
  Alternative sources of energy supply may need encouragement in preference to giving further encouragement to the oil industry. We may have to say that enough oil has been taken out of the North sea and that we do not want to go in for expensive, new, scientific systems of enhanced oil recovery. Of course, that would not happen without more concessions. However, for every oilfield now being worked in the North sea there is still a lot of oil left in the strata that can be extracted only by chemical means or other enhanced oil recovery systems. At present they cannot be considered when the price of oil is $30 per barrel. Nevertheless, things may change.
  The Government, Parliament and the nation at large must now consider what we really expect from the North sea. The Government are looking closely and technically at the smaller fields to see what might be necessary in the future further to encourage their working and development.
  Sir William Clark: Roll-over relief.
  Mr. Crouch: I heard a murmur from behind me about a tax process known as roll-over relief. I think that my hon. Friend the Member for Croydon, South (Sir W. Clark) may well be right to say that we should be considering such an extra concession later. The concession in the Bill is a minor but valuable one. It has done the trick, as we have heard from the oil operators and others in the North sea.
  We must look not only at the marginal fields, which have needed this help, but at the big production fields
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  which may benefit from enhanced oil recovery. They are being operated by the big oil companies, Exxon, Shell and BP—I have spoken with them myself—which all have different ideas about how it can be done. Experimentation is being considered in Houston to this day and I hope that we shall not be far behind in this scientific activity.
  We must not consider these matters in the context of oil alone. In some ways we have been through a remarkable revolution since 1965 when oil and gas were discovered in the North sea. That was less than 20 years ago. There has been a revolution in thought and that has produced a revolution in our economy. Whatever anyone may say about how this great revenue should be used, the arrival of oil on the British scene has caused us to forget some of the things that perhaps we should have been doing instead of drilling for oil in the North sea and pumping it out. This great treasure of a resource in the North sea has lulled us into a false sense of security not only about the economy but about what we should be doing about energy in the next 50 years. When one talks to colleagues in the National Assembly in France and in industry, one realises the enormous investment France has made in another resource, because it does not have our resources of oil and coal — nuclear energy. France has gone a bundle on nuclear energy. France has done a deal to get Soviet gas piped in because it regards that as a necessary alternative source of energy.
  We in this country, lulled into a false sense of security, have allowed things to fructify—
  The Under-Secretary of State for Energy (Mr. Giles Shaw): That is a beautiful word.
  Mr. Crouch: It is a beautiful word. Oil has been a wonderful thing for the Treasury. Graphs in the Treasury have shown oil production rising and will show it falling. When oil production starts to fall and we no longer get £10 billion a year — perhaps in three years' time — the Treasury may by then have a plan for the Minister so that the Chancellor can say in Cabinet that the time has come to do something to get that 40 billion tonnes of oil out of the sea.
  I say to the Ministers on the Treasury Bench and to the Chancellor—all know the argument on energy and the technicalities of oil energy—that they cannot make that decision and expect something to happen quickly. It will take 10 years to gestate. I say to them, think about it now and if the Government have to come back to us with another concession I shall welcome it.
  Mr. Moore: We have had an extremely well informed debate, crossing both sides of the House. It has been relatively non-partisan in the sense that both sides of the House welcomed the measures. I thank the hon. Members for Birmingham, Perry Barr (Mr. Rooker) and for Orkney and Shetland (Mr. Wallace) for indicating that they will be supporting the Bill. I am sure that the hon. Member for Perry Barr, as spokesman for the official Opposition, will wonder, with me, about the absence of the SDP throughout the whole of the debate. I assume that the SDP has a view on the North sea and on our nation's key tax and energy policy. It would have been beneficial to the House had we had the benefit of those observations. However, I am sure that we can always hope on that score.
  The hon. Members for Perry Barr and for Orkney and Shetlands rightly referred at the beginning of the debate to the high risks involved in the activities in the North sea.

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  All of us would put the problems of safety before anything else in our deliberations. We are conscious of the risks and the deaths that have occurred during the development of this asset.
  The hon. Members for Perry Barr and for Dunfermline, West (Mr. Douglas) referred to the problem of future jobs. We share their views on the need to see new jobs created in an oil industry that has already seen 100,000-plus jobs directly created over the past decade. It is hard to quantify. All we know from examination of this area is that development of new fields, which might not otherwise have occurred, might now come as a consequence of the measures this year and should create more jobs. I wish that we could quantify this but I know that the hon. Member for Dunfermline, West with his knowledge of this area will be aware that 70 per cent. and more jobs have come to the United Kingdom in the offshore industry. We hope to maintain that British content and I recognise the importance of that point.
  The hon. Member for Perry Barr referred in part of his speech to the use of the actual resource. He made some legitimate points but I think that my hon. Friend the Member for Croydon, South (Sir W. Clark) pointed out that we have used North sea revenue in the best way possible, to seek to reduce public sector borrowing and non-oil taxation below what they would otherwise have been. This has given more room, as my hon. Friend rightly suggested, in the capital market for private industry to borrow and invest, and more freedom to the private sector to choose how to use the benefits of oil. By using the revenue to reduce interest rates we shall have encouraged investment and thus provided income for the day when the oil runs out. I agree with my hon. Friend that we cannot be accused of frittering away the benefits of oil.
  The hon. Member for Perry Barr referred to the time when the new rules come into effect. The hon. Gentleman was right to remind the House that the consultative document of 7 May announced the clear intention that the new expenditure relief rules and the PRT charge on asset-related receipts would have effect from 7 May 1982. In the event, we selected the more convenient date, 1 July 1982, which is the beginning of the first six-monthly chargeable period following publication of the proposals. The industry was aware of our intention to make the changes from that date and certainly was not objecting. On the charging receipts, once the intention was known, it had to take immediate effect to prevent forestalling, for example, by rolling up future tariffs into a lump sum payment.
  My hon. Friend the Member for Croydon, South understandably asked about roll-over relief, about which he speaks quite often. I am aware of his interest in the subject of capital gains tax roll-over relief for disposals of North sea licences. We shall certainly consider the proposal but it obviously interacts with other aspects of the tax treatment of such disposals. My hon. Friend the Member for Croydon, South, the hon. Member for Dunfermline, West and my hon. Friend the Member for Kent—
  Mr. Crouch: Canterbury.
  Mr. Moore: I apologise to my hon. Friend. We must correct the latest edition of Dod, which does not seem clearly to state the honourable place that he represents.
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  My hon. Friend the Member for Canterbury (Mr. Crouch) — I tried partly to tackle this in my opening speech—referred to the problem of seeking stability. Although we shall obviously wish to maintain a stable regime—that is a clear goal for those in industry and in government — the Government must reconcile themselves to the changes that occur and must retain flexibility. We shall constantly examine and constantly listen to the comments that are made. I share the views of the hon. Member for Dunfermline, West on Mr. Williams. I am only too pleased from my personal background in another Department to acknowledge not only his but the industry's activities in this area. We continue to have useful discussions with the industry on many aspects of North sea taxation. We have a responsibility for bringing forward proposals for tax legislation when we are convinced that to do so would be in the national interest. We shall be considering many of the points made in the debate.
  I shall now try to answer some of the more detailed points. If I neglect to answer them all, I shall ensure that every one is replied to in such a way that it can be put into the record.
  The hon. Member for Dunfermline, West asked whether the proposals in the Bill would breach the ring fence. They do not involve any breach of that principle, which applies for corporation tax purposes. He asked how the Bill would treat tankers used for off-loading and multi-purpose support vessels that are used for more than one field. A company may own assets that it will use not only for one field, but for two or even more fields. An asset used in that way would be a dedicated mobile asset, for which front-end relief is available under clause 3. Whether any particular asset satisfies the conditions must be decided on the facts of the case, but the Bill provides for that position.
  The hon. Member for Dunfermline, West and other hon. Members asked about the Varley assurances and how many fields were covered. The assurances were reaffirmed and supplemented by a statement by my right hon. Friend the Member for Blaby (Mr. Lawson) — now the Chancellor of the Exchequer—when he was Secretary of State for Energy. He said that the Government did not intend to make any production cuts before the end of 1984. That statement was reiterated on 3 March by the then Minister of State for Energy.
  I was asked by the hon. Member for Dunfermline, West whether the tariff receipts allowance would be available for receipts from the the use of assets, other than pipelines, used to get oil from a new field to shore. I confirm what I said in answer to his intervention during my opening speech. He also asked whether the gas-gathering pipeline would have come about with the help of the measures in the Bill. I doubt that tax considerations were the decisive reason why oil companies were not prepared to make a sufficient commitment to the GGP project. Their fundamental problem was the lack of flexibility in relying on one line. The solutions that the industry has brought about since the demise of the GGP are much better.
  The hon. Member for Dunfermline, West also asked how the Bill would apply to a company that leases assets. The Bill does not charge receipts on any company that is not a participator in an oilfield. A leasing company will not usually be an oil producer. For reasons that I shall explain to my hon. Friend the Member for Bedfordshire, North (Mr. Skeet), we have not extended PRT to such companies.

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  I have spent four years of my ministerial career in the Department of Energy. We all recognise the astonishing expertise of my hon. Friend the Member for Bedfordshire, North. Tonight we heard a classic example of the diligence he has brought to the subject of energy over the years. I know that the House will not object if I spend a little time trying to answer some of the important points that he raised. If I cannot answer them all, I shall write to him.
  My hon. Friend asked why there is no definition of the word "asset". We did not think it necessary to define the word, and in the absence of such definiton the word takes its natural meaning. We have lived without a definition since the inception of the oil taxation legislation. As far as I am aware, we have not encountered any problems.
  My hon. Friend also asked about a particular asset, which I shall deal with in a moment. I endeavoured to obtain exhaustive lists of fixed assets and dedicated mobile assets for the debate. The list could go on and on. That illustrates one of the essential dilemmas in the inventive technology referred to by the hon. Member for Dunfermline, West. My hon. Friend asked whether process plant is within the scope of the new rules. Any plant used for initial treatment as defined in section 12 of the Oil Taxation Act is within the rules. An example is a plant used for stabilising oil or separating gas into its component fractions, but not further down-stream processes such as refining.
  My hon. Friend mentioned the nature of the powers under the Petroleum and Submarines Pipe-line Act 1975. He and I sat on the Opposition Benches during that Committee. The powers are not exercisable at the Government's option. Even if they were, I would not wish to rely on that sort of compulsion in preference to allowing market forces to work unimpeded by tax laws.
  My hon. Friend made three propositions about the value of front-end relief—that it would be less than the cost of charge on reliefs, that there would be no matching relief to the payer, and that it would lead to an ultimate increase in the tax take. Propositions one and two would depend on the circumstances. Has my hon. Friend taken into account the value of relief now as against charges that must be paid later?
  On the third proposition, I agree that if, as a result of these proposals, fields are developed that would not otherwise have been developed, there would be additional tax for the nation as well as additional profits for the companies.
  My hon. Friend asked whether we had reached agreement with Norway about the taxing proposals in clause 12, and whether the existing double taxation agreement applied. Inland Revenue officials have had talks with Norwegian officials. They recognise our right to tax receipts in the circumstances covered by clause 12. They have agreed that the existing double taxation agreement will cover the circumstances likely to arise in practice.
  Mr. Douglas: Have the Government held consultations with the Republic of Ireland and France?
  Mr. Moore: I cannot answer that question in specific terms now, but I shall write to the hon. Gentleman. The only current physical link is with Norway.
  My hon. Friend asked about the criteria for determining what constitutes a user field for the purposes of the tariff receipts allowance. He is especially concerned with the
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  criteria that will be used when tariffs are received from a foreign field. He asked how the Secretary of State would determine a foreign field. We see no reason to use different criteria from those used for determining United Kingdom fields. No hard and fast rules govern the determination of our fields. Each field is considered on its merits on a case-by-case basis. Determination is based solely on geological and geophysical criteria. The same criteria will be used for determining a foreign field.
  My hon. Friend asked what would happen if United Kingdom oil flowed to Norway. The current PRT system is designed to cover oil and gas activities on the United Kingdom continental shelf, and the transmission of the oil or gas to the United Kingdom. No provision is made in the Oil Taxation Act to allow expenditure for transporting petroleum by pipeline directly to a place outside the United Kingdom, nor is that allowed. But there is a concession covering direct exports from tanker loading fields.
  It follows therefore that if there is no statutory provision to allow the expenditure on those pipelines any tariffs arising from the transportation of petroleum cannot be charged under the provisions of the Bill. If oil or gas were at any stage permitted to be transported by pipeline directly to a place outside the United Kingdom, we would need to consider how the present rules should be altered, and would have to take account of the international implications of so doing. In principle, if petroleum was derived from a United Kingdom source, and the activity took place on the United Kingdom continental shelf, there would be nothing in international law to prevent us from taxing the tariffs.
  My hon. Friend asked why we proposed to tax participators in foreign fields, but not to tax the profits of service companies—that is, companies that are not oil producers but that might own an asset such as a pipeline, which it lets to others in return for a tariff. We are charging participators in foreign fields because they are in a position that is more directly comparable with our own oil producers. For them, the main expense is incurred in acquiring the asset, for example, in building a pipeline in connection with the production of oil. Any tariff that they receive for the use of the asset is a bonus, and will usually occasion only some incremental cost. But while for oil producers, whether our own or foreign, tariffs are likely to be a highly profitable marginal addition to income, non-oil producers will have to rely solely on tariff income for their profits. Given the large front-end costs of North sea assets, we doubt whether such companies could generate profits from tariffs large enough to bring them within the scope of a special additional tax such as PRT. They will be subject, however, to corporation tax.
  My hon. Friend the Member for Bedforshire, North asked why we had to make provision for gas banking schemes. Where a tariff is paid for transportation of gas transferred under such a scheme, the tariff will be charged to PRT. Except where the regulation applies, the receipts would not have qualified as receipts to which the tariff receipts allowance applied. The reason is that it would not be gas
  "won otherwise than from the principal field"
  —clause 9(6)(a). Clause 9(10) ensures that the receipts will qualify for the allowance.
  My hon. Friend questioned us on the intrafield tariffs. He asked why we do not give an allowance for receipts from within the same field. That can happen where one participator in the field does not own the field assets and

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  so pays the participator who does for their use. The argument that persuaded us that the full charge to PRT should be mitigated by an allowance does not apply sufficiently to justify an allowance for tariffs paid by one participator to another in the same field. We are trying to encourage the development of new fields.
  My hon. Friend asked about the treatment of remote associated assets. The Bill provides for one kind of associated assets in a different way from the clauses of the 1983 Finance Bill that were taken out after the announcement of the general election. It was realised that the Finance Bill's provisions on associated assets were drawn more widely than necessary so that the owner of a mature producing field might, largely at the taxpayers' expense, contract a pipeline to bring in oil from a distant field when it would be economically more sensible for a shorter link to a different, existing pipeline to be built.
  The provisions originally envisaged might have helped some companies that paid more tax more than others and subsidised the development of pipelines that were not just marginal but uneconomic. Therefore, it was decided to amend the rules but only in respect of the remote associated assets. We are distinguishing that class which we would not ordinarily expect the mature field to pay for — as a practical test, those that are not on or close to other mature fields assets. A pipeline to another field is the obvious example. We are proposing that relief for expenditure on those assets should continue to be available but not until, and only to the extent that, they generate receipts. My hon. Friend argued that that is tantamount to a breach of the principle of full front-end relief, but that cannot be said to be so. That principle was set out in the consultative document in the context of assets used for the participator's field. We are providing that he will obtain front-end relief even if he shares them. An associated asset, whether remote or not, is by definition not such an asset. It is one that is not in itself used for the participator's field but used typically to bring in another field's oil or gas.
  My hon. Friend asked about relief for any incoming tariff. He was talking about the interrelationship of the Bill with other oil measures this year and the doubled oil allowance. If a field has been taken out of PRT, it is true that it cannot then obtain PRT relief. As I have already said, the tariff receipts allowance should substantially reduce increases in tariff that could otherwise have tended to occur as a result of charging tariffs to PRT. Its effect will be particularly relevant for smaller fields of the sort that the doubled oil allowance might take out of PRT. I cannot say that there will be no increases in tariff in such cases, but they seem likely to be modest and tariffs are deductible for corporation tax as well as PRT.
  The allowance has been welcomed by the industry, which has not sought to argue in any of the detailed consultations that have taken place since the Budget that the allowance should either be increased because of the form taken by the other elements in the Budget package, or that there is evidence in any particular case of increases in tariffs being likely to meet the cost of future development — the future development that we are concerned with.
  I hope that I speak for the House when I say that we welcome the detailed contribution of my hon. Friend the Member for Bedfordshire, North. He has helped enormously in the understanding of this area. I also hope
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  that I have answered most of the main points in what has been a most interesting and helpful debate. It is a highly technical Bill, but it has had the benefit of unusually detailed and prolonged consultation with the industry since our original proposals were brought forward in May 1982, as my hon. Friend the Member for Canterbury said.
  I have explained why we have not met some of the suggestions. The industry would doubtless have preferred to have had them covered, but that does not detract from the general view that, following the consultation that I have described, the Bill is reasonably balanced in its substance and technically satisfactory in its detail. Therefore, despite its undoubted complexity, soundings taken through the usual channels suggested that it is not a Bill on which the House would want to spend a vast amount of time.
  There is also a positive reason for the Bill being enacted without unnecessary delay. The proposals to make changes in this complicated area were announced as long ago as May 1982 when we issued the consultative document. We have done our best to minimise uncertainty since then but it would be a grave discourtesy to the House to imply that that could give the same assurance as an Act of Parliament.
  We all want developments in the North sea to continue. In the interests of both the nation and the industry, it is desirable that the Bill should be enacted without unreasonable delay. Although it is only part of our overall package of tax measures for this year which will affect the industry, it is not an unimportant one. It affects the readiness of companies to share assets in the North sea so that the new generation of smaller fields can be developed. Without detracting from that, it brings into charge for PRT certain receipts that clearly should be so treated. I have every confidence in commending the Bill to the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House. —[Mr. David Hunt.]
  Considered in Committee
  [MR. PAUL DEAN in the Chair]
  Clauses I to 15 ordered to stand part of the Bill.
  Schedules I and 2 agreed to.

