Commons Sitting of 29 February 1984

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

    ECGD (Nigerian Trade)
    Mr. Chopeasked the Secretary of State for Trade and Industry by how much the premium income of the Export Credits Guarantee Department from business with Nigeria in each of the last three years has exceeded claims made in the same period; and whether he will make a statement.
    The Under-Secretary of State for Trade and
    Industry (Mr. Alexander Fletcher): ECGD premium income on Nigeria exceeded gross claims by £7·8 million in 1981 and by £27·1 million in 1982. In 1983, by contrast, gross claims exceeded premium income by £4·4 million. I have no further statement to make.
    Mr. Chope: Is my hon. Friend aware that the restrictions on cover for Nigerian business are causing great anxiety to exporters principally concerned with such business? What is the Government's policy? Do they favour British exporters increasing export activity to Nigeria, or do they advise them to cut back in the present financial circumstances?
    Mr. Fletcher: We are aware of the difficulties faced
    by British exporters, but they must be considered in relation to the situation in Nigeria. The Nigerian authorities are seeking debt relief for arrears of short-term credits accumulated in the past two years totalling about US$6 billion. ECGD-insured arrears are estimated at about US$1 billion. We must take that into account as well as the refinancing negotiations that are taking place before we can say anything more specific to British exporters.
    Mr. Skinner: Does the Minister recall that I have been
    in touch with his and other Departments over a considerable period about the state of the contract for W. H. Davis and Sons at Langwith junction in my constituency? Is he aware that the compay cannot get its money out of Nigeria and that scores of workers have been laid off due to that contract not being honoured? Does he agree that not only are the Government wrecking thousands of small businesses in this country, but that the ECGD insurance which they set up cannot do the job abroad when companies are in difficulties?
    Mr. Fletcher: The ECGD insurance does the job in specific cases. I do not believe that the hon. Gentleman's complaint is justified.
    Mr. Patrick Thompson: Is my hon. Friend aware that in trying to help exporters in my constituency I find that they are at a disadvantage because European competitors can obtain medium-term finance whereas the ECGD is unable, or unwilling, to help?
    Mr. Fletcher: I cannot agree with my hon. Friend. We are as competitive as our main European rivals in providing this kind of finance.

    London Docklands Transportation Consortium
    Mr. Tom Coxasked the Secretary of State for Trade and Industry when he last met the management of the London Docklands Transportation Consortium; and what was discussed.
    The Secretary of State for Trade and Industry (Mr. Norman Tebbit): I have not met the LDTC and have no plans to do so.
    Mr. Cox: I note that reply. Is the Secretary of State aware of the importance to London of the London Docklands railway development? Will he assure the House that any company wishing to tender for that project will be allowed to do so and that he will try to ensure that British steels and other British materials are used in the project?
    Mr. Tebbit: The hon. Gentleman addresses to me questions which should be addressed to those responsible for the tendering procedures for the contract.
    Mr. Shore: The Secretary of State has displayed an almost overwhelming interest in this very important project. Some of us have perhaps had a closer connection with it. We remember the six years delay since Sir Horace Cutler was blathering on about Olympic ways and fully-fledged tube lines running through east London. We are keen to see progress with the project and we should very much like the Secretary of State to take some interest in it. Specifically, when is the contract likely to be awarded, and when is the project likely to be completed?
    Mr. Tebbit: Of course I am interested in this matter because, like the right hon. Gentleman, I am a London Member. However, if he cannot arrange for the question to be addressed to those who are responsible for the decisions, he cannot complain when I tell him that my Department is not responsible for these matters.
    Mr. Shore rose—
    Mr. Speaker: No.
    Mr. Shore: With respect—
    Mr. Speaker: Order. I think not again.
    Mr. Shore: On a point of order, Mr. Speaker.
    Mr. Speaker: No. I will take the point of order afterwards.

    Battery Manufacturers
    Mr. Andrew F. Bennettasked the Secretary of State for Trade and Industry what aid his Department and the former Department of Industry has given to United Kingdom battery manufacturers in the last three years.
    The Minister for Information Technology (Mr. Kenneth Baker): For the three years ending 31 January 1984, aid totalling £10·66 million has been offered to British battery manufacturers.
    Mr. Bennett: Can the Minister say how much of that has been accepted, and how much has gone to Oldham Batteries in my constituency? That company is extremely concerned about Japanese competition in the sale of batteries. It is particularly alarmed at the Government's apparent enthusiasm to encourage Japanese car manufacturers to come to this country, as a result of which battery orders are placed in Japan, instead of ensuring that Britain, which can produce batteries extremely well, gets the orders for the work.
    Mr. Baker: The hon. Gentleman knows that I cannot release details of grants to any specific company. However, I can assure him that Oldham Batteries has had assistance under the various schemes. In answer to what the hon. Gentleman said about car batteries in general and the type of batteries that Oldham Batteries makes, I can tell him that about £7 million of the £10 million went to support companies manufacturing car batteries.
    Mr. Farr: Is my right hon. Friend aware that one of the real fears of British battery manufacturers is over the dumping by Japan of batteries in Britain? As evidence has been submitted to his Department showing that Japanese car batteries are grossly underpriced in Britain, can he say what he is doing about that and whether the relevant anti-dumping legislation will be implemented?
    Mr. Baker: I am aware of the problem. The British Battery Makers Society and Electric Battery Manufacturers Association have sought the advice of my Department about possible dumping and are now considering the possibility of launching a case on anti-dumping in conjunction with European battery manufacturers.
    Mr. Williams: Is the Minister aware that, in addition to the problem of surplus capacity—arising in part, of course, from the Government-induced recession, and in part from technological change—this industry is taking a hammering not only from Japanese high-volume exporters but even from the French and the Germans? Does he realise that this high degree of import penetration, at a time of surplus capacity, is exacerbated by the Government's policy of insisting on maintaining an artificially high pound in relation to non-dollar currencies—a phenomenon that is complained about in industry generally? When will the Government take action on interest rates to bring down the nonsensically high rate of sterling?
    Mr. Baker: A few days ago the right hon. Gentleman, who speaks for economic matters on behalf of the Labour party, advocated an economic policy which claimed higher Government expenditure and lower interest rates. I do not see how the two can be reconciled. He cannot chide the Government for maintaining a high level of sterling during the past 18 months, when sterling has fallen considerably against the dollar and even marginally against the European basket.