  Oil Taxation Bill
    Schedule 3

      TARIFF RECEIPTS ALLOWANCE
      Mr. Moore: I beg to move amendment No. 1, in page 36, line 20, leave out 'receipts from existing contracts and insert 'qualifying tariff receipts'.
      I apologise for delaying the efficient dispatch of business, but the amendment corrects a drafting error in the Bill. As printed, schedule 3, paragraph 3 would have no application at all because it says that sub-paragraph 1 applies paragraph 3 to cases where there are receipts "from existing contracts"—line 20—and
      "some are receipts from existing contracts and some are not".
      The first reference to "existing contracts" should have been to "qualifying tariff receipts". The amendment corrects the defect. It makes it clear that paragraph 3 is to apply in cases where some of the "qualifying tariff receipts" are from existing contracts and some are not.

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      My hon. Friend the Member for Bedfordshire, North (Mr. Skeet) naturally spotted the error and I thank him for his assistance.

      Amendment agreed to.

      Schedule 3, as amended, agreed to.

      Schedules 4 to 6 agreed to.

      Bill reported, with amendment; as amended, considered.

      Question, That the Bill be now read the Third time, put and agreed to.

      Bill accordingly read the Third time and passed.

  Liverpool Area Health Authority (Budget)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. David Hunt.]
  6.20 pm
  Mr. Robert Parry: I am pleased to be raising on the Adjournment the question of cuts in Liverpool area health authority's budget. I am delighted that the debate should be taking place much earlier than we had expected, and I hope that some of my hon. Friend's who represent Liverpool constituencies will have an opportunity to speak. Although the debate is concerned specifically with cuts in the budget of the Liverpool area health authority, I hope, Mr. Deputy Speaker, that you will allow it to range somewhat wider because some of my hon. Friends from Merseyside constituencies would like to take part. Two of them sat throughout the debate last week on the National Health Service but unfortunately were not called.
  The cuts being imposed on Merseyside and in Liverpool are causing much controversy. Merseyside regional hospital authority recently instructed the area health authority to make a package of cuts, imposing cuts of £5·5 million over five years, and that obviously represents a cut of over £1 million a year. Despite protests from consultants, doctors, nurses and trade unions, the package was accepted by the area health authority on 25 October. The cuts are opposed by the community health councils in Liverpool, and Liverpool city council is strongly opposed to them. The cuts affect the sick right across the board.
  There is to be a rundown of the Newsham general hospital leading to its eventual closure, and that will lead to the loss of 400 beds. At the Princes Park hospital, in my constituency, which deals with old people, 100 beds are to go. Under the Chancellor's instruction of a further per cent. cut in Liverpool's health budget, 24 beds will go at the Alder Hey children's hospital. Under the same instruction, the St. Paul's eye hospital, also in my constituency, will close a ward, in spite of the waiting lists. There is nothing more cruel than to make people go on fearing losing their sight. The Minister told me in a parliamentary reply on 3 November that 590 patients were awaiting eye treatment at St. Paul's, 181 of them women, and that 34 of the cases were considered urgent.
  Anybody with feeling and compassion for the afflicted must condemn the cuts which are affecting these unfortunate people. The Prime Minister, who has had personal problems herself, should understand that more than anybody. Fortunately for the right hon. Lady, she was able to jump the queue and receive private treatment. Not many of my constituents are able to pay for their treatment.
  In imposing the cuts, the Prime Minister has shown that she is unfeeling, uncaring and indifferent to the suffering of the people. She told lies during the general election campaign when she said that the National Health Service was safe with the Tories. I asked her last week in a parliamentary question whether she had any plans to visit St. Paul's eye hospital, and of course her answer was no. If the right hon. Lady had paid such a visit, she would be more aware than she is of the anxiety and fears of ordinary people.
  The women's hospital in my constituency has a 21-bed ward which is to be closed, again despite a waiting list of

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  nearly 500. The waiting list for general surgery in Liverpool is 1,747, 60 of them classified as urgent. As a result of this package of cuts, services will be slashed and 800 jobs will be axed, including doctors, nurses and ancillary, professional, technical and clerical staff, this in an area of very high unemployment. These are dedicated people who really care for the sick. I speak from experience because I have had the misfortune to have been a hospital inpatient four times in the past 10 years. I place on record my sincere thanks to these dedicated people for their care and attention during my hospitalisation. On each occasion I stayed in a National Health Service ward.
  In a letter to me dated 28 October the Minister dealt with St. Paul's and the Royal Liverpool hospital. He stated that press reports of patients being treated in corridors at the Royal Liverpool were "misleading and exaggerated." He wrote that despite a report by a professor at the hospital that that was happening. The bed occupancy rate at the Royal Liverpool hospital is 94·5 per cent. One wonders what the situation will be when the other hospitals are closed and hundreds of beds disappear.
  In a recent letter to me, the Minister suggested that I should write to the chairman of the Liverpool area health authority for certain information I wanted. I telephoned the administrator, a Mr. Derek Cumming, on 28 October and asked him for a copy of a recent health authority document following discussions on 25 October about the cuts. He informed me that he would have to discuss the matter with the chairman, a Mr. Pocock. I am still waiting for that report. It is a scandal that an elected representative of the area who asks for information from bureaucrats cannot get that information to enable him properly to raise the issue in the House. I hope that the Minister will look into that. I have been referring to documents which are public knowledge.
  I understand that the chairman of the local area health authority is a former official of the Wirral Conservative Association. I wonder therefore whether that was one reason for what occurred. I also wonder whether he is supporting the cuts. The question of the Heswall children's hospital, which is situated in the heart of Tory land in Cheshire, is worrying. I do not like to see any hospital closed but that hospital, which formerly cared for 150 children as inpatients, now has fewer than 50. I understand that it is a millstone round the area health authority's neck. Indeed, I believe that it is costing over £1 million to maintain the hospital.
  If there is no need for the hospital, why cannot the children be sent to Liverpool, at the Alder Hey children's hospital or the children's hospital in Myrtle street, because I understand that most of the 50 children at present at Heswall are from Liverpool? Why send them there from Liverpool? I hope that the Minister will give a clear view on that issue because it is causing much anxiety and strong feeling on the Liverpool side of the Mersey. Indeed, I am wondering whether, if this hospital had been situated in Liverpool's dockland, it would have existed this long. I doubt it.
  If the chairmen of the Liverpool and Mersey health authorities are not prepared to oppose the cuts, I suggest respectfully that they should offer their resignation. Only this week I received from the plumbing lodge of the EEPTU a copy of a letter that it wrote to Mr. Wilson, the chairman of the regional health authority, asking for his
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  resignation. The branch has a long history, for it was formed in 1865, which means that it has knowledge of Victorian values.
  I have spoken to the Minister for Health and I shall be meeting a delegation of Wirral and Merseyside Members to discuss these matters. However, it is only right and proper that I should make my views known on the Floor of the House and make it clear that I am totally opposed to the cuts in Liverpool and on Merseyside.
  6.30 pm
  Mr. Eddie Loyden: The Act setting up the National Health Service, which was established by the first post-war Labour Government, was in all probability one of the finest pieces of progressive legislation that we have seen. The post-war generation of children is living evidence of the benefits that accrued from the establishment of the Health Service.
  I was born in the slum area of Liverpool and I lived in it for most of my working life. I lived there during a period when there was not a national health service. I lived in a street that ran near Lamkiln lane, which was overshadowed by the now extinct Tate and Lyle factory. The conditions that then prevailed in that area led to a hearse arriving at someone's door almost every week to take away a child who had died at a very early age. In addition, there was the extremely high birth rate in Liverpool, especially in the area of Liverpool in which I lived.
  Those who were alive during that period have a greater understanding of the benefits and merit of the Health Service. It has been responsible for improving the health of the British people in a way that could not be imagined in the pre-war years. Those who lived in the years before the second world war without the National Health Service and after the war with it and all its benefits will, I am sure, be the first to defend to the death the Health Service and everything for which it stands.
  We are all aware, regardless of what the Prime Minister says almost every week in the House, that the Health Service is not safe in her hands. The question which my hon. Friend the Member for Knowsley, North (Mr. Kilroy-Silk) put to the right hon. Lady yesterday made her stutter and stammer. My hon. Friend asked why, if she felt that the Health Service was safe in her hands, she did not feel safe in the hands of the Health Service. He was making an important point. Conservative Members who applaud the Health Service, and do so because it is the result of a piece of progressive legislation that has provided many benefits for succeeding generations, are by and large those who do not use it. They have been in the fore in driving NHS resources into the private sector. Until recently it was considered proper to make blood freely available from the NHS to the private sector. That is an illustration of the way in which the private sector is bleeding the public sector.
  Mr. Robert Kilroy-Silk: The dependence of the private medical sector on the NHS goes much further than dependence on it for supplies of free blood. My hon. Friend will know that all the doctors and nurses that staff the private medical sector have been trained in the NHS. Many of the facilities, technological changes and revolutionary processes that are important to the sustenance of the private sector have their origins in the NHS. In that sense, private medicine is parasitic on the NHS.
  Mr. Loyden: I am grateful to my hon. Friend, for he has completed my argument about the parasitic nature of private medicine.
  The people of Liverpool and the surrounding area were astonished when the health authorities raised no objection to the cuts that were to be imposed upon them. It is a shame that those who hold positions of responsibility and who should act in the interests of the health services in the area should see fit not to object in the strongest possible manner to the cuts that are to be imposed.
  Liverpool, like many other cities, is faced with mass unemployment. It is the view of many experienced medical people that there is a correlation between mass unemployment and ill health. I share bat view. There is sufficient evidence clearly to show that places in which there is high unemployment have high incidences of respiratory diseases, cancer and many other diseases that are prevalent in industrial areas. At a time of high unemployment and social malaise, the people of Liverpool are to suffer an even greater blow because of the cuts that have been imposed by the Government on their health services.
  The population of Liverpool is equally concerned about the attacks on its health services as it is about the shameful level of unemployment on Merseyside. It sees the cuts as a further attack upon the living standards of ordinary working people at a time when we should be increasing the resources that we make available to the Health Service to enable it to cope with the serious problems that cities such as Liverpool are facing. At a time of great need, the Government are imposing cuts that will undoubtedly lengthen the waiting lists for surgery and for other treatment.
  I have had recently to attend the St. Paul's eye hospital in the constituency of my hon. Friend the Member for Liverpool, Riverside (Mr. Parry). The patients are having to wait for six to seven hours for treatment as some of the clinics have been closed because of staff shortages. About 75 per cent. of those awaiting treatment are in their sixties, seventies or even eighties. Eye afflictions are more predominant in that age group than among the younger generation. It is a disgrace that a hospital of international renown should be placed in a position in which it is virtually incapable of dealing with patients without causing them a great deal of distress. That shows what is happening to the Health Service in this part of the city. At the women's hospital beds have been closed. This means that patients will have to wait longer for treatment. There is a decline in the Health Service nationally which has serious consequences for those who depend on it for treatment.
  It is the responsibility of the Government to take into account circumstances on Merseyside. The House has been waiting patiently for the Government to bring forward the third report on the environmental problems of Merseyside. When the report is published. it will show the depth of deprivation and social malaise in this beleaguered city. The cuts in the Health Service will have a serious effect on the health and well-being of the people.
  I support wholeheartedly my hon. Friend the Member for Riverside in initiating this debate. The fact that the debate on the Oil Taxation Bill collapsed has given Merseyside Members of Parliament an opportunity to speak about circumstances in Liverpool and to recommend to the Government that they should think again about the Health Service in general and as it affects Liverpool.
  6.42 pm
  Mr. Robert N. Wareing: It is a pleasure to support my hon. Friend the Member for Liverpool, Riverside (Mr. Parry) in his attempt to bring home to the Government the reality of health provision in my native city, Liverpool. The cuts which are imposed on the Health Service in Liverpool can make sense only to one group—the dogmatic monetarists who seem to be to the fore in the Conservative party and the Government. They ignore completely the real needs of the people of Liverpool.
  When one examines what has happened in the last few months, one sees that cuts have been made without reference to the needs of the area. The man who is managing Health Service provision for the Government is not the Secretary of State for Social Services but the Chancellor of the Exchequer. Initially the budget for the Liverpool health authority area was £117,352,000. The first cut of £960,000 took place because of the reallocation of resources formula—a formula which makes no sense to the people of Liverpool. The argument is that it is based on a falling population. No one could deny that Liverpool has a falling population but one of the reasons is the redirection of labour because of economic circumstances. Government policies have led to there being 140,000 unemployed officially on Merseyside, although there are many more who are not able to register. We are told that £5·5 million is to be cut in the next five years.
  The second cut of £604,000 was to come from efficiency measures. I do not know what sort of efficiency adds to the waiting lists in an area that is already deprived.
  The third cut was even worse, because it had no backing on Merseyside. It was the 1 per cent. across the board cut by the Chancellor, but on Merseyside it meant a cut of £1,059,000.
  Therefore, the budget, which was initially over £117 million, has been cut to about £114 million. It is no use saying that all of this can be met by administrative cuts. Every time a porter is removed from the establishment at a hospital, such as Broadgreen, it means further delay in the treatment of patients. Porters are not simple accessories of the kind that one might find in private hospitals where the rich can afford luxuries. BUPA is a long way from most of the people we represent in Liverpool.
  Next year worse is to come, because we are told that another £960,000 is to be cut and that, by another efficiency round, an extra £600,000 is to be lopped off the budget. It is as if someone in the Department said, "Let us think of a number and cut the budget by that amount so that we can fit in with the wishes of the Chancellor". What we require in the Cabinet is a Minister who will resist the Chancellor of the Exchequer and fight for precedence for the Health Service in the same way as the Prime Minister fights for cruise and Pershing missiles to be sited here and for an air strip in the Falklands, irrespective of the cost.
  Some area health authorities have been given growth money for development. It is argued that in Liverpool there is an over-supply of beds, based obviously on the mystical formula that, because the population is falling, the area does not require so many beds.
  The Under-Secretary of State for Health and Social Security (Mr. John Patten): I am following the hon. Gentleman's speech with great care because he is making