    USA (Import Tariffs)
    Mr. Wallerasked the Secretary of State for Trade and Industry what response he received from the United States Government to his representations concerning the obstacles posed to United Kingdom textile manufacturers by high import tariffs.
    Mr. Tebbit: I raised the question of the reclassification by the United States Customs of certain types of garment in a way which would substantially increase the duties payable on them. The Administration's response was that they believed there was a solution to our problem, and our embassy in Washington is following this up in more detail.
    Mr. Waller: I thank my right hon. Friend for that reply, but does he not feel that the problem is somewhat wider? Is he aware that, under the Tokyo round, American tariffs against United Kingdom textile products are due to come down by 1987 to 33 per cent., whereas our comparable tariff is only 13 per cent. against similar products? How can my right hon. Friend possibly justify such a divergence, bearing in mind that the United States is not a developing, but a highly developed, country? If the United States is not prepared to reduce its tariffs against us, should we not consider taking action to protect jobs in our industry?
    Mr. Tebbit: It is not for me to justify the United States' policy on tariffs. There are large disparities between some Community and United States textile tariffs. They will be eased, but they will not be eliminated when the Tokyo round of tariff cuts is completed in 1987. We are concerned about those imbalances in market access, and we continue to press the United States to reduce its tariffs where that would help United Kingdom exporters, but our ability to achieve the reductions will often depend on the extent to which we are prepared to offer some concessions in other areas of interest to the United States.
    Mr. James Lamond: Did the Secretary of State also raise the other side of the question with the Americans, namely, that if they raise tariffs against not only Britain but countries such as China, textiles which were intended for the United States will flood into Britain and markets which would have been open to us will also be flooded?
    Mr. Tebbit: Yes, I made those very points when I was in America. The Americans told me that the measures they had proposed recently were directed not against European and British exporters, but against other countries. However, I also made the point that that would merely make the world position worse and possibly deflect those third party commodities back towards Europe.
    Mr. Bowen Wells: Does my right hon. Friend agree that United Kingdom textile manufacturers are hardly in a position to complain about high tariff barriers in the United States when they are protected within the European Community and under the multi-fibre arrangement? Is it not time that the textile manufacturers of the world got together and reduced tariffs all round?
    Mr. Tebbit: My hon. Friend directs our attention towards the danger of stone throwing by people who are perhaps living in houses with a certain amount of glazing. We are committed to a firm and effective implementation of the third term of the multi-fibre arrangement, which offers great protection to the United Kingdom industry, but which other people sometimes criticise strongly.

    Overseas Contracts
    Mr. Kenneth Carlisleasked the Secretary of State for Trade and Industry whether he will review the help given to industry by his Department to secure large overseas contracts; and whether he will make a statement.
    Mr. Tebbit: I am examining the advantages and disadvantages in terms of the national interest of assistance of this kind.
    Mr. Carlisle: Is my right hon. Friend certain that the help that his Department provides for our exporters at least matches that provided by our overseas competitors? In particular, does the projects and export policy division within his Department, which was set up in 1980, with great success, to co-ordinate our efforts to win orders, still have the resources and scope that it needs? Does he agree that many jobs depend on our success in that area?
    Mr. Tebbit: Yes, indeed. The projects and export policy division in my Department, which was set up at the instigation of my right hon. Friend the Member for Hertsmere (Mr. Parkinson), is in charge of co-ordinating Government help in the pursuit of major projects — diplomatic help, ministerial visits, ECGD cover, the use of overseas aid, and the bringing together of commercial finance. It does a good job and has had many spectacular successes.
    Mr. Weetch: Does the Secretary of State realise that while many small and medium-sized British firms make substantial efforts to improve their export performance, they face problems? Will the right hon. Gentleman accept from me that in Ipswich, where I have talked to the management of such firms, one of the principal problems they face is the expense of keeping salesmen in the field for extended periods? They have to meet travelling expenses and the cost of staying abroad. Is there anything that his Department can do to assist such firms, especially as in many parts of the world, such as Germany, Japan and France, they come up against determined sales competition?
    Mr. Tebbit: To start to go into that area of subsidy would, indeed, be to open a new round in international warfare in subsidising trade, but through the BOTB, through the fairs division, for example, great assistance is given to British business men who want to take part in overseas fairs and exhibitions.
    Sir Anthony Grant: Will my right hon. Friend bear in mind in this context the importance of a competitive export credit policy, because his hon. Friend's answer to our hon. Friend the Member for Southampton, Itchen (Mr. Chope) was not wholly convincing? Many industries which have to work on this task find that the French, in particular, and many other countries, are able to muddle up trade and aid much more skilfully, apparently, than we are. Will he please look at this matter again, as it is very important?
    Mr. Tebbit: I am not sure whether this will comfort my hon. Friend, but when Mrs. Cresson, the French Trade Minister, came to see me recently she had some criticisms to make of the extent to which we do the things of which we so often accuse the French. I think that her criticisms were entirely without justice, of course, but I have to say that we offer very competitive terms, and that is one of the reasons why we do better than the French at exporting.
    Mr. Bell: When the Secretary of State is reviewing the help given to industry for overseas contracts, will he take into account the document which has been published in the north-east entitled, "A response for a strong north", which has the support of the CBI and the northern region TUC, and is gathering support from other bodies in the region? When this document reaches his desk, will the Secretary
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    of State give favourable consideration to it, given that it will help us to secure overseas contracts and to increase and enhance the prospects of investment in the north-east generally?
    Mr. Tebbit: I should be unwise to say that I shall give favourable consideration to a document which I have not yet read, but I shall certainly give very careful and serious consideration to it.
    Mr. John Townend: Does my right hon. Friend accept that, regrettably, there is a tendency for trade with Third-world countries generally to be conducted on a basis of barter? Recent figures show something like 25 per cent., which could increase. Where British firms are faced with this problem, in what way can my right hon. Friend's Department help?
    Mr. Tebbit: So far as we can, we discourage other countries from going into barter trade, and therefore, where we are giving assistance, particularly through trade and aid, or through straight overseas aid, we do our best to persuade the countries concerned not to make barter trade a condition of contracts. I think that that is probably the most helpful thing that we can do.
    Mr. Campbell-Savours: What help was given to Cementation International in securing a contract to build a university in Oman, and, in the brief which the Secretary of State provided to the Prime Minister on this contract, was reference made to Cernentation's interest in that contract?
    Mr. Tebbit: The answer to the hon. Gentleman's second question is no, Sir.
    Mr. Speaker: Question No. 7, Mr. Neil Hamilton. Question No. 8, Mr. Robert Adley.
    Mr. Adley: Question No. 8, Sir.
    The Under-Secretary of State for Trade and Industry (Mr. John Butcher)rose—
    Sir William van Straubenzee: On a point of order, Mr. Speaker. Were you calling question No. 7?
    Mr. Speaker: I did not see the hon. Member for Tatton (Mr. Hamilton) rise when I called question No. 7, and I therefore moved to question No. 8. I now call the hon. Member to ask question No. 7.

    Jaguar Cars
    Mr. Neil Hamiltonasked the Secretary of State for Trade and Industry whether he has any plans for the privatisation of Jaguar.
    Sir William van Straubenzeeasked the Secretary of State for Trade and Industry whether a date has yet been set for the flotation of shares in Jaguar Cars as an independent company.
    Mr. Tebbit: We are currently considering the board's 1984 corporate plan, which includes the board's proposals for the first steps towards the return of the business to ownership by the public. We shall announce our decisions as soon as possible.
    Mr. Hamilton: Is my right hon. Friend aware that the excellent performance of this company makes it a very attractive candidate for privatisation? The taxpayer's interest in this matter, as the finder of the company, is to