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  some important points. Does he recall that it was in 1976, under a Labour Administration, that the redistribution of resources within regions in the National Health Service began? The Government are simply following that work which was properly begun then.
  Mr. Wareing: I was not a Member of Parliament in 1976. One of the reasons why I am here is that I replaced a Member who perhaps did not fight hard enough to change the decisions made by that Government. I do not in any way excuse what previous Governments have done. The hon. Gentleman should not fall back on the argument that there were cuts some years ago. I merely point out that Health Service workers received their greatest pay increases under a Labour Government. Liverpool has 20 per cent. unemployment compared with a much smaller percentage in 1976, but the Government are taking no account of the proportion of the population who need the National Health Service.
  In Liverpool we have not only a falling but an ageing population. Only the younger section of the population is able to "get on its bike", as the previous Secretary of State for Employment recommended. That leaves the people who are ill because of age and, I might add, because of unemployment. Some people are committing and attempting to commit suicide in our city because of stress, illness and the problems of unemployment.
  When people cannot get treatment in hospital, they fall back on primary care. In Gillmoss in my constituency there is little by way of primary care. Since 1979, infant mortality there has risen from 10 per 1,000 live births to 13 per 1,000 live births. That is the reality. Elderly people who are discharged from hospital too soon, simply because beds are in short supply, fall back on primary care.
  A few months ago, shortly after I was elected to the House, I asked the Minister for Health whether he would seek to implement the Black report, perhaps as an experiment—that report underlined the inequalities in health care—so that preference could be given to areas, such as Merseyside and Liverpool, where there were appalling housing conditions and unemployment. I agree with my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) that Conservative Members have not the foggiest notion of what it is like to represent a constituency in a place like Liverpool. They represent the leafier parts of the country. There is nothing wrong with that, but they should come and see for themselves.
  Recently I had some correspondence with a Minister about housing. I took up the case of a constituent that he had referred to me. The lady concerned had to be moved from a flat—the only one which was tenanted for about a quarter of a mile around. All the other flats there were boarded up, because the Government would not provide funds to allow housing repairs to be carried out properly, efficiently and speedily. The Minister was sure that I could get the lady accommodated on a temporary basis in another flat, so that she could get further up the housing list. He told me that he had written to my constituent saying, "You know, there are some really nice council flats in Liverpool." I see wry smiles on the faces of my hon. Friends who represent Liverpool constituencies. There are very few nice flats in areas open to such a person. It shows that Conservative Members do not know
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  the situation. If they would come to Liverpool, I would escort them—because they would need to be escorted—around parts of our city so that they could see the problem for themselves.
  Mr. Parry: Does my hon. Friend agree that it would be far better for the Government if the Prime Minister paid a visit to Liverpool? The right hon. Lady has been in power now for almost five years, and she has made only one brief visit to Liverpool, following the Toxteth riots. She has not been back since.
  Mr. Wareing: When the Prime Minister visited Liverpool, shortly after the Toxteth riots, it was in the early hours of the morning when there was no one to see her. I do not know whether that was fortunate for the people of Liverpool or for the Prime Minister. I agree with what my hon. Friend says, if for no other reason than that the Prime Minister would learn a lot. However, she would need my hon. Friend or me or my other hon. Friends who represent Liverpool constituencies to ensure that she was adequately safeguarded, because the people in Liverpool are outraged at the economic and social policies of this Government. The anger in the city has to be seen to be believed.
  My hon. Friend the Member for Garston mentioned the third report of the Select Committee on the Environment, published shortly after the general election. It showed that the Think Tank report predicted the riots in Toxteth. That did not surprise me. I forecast even greater problems and social unrest on Merseyside unless matters such as this are dealt with.
  We must look with sympathy at the needs of the people who are involved. There are 489 people waiting to get into the women's hospital in Catherine street. Twelve of them are urgent cases which cannot be dealt with now. These women need hysterectomy operations. Anyone whose wife has had that operation knows the desperate need that it involves. My wife was fortunate in being treated relatively quickly. Of course, that was in 1974—long before the infliction on this country of this Conservative Government.
  St. Paul's eye hospital has been mentioned. There, 275 people are awaiting admission. That is hard for the people who in the meantime have to attend as outpatients, as my hon. Friend the Member for Garston said. They have to wait hours and hours, and after they are treated they wait hours and hours again to get transport home. After all, every Liverpool Member represents one of the first 25 constituencies in the country in the unemployment league table. In my constituency and the Riverside constituency there are parts where 75 per cent. of the people are without the use of a car. They depend on the ambulance service and on public transport.
  The Government must study carefully the organisation of the National Health Service. They should not wipe off the board democratically elected councils, such as Merseyside, which have reduced fares for those who need the bus service to get to hospital. Instead, the Government should make the health services in the areas democratically accountable to the people. Then they will have people who can tell them what is really happening in places like Liverpool. As long as the Government appoint bureaucrats, they will have people whose jobs are in the gift of the Government and who will be only too pleased to keep their jobs by keeping quiet about the real needs of the people that we represent.
  6.58 pm
  Mr. David Alton: I associate myself with what has been said in this debate, and I am grateful to the hon. Member for Liverpool, Riverside (Mr. Parry) for raising this issue. It is an important issue, and I am glad that Mr. Speaker has managed to find time for it and especially that there is an opportunity for other hon. Members to participate in it.
  All of us who represent Liverpool constituencies regularly return home to find that yet another hospital or ward is under threat. Week after week we hear stories of worried people who work in the National Health Service whose morale is being sapped. They are worried about the future of their jobs and of the hospitals in which they work. That is something to which the Government must apply themselves.
  I am not entirely critical of the Government, or indeed of the Labour Government, but there will be a challenge from Merseyside, especially Liverpool, that the Government must wrestle with. That challenge was mentioned briefly by the hon. Member for Liverpool, West Derby (Mr. Wareing) when he referred to the ageing population of Liverpool. The fastest growing age group in Liverpool is the over-80s. People over retirement age form about one-third of our population. That is no secret. The Minister is well aware that that will mean not only a greater strain being placed on the local authority for the provision of meals on wheels and social services, but, inevitably, a greater need for geriatric facilities.
  Last year, and earlier this year, I met Dr. Jeremy Playfler and other geriatricians at the Royal teaching hospital in my constituency. As a result of that meeting I brought the problems of the geriatric services to the attention of the House in an early morning debate.
  I thank the Government for responding to my requests over Mossley Hill and Broadgreen hospitals, and for announcing that major capital investment will provide extra facilities. However, there is still concern at the Park and Newsham hospitals about the future of patients. Although most Opposition Members would admit that facilities in the old Victorian hospitals at Newsham and Park are far from the greatest, they are at least better than none at all.
  There is concern that, faced with tie challenge of growing numbers of people in the fastest growing age group, the over-80s, and with increased longevity we shall need more facilities rather than fewer. I ask the Government not simply to do what they are doing now, welcome though that is, but to think again about the future of Park and Newsham and to listen to what many of the hospital staff are saying.
  There is concern about the future of the National Health Service. Much of it stems from the publication of the Think Tank report. Although the Government and the Prime Minister said that the Think Tank report was being abandoned, many were left wondering whether it had been buried for good. The 5 per cent. abatement in unemployment benefit, which was, admittedly, restored later, was an element in that. There have been cuts in the provision of social services. Liverpool alone has lost more than £100 million in rate support grant in the past four years. The Minister knows what effect that has had on all the services, including education, housing and social services. I do not blame the Government, because the same problem that I have mentioned — the loss of
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  population in the past decade—is at the heart of their actions. We have lost people, as well as our rate support grant and funds.
  That brings me to the loss of funds by the local area health authority and some of the effects that that will have. It will lose more than £1 million. Two weeks ago I met Leslie Pocock, the chairman of the area health authority, to talk about the effects of that loss. An effect that I discussed with the dermatologists at the new teaching hospital a month ago is that a post in consultant dermatology has not been filled. Filling that post could make a great deal of difference to the second largest group of people after casualties using that hospital. It will require a relatively small sum of money, yet, because of the savings that it has been told to find, the area health authority has been unable to fill the post.
  Many of those affected could be at work, and doing useful things. I am glad to say that 80 per cent. of Liverpool's population is still in work, despite massive unemployment. Some are currently out of work because they cannot get treatment. There is a long waiting list in the dermatology department, stretching into 1984.
  Professor Vickers and other dermatologists, including Dr. Julian Verbov, expressed great concern about that. Although the area health authority is also concerned, it says that some of the problems stem from cuts that it is trying to cope with. Mr. Pocock also told me in a letter that there will undoubtedly be effects on the health of the people of Liverpool as a result of the reductions in expenditure. I should like the Minister to tell us what those effects will be, and where the cuts outlined in the area health authority's report will be made. He is likely to approve that report.
  I associate myself with the remarks of the hon. Member for Riverside. I hope that all Liverpool Members will be properly involved in the discussions before the Minister arrives at conclusions on these matters.
  The NHS was founded on the principle of provision regardless of resources. However, there is a feeling that we are moving towards an American-style private insurance system. That worries people because it will be based on the ability to pay; it will be based on wealth. The NHS has always been managed on the basis that one will receive health treatment regardless of the means at one's disposal. In a part of the country where so many people are either out of work or are low wage earners, it will not be possible for them to invest in private insurance medical schemes. The Minister must realise what the consequences would be on the personal well-being and health of many Liverpool people if we were to move significantly away from the NHS, which my right hon. and hon. Friends and I support.
  There is concern in Liverpool about the possibility of the closure of the Duchess ward in the women's hospital. As the hon. Member for Liverpool, West Derby (Mr. Wareing) said, many women rely on the services of that hospital. I have been inundated with mail from people who are concerned about its future.
  It has been suggested that Donald Wilson, the chairman of the regional health authority, acted almost improperly by not creating a great fuss over the impending cuts in the Health Service. From my meetings with him a few weeks ago, I believe that the facts are not as they have been related to the House. Mr. Wilson acted with sincerity. He decided not to make a public fuss because he believed that, given the population decline that Liverpool suffered, the

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  Government had gone out of their way to try to minimise the likely reductions that the regional health authority would have suffered. For that reason, he believed that it was not politic to make too much fuss about the impending cuts in case they were worse than he thought they would be. We must respect his sincerity and the reasons for his action.
  The position of the regional health authority is perhaps exemplified in the way in which it is trying to dispose of land in Liverpool. I should like the Minister to consider that matter. There is a piece of land in my constituency that is just off Aigburth road, known as the Crofton hospital site. The land was given in the 1920s by the Rathbone family for the people of the district to use as a tennis club and allotments. Young people from all over the area benefited greatly from it. The land was subsequently vested in the regional health authority and has been held in trust by it since. Because it followed the directive issued by the Department of Health and Social Security and the Department of the Environment, the land is now to be sold on the open market. Tenders have been invited. There is likely to be speculative housing development.
  The community will be robbed of a much-needed facility and amenity. It is Crown land. One could argue that the ruling by the Attorney-General earlier this year about the enhancement of the value of Crown land should apply in this case, as it did at the Fazakerley hospital site, and that the regional health authority is acting illegally in trying to develop it. One can also argue that the land should have remained for the use of local people as a facility. It helps many people to stay in good health. Many of them will have to rely on the services of the NHS if they do not get the chance of using the recreation facilities that the land currently provides.
  It is appalling that a regional health authority has to act as a property speculator to try to raise the funds to carry out the business that it should provide regardless and that should be financed via taxation. It should be centrally financed. It cannot be right that the regional health authority chairman has to auction off plots of land to try to improve geriatric facilities. That is the dilemma that he described to me.
  Many general practitioners in the inner city have long lists of patients. They say that if they could have the assistance of auxiliary nurses, and if they could be given improved facilities in their practices, they would be able to offer a better service to the people in their communities. One major problem that they face is security. In Liverpool we have a massive crime rate. There is one home broken into every 20 minutes and there is a crime committed every four minutes.
  Many of the crimes involve the stealing of drugs. Hon. Members have already referred to that problem. The Government should give serious consideration to providing increased security for general practitioners.
  Mr. John Patten: I am pleased that the hon. Gentleman has referred to the problems facing general practitioners in inner city areas. A week or 10 days ago, my right hon Friend the Secretary of State, following the report of Professor Acheson, announced a programme costing £9 million in the next three years which would
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  assist general practitioners in inner cities with problems relating to practice premises, security and nursing services.
  Mr. AltonI am grateful to the Minister for his remarks. I will communicate that fact to local general practitioners in my constituency. I hope that many of them will take advantage of the new facility.
  Liverpool city centre faces a major crisis, not just from a loss of population but because of the decision to create what was regarded as the great white hope—the new teaching hospital in Prescott street. Everyone on Merseyside admits that the great white hope has become a great white elephamt. The building of the hospital led to the various subsequent decisions to try to rationalise—a word used by many health chiefs—many other services which are required and rooted in local communities.
  Throughout the country, about 9,000 qualified nurses are on the dole. The Treasury admits that the cost of unemployment is running at more than £17·5 billion annually. Each qualified nurse costs more than £5,500 to keep on the dole. That is a crazy waste of resources when so much work remains to be done. We should be expanding what I may call for want of a better phrase the caring industry.
  Liverpool faces two great challenges. First, it faces the massive challenge of an aging population with increased health needs. Secondly, it has a massive unemployment problem. We should take those two challenges together. We should be providing jobs for people who can care for those in greatest need.
  7.12 pm
  Mr. Terry Fields: Unlike the hon. Member for Liverpool, Mossley Hill (Mr. Alton), I have not had the opportunity to meet top hospital officials and consultants, but I have certainly spoken to people at the sharp end—the young, the old and those on the estates who are suffering from ill health because of the health cuts that have occurred in the Liverpool area. Many people in valium valley suffer from nervous disorders, chest, heart and lung complaints as a direct result of bad housing and general unemployment in the city. We can only condemn past administrations as they are responsible for the deplorable conditions in housing stock, and that is one reason why people suffer from bad health. During the past eight years the local authority built no properties for rent in Liverpool. That fact has added to the problems faced by ordinary people.
  I wish to deal with the drug problem. Heroin addiction is rife in Liverpool. Police resources are stretched in dealing not only with problems of drug addiction but with drug-related crime. Some young people who suffer from a drug habit—we must not forget the pushers—must find, by some method, £200 a day to feed their habit, thereby putting an extra demand on all resources. The Government have cut back on the miserly and niggardly sum which they provide for the care of drug addicts. That amount of money set aside for drug treatment would not even scratch the surface of the problem in Merseyside, let alone deal with the national problem.
  Mr. Parry: Will my hon. Friend tell the the House of the growing problem of solvent abuse, especially among young children? The director of education in Liverpool has confirmed that such a problem exists.
  Mr. Fields: My hon. Friend is correct in intimating that statements have been made about that matter. The problem is severe and must be dealt with. When we discuss bad health and nervous disorders, we must examine the root cause. One of the reasons has been the industrialisation of Liverpool during the past decade.
  On the one hand, the Liverpool health authority is reacting to the fear and blackmail that the Government have imposed, by their monetary policies, not only on the health authorities and on the workers, but on every other authority with which they are involved, and especially on management and business.
  We must pay regard to the non-accountability of some of those who serve on the health authorities, and who are, at the behest of the Government, carrying out the cuts. The cuts emphasise the scale of the problem in hospital treatment in Liverpool as well as increased demands on the social services. Manufacturing industry has been decimated. The decline has been almost 40 per cent. in the past decade. All four major industries in the city have suffered job cuts. I appreciate that it may seem that we are talking about the decline of trade and industry, but those are the root causes of sickness, nervous disorders and the rest.
  Many of the large multinational firms have pulled out of Liverpool, and that has created a problem of fear and anxiety. The general psychology affecting those on the Liverpool health authority is fear for the future.
  The Government must be warned. The fight back has already started in Liverpool. Although people are on their knees, they are prepared to struggle and to take on the Government and those acting on their behalf in their attacks on the Health Service. We must discuss the scale of the attacks. Liverpool has suffered a cutback of 422 hospital beds, including 20 per cent. of medical and geriatric beds. There has been a cut of 25 per cent. in surgical beds and 22 per cent. in children's beds. Also, 273 psychiatric long-stay beds have been phased out at Rainhill hospital, on the outskirts of Liverpool. The planned increase in day hospital beds for the elderly and mentally ill is a long way short of the recommended level. Newsham general hospital and Princess. Park hospital are to be closed. The Liverpool health area will suffer staff cuts of about 769. Having spoken to those involved, I believe that the figure will be closer to 1,000.
  The Government say that the gap in health service will be met by an improvement in the social services provision as stated in their document "Care in the Community". I wish to deal with some of the charges as they affect present-day Liverpool society. The dramatic cut in hospital beds can only lead to a decline in patient care. Patients will be discharged early because of the need for hospital beds only to be met by inadequate social services support outside. The already long waiting lists will increase and loss of life will occur because of the inability of the hospitals to deal with the increases demand.
  Old-age pensioners are increasing in number. At the same time, two geriatric hospitals have closed which will create an intolerable demand on the remaining beds. Community and hospital based care for the elderly will be especially badly hit. The hospitals need replacing and not closing down. Linked with the cuts in beds are cuts in staff, resulting in a decline in standards of care for those in hospital. More important for those employed in the hospitals will be the intolerable working conditions caused by the cuts. Everything is dependent on the planned
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  expansion of the social services. The Government are already hacking away at the social services. The plan therefore falls apart immediately. The closure of hospitals and the loss of nurses and doctors will, supposedly, be covered by staff supplied from outside agencies. Such agencies do not exist. As a consequence, the health of our people will suffer.
  We welcome the injection of capital into Liverpool. But much work remains to be done. Bricks and mortar are no substitute for caring personnel in hospitals of all types. Despite what the Government are attempting, I call on my local authority to ask the Merseyside health authority and the DHSS to identify Liverpool's special problems with the aim of achieving a more just allocation of funds to the Liverpool area.
  I have spoken not to the consultants but to the workers, to NUPE and to COHSE. They are prepared to fight and struggle for their jobs, irrespective of whether the Government or the regional health authority are trying to take them away. They care about the people in their hospital beds and the people of Liverpool who will lose the services. They are prepared to take on the Government.
  Mr. Parry: My hon. Friend is clearly aware of the Health Service trade unions' determination to oppose the closures and job losses. I am sure that he, like me, will support them if they are forced into industrial action or even the occupation of wards.
  Mr. Fields: My hon. Friend is absolutely correct. We are on record as saying that, although we have to fight the Government's legislative proposals in the House. Liverpool Members will be back on the picket lines with those workers defending their jobs and the services in our area.
  My hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) is right about privatisation. One day we shall expose in the House the web of corruption and deceit that it entails. Grand Metropolitan has tendered for cleaning services throughout the country, and it is no coincidence that BUPA has shares in Grand Metropolitan. The Government are selling off the hospital services to private industry and at the same time subsidising their rich backers and friends.
  Mr. John Patten rose—
  Mr. Fields: I have nearly finished.
  We are prepared to fight for the workers. We warn the Government now that their policies will lead to confrontation in areas such as Liverpool. We shall he four square behind those workers.
  7.21 pm
  Mr. Robert Kilroy-Silk: I congratulate my hon. Friend the Member for Liverpool, Riverside (Mr. Parry) on his initiative in seeking an Adjournment debate on this subject and on his good fortune in not just obtaining it, but obtaining it in prime time and for four or five hours instead of half an hour. Adjournment debates rarely take place in such circumstances. The opportunity has thus been given not only to my hon. Friend the Member for Riverside but to others to speak at first hand about the social, economic and health problems of Liverpool and Merseyside, to bring home forcefully to the Minister not just the problems of the area, but the views of Members from all parties representing Liverpool and Merseyside constituencies—
  Mr. Terry Fields: Where are the Tories?
  Mr. Kilroy-Silk: —and to insist that the Minister replies not with the platitudes that we have come to expect from him and his colleagues, but with serious proposals to deal with the fundamental and deep-seated health problems of our area.
  As I am sure you are aware, Mr. Deputy Speaker—I hesitate to point it out in case you are not—the motion refers to Liverpool, and I do not represent a Liverpool constituency. I represent a Merseyside constituency, but my hon. Friends from the city will acknowledge that the overwhelming majority of my constituents seek and receive their health care in Liverpool and its hospitals. Therefore, I am as interested in the subject as they are and my constituents are as concerned and as deprived as theirs.
  My hon. Friend the Member for Riverside and my hon. Friends the Members for Liverpool, Garston (Mr. Loyden), West Derby (Mr. Wareing) and Broadgreen (Mr. Fields) have all referred to the social and economic deprivation of Liverpool and Merseyside. That is perfectly proper as we cannot adequately deal with the Health Service in the region unless it is set in the context of the region as a living entity.
  It must be acknowledged that Liverpool is increasingly becoming the most deprived and disadvantaged of our cities and Merseyside the most vulnerable of our regions. As has already been said, hardly a day goes by without further substantial job losses and closures of large factories. Added to the deprivation and the inadequacy of employment opportunities and educational and housing facilities, we have a seriously underfunded Health Service. The Under-Secretary of State shakes his head, but that has always been so. If he bothers to consider the facts, which have no doubt been provided for him, he will find that historically Liverpool and Merseyside have been under-resourced. One of the reasons for the RAWP programme is to redistribute money from the better off regions, especially London and the south and south-east, to regions such as Merseyside and the north-west which have not had their fair share of the nation's resources in the past.
  My hon. Friend the Member for West Derby referred to the Black report and the picture painted by it of the inadequacies in Health Service provision in the region. The Minister persists in shaking his head, so I shall give him the facts that he provided to the House. He produced evidence showing that there was already a deep and serious crisis in the Health Service on Merseyside. In a written answer on 28 October he said that on 30 September 1982 there were 2,018 urgent cases on the hospital inpatient waiting list in the Mersey region, of whom 1,418 had been on the list for more than a month. They may be figures only to the Minister, but to us they represent constituents in pain, distress and agony. The Department determined that they were urgent cases. The definition is not mine but that of the Department and the regional and district health authorities. It is intolerable that so many of our constituents should have to wait so long for urgent inpatient treatment.
  Mr. John Patten: I share the hon. Gentleman's concern about those figures as representing individuals not just statistics, but I remind him that inpatient waiting lists were shortening rapidly between 1979 and 1982—until the health workers' strike. Waiting lists were shorter in 1981 than for many years previously. They are still shorter
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  than they were in 1978, but unfortunately we are still making up the backlog. The National Health Service suffered as a result of the strike, but patients suffered far more.
  Mr. Kilroy-Silk: I knew that the hon. Gentleman would say that. He made the same point in a written answer on 8 November, to which I shall refer in due course, but he has not answered my question. I was not going into the reasons why the waiting lists were so long. I was simply stating that they existed. If the numbers have increased slightly due to industrial action, I do not seek to deny it, but that does not answer the point that there were and would be in any event a large number of people waiting for urgent inpatient treatment. It is scandalous that at such a time the Government make pious noises about the Health Service being safe in the Prime Minister's hands while cutting expenditure on the service to the greater detriment of our constituents.
  The 2,000 or more urgent cases are not the whole picture of the waiting list on Merseyside. There are 35,656 more individuals waiting for inpatient treatment, of whom 11,630 have been waiting for more than a year. Several thousand of those are fairly urgent cases. All those people are still waiting not because there was industrial action a year or more ago but because of the inadequacy of the services on Merseyside. They will have to wait in greater distress, pain and agony because waiting lists will increase and waiting time will lengthen as a result of recent Government action.
  A more graphic demonstration of the problem is provided by the figures given by the Minister in a written answer to my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) on 8 November. In St. Helens and Knowsley district health authority there were 3,558 people waiting for hospital treatment on 30 September 1981, but on 30 September this year the figure was 13,288. That is a dramatic increase in the number of my constituents in that district health authority area who are waiting for hospital treatment. The Minister does not like the figures, but they are important. Whatever their origin or cause, the figures show the scale of the problem and are a starting point. If we go behind the figures—[Interruption.] If the Minister wishes to intervene he knows the procedure. I shall gladly give way, but I cannot answer him while he is muttering.
  Mr. John Patten: I am sorry for having shouted across the Chamber to the hon. Gentleman. I should have asked him to give way. The hon. Gentleman is talking about the need to deal with the problems that face us. He says that those statistics are a measure of the problem. That is an incontrovertible fact. However, that demonstrates more clearly than anything else the need for the National Health Service not only to spend adequate sums of money but to spend that money wisely, and the need for a more efficient National Health Service, which the Government are committed to bringing about.
  Mr. Kilroy-Silk rose—
  Mr. Deputy Speaker (Mr. Paul Dean): Order. I hope that the hon. Gentleman will not stray across the border. We are discussing the budget of the Liverpool area health authority.
  Mr. Kilroy-Silk: You know me well enough, Mr. Deputy Speaker, to know that I never stray in any circumstances.