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    get his money out on the best terms possible, and the experience of nationalised industries so far for the taxpayer is that he should take the money when it is available and run.
    Mr. Tebbit: I am anxious to see this company returned to true ownership by the public, as I said, and I shall be bound to bear in mind, when I am arranging that matter, the best interests not only of the taxpayer but of Jaguar and of BL.
    Sir William van Straubenzee: To explain my concern about my hon. Friend the Member for Tatton (Mr. Hamilton), may I ask my right hon. Friend to make clear his absolute commitment to handing over this great company to the private sector? Will he bear in mind the great lesson to be learnt from the National Freight Corporation of allowing those who work in the company to participate in the shareholding?
    Mr. Tebbit: As with all our measures of privatisation, we shall do our best to ensure that there are attractive terms for the workers in the company. However, it would probably be too big an operation for a management and work force buy-out, which would probably have adverse effects on the company's balance sheet in relation to the borrowings that would be required.
    Mr. Park: When considering his privatisation plans for Jaguar, will the Secretary of State also bear in mind that although Jaguar has an established identity, there is still a degree of interdependence with the rest of British Leyland? Will the right hon. Gentleman also bear in mind that if Jaguar were sold to a company with its own means of producing components so that orders were taken away from British Leyland, the repercussions might have an effect on the future of British Leyland?
    Mr. Tebbit: I shall bear all those considerations in mind when reaching my conclusions.
    Mr. Dykes: Is my right hon. Friend entirely happy with the profit projections in the corporate plan?
    Mr. Tebbit: I am never entirely happy about anybody's profit forecasts. Such forecasts are never high enough, and they are always too likely to be affected by various adverse circumstances. That is the way of the world. However, I am confident that Jaguar can successfully return to the private sector in due course.
    Mr. Geoffrey Robinson: We are only somewhat reassured that the right hon. Gentleman understands that the need for long-term capital for Jaguar puts it way beyond a management buy-out provision, but will he bear in mind that Jaguar will also need long-term access to research and development, which could be provided by BL? Will the right hon. Gentleman give us an assurance that he has not ruled out—as has been reported in the press—the idea of BL retaining a strong minority stake in Jaguar?
    Mr. Tebbit: Of course I understand the need for a company the size of Jaguar to have some access to ouside research and development facilities. Many companies have such access and buy in expertise of one sort or another. I note what the hon. Gentleman has said about BL retaining a shareholding, and in due course our decisions will be announced to the House.
    Mr. Randall: Is the Secretary of State aware that the sale of Jaguar could have a serious impact on BL's ability
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    to remain in the high-volume, low-margin car manufacturing business, and that that could have a detrimental effect on jobs in Britain?
    Mr. Tebbit: I note what the hon. Gentleman says, but I do not think that that would be a bar to the sale of Jaguar, and nor does the board, which probably knows at least as much about the business as the hon. Gentleman does.
    Mr. Shore: Does it occur to the Secretary of State that we are glad that he has so far given rather cautious answers? Does he agree that it would be manifest nonsense and would lead to a weakening of British Leyland as a whole, and Jaguar if separated from it — [Hon. Members: 'Why?".]—if Jaguar were privatised in the way suggested by some Conservative Members? Before the Secretary of State reaches any decision, will he look not only into the prospects for capital expenditure and from where that money may come, but into the history of Jaguar, which, when it was under private ownership, voluntarily merged with BMC, which was also under private ownership, to give it sufficient strength to survive?
    Mr. Tebbit: I certainly shall. As the right hon. Gentleman will recollect, it did not work out too well.

    Tourism
    Mr. Adleyasked the Secretary of State for Trade and Industry what are the implications for tourism in England of the Tourism (Overseas Promotion) (Scotland) Bill [Lords].
    Mr. Butcher: This legislation, which was debated in the House on 21 February, does not affect in any way the statutory function of the British Tourist Authority to promote England, and all other parts of Britain, abroad.
    Mr. Adley: My hon. Friend knows of my interest in the industry and of my full support for the Bill. In the debate that he has just referred to great concern was expressed by Scottish Members about the appointment of one person to be chairman of the British Tourist Authority and the English tourist board. Will my hon. Friend make urgent and serious representations to the Scottish Office and to our Scottish colleagues to assure them that the appointment is no threat to the tourist interests of Scotland? Does he agree that the long-term interests of Britain depend on strengthening the regional boards in England?
    Mr. Butcher: I am delighted that my hon. Friend has given me an opportunity to clarify the position. He is right when he says tht the joint chairmanships which Duncan Bluck will occupy are no threat to the current position and role of the Scottish tourist board. With regard to the English regional tourist boards, my hon. Friend may be encouraged to know that the ETB is being asked to devolve certain marketing functions to the regional tourist boards. In general, as he will know, the future movement of tourist policy will depend to a large extent on what Mr. Duncan Bluck can pursue. It is only because there was not legislative time available to sort out the position across the country as a whole that we were unable to formalise this earlier.
    Mr. Bruce: The Minister has said that there will be no confusion between the chairmanships of the English tourist board and the British Tourist Authority. I am afraid that we in Scotland know too much about confusion between

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    England and Britain to be convinced. Will the Minister acknowledge that in these circumstances a budget of £200,000 to enable the Scottish tourist board to promote itself is not likely to be adequate to make a significant difference to the strong position of London as the gateway to tourism in Britain?
    Mr. Butcher: The total spend of Scotland will be something like £3,200,000, because it has been allocated approximately £3 million through the British Tourist Authority. London remains the major magnet for the United Kingdom as a whole. Many tourists who eventually go to Scotland will have come to London as the first step in their international route to Scotland.
    Mr. Hicks: In view of the content of the statement on tourism made by my hon. Friend the Minister of State last November, and my hon. Friend's remarks about the future role of regional tourists boards within England in respect of marketing and promotion, will my hon. Friend assure the House that nothing contained in the Bill will prejudice those areas?
    Mr. Butcher: I can give my hon. Friend that assurance.
    Mr. Gould: Do not these organisational changes take place against a backdrop of a declining trade balance in tourism? Is the Minister aware that in 1981, 1982 and 1983 we failed to earn our customary surplus and that we have fallen into a substantial deficit? Why has that happened? When will the position change, and what is the Minister doing to change it?
    Mr. Butcher: We still have a £8 billion turnover in tourism in the United Kingdom. It is a major industry, almost on a par with the car industry in terms of turnover. Our position internationally is affected by a number of factors, not least exchange rates, and tourist policy within the United Kingdom has to be tempered by those movements.

    Warship Yards (Privatisation)
    Mr. Hirstasked the Secretary of State for Trade and Industry if he will bring forward proposals for privatisation of the warship yards at present owned by British Shipbuilders.
    Mr. Butcher: I have received a report from a merchant bank. I am now preparing detailed proposals.
    Mr. Hirst: I thank my hon. Friend for his reply and hope that I can take from it that he will be presenting proposals fairly soon for the privatisation of these warship yards. [HON. MEMBERS: "Warships?"] Perhaps I am being presumptuous. Does my hon. Friend agree with me that it is important that the dead hand of State control should be removed as quickly as possible from the only remaining profitable yard within British Shipbuilders? In view of the circumstances that surrounded the acquisition of the companies when they were nationalised, does he agree that the former owners should be given first refusal on their disposal?
    Mr. Butcher: We are anxious to remove the dead hand of nationalisation from the warship building yards. We believe that it is in the best interests of those yards and, indeed, of the country and taxpayers as a whole that this should happen. I fully appreciate my hon. Friend's
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    concern for the position of Yarrow. I should like to congratulate the Yarrow yard on its full order book and its involvement in the designing of the new type 23 frigate. We would, of course, welcome a bid from Yarrow plc for this yard, but I am sure my hon. Friend would not expect me to say that it should have sole shooting rights.
    Mr. Dixon: Does not the Minister realise that the flogging off of the warship yards is wholly irrelevant to the problems faced by the British shipbuilding industry? In view of the European Commission's interpretation of the recent change in the fifth directive, will the Minister provide additional aid for the shipbuilding industry—as the French Government have done—to help it through the present world crisis?
    Mr. Butcher: The hon. Gentleman is right to link the volume of aid with performance. However, I am afraid that that connection has not been especially beneficial. Since nationalisation, British Shipbuilders has received £1·03 billion of taxpayers' money, and since the Government came to power it has received £935 million of public funds. Surely that record can be remedied in the interests of the taxpayer and the industry as a whole only by a vigorous programme of denationalisation.
    Mr. Bill Walker: Does my hon. Friend agree that when the warship yards were in private ownership they had a good export record, but that since they were nationalised the record has not been so good and some of our overseas competitors have increased their share of the market?
    Mr. Butcher: My hon. Friend makes a valuable point. The by-products of denationalisation and a return to private management will be a much more effective addressing of the international market and, perhaps, a better use of public sector contracts to address those markets.
    Dr. Godman: I hope that the hon. Member for Strathkelvin and Bearsden (Mr. Hirst) is not seeking the privatisation of Royal Navy warships.
    Is the Minister's Department monitoring closely the negotiations on the acquisition of Scott Lithgow? Does he believe that those negotiations may be adversely affected by the formal cancellation by BP of its contract with Scott Lithgow for a semi-submersible rig?
    Mr. Butcher: Of course we monitor closely the negotiations between Scott Lithgow, British Shipbuilders and potential purchasers. I hope that the hon. Gentleman will join me in urging the earliest decision on this matter, which would be in the interests of the work force and the yard.
    Mr. Chope: Can my hon. Friend say more precisely when it is likely that the privatisation of the warship building yards will take place? Is he aware that the Vosp.tr Thornycroft work force at Southampton, which has consistently contributed to British Shipbuilders rather than drawing upon its money, is concerned about getting an early decision?
    Mr. Butcher: Vosper's yard has an excellent record, not least in industrial relations and productivity. We are anxious to proceed as soon as possible, but will do so with proper consideration and prudence.
    Mr. Shore: Does the Minister not understand that the basic difference between the state and plight of merchant shipbuilding yards and naval shipbuilding yards is

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    precisely that the latter are sustained by some £2,000 million of British Government orders, whereas the other shipyards have virtually no orders, and some of those are in danger of being cancelled? Would it not be total folly to attempt to sell the one profitable area of shipbuilding during the middle of a continuing world recession, as that would be a death sentence to most of the marine shipbuilding yards?
    Mr. Butcher: The merchant shipbuilding yards will survive and, I hope, thrive again only if they continue to reduce their costs and to make the best use of the skills available to them. Whether the warship building yards are privatised or not—and they will be—the question still remains whether the merchant shipbuilding yards are prepared further to increase productivity, because only by so doing can they have the best safeguards for their future.

    Electronics Industry
    Mr. Hendersonasked the Secretary of State for Trade and Industry if he is satisfied with the balance of Government incentives for the electronics industry between the attraction of inward investment and the development of indigenous enterprises.
    Mr. Kenneth Baker: I am satisfied that there is a reasonable balance in incentives between inward investment and the development of indigenous industry. When we consider inward investment cases, the benefits to the United Kingdom are taken into account in terms of trade, employment and technological development and the effects on existing industrial structures.
    Mr. Henderson: Will my right hon. Friend give some recent examples of success in inward investment policy in Britain in general and Scotland in particular, and the number of jobs involved? Can he assure the House that emphasis will be placed where there is a transfer of technology or skills, and that, in any event, the support for indigenous companies will be no less than that available to foreign companies?
    Mr. Baker: In the last few months well over £100 million has been invested by overseas companies in developments in electronics in Scotland, and there is no doubt that the United Kingdom generally has become a magnet for investment of this sort. To give some examples: Hewlett Packard, 700 jobs at South Queensferry; Wang, 150 jobs at Stirling; and last week the Japanese silicon manufacturer, Shin Etsu, made a £37 million investment bringing 400 jobs to Livingston. [Interruption.] This is Japanese money. What is wrong with that?
    Mr. Wrigglesworth: Does the Minister agree that the development of new telecommunication services will provide tremendous incentives to the electronics industry? If so, why will Government not provide for more than just Mercury and BT to provide such services in this country?
    Mr. Baker: The hon. Gentleman underestimates the degree of competition for which we are allowing. There is not only Mercury and BT—and the very existence of Mercury has led to substantial investment by Mercury itself, and orders that would not otherwise have been placed—there are also the two radio cellular networks and the 11 cable networks for which we have granted licences, which will also be capable of carrying data
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    transmission. We are pushing ahead in all these areas because it is good for British technology and good for British jobs.
    Mr. Warren: Will my right hon. Friend consider the tremendous incentive that his Department could give to the indigenous British electronics industry if he could encourage his colleagues at the Departments of Transport and of Defence to give special weighting to the advantages of buying British rather than importing?
    Mr. Baker: I shall certainly draw the attention of my colleagues in those Departments to that. We try to use public purchasing creatively to encourage British development and industry.
    Mr. Hoyle: On the basis of indigenous industry, may I ask the Minister to say why the Government are contemplating selling off Inmos, perhaps to a foreign buyer, when we are 30 per cent. short of silicon chips and are actually rationed? Is this not madness?
    Mr. Baker: The House will know that we have provided in the last four or five years over £100 million of support for Inmos, and I am glad to say that the company is trading profitably and is now in a position to go to the market for further private funds.
    Mr. Richard Page: I support the remarks of my hon. Friend the Member for Fife, North-East (Mr. Henderson). Will my right hon. Friend make strong representations to the Chancellor of the Exchequer to reverse the present tax structure on made-up component boards coming here in favour of individual components coming into this country so that we can help assembly production and, therefore, employment in Britain?
    Mr. Baker: This is a matter not for the Chancellor of the Exchequer but for my Department, and we have taken it up with the Common Market. I am concerned about the differential levels of import duties on components and circuit boards, which in certain circumstances operate against our interests.
    Mr. Ashdown: While on the subject of incentives for indigenous industry, may I ask the right hon. Gentleman to say when his Department will provide the incentives to enable our indigenous high-technology electronics industry to have a free market abroad by stopping the Americans from using Cocom in such a way as to block our exports so that their industry can clean up and move in?
    Mr. Baker: My right hon. Friend raised this issue on his recent visit to America, and we are concerned about certain actions of this sort. Generally in these matters we are in favour of the most free market possible because we have the fastest growing electronics industry in Europe, and we can have that only with a substantial international market.
    Mr. Williams: Will the Minister confirm that the great attraction for the several Japanese electronic companies that are poised to come into the United Kingdom is access to the Common Market? In exchange for that benefit, will he ensure not only that there will be, as he has said, the maximum use of British components and a net addition to the jobs in the industry, but that any newcomers bring research and development capability with them, which so many of their predecessors have failed to do? Will he also confirm that another Japanese company in a different

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    sector, which has for five or six months been wanting to invest in Britain is having that investment blocked by the EEC?
    Mr. Baker: If firms were interested solely in a base to get into the Common Market, they could invest in Germany, France or Italy. They come here because we have a strong electronic base and a high throughput of electronic engineers and training for technicians. They benefit from this. As to screwdriver assemblies, I remind the hon. Gentleman that when Sony came here to make television sets in south Wales, many hon. Members tried to stop it because it was a screwdriver assembly operation. Now, 85 to 90 per cent. of the components in that plant are made in Britain. This is an undoubted success story, and we shall encourage every investment, because even if it begins in a modest way it may lead eventually to full R and D.

    Design Advisory Service Funded Consultancy Scheme
    Mr. Batisteasked the Secretary of State for Trade and Industry what is the latest figure for the total number of applications made under the Design Advisory Service funded consultancy scheme.
    Mr. Butcher: Up to the end of January 1984 a total of 1,491 applications had been received. The rate of applications currently being received — about 80 per month—is almost double that of the same period last year.
    Mr. Batiste: Does my hon. Friend agree that successful design work is essential to British industry if it is to capture its proper share of the growing market in consumer goods? Is he satisfied that British industry as a whole is making sufficient use of this excellent scheme?
    Mr. Butcher: The scheme is an excellent supply side measure, which has been used to good effect by all sectors of British industry. My hon. Friend has a strong point. We should use our functional engineering and industrial designers to far greater effect to help companies to address the domestic and international markets with far more vigour. For consumer goods in particular, there is evidence that the well-designed products are the products consumers will buy, and more of them should and must be British.