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  The Minister has made a pertinent point. I do not know whether he is accusing the doctors, nurses and ancillary workers in the Health Service of being inefficient. I would not make that accusation, and I doubt whether his hon. Friends would — [Interruption.] That is what the Minister implied. He said that the figures point to the inefficiency of the National Health Service. The NHS represents people — patients, doctors, nurses and ancillary workers. If the Health Service is inefficient, it must mean that they are inefficient. I have no evidence of that, but I know that the only answer to the problem of long waiting lists is an increase in resources.
  I shall give the House an example from Liverpool, just to prove that I shall not stray from the subject of the debate. My maiden speech in the House dealt with the problems of children with holes in the heart—they were called blue babies—who were dying in my constituency and in Liverpool because of long waiting lists. That did not need to happen, as was confirmed by the fact that London hospitals offered me places for my constituents because they had empty beds and idle nurses and doctors. With the help of Ministers in the Labour Government, I transferred to London dozens of young people who would otherwise have been disabled or who would have died because of long waiting lists in the north-west. The problem was recognised and we spent more money to provide new surgical facilities in Liverpool and Manchester. That was a clear demonstration of the inadequacy and paucity of services in our region compared with those of other regions. It showed that our region had been neglected and poorly treated.
  If the Minister wishes to go beyond the figures, as he undoubtedly does because they are embarrassing, we can examine reports on the conditions in some Liverpool hospitals, most notably the Royal Liverpool hospital, which is the one—other than perhaps the hospital at Walton—that is most used by my constituents. I am sure that the Minister has seen the article in The Sunday Times of 14 August this year, which reported allegations that, because of the shortage of beds, the Royal Liverpool hospital had to turn away patients from the accident and emergency units. When those patients were finally admitted, they were more seriously ill than when they first appeared at the units. Does that show an efficient Health Service or adequate services and resources in the area? Of course not.
  The problem has become worse. We now hear of consultants sending out
  "scouts to walk round the wards in a bid to find"
  beds for their patients. We have heard of
  "the controversial practice whereby in-patients were moved into chairs during the daytime while their beds were used for day surgery cases."
  In its report on the practice, the General Nursing Council described it as a "common operational feature" and "an unsafe practice". That happened in a major hospital in Liverpool because of inadequate resources. The same report stated—the point was also made by my hon. Friend the Member for Riverside — that the bed occupancy rate was 96 per cent. That is a staggering figure when compared with any other hospital in Britain. It is no surprise that Dr. Austin Carty, the chairman of the Royal Liverpool hospital, in the article in The Sunday Times, said:
  "We are in a state of crisis."
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  The crisis involves 37,000 people on the waiting list, several thousand of whom are urgent cases and about 1,000 of whom have been waiting for more than a month in great pain and distress. Yet the Government say that they will cut resources. Whatever the Minister and his senior colleagues in the Department may say, the health authority is not keeping pace with demand. The Minister knows very well that the derisory 1 per cent. increase in National Health resources does not compensate for the increased demands either of an aging population or of technological change. In real terms, on the scale of increase given by the Government, the Health Service will be substantially worse off during the next two years, and, if the Government go their full term, at the end of the next four years, worse off than it was when they came to office. The Health Service is not safe either in the hands of the Minister or those of the right hon. Lady who put him where he is.
  Unfortunately, despite that background, Mersey regional health authority and Liverpool district authority, which are staffed by Tory place men, have not only been prepared to accept and to impose cuts on the Health Service, but have enthusiastically and gleefully accepted them. It was a disgrace to them, and it caused me great disgust, that the Mersey authority was the first in Britain to acknowledge publicly that it would accept the cuts imposed by the Government and would co-operate in imposing them.
  Mr. Loyden: Is my hon. Friend aware that the only people in the regional health authority who opposed the cuts were its Labour members?
  Mr. Kilroy-Silk: My hon. Friend is correct, and the Labour members of the regional health authority and the district health authorities still oppose the cuts. They know, as do my hon. Friends, what will happen at the sharp end if the cuts are implemented.
  Mr. Alton: I am sure that the hon. Gentleman will accept that others outside the Labour party are also opposed to cuts in the Health Service, but they recognise that the regional health authority has been placed in a major dilemma. It is not just a question of talking to the workers, important though that is. Those who have taken the trouble to talk to the chairman of the regional health authority realise that he has been placed in an impossible dilemma. He should not be vilified and criticised for trying to discharge his duties to the best of his ability and in a sincere way.
  Mr. Kilroy-Silk: I am sorry, but I disagree with the hon. Gentleman. Other people may oppose the cuts, but they are not doing so as effectively or vociferously as Labour Members both in the House and outside. The hon. Gentleman is saying that one should understand the difficulties in which the chairman has been placed by having to impose these cuts. I am sorry, but the problems he faces in imposing the cuts decided by his friends in Whitehall and Westminster are nothing compared with the problems that confront my constituents, who will be in pain, distress, end up disabled and die while still on the waiting lists because the chairman of the regional health authority has been embarrassed. My god, we should be talking about something more important than the slight embarrassment of a Tory chairman of a regional health authority.

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  We are talking about the health and lives of our constituents, for whom it is our duty and obligation to fight. Whatever his political point of view, one would have expected a regional health authority chairman to have taken the same view and to have been prepared to fight to sustain these services. He has at his fingertips a clear picture of the demands that are made and the lack of resources to meet them. He must know better than anyone how irrelevant these cuts are and how damaging they will be to the Health Service on Merseyside and the welfare of the people there.
  Not only are we damaging the Health Service, but jobs are being lost. The regional health authority estimates 500, but according to every other informed estimate, including the trade unions, the figure is 900 to 1,000. That is a disgrace. It is a scandal that at a time when 37,000 people are on the waiting lists, thousands of whom are awaiting urgent surgery, we should as a deliberate act of policy put nurses and doctors on the dole. What kind of society is that?
  Any reasonable or sensible community would admit that on Merseyside there is a horrendous problem of mass unemployment, yet there are empty hospitals, unused beds and people in pain and distress on the waiting lists. It is only sense to put the doctors and nurses to work in those hospitals and to use the beds for the alleviation of the distress and suffering of those individuals.
  As we heard in the previous debate, the Government are receiving £8,000 million more a year in the tax take from oil revenues than the Labour Government received when in office. With that money they could pay the entire salaries of every person in the health and social services. They could pay for every doctor, nurse, ancillary worker, home help and physiotherapist. That is the amount the Government received in 1982–83 from North sea oil revenue taxes over and above what the Labour Government received in their last year of office.
  That is the scale of the problem and the size of the resources at their disposal, yet they spend £17,000 million a year to keep people in idleness on the dole and on bombs and weapons of destruction both here and abroad. That shows the disgrace of the Government's health priorities as well as their general economic and industrial policies. The way in which they have treated Merseyside and the rest of our people who depend on the NHS is nothing less than criminal.
  Nowhere is that better demonstrated than in the priority, support and sustenance that they are giving to the development of private medical practice and their opposition, which they manifest on every occasion, to the NHS. They are not content just to snub it and treat it with contempt, like the Prime Minister who constantly goes out of her way to belittle its achievements and efficiency. They are doing everything possible to create a crisis of confidence in the NHS so that more people will take out private medical insurance.
  That is not an accident. It is a deliberate policy of trying to convey an impression that the Health Service is being dismantled and destroyed so that as a consequence frightened people will financially support the private medical sector. It is no accident that the NHS is declining at the same time as private medical practice is increasing.
  Mr. Terry Fields: Is my hon. Friend aware that a private hospital in Peterborough is being used for NHS patients? Earlier my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) mentioned his wife's hysterectomy. The current rate in that hospital for such an operation is £2,000. That is the threat posed to our constituents as a result of private medicine.
  Mr. Deputy Speaker: Order. I hope that the hon. Member for Knowsley, North (Mr. Kilroy-Silk) will not refer to Peterborough, which is a long way from Liverpool.
  Mr. Kilroy-Silk: It is, however, interesting to compare Peterborough with Liverpool, and my hon. Friend makes an important point.
  It is all very well for the rich and privileged in Peterborough if there is a decrease in NHS facilities, but it is no good for my constituents in Kirkby, Cantril Farm, Prescot or Knowsley village. They do not have the wherewithal to take advantage of the marvellous new hospitals that are being built throughout the country, and neither do the constituents of my hon. Friends from Liverpool.
  That is why we support my hon. Friend the Member for Riverside. That is why we are present tonight. It is not surprising that we feel deeply and strongly on this issue. Our constituents can go nowhere other than the NHS. Our duty, which we shall not shirk, is to ensure that each service provided is the finest that can be given. If the Minister has any real feeling for the Health Service, he will do everything in his power — and back it up by providing the money—to reduce the waiting lists and waiting time for the people of Merseyside substantially, permanently and immediately.
  7.47 pm
  Mr. Tony Marlow: The hon. Member for Knowsley, North (Mr. Kilroy-Silk) spoke eloquently of the people who used the hospital service in Liverpool. He spoke of their concerns, delays, pain and suffering and the concern of their families. I assure him that hon. Members from other parts of the country feel just as deeply about their constituents. I also assure him that my hon. Friend the Minister is concerned to ensure that the Health Service in Liverpool is among the finest in the country.
  The hon. Member for Knowsley, North has identified the problems and seeks solutions to them. He wants resources for the Health Service. We all do. However, there are more resources per head of the population for the Health Service in Liverpool than, for example, for the Health Service in Northampton. Therefore, in many respects Liverpool is not under-resourced.
  There are two ways of obtaining those extra resources. We can either ask the taxpayer for more money—
  Mr. Gerald Bermingham: Does not the hon. Gentleman agree that in Northampton, an area that I know fairly well, certain psychiatric services are available—at St. Andrews hospital among others? Is he further aware that the psychiatric hospital at Broadgreen in Liverpool is not scheduled for development until about 1992? Therefore, does he not agree that the provision of psychiatric services in the Liverpool district health authority area is vital and necessary and that eight to 10 years is too long to wait?
  Mr. Marlow: I cannot be specific about the point that the hon. Gentleman makes, except to say that the provision of adequate psychiatric services in Liverpool, as elsewhere around the country, is obviously very important.
  If I can come back to the point made by the hon. Gentleman, it is a question of resources. How are we going to get the resources? There are two ways. One way is to go to the taxpayer to ask him for more resources, but before we do that we have got to look at what we are getting at the moment.
  Mr. Bermingham rose—
  Mr. Kilroy-Silk: Liverpool.
  Mr. Marlow: I am coming to Liverpool. This Government, in general, are providing, for every £5 we asked from the taxpayer in 1979, £1 extra. That is a considerable amount of money that the taxpayer is paying towards the hospital service in Liverpool and elsewhere. We are asking every person in work for £14 a week in taxation for the Health Service. We are asking every family of four for £20 a week in taxation towards the Health Service. We have 200,000 more people in the National Health Service than we had 10 years ago. The resources are there and must be there in Liverpool as they are anywhere else.
  We must concentrate on the efficient and effective use of those resources. Goodness me, people in the Health Service work and they work hard, and I am sure that they work as hard in Liverpool as they do anywhere else. The people are there and they want to do an excellent job for their patients. Those resources must be better used.
  I shall give an example to the hon. Member for Knowsley, North so that he can take it back to Liverpool and use it there. In Northamptonshire, we have moved from having one area health authority and two district health authorities to having two district authorities. In the changeover, at the administrative, bureaucratic level there was no saving in staff, which should have been effected. There must be the scope for savings there so that the money can be spent on patient care. There must be scope in Liverpool and elsewhere for savings on bureaucracy, secretaries and administration, so that the money can be spent elsewhere. If the hon. Gentleman were to ask anybody in Liverpool in the Health Service whether there was any waste of money in the Health Service, that person would have to say, in all honesty, "There is a great deal of wasted money. There is a great deal of inefficiency."
  Mr. Kilroy-Silk: I am sorry to slop the hon. Gentleman as he was getting steamed up—we all know how he gets steamed up. Can we have an example of the waste in Liverpool?
  Mr. Marlow: I said to the hon. Gentleman that if he were to ask anyone in Liverpool where there was any waste-
  —
  Mr. Kilroy-Silk: Give an example.
  Mr. Marlow: I shall tell the hon. Gentleman where I expect there will probably be waste. Although I cannot give specific items, I can say where there might be waste. In terms of secretarial work in the health authorities, if the hon. Gentleman went round and were to see how many secretaries were employed and how heavily they were employed, he would probably find that savings could be made that could be spent on patient care. He would
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  probably find that there are consultants who sometimes indulge in an expensive course of treatment when the best buy might be a different course of treatment, so that more money could be made available for the kidney patients in his constituency.
  Mr. Kilroy-Silk: The hon. Gentleman is fantasising.
  Mr. Marlow: If the hon. Gentleman thinks that I am fantasising, Liverpool must be quite different from anywhere else in the country. If one asks any other health authority, or anyone who works in a health authority anywhere in the country—
  Mr. Alton rose—
  Mr. Kilroy-Silk rose—
  Mr. Marlow: I shall not give way because I am just about to finish.
  I advise the hon. Member for Knowsley, North, if he is concerned, as I am sure that he is, for the health and welfare of his constituents, to follow the course of the optimum utilisation of the Health Service resources in his area. That is the way in which he should move and that is the signal service that he would be able to do to his constituents.
  Mr. Bermingham: Clutching at straws.
  Mr. Marlow: I suggest to the hon. Gentleman that he should go and clutch at a few straws in his own constituency because he will find that some of those straws will have silver linings, if not gold ones, and the money and the resources can be made available.
  The Griffiths report has put forward suggestions and proposals have been made for increasing efficiency and the management skills in the Health Service. I suggest that the hon. Member fo Knowsley, North follows that up for all he is worth in the interests of his constituents and the Health Service.
  7.55 pm
  Mr. Gerald Bermingham: I listened to the hon. Member for Northampton, North (Mr. Marlow) but I did not comprehend what he said, because I cannot reconcile it with statistical facts. As I understand it, we spend approximately 7 per cent.—I am open to correction—of our total costs on administration. That figure is lower than for many equivalent European countries and one that reflects a good rate of return.
  I mention that purely to answer the comment made a few moments ago, as the hon. Member for Northampton, North would not give way when I asked him to do so to give him the figures.
  Mr. Dave Nellist: Is my hon. Friend aware that the administrative costs in hospitals in America are about 25 per cent. of the total costs?
  Mr. Deputy Speaker: Order. I hope that hon. Members will not attempt to stray from the debate, which is on the Health Service in Liverpool.
  Mr. Bermingham: I have no intention of straying, but my hon. Friend is correct.
  Mr. Marlow: If the hon. Gentleman wants to put the matter accurately, I suggest that he looks carefully at some Health Service accounts. They would cut out the administrative expenditure, as he says, at the level of 7 per cent. If he goes further through those accounts and asks