    Textile Industry
    Mr. Alfred Morrisasked the Secretary of State for Trade and Industry what measures he proposes to assist the textile industry further to improve its international competitiveness.
    The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): The Government's policy will continue to be directed towards establishing the right economic framework for sustainable growth, and to giving firms confidence to invest and increase their competitiveness. I have been pleased to see recent reports of improved company results. The higher figures for both output and employment suggest that the textile industry is pulling out of recession.
    Mr. Morris: Is the Minister aware that profitability is still lower than it was four years ago, and of the now urgent
    250
    need for investment in the new generation of textile manufacturing equipment if the industry is to improve its international competitiveness? Will the Government. respond to the British Textile Confederation's document entitled "Plan for Action", which was published a year ago and which sets out proposals for achieving the right level of investment?
    Mr. Lamont: The right hon. Gentleman will know that we wanted to consider these proposals alongside those that we have received from the economic development committees of the clothing, knitting, footwear and leather industries, which were received later than the textile industry's submission. It is logical to consider them together and we hope to make a response shortly. I understand the right hon. Gentleman's anxiety. As regards profitability, although profits are historically low, there has been a sharp increase. Courtaulds, Vantona-Viyella, Dawson International, Illingworth Morris, have all reported sharply improved profits.
    Mr. Dorrell: Is not the new emphasis on international competitiveness as a key objective for the textile industry a welcome development, and will my hon. Friend take every opportunity to encourage the industries which he named, which have applied for assistance under the Industry Act schemes, to continue to put the emphasis on increasing international competitiveness rather than looking to the Government to protect them against international competitiveness?
    Mr. Lamont: My hon. Friend is right. The underlying fact is that there have been dramatic improvements in the British textile industry, particularly in companies such as Courtaulds, which have dramatically turned round
    Mr. Sheerman: Is the hon. Gentleman aware that the industry has been extremely competitive and has done a great deal of good work in spite of the Government's policies, which it has had to endure over the past four years? Is it not time that the Government responded with the action that has been demanded by all parts of the industry? Is he aware that what the Government have done in other sectors, such as education and training, has not been done for the textile industry and represents a dereliction of duty that could damage the future of the textile industry?
    Mr. Lamont: I totally reject the hon. Gentleman's last point. He heard what I said to his right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris). We shall be replying to the submission in "Plan for Action" as quickly as possible.
    Mr. Nicholas Winterton: While my hon. Friend has been able to quote a number of companies which have returned a very satisfactory level of profit this year, is he aware that the overall return on capital involved in the industry is extremely low and does not encourage the investment that will be necessary for the industry to purchase the new generation of high technology machinery which is essential if we are to compete in the real world, in which textiles are seeking to compete at present? Will he therefore come forward with some proposals to assist investment in this vital industry?
    Mr. Lamont: My hon. Friend is quite right in saying that although the profits of the textile industry have increased sharply the margins are lower than in British industry generally. However, he ought to recognise that it

    251
    is the function of management in this industry to widen the margins and to improve design of clothes and textiles. It is design — not just price — that is a key to the competitiveness of the textile and clothing industries.
    Mr. Ryman: Is there no limit to the complacency of the Government on this matter? The Minister may like to consider two specific points that would help the industry enormously. The first is protection against oil-subsidised imports from America, particularly from South Carolina, which have directly resulted in three companies in the north-east of England going bankrupt—one, P. Shapiro Ltd., only last week. Will he also consider the British Technology Group's policy of investment in manufacturing industries, with a view to giving further help to the textile industry?
    Mr. Lamont: The British Technology Group has very little to do with the textile industry. We have set out our views on the group's functions in the White Paper. The question of American energy prices is one that we have taken up on many occasions with the United States Administration. The one thing that people cannot say about the textile industry is that it lacks protection. It has very extensive protection indeed. Of course, through the MFA, we wish to make that protection effective in places where agreements have been negotiated. Those agreements should be honoured.
    Mr. Thurnham: Does my hon. Friend agree that if other countries did not subsidise their electricity prices that would help British manufacturers?
    Mr. Lamont: If my hon. Friend is able to provide evidence about the subsidisation of electricity prices in other countries, we will examine it very carefully. He will be aware that the cost of generating electricity in many countries is cheaper because of cheaper coal and a higher proportion of nuclear power.
    Mr. McGuire: Is the Minister aware that this is a model industry, in Conservative terms, in that it has had high capital investment and very low wages? One of the common accusations that we hear is that the wages of the work force have been too high and that this has driven firms out of business. This was not and is not the case with the textile industry. Will he seriously examine its problems and consider how a Government who are concerned to preserve an industry can go about helping it in a real fashion?
    Mr. Lamont: I agree with the hon. Gentleman that it is certainly a model industry in terms of industrial relations and that high wages have not been a cause of its problems. As I have said to the House already, we are looking at "Plan for Action" and we shall respond to it.
    Mr. Ashdown: In the light of the comments made in the British Textile Confederation's paper, will the Government consider instituting a small textile firms investment scheme, similar to that which operates in the engineering sector?
    Mr. Lamont: As the hon. Gentleman said, that is one of the proposals that have been put forward, and we are looking at it.
    Mr. Williams: Is it not ludicrous for the Minister to say in one breath that the Government want to create the right framework for the industry and in the next to say that they have delayed, dallied and dithered for 12 months in
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    response to a plea for urgent action from the industry? Contrary to the Minister's optimism, the fact is that the industry has levels of profitability that are so low that it cannot afford the new generation of machinery that is essential to its survival. The Minister is guilty of appalling complacency and irresponsibility.
    Mr. Lamont: The right hon. Gentleman is totally wrong. In bringing about the right climate, we have achieved significantly improved results within the textile industry. I quoted Vantona, Dawson, Illingworth Morris and Courtaulds—all leading companies. The right hon. Gentleman merely needs to look at the runaway performance of the textile sector on the stock exchange to see that it is facing a very much brighter climate and is doing very much better as a direct result of the Government's policies on inflation and interest rates.

    Radio Amateurs
    Mr. Neil Thorneasked the Secretary of State for Trade and Industry whether he will increase the number of times a registered radio amateur emergency network group may participate in exercises with their user services to four per month.
    Mr. Alexander Fletcher: The present limit on Raynet group exercises of one per month was agreed between the Department and the Radio Society of Great Britain. We are currently considering this issue again with the society, and shall consider any proposals it puts forward.
    Mr. Thorne: In view of the importance of Raynet to charities and other organisations that may run fétes in the summer, will my hon. Friend carefully consider this matter, as I believe that there is considerable demand for this type of assistance on those occasions? It helps to clear the airwaves of the type of behaviour found among some CB enthusiasts and it is particularly important for civil defence. In that regard, I would be grateful if my hon. Friend were as generous as possible.
    Mr. Fletcher: We shall be happy to consider any proposals that are put to us.
    Mr. Barron: Mention has been made of civil defence. Has the Minister considered the introduction of a novice's radio licence for radio amateurs so that they can eventually hold a full licence and be of benefit to the nation?
    Mr. Fletcher: We are not considering a novice's licence, but arrangements exist whereby very young people can learn to use these radios under supervision from a proper licence holder.

    Television and Video Industry
    Mr. Pikeasked the Secretary of State for Trade and Industry if he will make a statement regarding Government policy and strategy for the television and video industry.
    Mr. Kenneth Baker: The Government's policy for the television and video industry is to encourage British companies to compete with foreign manufacturers in both domestic and export markets by improving their productivity and the quality and technology of their products.
    Mr. Pike: Does the Minister recognise that in respect of cable and satellite television, the British television and

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    electronics industry is at present well in advance of our Japanese and foreign competitors? Will the Government take all the necessary decisions to ensure that British manufacturers take advantage of this lead before the Japanese and other competitors catch us up?
    Mr. Baker: I am glad to be able to agree with the hon. Gentleman. One of the reasons why we are keen on both cable and DBS is that at present we have a lead in both these technologies. If cable systems can be operated in the United Kingdom in the next 12 months, and if the satellite can be launched successfully, we shall have satellite television in 1987–88 and have a lead on any other European country. That will give us a technological lead in the manufacture of sets and equipment. That is why we are pushing ahead so strongly.
    Mr. Holt: Does my right hon. Friend agree that the biggest stimulus that could be given to the television and video industry is for the Government to revise the policy whereby licensing, which is a form of taxation, removes the incentive for entrepreneurs such as Clive Sinclair? Would it not be much better if the industry were freed from this outmoded taxation — which falls unfairly on all sectors of the community—by the abolition of television licensing, thereby allowing the BBC to be funded in a different manner?
    Mr. Baker: That matter is really for the Home Secretary, as it goes much wider than my departmental responsibilities. The present licensing system has not hindered Sir Clive Sinclair, who has developed the best small television set in the world, at about a third of the cost of that produced by the Japanese.

    British Shipbuilders
    Mr. Fallonasked the Secretary of State for Trade and Industry if he will make a statement on British Shipbuilders policy towards shiprepair.
    Mr. Lamont: British Shipbuilders is, with the Government's approval, in the process of moving out of shiprepairing. In disposing of its shiprepair activities, BS is mindful of the need to preserve as many jobs as possible. Successful management buy-outs have been achieved at Tyne Shiprepair and Grangemouth Dockyard Ltd. Taken together with Readheads, about 600 jobs in all have been preserved.
    Mr. Fallon: Do not the two management buy-outs and the Readheads co-operative point the way to the future of shiprepair in this country, and to the sort of working practices that must be applied throughout British Shipbuilders?
    Mr. Lamont: My hon. Friend is absolutely right. When a nationalised industry gets out of an area of operation it makes sense to give the labour force a chance to buy assets and to have a management buy-out. I regret that when the workers wanted to buy the yard at Readheads they were opposed by the trade unions and Opposition Members.
    Mr. Shore: On a point of order, Mr. Speaker. I tried to raise this point of order with you, as you will recall, shortly after the answer to question No. 2, which was tabled by my hon. Friend the Member for Tooting (Mr. Cox). My hon. Friend asked the Secretary of State for Trade and Industry about the London Dockland Transportation Consortium, but the Secretary of State declared frankly and openly that that matter was not for him, as it was not within his remit and interest as the Secretary of State. Something is wrong, as my hon. Friend should have been advised in good time if that were the case. My hon. Friend sought an answer to a legitimate question, which should have been transferred. I ask you, for the future benefit of my hon. Friend, and Members on both sides of the House, what advice should have been tendered, or could be offered, to hon. Members who table a question to the wrong Minister.
    While I entirely accept the general desirability of not raising points of order until the end of Question Time, may I ask you to apply that practice in a totally non-discriminatory way in future'?
    Mr. Speaker: In relation to the right hon. Gentleman's remarks about not raising points of order until the end of Question Time, that is exactly the practice I have always followed and I shall continue it.
    Mr. Tebbit: Further to that point of order, Mr. Speaker. I am sorry that the right hon. Gentleman was misled by circumstances. I understood that the hon. Member for Tooting (Mr. Cox) was particularly anxious to put his question to me, although he was aware that I had no departmental responsibility for the contractual matters to which the right hon. Gentleman referred. The hon. Member for Tooting asked when I had last met the management of the group and, therefore, I had to tell him that I had not done that and had no plans to do so.
    Mr. Skinner: Further to that point of order, Mr. Speaker. Will you confirm, in view of what my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore), the Shadow Leader of the Opposition — the House—[Interruption.] You never know. Anything can happen. In view of my right hon. Friend's remarks regarding points of order, and the fact that he wanted to see impartiality, will you confirm that, when the hon. Member for Tatton (Mr. Hamilton) was asleep and did not ask question No. 7, a point of order was raised by the hon. Member for Wokingham (Sir W. van Straubenzee), who tabled question No. 10, and that he somehow managed to get his point of order across?
    Mr. Speaker: I am grateful for the hon. Gentleman's help. I did not see the hon. Member for Tatton (Mr. Hamilton), and I did not hear the question asked or see he hon. Gentleman rise in his place. Sometimes the view from the Speaker's Chair is restricted, but the hon. Gentleman was obviously in his seat.

Visitors (Notice)
3.34 pm
Mr. Andrew Faulds: On a point of order, Mr. Speaker. I am sorry that I have not had the opportunity to give you notice of this point of order, but the matter has only just come to my attention. I normally enter these premises by New Palace Yard so that I can dutifully get to my office as quickly as possible and deal with my constituents' interests—[Laughter]—something that the House obviously endorses. But today, because of personal reasons that I will not go into—
Mr. Nicholas Soames: What is her name?
Mr. Faulds: —I had cause to enter by St. Stephen's entrance, and I was extremely perturbed to find on the closed door to St. Stephen's entrance a notice in the following words:
"Visitors by appointment only. Closed to the general public."
If a constituent of mine wishes to approach me, I would like him, or preferably her, to have direct access to whatever advice he or she seeks. The words, "Visitors by appointment only", are somewhat off-putting, and since some of my constituents — [Interruption.] This does affect all hon. Members, and perhaps others would be advised to listen. Some of my constituents are somewhat timorous creatures, and they might be put off by that rather admonitory wording.
I should like to raise with you, Mr. Speaker, a serious point. I have always understood that constituents could enter the House totally unhindered if they had a point to raise with Members. If the new understanding is that appointments must be made with Members before they can discuss their problems, I do not find that acceptable. I should like you, Sir, to look into this matter, both as to the unacceptablity of this notice and to try to establish who was foolish enough to advise such wording on that notice.
Mr. Speaker: I will certainly look into the wording of the notice. The hon. Gentleman did not say at what time he entered the building—
Mr. Faulds: Two thirty-five, Sir.
Mr. Speaker: I will look into the wording of the notice, but I understand that it has been up for many years.