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  how much is spent on secretarial, accounting procedures and various other things, he will find that those figures come well above 7 per cent. It depends where one draws the line.
  Mr. Bermingham: I think that the point has already been well made.
  It is a well-established and well-known fact that psychiatric medicine is a growing part of the Health Service, but it is a Cinderella part. I see that the Minister is nodding his head in agreement. Investment in this part of the Health Service is desperately needed, yet we cannot invest because once a capital structure is built there will be administrative and running costs, which means increased funding, and so on, and the funding is not available without taking it from another part.
  As the Department is well aware, on 24 October I asked a series of written questions, reported in column 59 of Hansard, about psychiatric services. One of the matters that I raised in particular was that of psychiatric services for the elderly. It is regrettable to report that in that Cinderella part of our society there are an increasing number of people in desperate need, and in Liverpool and Merseyside generally those numbers are steadily rising. I shall have to concede that £6 million of additional moneys has been put in last year, but that is just a drop in the ocean of need.
  Mr. John Patten: It is a start.
  Mr. Bermingham: It is a start, but it is nowhere near adequate, and that £6 million would not even be adequate to deal with the needs of Merseyside, Liverpool in particular. That is the background to our debate.
  The development of psychiatric services in Liverpool has a direct relevance to my constituency because it is proposed to build a psychiatric unit in the Broadgreen hospital within the Liverpool conurbation. I am told that even if planning started tomorrow, it would be at least one to two years before the first sod had been cut in the development. It would then be, roughly, another six to eight years before the unit was ready. The proposed unit at Broadgreen is pencilled in for 1992, and we are in 1983. With the growing problem, that is the suggested solution for Liverpool. I hate to say that it was suggested that the unit should be put near the mortuary, and I leave it to the House to draw its own conclusion on my feelings about that matter.
  This is a part of medicine that is neglected. As a result, Liverpool patients are sent, as the Minister will be aware, to Rainhill, another hospital in my constituency. It needs considerable capital moneys spent upon it. The March intake of trainee mental health nurses, of which we are desperately short, has been deferred. There is a growing problem, so training is stopped. That directly involves patients in Liverpool. They have to go to that hospital, which is about 13 miles away.
  The Government may admit that the facilities and treatment available for the mentally infirm and elderly mentally infirm are inadequate and that further investment is needed, but they then talk about funding regions and districts in such a way that hospitals will not be built until 1992. How are we to meet the need? What is to happen to the people of Liverpool between now and 1992? Where is the treatment to come from? Can such a policy be right?
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  Much has been said about the availability of resources. We all know that they are there, but it is just a matter of priorities. In our society, priority should be given to looking after the sick, the disabled and the elderly. The Government should accept that our mental health services are poor. We should be ashamed of the facilities now available.
  Mr. John Patten: I have listened carefully to the hon. Gentleman. Setting aside his general strictures on the Government's policy towards the National Health Service in the Liverpool region, will not he recognise that there has been a massive change of attitude towards mental illness and a great structural change in the way in which mental illness is treated? Rightly, there has been a decline in the number of large long-stay hospitals and an increase in care in the community. However, in all reason, such a change cannot be achieved overnight—or perhaps even within a considerable number of years—whichever party is in power.
  Mr. Bermingham: I welcome what the hon. Gentleman has said. I agree that the philosophy about long-term, long-stay patients has changed and that that change was much needed. However, that requires resources. We must have various facilities, such as secure and intermediate units in the region. The Minister will be well aware that the first such unit was recently opened in my constituency. It has 40 beds, which could easily be filled. However, we need more than that in Merseyside and Liverpool. The patients exist and the catchment area will be very wide. There are not enough facilities. Modern thinking says that there should be treatment in the community. However, that requires district and other nurses, halfway houses, feed-back accommodation, outpatient clinics and a thousand and one other facilities. For all of them, we need resources.
  The Government are committed to cutting the funds of regional and district health authorities, so how can the desperately needed resources be found? There is no logic to it, unless it is said that psychiatric care means that we must give up renal units, surgery and paediatric units, in addition to cutting staffing levels in major hospitals and general expenditure on health, so that resources can be channelled into that needy area.
  Given the overall position of the Liverpool area health authority, it is obvious that there is no way in which it is possible to marry successfully the services that are needed with the funds that are provided. The need far exceeds the funds. That health authority has had its funds cut. It does not have adequate funding with which to meet the area's needs.
  The subject of mental health is dear to my heart. It directly involves my constituency. The principle that I enunciate tonight is simple. In a caring and civilised society, the mentally handicapped and sick need the investment and resources that will give them the health care that they deserve. I lay this charge at the Government's door. They walk a path to an uncivilised society.
  8.4 pm
  Mr. Eric Heffer: This is the first chance that I have had to speak on Merseyside affairs from the Opposition Front Bench since being appointed to my job by the new leader of the Labour party. I do not have

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  a specific brief that deals with national health and medical matters. Nevertheless, I have an opportunity to join in the debate, and I am delighted to do so.
  I am sorry that the hon. Member for Northampton, North (Mr. Marlow) has left the Chamber, although I did not want to become involved in a great argument with him. However, I am sure that he and the Minister both believe that the NHS must, at all costs, be made more efficient than it is.
  I should like to relate a little story about the previous Minister for Health who visited Walton hospital. I happened to be with him, and met him together with the shop stewards and representatives of the unions and management. I went round the hospital with him. In a geriatric ward he became rather angry, saying that there were too many people in it. He said that they were staying there for too long and that people should be returned to society much more quickly. I had to point out to the Minister that many of those old people had left houses that were in very bad repair and in a condition that the hon. Gentleman would not like to live in. If patients were returned more quickly, they would have to return to the same rotten, lousy conditions. The next time they came to hospital would probably be their last, because of those conditions.
  The Government have clearly developed a policy that compassion and care should be sacrificed on the altar of efficiency. I hope that that philosophy will be refuted once and for all.
  The Labour party built the NHS in 1948—that is when it came into operation—because it was necessary for our people to have for the first time a decent health service throughout Great Britain. In case there should be any misunderstanding about what the Conservative party did then, I should add that it opposed the introduction of the NHS. It is all very well for Conservative Members to say that the NHS will be safe in their hands. If they had been committed to it from the word go, we might have believed them. I related that story about Walton hospital because it embodies the difference in attitude and philosophy between Labour and Conservative Members.
  Some interesting points have been raised tonight. One of them will no doubt be raised again. It is that Merseyside has the same sort of funding as everywhere else. In reply to my hon. Friend the Member for Liverpool, Riverside (Mr. Parry), the Minister for Health said:
  "In view of the projected decline in the city's population and changes in the authority's catchment area for patients, Liverpool would be considerably overfunded in comparison with other health districts by the end of this decade if no action were taken. The RHA has decided that Liverpool's revenue budget should be reduced by 6 per cent. by 1988–89 against a background of a projected 9 per cent. decline in population." — [Official Report, 24 October 1983; Vol, 46, c. 53.]
  I find this a worrying philosophy.
  Of course there has been a decline in the population, but the hon. Member for Liverpool, Mossley Hill (Mr. Alton) made the important point that we have an ageing population which needs greater care than a younger population. Therefore, it is not necessarily logical to say that because there is a decline in the population the requirement for health care will diminish. It may mean that resources should be shifted from one aspect of health care to another and it could mean that in the long run the amount of health resources needed for Liverpool and Merseyside as a whole will increase because, while the population of Liverpool may decline, the population of the
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  Merseyside conurbation may increase. The hospitals are used by the conurbation and not by the population of Liverpool alone. That is an important point.
  Mr. Parry: I congratulate my hon. Friend on his appointment to the Front Bench to speak on behalf of Liverpool and Merseyside, which he has done for many years. Does my hon. Friend agree that Liverpool has been written off by the Government not only in terms of employment but in health care? Is he aware of the Government's recent decision, which I fully support, to give £650,000 to bone marrow transplant clinics in London but not to give a penny piece to the Liverpool unit which is subscribed to by the ordinary people of Liverpool?
  Mr. Heffer: My hon. Friend is absolutely right. He has underlined an important point that was made earlier in the debate.
  On 8 November my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) asked a comprehensive question. He asked the Secretary of Slate to
  "list the private hospitals in England which offer acute medical and surgical care, giving for each hospital the number of beds and the owner." —[Official Report, 8 November 1983; Vol. 48, c. 57.]
  I looked with great interest at the position in Liverpool and discovered that there are eight private hospitals in Liverpool but that their total number of beds at this stage —I am pleased to say—is 285. I also looked at the waiting list for inpatients for National Health Service hospitals and discovered that on 30 September the number—
  Mr. John Patten: Which year?
  Mr. Heffer: In 1981. The number was 7,172. On 30 September 1982 the waiting list had increased to 8,553. Very few of those people will have enough money to go into the 285 beds in the private hospitals. The people of Liverpool rely almost entirely on the National Health Service. Most of the people in Liverpool want to rely on the National Health Service and they want to rely on the hospitals in their area. They do not wish to go into private hospitals, unless, of course, they are rich and decide that that is the solution for them.
  The Secretary of State announced on 30 September this year the revised manpower targets that had been agreed by each regional health authority. We know that they were somewhat lower than had been originally expected. I shall give the full figures. The staff employed in Merseyside hospitals numbered 44,844. The target for 31 March 1984 is 44,338—a reduction of 506. Those 506 members of staff will not all be administrators; they will be nurses, ancillary staff and doctors, the very people concerned with the care and health of the people. That is why we are so deeply concerned.
  The Merseyside regional health authority has instructed the district to cut the number of jobs by March 1984. The bulk of the cuts will fall in Liverpool and Wirral. The cuts will cost the Liverpool district health authority £1·6 million between now and next March. Above and beyond that figure, the long-term strategy will cost £5·5 million over the next five years, and 735 beds and more than 800 full time jobs will be lost. In practice, the cuts will mean that Newsham hospital in my constituency will lose 15 orthopaedic beds while it has a waiting list of 509. The

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  women's hospital will lose 21 gynaecological beds—one quarter of its total—while it has a waiting list of 629. It must also lose 10 geriatric beds. St. Paul's eye hospital is to lose 11 beds — the waiting list is 275. Alder Hey children's hospital is to lose 24 paediatric and orthopaedic beds—the waiting list is 72.
  I thought that the Government understood the special problems of Liverpool. If we do not have special problems, why have the Government agreed that there should be a Minister with responsibility for Merseyside? One does not appoint a Minister for one part of the country unless there are special problems in it. The fact that the Government have appointed a Minister with responsibility for Merseyside is a recognition of Merseyside's special problems. Some of those special problems have been brought out in this debate. What precisely will the Government do?
  I have been disappointed by the failure of those who make up the regional and district health authorities to make a stand on these issues. I appreciate what the hon. Member for Mossley Hill said about the chairman of the regional health authority, but if I felt that strongly, and if I were facing such a dilemma, I know what I would do—I would resign. If one feels that strongly about something, one gets out of the job and explains publicly why one has decided to do so.
  Mr. Alton: I am glad that the hon. Gentleman phrased his remarks in the way that he did. Does he accept that some of the remarks made earlier tonight about the chairman of the regional health authority were unwarranted? If he were to resign tomorrow, he would say to the hon. Member for Liverpool, Walton (Mr. Heffer) and to other hon. Members that he would be replaced by someone worse, that the cuts would still be made whether he was in the job or not, that he had no party political affiliations and that he was trying to do a good job, just like every other regional health authority chairman in the country. The chairman was trying to cope with difficult problems. Therefore, it is not he who should be vilified as he was tonight.
  Mr. Heffer: Not only the chairman but the whole committee should resign. Of course, I know that the hon. Gentleman is right: it would undoubtedly be replaced. However, it would not be responsible for what is happening. The majority of people in the area would know what was happening if the committee had taken a stand against policies that it could not accept.
  Although the committee has not made a stand, many people recognise that the cuts are not generally accepted. Indeed, a delegation from the British Medical Association recently discussed the matter with the Secretary of State. Members of the delegation said that they were profoundly depressed by the current financial economies and that the cuts would affect patient care. That is the opposite to what the Government are arguing. They claim that they are carrying out efficiency moves to help the patient. It is a strange way to help patients if it means removing doctors and nurses and causing great worry to the personnel in hospitals. Almost 4,500 staff will be lost throughout the country, and many believe that that could be only the beginning. Such a policy has a bad effect on the morale of any organisation.
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  We want answers from the Government. There is a great feeling of distress and anger in Merseyside. People are angry about the high levels of unemployment—the highest in Britain. They are angry about the Government's cut in rate support grant, with its effect on housing conditions. They are angry about what the Government are doing to the NHS.
  If the Government really mean that the NHS is safe in their hands, the Minister should assure us that the Government will tell the regional health authority that it does not have to carry out the cuts. The Minister should assure us that the Government will reverse their policy and initiate inquiries into how improvements can be made to the Health Service in Liverpool.
  8.23 pm
  The Under-Secretary of State for Health and Social Security (Mr. John Patten): In the brief two hours and seven minutes that remain to me to reply to the debate, I shall do my best to answer most of the points raised in what has been an interesting debate! I am grateful to the hon. Member for Liverpool, Riverside (Mr. Parry) for initiating the debate. When he applied to Mr. Speaker for an Adjournment debate, he could not have expected a half-day Supply debate.
  A chance but happy occurrence has led to the House discussing the health problems of one of Britain's major regions. It is not often that we have an opportunity to discuss health care within a regional framework. During the 18 months before I went to Stormont Castle—which I left for the Elephant and Castle—I tried to listen to debates on regional issues. I remember some fascinating debates on the economic problems of the northern region and the west midlands. To my knowledge, this is the first time that we have had an opportunity to discuss the health care problems of one particular region. I hope that fate, the Leader of the House, the Opposition or the alliance will provide us with a similar opportunity in future.
  A good number of hon. Members have taken part in the debate. I pay tribute to the force that lay behind the speech of the hon. Member for Riverside. Two points that he raised caused me special concern. I cannot answer either of them tonight but will write to him as soon as possible. First, he suggested that he had approached the district health authority and asked for public documents, but they were not made available to him. That is a disturbing suggestion. I shall make inquiries and write to him. I also wish to consider in detail his point about the movement of patients between catchment areas — especially young people and children in his constituency — over considerable distances. I do not know the facts about the cases that he mentioned, but again will make inquiries and write to him.
  The hon. Gentleman has given the House an opportunity to look at the whole range of health care problems in the Liverpool region. The hon. Members for Liverpool, Garston (Mr. Loyden) and Liverpool, West Derby (Mr. Wareing) both contributed to the debate. The hon. Member for Liverpool, Mossley Hill (Mr. Alton) struck a balance in his contribution. It was good of him, in his almost bipartisan position tonight, to come to the aid of the regional health authority chairman, Mr. Don Wilson. I believe him to be an excellent chairman who serves the interests of the public to the best of his abilities. It is not seemly to attack people who give up so much of their time and energy to public service for precious little