Select Committee (Broadcast)
3.36 pm
Mr. Brian Sedgemore: On a point of order, Mr. Speaker. I wish to raise a point of order concerning the conduct of Chairmen of Select Committees which are conducting sensitive and contentious inquiries. You will be aware that about two weeks ago various hon. Members lodged complaints with the Select Committee on Members' Interests about the Prime Minister's conduct in relation to a contract in Oman. Last Saturday on "The Week in Westminster", the hon. Member for Wealdon (Sir G. Johnson Smith), the Chairman of the Select Committee on Members' Interests, took part in a broadcast, throughout which he spoke about the Prime Minister's dealings in Oman. In effect, he spoke to her innocence, to the fact that she had in no way committed a misconduct or broken any rules, and he said that it was merely a mother trying to defend her son.
I wish to put four points to you, Mr. Speaker. First, in my submission it is difficult to conceive of a greater contempt of the House than that the Chairman of a Select Committee conducting a sensitive inquiry should seek to pre-empt the issue—
Mr. Speaker: Order. This is a matter which the hon. Gentleman should raise on a motion. It is not a matter with which I can deal on the Floor of the House.
Mr. Sedgemore: I am asking for your advice Mr. Speaker—
Mr. Speaker: I have just given my advice to the hon. Gentleman. I can say nothing more about it. If the hon. Gentleman wishes to criticise the Chairman of a Select Committee, he must do so by way of a motion.
Mr. Tam Dalyell: On a point of order, Mr. Speaker.
Mr. Sedgemore: Further to that point of order, Mr. Speaker. I am not seeking to criticise the Chairman of a Select Committee. I am asking for your advice about what happens when Select Committees are considering highly contentious and sensitive issues, and I am asking you to help Back-Bench Members to sustain the integrity of the House. We need to know what is and is not permissible for Chairmen of Select Committees to say on radio in the middle of an inquiry, because my constituents are saying to me—
Hon. Members: Ah!
Mr. Dennis Skinner: Look at those hooligans.
Mr. Speaker: Order. I must tell the hon. Member for Bolsover (Mr. Skinner), who has been helpful this afternoon, that we should have no hooliganism.
Mr. Skinner: They shouted, not me.
Mr. Sedgemore: Further to that point of order, Mr. Speaker. My constituents are saying to me that I have told them that I shall not make any public pronouncements on this issue because it is being investigated by a Select Committee. My constituents are asking me why there is one set of rules and conventions for me as a Back-Bencher, and another for the Chairman of the Select Committee.
Mr. Speaker: Order. I have already told the hon. Gentleman that he is going into the merits of the matter. He must put down a motion, and we will deal with the matter in that way.
Mr. Dalyell: On a point of order, Mr. Speaker. With respect, there is a precedent. In 1967, after I had talked too freely on a Select Committee report, the question of a breach of privilege was raised. It will be within the recollection of some hon. Members and of the learned Clerks that as a result of my talking to The Observer in the case of Porton Down and Mr. Lawrence Marks before—although I did not know it at the time—the report had been published, the matter was automatically raised on the Floor of the House as a question of privilege. May we ask for your guidance, Mr. Speaker—perhaps not off the top of your head but in the form of a statement tomorrow—as to whether the hon. Gentleman's astonishing broadcast, which some of us heard on Saturday morning, constitutes a flagrant breach of privilege? What is sauce for the goose is sauce for the gander. In 1967 some of us had to go through it all—Speaker, black cap and all. My hon. Friend the Member for Bassetlaw (Mr. Ashton) had to go through it, too. You do not do that in these civilised days, Mr. Speaker, but Mr. Speaker King was quick enough on the draw in those days. What has changed?
Mr. Speaker: I remember the incident well. If the hon. Gentleman considers that this is a question of privilege, he should raise it with me in the present way, by writing to me.

Rates Bill (Allocation of Time)
3.42 pm
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,
That the following provisions shall apply to the remaining proceedings on the bill:—
Committee
1. — (1) The Standing Committee to which the Bill is allocated shall report the Bill to the House on or before 20th March 1984.
(2) Proceedings on the Bill at a sitting of the Standing Committee on the said 20th March may continue until Eleven p.m., whether or not the House is adjourned before that time, and if the House is adjourned before those proceedings have been brought to a conclusion the Standing Committee shall report the Bill to the House on 21st March.
"Report and Third Reading
2. — (1) The proceedings on Consideration and Third Reading of the Bill shall be completed in two allotted days and shall be brought to a conclusion at Ten o'clock on the second of those days; and for the purposes of Standing Order No. 45 (Business Committee) this Order shall be taken to allot to the proceedings on Consideration such part of those days as the Resolution of the Business Committee may determine.
(2) The Business Committee shall report to the House its Resolutions as to the proceedings on Consideration of the Bill, and as to the allocation of time between those proceedings and proceedings on Third Reading, not later than the fourth day on which the House sits after the day on which the Chairman of the Standing Committee reports the Bill to the House.
(3) The Resolutions in any Report made under Standing Order No. 45 may be varied by a further Report so made, whether or not within the time specified in sub-paragraph (2) above, and whether or not the Resolutions have been agreed to by the House.
(4) The Resolutions of the Business Committee may include alterations in the order in which proceedings on Consideration of the Bill are taken.
Procedure in Standing Committee
3. —(1) At a sitting of the Standing Committee at which any proceedings on the Bill are to be brought to a conclusion under a Resolution of the Business Sub-Committee the Chairman shall not adjourn the Committee under any Order relating to the sittings of the Committee until the proceedings have been brought to a conclusion.
(2) No Motion shall be moved in the Standing Committee relating to the sitting of the Committee except by a member of the Government, and the Chairman shall permit a brief explanatory statement from the Member who moves, and from a Member who opposes, the Motion, and shall then put the Question thereon.
4. No Motion shall be moved to alter the order in which Clauses, Schedules, new Clauses and new Schedules are taken in the Standing Committee but the Resolutions of the Business Sub-Committee may include alterations in that order.
Conclusions of proceedings in Committee
5. On the conclusion of the proceedings in any Committee on the Bill the Chairman shall report the Bill to the House without putting any Question.
Dilatory Motions
6. No dilatory Motion with respect to, or in the course of, proceedings on the Bill shall he moved in the Standing Committee or on an allotted day except by a member of the Government, and the Question on any such Motion shall be put forthwith.
Extra time on allotted days
7. —(1) On the first allotted day paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings on the Bill for two hours after Ten o'clock.
(2) Any period during which proceedings on the Bill may be proceeded with after Ten o'clock under paragraph (7) of Standing Order No. 10 (Adjournment on specific and important matter that should have urgent consideration) shall be in addition to the said period of two hours.
(3) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 10 stands over from an earlier day, a period of time equal to the duration of the proceedings upon that Motion shall be added to the said period of two hours.
Private business
8. Any private business which has been set down for consideration at Seven o'clock on an allotted day shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill on that day, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the conclusion of those proceedings.
Conclusion of proceedings
9. —(1) For the purpose of bringing to a conclusion any proceedings which are to be brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee or the Business Sub-Committee and which have not previously been brought to a conclusion, the Chairman or Mr. Speaker shall forthwith put the following Questions (but no others), is say—

(a) any Question already proposed from the Chair;

(b) any Question necessary to a bring to decision a Question so proposed (including, in the case of a new Clause or new Schedule which has been read a second time, the Question that the Clause or Schedule be added to the Bill);

(c) the Question on any amendment or Motion standing on the Order Paper in the name of any Member, if that amendment or Motion is moved by a Member of the Government;

(d) any other Question necessary for the disposal of the business to be concluded;

and on a Motion so moved for a new Clause or a new Schedule, the Chairman or Mr. Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(2) Proceedings under sub-paragraph (1) above shall not be interrupted under any Standing Order relating to the sittings of the House.
(3) If an allotted day is one on which a Motion for the adjournment of the House under Standing Order No. 10 (Adjournment on specific and important matter that should have urgent consideration) would, apart from this Order, stand over to Seven o'clock—

(a) that Motion shall stand over until the conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion at or before that time;

(b) the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion after that time shall be postponed for a period equal to the duration of the proceedings on that Motion.