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  recognition or personal reward. This Chamber is not the place for public attacks on people who do not have the right of reply here.
  The speech of the hon. Member for Mossley Hill was a sharp contrast to that of the hon. Member for Liverpool, Broadgreen (Mr. Fields). I have not been fortunate enough to hear him speak before. I fully appreciate his strength of feeling about the welfare of his constituents and his views about those who work in the Health Service and trade unionists. But I hope that, when he reads his speech in Hansard tomorrow, he will reconsider some of his aspersions against consultants in the NHS. After all, they are at the sharp end. They make physical judgments and undertake surgical operations. They are as important as any other group in the NHS. I do not suggest that they are necessarily more or less important, but they are important.
  Mr. Terry Fields: I do not know why the Minister thinks that I was attacking consultants. I was referring to the fact that the hon. Member for Liverpool, Mossley Hill (Mr. Alton) had been speaking to tops in hospitals. I simply said that I have not spoken to such people but to ordinary working people in the street. I was casting no aspersions on anybody.
  Mr. Patten: I am glad to have that assurance. I have never met a toff in a hospital—
  Mr. Fields: I said "top", not "toff".
  Mr. Patten: I apologise. I have never met a toff but I have met several top people in hospitals.
  The hon. Member for Broadgreen made a serious allegation and I am not sure whether it applies to the Merseyside region generally. He said that there was a corrupt relationship between the private sector and the NHS. If that is the case and he wishes to draw some allegations to my attention. I hope that he will do so either now or subsequently in writing. I assure him that they will be urgently considered. We keep the highest possible standards of public probity in the NHS and I should not like it to be felt that an hon. Member had criticised people in the NHS in Liverpool for something that might have happened between it and the private health sector. I should like any information that the hon. Gentleman has in order to clear up that point.
  Neither the hon. Member for Knowsley, North (Mr. Kilroy-Silk) nor my hon. Friend the Member for Northampton, North (Mr. Marlow) has been able to stay in the Chamber. They were kind enough to tell me that pressing constituency business took them elsewhere. We have had a notable contribution from the hon. Member for St. Helens, South (Mr. Bermingham) who has a particular interest in mental health.
  The hon. Member for Liverpool, Walton (Mr. Heffer) in his new role placed the problems of Merseyside in a broad regional and historical perspective. I was in the House when my right hon. Friend the Secretary of State for Defence, who was then the Secretary of State for the Environment, made his first ever announcements about Merseyside and its environmental problems in particular. I well remember the generous response of the hon. Member for Walton to those announcements that afternoon. I understand that he wants to see the Government's response improved in various ways and I listened to what he had to say about Merseyside, having represented a constituency there for so long, with respect.
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  In the NHS generally, and in the Liverpool area in particular, it is easy to spend more but it is not necessarily so easy to spend well. That sentiment underlies everything that I have to say about the NHS and the Liverpool health authority's budget. It is not just how much money is available for the NHS in Liverpool that is important but how that money is spent, which is almost as important. That theme will also underlie what I have to say this evening in discussing the health authority's budgetary problems. After all, that has been the underlying theme in the speeches of Labour Members tonight.
  Three factors must be taken into account. First and foremost, as Labour Members know, the Liverpool health authority has just completed consultation on a long term and important strategy for the Health Service in Liverpool. That strategy will take into account the views of the regional health authority and the Government that have been assembled through the regional review system which is such a notable part of the way in which the NHS is being run. It is a modern and coherent method by which the Department of Health and Social Security examines once a year what happens in each of the 14 regions of Britain, just as each region goes on to examine what happens in each district of each region.
  In the course of the regional review, those who attended were the first to say that there were inefficiencies in the system upon which improvements could be made. The hon. Member for Knowsley, North is not in the Chamber at the moment. He explained that he had to leave to deal with urgent constituency business. He took me to task for suggesting that efficiency was a nasty concept which attacked individuals such as nurses, doctors. administrators, ancillary workers and others in the NHS. That is not what the Government mean when they talk about efficiency. When the Government talk about efficiency, they mean making the best use of available resources to save the maximum sums that are available for better patient care. All the efficiency savings that have been made in the Liverpool district are returned to be spent on care within that district.
  There are in Liverpool, in the Mersey region generally as throughout the country, a number of old and outdated hospitals which do not give a high standard of patient care but which cost the Health Service dear because of the inefficiencies inbuilt into running them, such as the design of the building, the heating, floor levels and so on.
  Mr. Alton: While no sensible person could take exception to the Minister's argument that where efficiencies can be made they should be made, how can he justify the closure of, say, the Duchess ward of the women's hospital, the orthopaedic ward for paediatrics at Alder Hey hospital or the non-replacement of the dermatologist to whom I referred in my remarks about the new teaching hospital? Does the Minister disagree with the sentiments expressed by the chairman of the area health authority that inevitably the £1 million-plus cuts that will have to be made will have an effect on the health of the people in the care of that authority?
  Mr. Patten: It strikes me as peculiar that all the time when, nationally, one is spending more one is accused of cutting. What is happening in the National Health Service is a continuing process of rationalisation. The hon. Gentleman raised two ward closure issues and I shall come to those later in my speech.
  Mr. Parry: Can the Minister explain why not a penny piece has been given by the Government to run the new bone marrow transplant unit that has been subscribed to—indeed, it has been built and opened—by the general public through a Liverpool Echo campaign? The public having paid for this unit, I cannot understand why the Government cannot at least fund the running of it.
  Mr. Patten: My hon. and learned Friend the Minister for Health announced a few days ago a considerable increase in the amount available for bone marrow transplants in the current financial year, plus the promise of further sums in future years to enable a number of regional centres to carry out transplants in the future, and the hon. Gentleman's point must be seen in the context of that announcement.
  The hon. Member for Riverside mentioned hospital closures, and I must remind him that they have been going on for a long time. It is not a phenomenon invented after 1979. It causes me a wry smile occasionally to reflect on the fact that between 1974 and 1979 the Labour Government shut 272 hospitals, a number of them in Liverpool, more than double the number of hospitals that have been closed since 1979. That figure must be set against the biggest hospital building and planning programme in Britain since the inception of the NHS in 1948, with more than 140 new hospitals being planned and built, such as the hospital to which the hon. Member for Mossley Hill referred, the name of which he might care to remind me.
  Mr. Alton: I referred to the capital programmes to improve geriatric facilities at the new unit at Mossley Hill hospital and the steps taken to improve the wards for geriatric care at Broadgreen. I paid tribute to the Government because those steps are welcome.
  Mr. Loyden rose—
  Mr. Patten: I must first reply to the hon. Member for Mossley Hill because he leads me to dilate further on the importance of rational hospital planning, in Liverpool and elsewhere.
  As new capital developments take place—about £31 million worth of capital developments are planned for the Liverpool area in the next 10 years—it is only natural that outdated capital stock should be closed down, and that stock is one of the major problems facing the NHS. That is why the Ceri Davies report — nationally, not in a regional sense—pointed out that there was a backlog of maintenance going back decades, accounting for about £2 billion of NHS property needing improvement.
  Mr. Loyden: The Minister has referred to hospital closures during the period of the Labour Government, but in Liverpool the closure of the Stanley, northern and southern hospitals were all long overdue closures. It is misleading to argue that the closures, which happened to be prior to the building of new hospitals in Liverpool, were not an essential exercise that the then Government had to undertake.
  Mr. Patten: I do not want to be led over the bounds of order, Mr. Deputy Speaker. I know that you would call me back sharply, if I were to do so. The hon. Gentleman is propounding an interesting new thesis which, basically, is that Socialist closures are good and Tory closures are bad. There is nothing more that I can usefully say other than that I do not agree.
  Mr. Bermingham rose—
  Mr. Patten: I shall not give way and I hope that the hon. Gentleman will forgive me. I should like to make some progress in my speech before giving way to him.
  Mr. Heffer: Will the Minister give way to allow me to intervene on the capital programme issue?
  Mr. Patten: I shall address myself to the capital programme shortly. I hope that the hon. Gentleman will allow me to give way to him at that stage. I do not want to fire all my shots so early in my speech.
  I said that there were three factors which we had to bear in mind when considering the Liverpool health authority's budget. The first factor was its plan, the second was Liverpool's population decline and the third is the extent of new hospital provision elsewhere in the Mersey region, which must be taken into account. When we were examining the regional pattern it was clear that Labour Members were considering Liverpool's hospital provision without recognising that new hospital provision was being made available within the rest of the region.
  Current projections show that Liverpool's resident population will decline by 9 per cent. from 503,722 in 1981 to 456,500 in 1991. I have given the detailed figures in the light of the new role of the hon. Member for Walton. Accompanying the population decline will be the provision of major new hospitals in Runcorn, Southport and Warrington. These hospitals will be completed in the rest of the decade. That will result in a reduction in Liverpool's patient catchment population of about 10 per cent. to 15 per cent. in certain specialties. It has not been possible in the NHS since 1948 to provide every specialty in every hospital in Britain. It is necessary for patients to travel to avail themselves of certain specialties.
  In the technical sense of the word it still remains the fact that the health authority is overfunded compared with other authorities in the Mersey region. [Interruption.] I know that Labour Members do not agree with that but I shall be grateful if hon. Members will allow me to put my side of the case. In my phraseology I am drawing on the excellent plans introduced in 1976 by the then Labour Administration to redistribute resources about the geography of the NHS. That was the resource allocation working party process. There were references then—I am going right back to 1976 — to underfunded and overfunded regions.
  It is my contention and the Government's that if the funding of the Liverpool authority had not been adjusted to take account of demographic change and important new developments elsewhere, which in all fairness Labour Members should take into account in their regional analysis, the district would have consumed an ever increasingly disproportionate amount of resources compared with that consumed by other districts within the rest of the region. Accordingly, the regional health authority decided last year to reduce the revenue available to Liverpool by about 6 per cent. by the financial year 1988–89.
  Mr. Heffer: I find what the Minister has said about overfunding remarkable. I could take him now to Walton hospital, where there are two geriatric wards for men and women. They have one toilet unit with three toilets. I have been complaining about this for a long time. They have made one slight improvement. They put up—
  Mr. Terry Fields: A roll of paper.
  Mr. Heffer: That is right. They put up a few bits of paper here and there and laid carpet in the middle of the ward. There has been a slight improvement but the toilet facilities are the same. Then the Minister has the audacity to say that we are overfunded.
  Mr. Patten: We face a considerable problem in Liverpool as we do elsewhere with finding available resources. If the hon. Gentleman has other problems doubtless he will write to me about them. He should also note that the cumulative total of reduction of revenue available to Liverpool by 1988–89 compares with a 9 per cent. reduction in population. So there will be a 6 per cent. reduction in resources compared with a 9 per cent. reduction in population. That will still leave that authority funded by about 5 per cent. more than the average for all the other authorities within the Mersey region.
  Mr. Bermingham: Would not the Minister agree that the projected figures for the population are about as reliable as undertakings by the Government to fund the Health Service? Figures have been calculated on the population in 1976.
  Mr. Patten: 1979.
  Mr. Bermingham: I am sorry, 1979. It is now 1983. No doubt the Minister could have corrected the figures if there had been an intermediate count. While there may be a change in population because the inner city will be rebuilt and there may be slum clearance, there is a semi-urban development around the city spreading out towards the Knowsley and St. Helens area. Some of those people will have to be served by Liverpool district health authority. The other point is that we must not forget that inflation is running at about 6 per cent. and we await with interest to see what will happen.
  Mr. Patten: Several interesting but not totally inter-related points have been raised. I fear that if I were to reply to some of them I would be called to order.
  Of course, demographic projections are notoriously difficult. However, they have been rather more successful since the 1971 census. We have much better planning figures. As you know, Mr. Deputy Speaker, I have got only another hour and three quarters in which to sum up the debate so I hope that Opposition Members will permit me to make a little progress before I give way again. I have found this regional debate so interesting that I want to give way as much as possible to give hon. Members the opportunity that people in my regional health authority area, Oxford, have never had to debate such issues.
  The third major factor that we have to bear in mind when we consider the issues facing the health authority is that there are a number of indicators that make us realise that Health Service provision in the Liverpool area needs a fresh look. There is widespread agreement that community health services and local services for the mentally ill, already mentioned by the hon. Member for St. Helens, South, and also the mentally handicapped in Liverpool, require improvement. At the same time there is evidence to suggest that there may be an over-provision of certain types of hospital beds, particularly acute beds, in the city. While we do not believe that Health Service planning should be tied to norms of a certain number of beds per thousand population, we have evidence which shows rather startling figures for Liverpool. For example,
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  in 1981 there were 589 general medicine beds in the district, whereas medical planners estimated that 319 beds will be needed for 1991.
  Of course, we can debate endlessly whether the medical planners have got it right, and of course we must take into account the important issues raised by the hon. Member for Walton about the home conditions of the people who go into hospital and the problems that face them when they return home. That must explain some of the length of stay periods in Liverpool. None the less, in a strict analysis of the need for acute beds in Liverpool there are considerably more than the planners suggest are necessary. For general surgery, the comparable figures are 442 and 331 beds respectively.
  The excellent new performance indicators that we are developing in the DHSS show that in 1981 Liverpool had the second longest length of stay and the third lowest throughput of patients per bed in the country. I suspect that there is considerable agreement across the Floor about the reasons for that, but that should not prevent us from examining the situation closely. I do not seek to argue that such indicators prove good performance or bad performance for Liverpool, bearing in mind the social problems that exist there. However, many patients, in ideal circumstances, want to get home early. They do not want to spend a long time in hospital. That is why the development of five-day wards, for example, is a great and continuing improvement in the NHS, and we are grateful to the nurses and consultants who make those wards work so well and get people out for the weekend.
  Against the background of those three factors, the Liverpool health authority, as has already been said by a number of hon. Members including the hon. Member for Riverside, produced a consultation document on its long-term strategy. Hon. Gentlemen will be familiar with its general thrust: a reduction in bed numbers in most acute specialties, recommended for inner city areas, as much in London as in Liverpool; the development of community-oriented services particularly for the elderly, the mentally ill and the mentally handicapped; and a recommendation to close Princes park and Newsham general hospitals. I do not intend to discuss those closures in detail tonight. It would be premature to do so. The Liverpool health authority endorsed the strategy at its October meeting I dare say that hon. Gentlemen are familiar with the procedure. The recommendations now go to the regional health authority and then land, if they get that far, on Ministers' desks. At that stage Ministers are required to make an objective judgment on the closures. I do not intend to prejudge any of the proposals, in advance even of the comments from the regional health authority, which has not yet considered the document, and certainly has not passed on any comment to me.
  Mr. Terry Fields: How does the Minister make his objective judgments? When was the last time he spoke to a home help? I speak as someone who is married to a home help, and I know the difficulties that are caused by the cutback in resources. The emphasis should be shifted from hospital care to community care, because the resources and staff are not available in the hospital and old people and those in need will suffer.
  Mr. Patten: In using the phrase "objective judgment", all I was saying was that in my opinion it is extremely important for Ministers, faced with the difficult problem

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  of evaluating closure proposals, not to make any prejudgments about the rights and wrongs of the closures, and certainly not to give the impression to anyone in this Chamber or in Liverpool that any such prejudgment has been made.
  Mr. Heffer: I am sorry to keep interrupting the Minister, but may I put a question to him? Before the decision is finally made, will he or the Minister of State or, preferably, the Secretary of State come to Liverpool, see for themselves the hospitals that are likely to be closed, and speak to the staff, the trade unions and the local authorities about the services that they provide? In fact, I hope that he will speak to all the people who are involved before the decision is made. Can he assure us that he will do that?
  Mr. Patten: I cannot give an undertaking tonight. It is some time since a Minister from the Department of Health and Social Security visited a hospital in Merseyside. I have not been there since I was appointed to my new job in June, and I want to pay such visits. In recent months, when hospitals have been threatened with closure, I have visited hospitals such as the Prince of Wales hospital in Haringey. I spent some time talking not just to consultants, nurses and adminstrators but to shop stewards and trade unionists. I was a member of a trade union in my previous profession. I am always happy to talk to trade unionists about such problems.
  In case hon. Members think that we are dealing with a litany of despair and criticism, I must draw their attention to the positive aspects of health strategy in Liverpool and the Merseyside region, which were mentioned only in the interesting contribution by the hon. Member for Mossley Hill. I hope that all this praise and thanks is not doing his political career any damage. I promise not to thank him again during my speech. I always listen with interest to what he says.
  Substantial capital developments are pledged for the city over the next decade — £31 million worth. In addition to major redevelopments at Broadgreen hospital and Alder Hey children's hospital, there will be a subsequent expansion of day places for the elderly and the development of community units for the mentally handicapped.
  Moreover, the cumulative revenue reduction of £5·76 million a year by 1988–89 will be offset by extra earmarked revenue of about £2 million a year for mental illness and mental handicap services. I hope that the hon. Member for St. Helens, South, who raised that point, will welcome that extra earmarked revenue. There are many positive benefits for the people of Liverpool in that strategy.
  Mr. Heffer: Will the Minister give way?
  Mr. Patten: I have already made the joke twice that I could speak until 10.30. I now have one hour and a half left to finish my remarks. I shall have to keep the House until 10.30 pm, on what is an important issue, unless I can make progress.
  Mr. Heffer: The hon. Gentleman must understand that we are concerned about his figures. Is the £31 million in addition to the present allocation or is it part of the overall cash? That is important. A report by the works officers in
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  the district health authority argued that £11 million was required for outstanding maintenance. If the £31 million is in addition, we shall welcome that. What exactly is the £31 million? Where is it coming from?
  Mr. Patten: I am happy to clear up that point. The £31 million is exactly what I said it was. It is the plan for capital spending within the boundaries of the city of Liverpool until the end of the decade. It is the planned sum of money that will be spent. I hope that the hon. Gentleman welcomes that, as well as the £2 million earmarked money, which is extra money. It will go towards developing services for the mentally ill and mentally handicapped. I would be sorry if people in Liverpool did not welcome that, but I am sure that they will.
  Hon. Members have mentioned certain wards. I refer first to the 16-bed orthopaedic ward at Newsham general hospital. Occupancy of that ward was low, despite what we heard about waiting lists. Occupancy was between only 54 per cent. and 67 per cent. That is not a very satisfactory state of affairs. The ward catered principally for elderly patients who had been transferred from Broadgreen hospital after surgery. The geriatricians at Broadgreen have been able to increase the number of patients accepted from orthopaedic wards and therefore the district health authority, which is charged with hospital planning in the area, considered that the Newsham ward was, for the moment, surplus. The ward has been temporarily closed, as it was operating at a 54 per cent. to 67 per cent. occupancy rate. I am sure that it would not be suggested for one moment that such an occupancy rate is desirable in our modern Health Service.
  The women's hospital has excited a considerable amount of interest. The hon. Member for West Derby referred to it. Occupancy at the women's hospital is low, at 66 per cent. Turnover is slow and length of stay well above the national average. The authority has decided, I think rightly, as a temporary measure, that it can provide the same level of service with fewer beds.
  Mr. Terry Fields: The bandying around of statistics is intended to confuse people. The Minister seems to be saying that an occupancy rate of 65 per cent. or 70 per cent. entitles the authority to close down the ward. As a result of the Government's economic policy, trade and industry are now operating at 60 per cent. or 70 per cent. Do the Government therefore intend to close all trade and industry? We need good trade and industry, just as we need good hospitals.
  Mr. Patten: I am not trying to confuse anyone with statistics. I am trying to put before the House the incontrovertible fact that the occupancy rate in the women's hospital is low at 66 per cent. The hon. Member for Broadgreen and I can draw different conclusions from that, but it is a fact.
  Mr. Wareing: If the occupancy rate is only 65 per cent., why is there a waiting list for the Catherine street women's hospital? Why are 12 urgent cases still waiting treatment?
  Mr. Patten: I cannot deal with those questions tonight. I am not aware of the details of such a waiting list nor of the 12 cases to which the hon. Member for West Derby refers.
  A decision must be made on a 10-bed female long-stay geriatric ward at Newsham general hospital. This ward

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  was already closed temporarily due to staff sickness and the consultant concerned — we must depend, quite rightly, upon consultants for clinical judgments—said that he hoped to be able to maintain normal levels of service without the use of the ward. In that case, we took medical advice.
  We must deal with the important matter of the internal redistribution of beds at St. Paul's eye hospital. I am afraid that I must give another "clarifying" statistic, although it is not aimed to confuse. I am not the only hon. Member who has used statistics. Almost every hon. Member who has taken part in the debate has read out rows of figures, mostly from parliamentary answers that I have given in the past two or three weeks. Occupancy at St. Paul's eye hospital is only 70 per cent. and the ophthalmic waiting list in Liverpool has been decreasing in recent years, with the unfortunate exception of the period during last year's industrial action. The sooner we forget about that, and the less said about it, the better. The authority considered that beds could be reduced without a substantial reduction in work load.
  Mr. Parry: I wrote to the Minister about the waiting list and the Minister replied to me on 28 October. I included a letter from a patient stating that her appointment had been cancelled because of insufficient staff. She said in the letter that she was grateful to the staff of St. Paul's eye hospital as she feared that she was going blind. How can the closure of a ward be justified when the Minister's reply indicated that nearly 500 people are awaiting admission?
  Mr. Patten: I have just explained the circumstances surrounding the closure of that ward. I can only refer the hon. Gentleman to tomorrow's Official Report.
  There are also very low occupancy levels on paediatric orthopaedic wards. That, too, has caused concern locally. In June this year, the waiting list was only 75 and there were no urgent cases. Contrary to the gloomy picture painted by Opposition Members, in this area the vast majority of cases are treated within six months of appearing on the waiting list. Again, therefore, the authority considered that the closure of a 24-bed ward would not affect services. That change is certainly in line with the long-term strategy being developed.
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  None of the measures that I have mentioned constitutes a savage reduction in services of the kind suggested by the Opposition.
  I stress one point about temporary closures, which I hope will reassure hon. Members and their constituents. The closures were effected before the full consultation process had been undertaken because the authority believed, as it is entitled to do, that urgent action was necessary in the interests of the service as a whole. We have always recognised that in the very short term there may be circumstances—including financial pressures, but sometimes other problems such as illness of individual specialist consultants—which justify authorities acting in that way. I reassure the House, however, that before the closures can be made permanent — if, indeed, it is proposed that they should be permanent — the full consultation process must take place. If the community health councils object, the matter will come to Ministers in the normal way.
  Mr. Alton: The Minister referred to statistics. Florence Nightingale once said that statistics were important because they were a measure of God's purpose for us here on earth. They are also a measure of the challenge. Many Opposition Members have put it to the Minister that there are grave problems in Liverpool, especially for elderly people. One statistic that we tried to impress upon him was that the fastest growing group was the over 80-year-olds and that one third of the population was over retirement age. What increased provision will there be, not just in capital schemes but in increased revenue expenditure, to provide for those people?
  Mr. Patten: Part of the regional strategy adopted by the Merseyside regional health authority is to switch resources within its substantial budget away from always providing acute care and towards providing better community-based provision for the elderly, the mentally handicapped and the mentally ill. The overall strategy is most interesting, but it is fraught with difficulties. The difficulties are compounded by the environmental and social problems of Merseyside. Nevertheless, I believe that the health authority is being thoroughly realistic in its approach to the problem in the interests of people who count most—the patients.

  Solvent Abuse
  9.8 pm
  Mr. Roy Galley: The problem of solvent abuse and glue sniffing has been debated several times in the House. With the proposed issue of a voluntary code of practice on the sale of relevant products, and in view of recent reports of further deaths from solvent abuse, it is timely that the matter should be raised again.
  This serious problem requires a co-ordinated and effective approach. It is difficult to obtain accurate and comprehensive figures, but the most accurate figures available suggest that since 1971 there have been 236 deaths. There were 22 deaths in 1980, 39 in 1981, 66 in 1982 and 33 in the first six months of this year. There is an accelerating problem in terms of known deaths.
  Therein lies a major difficulty to which I hope we can address ourselves. We do not have a secure statistical basis on which to determine the extent of the problem, and we have no figures for hospital admissions or referrals to general practitioners or social services departments. We have nothing to help us to understand the depth of the problem, which is a continuing factor in modern society. It would appear that outbreaks occur on an irregular basis in different parts of Britain. We need further information about locality, age, sex and reasons. There are varying degrees of abuse from the occasional, almost isolated, incidents to full addiction. My first plea to my hon. Friend the Minister is that there should be an attempt to obtain more detailed statistical information to give us a basis on which to make good judgments on the matter.
  The health effects and risks also differ greatly. They include euphoria, hallucination, fits, behavioural pattern disturbance and sometimes coma. They can go much further, involving either serious personality disorders or major psychiatric problems. They can involve permanent damage to the heart, kidneys, lungs and other organs. In the hallucinatory state, the effect can be damaging to the user or to others. The major cause of death is suicide while someone who has abused the substances is in a hallucinatory state.
  In that context, and with the seriousness of the problem, much debate has centred on the possibility of legislative action. It has been argued that the use of solvents in this way could be made a criminal offence, rather similar to the misuse of drugs. On balance, that would be difficult to enforce and it may lead to more surreptitious abuse. Powers under the Public Order Acts 1936 and 1963, the Criminal Damage Act 1971 and the road traffic legislation give the police some scope for taking action where there has been crime as a result of solvent abuse. Perhaps when the Government consider changes in public order legislation the effects of solvent abuse could be included in one of the categories of crime. However, it would be wrong to direct legislative effort against those who have abused solvents, primarily because they require treatment and because there is little in terms of criminal mentality about it.
  Mr. Robert Kilroy-Silk: Is the hon. Gentleman aware of the Scottish system of children's panels rather than juvenile courts? The children who are referred to those panels are not always treated as criminals. One of my hon. Friends recently introduced a Bill that
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  allowed children to be referred to children's panels if they were involved in solvent abuse. Perhaps the Minister could consider that idea for England.
  Mr. Galley: The hon. Gentleman has made a valid point, and to some extent he anticipated what I planned to say. I was going to suggest not the panel system that operates in Scotland, but a similar system.
  We could insist upon the legal control of the manufacture or supply of the products, but the great difficulty with that is the enormous range of products available to anyone who wishes to abuse them. They include glue, aerosols, hair lacquer, petrol and dry cleaning fluids. Many of those products are used legitimately in household activities, and it would be wrong in principle and difficult in practice to impose severe controls on products for which there are many everyday legitimate uses. It would also be extremely harsh to impose on shopkeepers a duty not to sell particular products to people under a certain age. That would compound the problems that currently face licensees in relation to the serving of alcohol. I believe that such a step would be draconian.
  That brings me to the proposed voluntary code of practice, which would be fairer to shopkeepers. However, we must have some doubts about its ultimate efficacy in coping with this problem. One hopes that it will go some way, but shopkeepers will need some education in recognising the problem, understanding the signs and knowing what to do about it. All are essential parts of the difficulty that we face. Therefore, there must be some training if shopkeepers are to play an effective role under the voluntary code. I hope that the Minister will assure us that the operation of this code will be rigorously and frequently reviewed.
  Labelling has also been suggested, but that could be counterproductive, as in some instances it may incite rather than inhibit experimentation with solvents. Another suggestion has been the use of additives in solvents. In some cases it is possible to have non-solvent glues, but in general the dangers of increased toxic effect make that approach dubious.
  Many other people may urge legislative activity along the lines that I have suggested, but on balance we must concentrate our efforts elsewhere, in particular on health education and referral systems. Only by education will we have any chance of moving towards prevention, and that must be our prime aim.
  In this respect, there are two problems. The first is recognition. Many parents, teachers and social workers do not readily recognise the symptoms that are evidence of solvent abuse. Even when those symptoms are recognised, those concerned, including professionals in some cases, often do not know where to refer them. At present, there is no system for dealing with the problem, once identified.
  A fairly horrific incident recently occurred in my constituency. An anxious parent, aware that there was a problem and thinking that it had something to do with solvent abuse, had to ring 23 different agencies before finding someone who was able to assist.
  Multi-disciplinary teams are now being developed in many parts of the country and training is taking place. The Calderdale area, of which my constituency is part, is now endeavouring to take this further. I hope that the Minister will encourage such activity and give it an added boost. The Calderdale area is producing an up-to-date,

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  comprehensive training programme which, it is hoped, will eventually produce neighbourhood teams to deal with abuse cases. Such training would extend to teachers, the police, education welfare officers, youth club leaders, general practitioners, social workers, and so on, and to all agencies which at any stage would have anything to do with the problem. It would be more extensive than many of the multi-disciplinary efforts that have taken place so far.
  The key to the scheme is that in each locality—probably within a council ward or definable area—a trained team will be able to assess the problems and cope with solvent abuse. This neighbourhood approach is of particular significance. There will be professionals operating in one of these capacities. The idea is that there should be a pool of trained people to whom they can turn. There will be a panel of experts to whom problems can be referred and the trained experts would have colleagues with whom they could discuss individual cases. As a result, parents and teachers will have greater confidence that there are people available, ready and willing to assist in their problems.
  It is the combination of training and the outline of the referral system that is probably most needed. I hope that such a local initiative is something to which in a practical way, perhaps financial, perhaps as guidelines from his Department, my hon. Friend the Minister will be able to give assistance. One result of the suggestion is that we may be able to get a better basis of statistical and qualitative information that will deepen our knowledge of the problem. We could then know more about where children—in many cases it is children, though not always—obtain the solvents, what forms of treatment work, what level of treatment is required, and so on.
  As to the point that the hon. Member for Knowsley, North (Mr. Kilroy-Silk) made, we shall have established a fairly informal referral system, and a trained but informal panel. There is then scope, if the system works and can be developed, for a more formal system, with the possibility of a solvent abuse register, rather on the lines of the child abuse register, which would be the basis for dealing with future cases. I hope that the Minister will keep an open mind on this matter and consider carefully the argument about a proper referral system. There are problems about definition, but they can be overcome.
  We have a serious problem which, as a nation, we are only just beginning to tackle. The voluntary code of practice is but one small step towards tackling the problem. I hope that the Government will not rest on their laurels, having taken that step. It is not the end of the problem. There is much more to be done. I hope that the Minister will take steps to encourage and promote health education and an adequate referral system.
  On balance, while it is right to take the stand that sensationalism may lead to imitation and that a low-key approach is more productive, we must not take as an excuse for inaction the fact that the voluntary code is in operation.
  9.22 pm
  Mr. Harry Greenway: I congratulate my hon. Friend the Member for Halifax (Mr. Galley) on securing an Adjournment debate on this important topic and on a lucid and interesting speech which points to various possible solutions of a growing problem. I also congratulate my hon. Friend the Minister, who will reply,
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  for the marathon that he is undertaking at the Dispatch Box, and I thank him for his courtesy in being present to handle this topical and important subject.
  There is no doubt that glue sniffing and solvent abuse are seriously on the increase. I first started to deal with young people as a teacher 26 years ago, and there was no question or hint of glue sniffing in schools at that time. I taught in schools all over London and I also helped in youth clubs and other such places. However, 15 or 16 years ago we began to pick up the first hints of glue sniffing, and, with the build-up over the period, we can see the pattern and the type of children who go in for glue sniffing. My hon. Friend the Member for Halifax mentioned the 236 deaths from solvent abuse that have occurred since 1979. A breakdown of those figures would probably show a rising trend and that there had been more deaths in the past year than in any other year.
  In the past three years I have received four petitions from my constituents. I have had two petitions from head teachers: one from the head of a first school for children aged between five and eight years, and one from the head of a middle school for children aged between nine and 12 years. I also received two petitions from parents. In each case, the petitions contained the signatures of several hundred concerned neighbours — adults and parents. There can be no doubt that the public are looking to Parliament and to this Government for a solution to a problem that has given rise to such great concern.
  I have not seen toddlers suffering from the after-effects of glue sniffing, but I am told that they become almost unconscious and stagger about. It is highly probable that they will suffer brain damage as a result of glue sniffing. Indeed, I have been told that by general practitioners and others in the medical profession who are well qualified to comment.
  I have seen children aged between eight and 10 years who have been glue sniffing. They are in a dazed state and unable to concentrate on anything. They are not in command of themselves and seem unable to control their actions. It is impossible to hold a proper conversation with them. It is worrying that such young children, including toddlers, should be free to put themselves into that mental and physical condition. A few months ago a teenager wearing pumps and jeans ran riot in my constituency and kicked down a very strong wooden fence after he had been glue sniffing. That is an intimation of the effect that glue sniffing had on him. He did not feel any pain, and those who saw him doing it were very disturbed by his violent state. In his natural state he was a normal, peaceful boy. Is it any wonder that parents, teachers and other members of society are very worried about this growing problem, or that they demand action from Parliament?
  I am glad that hon. Members have become increasingly concerned about this problem. A few months ago, a measure was passed dealing with the situation in Scotland. I was sorry to see Scotland ahead of England —
  Mr. John Maxton: It always is.
  Mr. Greenway: I can think of no other area in which the Scots are ahead of the English. However, Scottish Members may like to think otherwise.
  Children and adults who sniff glue usually go to waste land, or to huts that were originally put up for building work. Such places are scarcely frequented, if at all. There they can get on with glue sniffing, undisturbed and

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  undetected. That is why they inhale and become intoxicated to the extent that they do. I am told that the odd sniff has certain stimulating effects and may damage the brain. However, the odd sniff does not have the very serious effects that I have described.
  The moral must be that detection is valuable in the prevention of glue sniffing. It will help if parents, teachers and members of the public are on the alert and know the areas in which glue sniffing may take place. Here is a case for educating the public about what could happen.
  An increasing number of adults have died as a result of glue sniffing. It has been discovered that such people are almost always looking for stimulation because they are bored. People do not become bored when they are living stimulating and satisfying lives, but that is a broad problem for society. Sometimes adults are found sniffing glue with bags over their heads. Although it sounds peculiar, it happens, and psychologists tell me there is an explanation for it. Such adults are seeking stimulation and they get it in that way.
  Can people be educated away from glue sniffing? Perhaps, but I wonder how far education will take us. I was interested in the path pointed to by my hon. Friend the Member for Halifax. Education will have an arresting effect on some people if they know what damage they can do to other people and to their property, but those who are determined to sniff glue or to go for other forms of solvent abuse will not be deterred by education. Indeed, a broad programme of education might stimulate additional interest in solvent abuse and increase addiction to solvents. Therefore, education is not necessarily the panacea that some people think it might be. In any event, how would one educate people out of glue sniffing? The more one talks about it, the more interest is spread and the more people are stimulated to do it. The problem could increase in that way.
  I believe that we need to look for other solutions. I would ban the sale of glue that stimulates behaviour of the kind that I have described. The ban on the sale of fireworks to children under the age of 14 has been fairly successful. A ban on the sale of glue and solvents should be considered with much more determination than has so far been shown by successive Ministers.
  Will my hon. Friend consider the American practice of adding something at the production stage which makes the sniffer violently sick?
  The Under-Secretary of State for Health and Social Security (Mr. John Patten): It does not work.
  Mr. Greenway: I am told that it does work.
  Mr. Patten: I have listened to my hon. Friend's constructive point with close attention but I must tell him that, although the idea of adding noxious substances to prevent people using solvents is tempting, it has been tried in the United States and has not proved successful. Most states have withdrawn the regulations and the Federal Government are against them not because they do not think it is a good idea per se, but because it does not work.
  Mr. Greenway: I take my hon. Friend's point. What he says makes it clear that American practice has not been as successful as it has been described to me. If an individual drinks disinfectant, he will be ill because the
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  body rejects it. It is not beyond the wit of our inventors to produce a noxious substance that can be added during the glue production stage. I do not want it necessarily to produce violent sickness, but it should lead the body to reject glue that has been inhaled.
  The fact that there has not been wide success with such a device in the United States should not prevent us from trying something similar. It could be the simplest possible solution to the problem.
  Mr. Peter Thurnham: Although it may be attractive to find an adulterative substance, the sort that has been tried in America has been found to be carcinogenic and, therefore, should be avoided.
  Mr. Greenway: My hon. Friend made the point even more clearly than the Minister—
  Mr. John Patten: I could not pronounce carcinogenic.
  Mr. Greenway: I urge my hon. Friend to attempt to do so if he intends to use that word when he replies to the debate. He could do better than he thinks.
  Every test should be undertaken to investigate the idea that I have advocated. Naturally, a substance tried in the United States and found to be carcinogenic is wholly unacceptable. The House would not suggest its use. But the idea is interesting and valuable, and it is a possible simple solution to the problem.
  Children sniff glue as a form of social defiance. It may be disrespect or a sense of rebellion against teachers and society. They do it for kicks. If they led a positive life, they would not do that. We must ensure that adults and children live broad and fulfilled lives so that such practices stop. I know that that is asking for Utopia, but we must ask for it or we shall never get anywhere.
  9.37 pm
  Mr. Hugh Brown: I have been tempted to speak because of the statements in the press today about a meeting between the Minister and representatives of the manufacturing and retail trades that provide the substances. I compliment the hon. Member for Halifax (Mr. Galley) on giving the House an opportunity to comment on the subject.
  I am not as conceited as my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton). I do not think that Scotland leads the field. Indeed, Scotland has more than its share of the problem. We have suffered it for a little longer than England and Wales, and can offer one or two constructive suggestions. However, I fear that they are not applicable to England and Wales because of the Social Work (Scotland) Act 1972 and the children's panel system.
  Although the Private Member's Bill introduced during the last Parliament made some contribution to solving the problem, its only constructive act was to bring children into the ambit of the referral system. There are no lessons to be learnt from the constitutional set-up in Scotland, but our knowledge and experience of the problem may be helpful.
  I am always worried about anything said publicly that suggests that Parliament has the answer to the problem. The Minister is an honest man and we are not discussing a party issue. One of the difficulties that some hon. Members face is that, because they have raised these matters in Parliament, anxious parents seem to think that

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  there is a solution if only people were to tell them what it was. However, we are as far away from a solution as we have ever been.
  The hon. Member for Halifax mentioned the need for information. It is my guess that the greatest incidence of this problem is in deprived areas or in those areas where sons and daughters of wealthy parents do not know what to do with their lives. Those are the two extremes. I suspect that the greatest number come from deprived areas, taking the usual definition of a deprived area. I do not say that the problem is caused by unemployment, but it must be related to the social circumstances in which far too many people find themselves in such areas, and they are increasingly made more hopeless by Government policies. I recognise that nobody has a detailed solution to the problem of glue sniffing or addiction of any kind. I am only saying that the problem is greater in areas of deprivation where people are either living on social security or low incomes. To that extent, the Government are a wee bit complacent about the problems that face people in deprived areas.
  Mr. Greenway: I do not say that the hon. Gentleman's point is invalid, but I point out from my broad and long observation of the type of people who go in for glue sniffing that they have tended to be of a particular psychological type rather than social genre.
  Mr. Brown: Yes, there may be a psychological problem associated with glue sniffing. We may draw different conclusions, but perhaps the Minister can say whether, on the evidence that is available, it is true that the greatest incidence of solvent abuse is in areas of deprivation. There may be other forms of addiction such as drugs and alcohol which perhaps affect the middle classes more, but I shall not go into that because we are talking about solvent abuse. Unless the Minister can contradict me, I think that solvent abuse occurs mainly in deprived areas.
  Mr. John PattenI am not attempting to contradict the hon. Gentleman. I appreciate the way in which he is casting his remarks. All I can say is that we do not have the facts and figures. There has not been adequate research. In the past two years we have begun to fund more detailed research into the prevalence of the problem. I should also point out — these are purely qualitative impressions—that the people involved in glue sniffing and solvent abuse in Britain are sometimes remarkably young, often between the ages of seven and 11. They sometimes indulge in the habit for a remarkably short time and the habit seems to be just as prevalent in southern areas, where people are generally better off, as in the northern areas. Only research will enable me to agree with or contradict the hon. Gentleman.
  Mr. Brown: That means that my opinion is as good as the Minister's. I am not trying to score points. It so happens that I have a constituency that probably has more deprived areas than that of any other hon. Member. Perhaps I am obsessed with the fact that the problems are almost overwhelming at times in the sense that social agencies are completely incapable of meeting the needs. Glue sniffing and solvent abuse create one of those needs.
  I know that the Minister will not dare to speak for the Scottish Office but—
  Mr. Patten: Certainly not.
  Mr. Brown: I know that discussions have been going on. I am assuming that manufacturers and retailers do not stop at the border and that they have outlets in Scotland. There are governmental problems but I say this in the friendliest possible way. We in Scotland would like to feel that the Scottish Office has been advised of any discussions on the problem down here because the retailers and manufacturers do not discriminate when it comes to the border.
  It does not do any harm to raise subjects of this kind on the Adjournment. Many youngsters have a feeling of hopelessness. I am a fair-minded person and I cannot honestly say that unemployment and the capitalist system cause all the social problems with which we are afflicted, but they aggravate them. Whatever the economic philosophies and policies may be, our present system is totally incapable of providing a meaningful life for the majority of young people in many areas. That is all I am claiming, and in that context it is wrong to look at this as an isolated problem of solvent abuse without examining the underlying social scene of which the youngsters are part. To that extent, we are entitled to keep drawing attention to the failure of the Government to make resources available to enable young people to lead more meaningful lives.
  9.46 pm
  Mr. Gordon A. T. Bagier: I came into the Chamber as a matter of interest because I heard that the debate had started. One has no way of knowing, until one hears what is going on, the subject of the second Adjournment debate.
  The Minister said that in the last two years or so the Government had got down to some serious study of the causes of solvent abuse. I felt appalled in a sense when I heard that because—I do not make a party political point — between 10 and 14 years ago I raised with Ministers the question of glue sniffing. I have been worried—I hope that it does not happen as a result of this debate—lest, if too much publicity is given to the glue sniffing phenomenon, we get the copy-cat syndrome, with kids saying, "There must be something in it", and they start the habit. We normally find that the tragic gets wide press coverage. That is followed by people trying it, and I have always felt as a Member of Parliament that I should hate to have had a part, so to speak, in helping to spread a tragic habit.
  The industry must do something more positive than it has done up to now. I noted with interest the remarks of my hon. Friend the Member for Glasgow, Provan (Mr. Brown) about the deprived areas having more than their share of problems of this sort, and of course they have. After all, it is expensive to drink beer and whisky nowadays and people may wish to drink something else.
  But drinking has nothing to do with youngsters in this context, and that is why, faced with the prospect of youngsters gathering together to sniff glue, I cannot understand how such a product can be on the market. It is not only a bad habit but a dangerous one; it can blow a kid's head to smithereens. That is why I am sorry that so much publicity has been given to glue sniffing from time to time, instead of the industry getting down to doing something about it.
  Mr. John Patten: I now know of the hon. Gentleman's long-standing interest in the problem. I remind him that

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  there are more than 700 forms of substance which can be abused. Most family homes contain substances which in the past have been sniffed or sprayed into mouths. If it were just a matter of one substance, it would be easier to concentrate the medical research about which my hon. Friend the Member for Ealing, North (Mr. Greenway) spoke. It is a difficult problem but one of which the manufacturers are aware.
  Mr. Bagier: I accept that, and none of us would seek to make party points on the issue. We are simply underlying the tragedy of the situation. I hope that the industry has gone into the matter in depth, but at some stage we must come to grips with analysing the problem.
  There are dangerous substances on the market that can readily be bought by youngsters, and these are the substances that create the great problem that we are discussing. I am aware that discussions on it have taken place in the past few years and I hope that the Minister will tell us how deep they have been and what progress has been made. Have specific proposals been made to overcome the problem? Is there no additive that, for example, will make the sniffer sick? That is the type of immediate remedy that laymen such as myself look towards. We cannot solve the problem outside. We can only help to create the legislative atmosphere that will lead to steps being taken to put matters right.
  I agree that there are many substances that are known to be dangerous, but the one which has been mentioned so often over the past 10 or 14 years is glue. It is a substance that is commonly known and readily available. That being so, is the Minister satisfied that the industry is doing everything that it can to eradicate or reduce the danger of its misuse? For example, has consideration been given to increasing the price of the product? I think that the House would welcome a response along those lines.
  9.51 pm
  Mr. John Maxton: I am not sure that my hon. Friend the Member for Sunderland, South (Mr. Bagier) is right when he suggests that publicity might lead to greater dangers. In many areas—I know that this applies in the constituency of my hon. Friend the Member for Glasgow, Provan (Mr. Brown) and in mine—the prevalence of solvent abuse is great in the deprived areas. My constituency contains deprived areas and extremely affluent areas and I know that the problem is at its worst in the very deprived areas. Solvent abuse is so prevalent in deprived areas that I doubt whether there would be any great increase in the practice if a publicity campaign were launched which was designed to educate children and parents on the issue. I am not convinced that we can continue to allow it to remain a low key issue.
  In my view, it is impossible to place a complete ban on the sale of potentially dangerous products because of the range that they cover. I suggest that Ministers should give their attention to a measure that states that shopkeepers who sell solvents to children knowing that they intend to abuse them should be prosecuted. Shopkeepers in Scotland have recently been prosecuted successfully for making up plastic bags of glue for sale to youngsters. The Daily Record labelled them "happy bags". If we as a legislature cannot take action against that sort of conduct, what can we do? We must consider introducing legislation that
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  states that a shopkeeper who knowingly sells glue or solvents to youngsters believing that they may then use or abuse those substances shall be prosecuted.
  I accept that it would be difficult to implement such a measure. There are many laws that we pass in this place—for example, those relating to speeding on our roads—in the knowledge that many people will break them. We use these laws as deterrents. They are not enacted because it is believed that very many people will be caught by them. I do not like using the deterrent argument because there is always the danger that it will be thrown back at me in future in another context.
  I believe that there are many shopkeepers who will stop selling glue or who will make an effort not to sell it to youngsters, especially if the police tell them quietly that a law has been enacted that bears on selling glue or solvents to youngsters in the belief that they may then use or abuse those substances. They will make an effort because they will never be sure whether the youngsters will use it for sniffing.
  I think that there is a correlation — it is not necessarily absolute — between social deprivation and the use of these substances. It is not enough to say that it is people under 16 or who are not at work who are using these substances. In Castlemilk, a large housing estate in my area, about 60 per cent. of the children know that they will not get employment when they leave school. If they have older brothers and sisters they know that from the age of nine, 10 or 11. That creates an atmosphere of despair at home and in the society in which they live.
  It is no longer an individual's problem but a social problem. My hon. Friend the Member for Provan and I have had the experience of constituents seeking housing transfers because of youngsters glue-sniffing, committing acts of vandalism and making their houses intolerable. It is a social problem that affects other people and not just the individuals directly concerned. Social deprivation must be taken into account. As I said about crime on Monday, I shall say about glue sniffing tonight: one of the major answers is a change in economic policy that would ease the social deprivation.
  9.56 pm
  Mr. Peter Thurnham: I am pleased that this debate has taken place because this is an important issue in my constituency. I have here a three-page letter from the chief superintendent of police in Bolton about the problem. I take issue with the hon. Member for Glasgow, Cathcart (Mr. Maxton) about social deprivation. The problem is concerned more with the age of the people and the degree of parental control exercised over them.
  With over one death per week, the time has come for action by the Minister rather than soft talk. We should aim for a tax on the solvents to raise funds for research to find a suitable adulterating product that could be added to the solvent to control abuse. The products that have been examined so far have been found to be carcinogenic, but this is similar to the need for methyl alcohol to be added to ethyl alcohol. No doubt a suitable substance could be found if sufficient resources were devoted to research.
  9.57 pm
  The Under-Secretary of State for Health and Social Security (Mr. John Patten): It was shortly after 6 o'clock that we began to debate the Adjournment of the House and

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  it is shortly before 10 o'clock that I rise to wind up the second of the debates to which it is my pleasure to reply tonight. I regard replying to the debates as a privilege because they have been excellent.
  Earlier, at the behest mainly of Labour Members but one Liberal Member from Liverpool, we had a first-rate debate, relatively free of party slanging across the Floor of the Chamber, about the problems of health care in the Liverpool region. Equally, we have had an excellent debate on one of the growing social problems of our time, again largely bereft of party political points. Since shortly after 6 o'clock the House has shown a face that it does not normally show in the evenhandedness of debates. It may not be glamorous for the Gallery writers, but the debates have been of a very high standard.
  The problem of solvent abuse was raised by my hon. Friend the Member for Halifax (Mr. Galley). I congratulate him on securing the Adjournment debate and making not only an analytical speech about the problems but suggesting, as did my hon. Friend the Member for Bolton, North-East (Mr. Thurnham), positive steps which might help to solve the problem.
  I shall try to reply to all the points raised in the six or seven short speeches that have been made. I shall consider briefly the dimensions of the problem and what relatively little we know about it. I shall then examine how legislation can help, if it can. Then I shall deal with prevention, education and the role of the family. After that, I shall say what the Government intend to do, following the announcement that I made yesterday about the new guidelines that we are introducing with retailers. I hope that the 31 minutes that are left to me will allow me adequate time to deal with all these important problems.
  I was interested to hear from hon. Members on both sides of the House that various people closely connected with children saw the problem growing 14 to 16 years ago. However, the problem seems to have attracted great public concern only within the past five or six years. We think that the problem has been growing in large numbers but we do not know, because—
  It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, That this House do now adjourn. —[Mr. Major.]
  Mr. Patten: I believe that the research that we are now conducting and funding, particularly in London, will enable us to get the measure of a problem which is not easily correlated with one particular social group — people in trouble, people who are unemployed, people who are socially disadvantaged, or any other group on whom it is easy to pin a problem. It is clear from schools in the relatively prosperous south that glue sniffing as a habit is attracting the attention of relatively young children — 10, 11 and 12-year-olds. Fortunately, those young children often get rid of the habit quickly. It is only a small but unfortunately growing hard core who take to solvent abuse.
  I shall not go through the list of solvents, aerosols and other items that can be abused, for fear of encouraging people who might hear what I say. We know that the small hard core of people who sniff in an addictive way are putting their health at risk. There is disturbing evidence of potential long-term damage to the liver and, in particular, to the brain, and, in extreme cases, death can be caused.
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  My hon. Friend the Member for Halifax drew our attention to the fact that 236 people, predominantly young people, have died directly as a result of solvent abuse since 1971. That the problem is growing is incontrovertible, but the size and distribution of the problem are not yet clear, in terms of geography, within urban and rural areas, and related to social and economic classes. More work needs to be done, and the Government are promoting that work.
  Next, I shall say a word about legislation. It is easy to say, "Why do the Government not introduce a law to ban glue sniffing?" Unfortunately, with glue sniffing and solvent abuse, as with many other social problems, it is not easy for the Government to frame one or a number of laws which can lead to the speedy banning and getting rid of it. Oh, that life were so easy! The life of legislators in this Chamber would be much easier if we could simply legislate to get rid of social problems. That is not to say that the Government have put legislation out of court and are not prepared to consider further legislation. I should not want the House to think that. However, I want to bring to the attention of the House some of the problems that face us in framing legislation.
  It has been suggested, for example, that we should introduce a law to ban the carrying of solvents which can be abused. There are two problems. The first is in Defining and setting down in statute or by regulation the hundreds, if not thousands, of different substances that can be abused by people who go in for solvent abuse. That, in itself, would be a substantial problem. The second problem is that some of the substances which can be abused are also properly used for various purposes—for example, in modelling by young people. Why should someone be banned from legally carrying substances? That is not to say that at some stage in the future action may not need to be taken, but framing legislation that will work and be effective in this difficult social area, which has been a matter of cross-party consensus in the Chamber tonight, would be extremely difficult.
  Mr. Bagier: We do not object to youngsters using solvents for modelling. However, the substance should be obtained only by the child's parents and not by the child going into the shop and saying "I am a modeller". We should consider not so much what is used but how it is used.
  Mr. Patten: The hon. Gentleman has made a positive suggestion. I shall answer it when I refer to prevention and the role of retailers.
  There is a list of laws that could be introduced. My constituents, as well as other Members' constituents, are concerned about disorderly behaviour by young people that seems to be a direct result of solvent abuse. One could introduce a law to make it an offence to be "glued up" and disorderly in the street. However, there are considerable problems in defining such an offence. That would be a matter for my right hon. and learned Friend the Home Secretary, not for me.
  There could be a public order offence connected with solvent abuse, but the police already have wide powers to detain people who are allegedly behaving in a disorderly way that affects the general public. Therefore, legislation would be difficult to frame. I am absolutely convinced that there is no single, easy legal solution that will get rid of the problem.
  Mr. Jerry Wiggin: I entirely accept my hon. Friend's argument. We have had legislation to deal with the abuse of alcohol for nigh on 100 years. That is one road that the Government might seek to go down—if they are looking for money to spend on research, they should impose the law in the same way to cope with those who are abusing themselves and offending the general public.
  Mr. Patten: My hon. Friend has raised some extremely important points about abuse and ways of preventing abuse of these substances. Legal ways of tackling the problem are possible but are fraught with difficulties. There are other ways of moving forward, including prevention.
  Mr. Maxton: The Minister seems to be moving off the legislative point. Will he deal with the question of people knowingly selling addictive substances? That is important.
  Mr. Patten: It is important. The hon. Gentleman referred to some incidents in Scotland that are not my ministerial concern. There are two outstanding cases in Scotland, in which it is alleged that retailers have sold "kits" to children for solvent abuse. Therefore, it would be best if I did not comment further on that point.
  It is clear that there is common ground on both sides of the House that everything must be done to prevent substances that can be abused from falling into the hands of young people who will abuse substances if they can buy them in shops. That is why I am pleased that yesterday, following a meeting at which all the British Retailers Association members, all the members of the shopkeepers' associations and many of the manufacturers' association were represented, agreement was reached that guidelines should be produced in England before Christmas this year. Those people will do what can be done to encourage shops not to sell to young people solvents that can be abused.
  I wish to make two points. First, the Government are grateful for the freely given co-operation from retailers, shopkeepers and manufacturers' organisations in drawing up these guidelines. Secondly, neither the Government nor the general public can expect shopkeepers to be society's policemen. We cannot put that burden upon them. We can encourage them to encourage their staff to observe a few sensible rules about the sale of solvents to young people.
  I wish to consider quickly the draft guidelines. A notice will be provided to shops reserving the right of shopkeepers and shop assistants not to sell any substances—they will not be named—if they do not wish to do so. The staff will be given detailed guidelines, which will teach them to observe the symptoms of probable glue sniffers. Detailed guidance will also be given to staff on how not to sell those substances to young people but, at the same time, to use sensitivity and not create a rumpus in the shop. General guidelines will be issued to shopkeepers about how to keep out of sight and therefore out of mind for young people, substances of one type or another that are popularly know to contribute towards this evil social habit. The guidelines will be published before Christmas. Of course I do not expect for one moment that the position vis-à-vis solvent abuse to change overnight. I am not so naive as that.
  Retailers in England can make a positive contribution to solving this problem. I understand that the manufacturers have further ideas, which are being explored and which we shall make known as soon as possible. The Under-Secretary of State for Scotland, my
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  hon. Friend the Member for Edinburgh, South (Mr. Ancram), is aware of what is going on in England and what has gone on in Northern Ireland, where a similar code was introduced six or nine months ago. I am sure that he will be putting forward his proposals and drawing conclusions about this type of activity in Scotland.
  Mr. Donald Dewar: I apologise in that I have not heard the entire debate—
  Mr. Patten: It has been very good.
  Mr. Dewar: I shall most certainly take the Minister's word about that. I shall read the part of the debate that I missed. The Minister used the nicely measured term that the Under-Secretary of State for Scotland is aware of what has been going on. Has the Scottish Office been actively involved in discussions? Has there been any direct contact by the Scottish Office, as general awareness sometimes leads to inaction, especially in the Scottish Office.
  Mr. Patten: I utterly refute that statement. This is the first time in four hours that vulgar party politics have intruded on our otherwise totally bipartisan debate. [Interruption.] I see the hon. Member for Glasgow, Garscadden (Mr. Dewar) is waving his finger at that.
  As the problem is locally based, we have left it to be dealt with by the individual countries. Northern Ireland, much to its credit, has had a similar code for the past six or nine months, which applies to retailers in Belfast and the rest of the Province. I am not responsible for Scotland. I must leave that matter to my hon. Friend the Under-Secretary of State for Scotland who can reply to questions such as those that have just been raised.
  Mr. David Harris (St. Ives): Does my hon. Friend know what effect the code had in Northern Ireland? Does he really believe that a code of conduct is the answer to this problem? I believe that most hon. Members do not. Surely the answer lies in the attitude that the police take in each constituency to this serious problem. If the police will come down hard on the problem, I do not think that it will be as great as it has been up to now. With the greatest respect to my hon. Friend, I do not think that a code of conduct will do anything to alleviate the dreadful difficulty faced by some of our young people.
  Mr. Patten: I do not wish to criticise my hon. Friend, but I suggest that he read tomorrow's Official Report. I said just a few minutes ago that I clearly recognised that the code of practice and the guidelines for retailers would form just one small but very important part of the overall action that the Government can take on this social problem. I have referred to action that must be based on research. I have said that action may or may not include further legislation. I have said that action must include prevention and education.
  I was heartened indeed to hear my hon. Friend the Member for Halifax tell the House of the range of local community based activities focusing on prevention through the community, the schools, the social workers and informal networks of people involved. We wish very much to encourage and help that work. I hope that, without asking me to write out a cheque tonight, my hon. Friend will keep me in touch with what is being done. We are convinced that low-key education, especially in schools, forms an important part of any preventive strategy for dealing with a problem that cannot be solved at a stroke by any single law or Government action.

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  Equally important is the role of families. Prevention of solvent abuse is best and most effectively rooted in the family. The signs are all too clear—running eyes, spots around the mouth, curious incoherent speech, withdrawal into rooms and refusal to talk to parents. Those signs should be alarm bells for parents. They can then either deal with the problem themselves — I am sure that most families could make a good effort at that—or seek help from general practitioners—which I strongly recommend—community nurses, social workers and schools. One of the best ways to deal with the problem is to handle it within a local framework in the community itself.
  I greatly commend the approach and attitude of my hon. Friend the Member for Halifax in his most interesting, fairly worded and objective assessment of the problem. I shall happily give way if I misunderstood what he said, but I believe that at no stage did he suggest that a magic wand could be waved or that there was any single solution to the problem.
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  A number of approaches have a contribution to make. Legislation may have a role to play, as may better codes for prevention in various areas and ways. A better and more thorough education about the problem is perhaps a matter for the schools and for my right hon. Friend the Secretary for Education and Science. Certainly the families have a most important role.
  In mid-December, the Government will bring forward a package of proposals prepared by the Home Office and the Department of Health and Social Security—public order and health education are interrelated in this—to show what the Government intend to do next about a problem that is highly disturbing, both locally and nationally.
  Question put and agreed to.
  Adjourned accordingly at seventeen minutes past Ten o'clock.