(4) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 10 stands over from an earlier day, the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion on that day shall be postponed for a period equal to the duration of the proceedings on that Motion.
Supplemental orders
10. — (1) The proceedings on any Motion moved in the House by a member of the Government for varying or supplementing the provisions of this Order (including anything which might have been the subject of a report of the Business Committee or Business Sub-Committee) shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings.
(2) If on an allotted day on which any proceedings on the Bill are to be brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee the House is adjourned, or the sitting is suspended, before that time no notice shall be required of a Motion moved at the next sitting by a member of the Government for varying or supplementing the provisions of this Order.
Saving
11. Nothing in this Order or a Resolution of the Business Committee or Business Sub-Committee shall—
(a) prevent any proceedings to which the Order or Resolution applies from being taken or completed earlier than is required by the Order or Resolution, or
(b) prevent any business (whether on the Bill or not) from being proceeded with on any day after the completion of all such proceedings on the Bill as are to be taken on that day.
Re-committal
12. — (1) References in this Order to proceedings on Consideration or proceedings on Third Reading include references to proceedings, at those stages respectively, for, on or in consequence of re-committal.
(2) On an allotted day no debate shall be permitted on any Motion to re-commit the Bill (whether as a whole or otherwise), and Mr. Speaker shall put forthwith any Question necessary to dispose of the Motion, including the Question on any amendment moved to the Question.
Interpretation
13. In this Order—
"allotted day" means any day (other than a Friday) on which the Bill is put down as first Government Order of the Day provided that a Motion for allotting time to the proceedings on the Bill to be taken on that day either has been agreed on a previous day or is set down for consideration on that day;
"the Bill" means the Rates Bill;
"Resolution of the Business Sub-Committee" means a Resolution of the business Sub-Committee as agreed to by the Standing Committee;
"Resolution of the Business Committee" means a Resolution of the Business Committee as agreed to by the House.
I believe, Mr. Speaker, that most right hon. and hon. Members will by now be familiar with the issues raised by the Bill. Should there be any who are still in doubt, my right hon. Friend the Secretary of State for the Environment will, at the end of this debate, explain in detail the need for the legislation. None the less, in view of the importance of the subject, it is appropriate for me to open my brief contribution by reminding the House as briefly as I can of the purposes of the Rates Bill.
There are three distinct elements to the Bill. Part I provides for the selective limitation of the rates or precepts of the highest spending councils in the country. These proposals have emerged from the experience of four years of effort to counter the historic growth in local government spending.
During that period, the traditional means of securing the observance of the public expenditure plans of the Government, so far as local government is concerned, have been widely tested. Exhortation and the application of general pressures through the rate support grant system have not had the desired effect on all authorities. We have had to invent new procedures. The Local Government, Planning and Land (No. 2) Act 1980 and the Local Government Finance (No. 2) Act 1982 each sought to restrain the higher levels of spending through the grant system.
Those earlier attempts have eventually secured a fair measure of success with the majority of authorities. In 1983–84 80 per cent. of all authorities are spending at, or close to, the expenditure targets set for them. But there is also a disappointment because, despite those efforts by the majority, we are still with an overspending of some £770 million in the current financial year, and three quarters of that figure is accounted for by 16 authorities. As well as these departures from the Government's expenditure plans, there is another consequence of high spending: the very high rates which put intolerable burdens on domestic and business ratepayers alike.
That, then, is the background to part I of the Bill. It has the twin objectives of restraining local government's

261
expenditure and holding down the rates of the highest spending authorities. We have always made it our intention that this legislation should be available to affect the rates which are set for 1985–86 that is the financial year after the one which starts in the coming April.
Mr. Allan Roberts: The Leader of the House has said that the purpose of the Bill is to enable the Government to determine the levels of rates and services in certain local authorities. Traditionally, that decision has been made locally and a judgment has been made on those decisions at local elections through the ballot box. What will be the purpose of holding local elections in areas to which the Bill will be applied in the financial year in which he wants it to be operated?
Mr. Biffen: That is not relevant, as local authorities will be subject to the decisions of their local electorates within the parameters that this legislation will set. If the hon. Gentleman is so dismissive of local elections as to suppose that they are invalidated merely because of the guidance and disciplines that the Bill contains, I think he is showing a disregard for the potency of local elections.
Obviously, setting a fair rate limit is not a task which can or should be rushed. There are a number of stages to be observed. The highest spending authorities must be identified and formally designated. In fairness to the local authorities, an expenditure level must be set early enough in the year to allow them time to make the necessary plans. Arrangements must be made to achieve the required savings or to make representations to the Secretary of State that a higher figure is necessary.
Subsequently, the expenditure figure must be translated into a rate poundage figure and time provided for Parliament to debate that figure before the authority has to make its rate or precept. All of that process cannot begin until the legislation is complete. For that reason the Government feel that it is right to ask for the Bill to complete all its stages well before Parliament rises for the summer recess.
To give time for the Bill to be properly examined in the other place, this House must complete its consideration in time for it to have its Second Reading in the other place before Easter.
Mr. W. Benyon: Am I not right in thinking that the parliamentary processes to which my right hon. Friend has just referred could not conceivably start until the new Session of Parliament in October or November?
Mr. Biffen: I think that my hon. Friend is referring to administrative processes. It is important for this House to play its part to enable Parliament in its totality to provide the framework to which my hon. Friend refers.
At this point I should like to refer to the other two elements of the Bill. Part II provides for a general power of rate limitation. Of course, it is not the Government's intention that part II should have immediate effect. Indeed, we have said repeatedly that it is our hope that it need never be used at all. It did, however, clearly prove a controversial element in the legislation when it was debated on the Second Reading.
Mr. George Park: The Leader of the House has said that this House will discuss the level of rate before local authorities make their rate. Will it not
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also be necessary, if the metropolitan county councils are wiped out and precepting authorities are put in them place. for their precepts also to fit into this timetable?
Mr. Biffen: That may be true, but I assure the House that what is now being recommended is in the context of the legislation before the House and not of anything which may be contained in future legislative proposals.
The Government wish to ensure that sufficient time is allocated for the provisions of part II to be properly scrutinised. The longer the delay in presenting this timetable motion, the greater would have been the difficulty in securing that end.
Part III of the Bill contains some important reforms of the existing rating system. They provide for statutory consultation within local business about rate levels and for better information to be given to all ratepayers about how much they are paying in rates and to whom. There are also a considerable number of minor reforms which are of some technical complexity. All these provisions, too, should find a proper amount of time allocated for their consideration.
Bearing this in mind, it is with stoicism—if not with surprise—that I have to tell the House that the Standing Committee has, after 80 hours of debate, managed to complete only six clauses. In what I might most charitably call its determination to ensure that no point goes unconsidered — [HON. MEMBERS: "Quite right."] Hon. Members say "Quite right," and I am happy to read that into the record so that the House may make its judgment accordingly. The Committee took 18 hours to deal with clause 1, 35 hours to deal with clause 2 and a further 18 hours on clause 3, and all this after a whole morning sitting of two hours had been taken to debate a motion that the Committee should sit in the afternoons as well as the mornings.
Mr. Allan Roberts: The Minister gave notice at the second sitting that a motion to sit in the afternoons would be moved at the third sitting. It is unprecedented to make such an announcement when a Committee has met only twice and has had no opportunity to debate the legislation. In the same way, the Government Whips forced the all-night sittings and the long hours.
Mr. Biffen: Not only is that not without precedent, but it demonstrates the prescience of my hon. Friends in charge of the Bill in judging that it would be a matter of major political concern, requiring proper and measured debate and judgment if all the issues were to be considered. That sensible and wise judgment, alas, was frustrated by the calculated loquaciousness of the Opposition.
In the light of the great difficulty in making ordinary progress, the Government had no alternative but to introduce the timetable motion. It has been suggested in some quarters that its introduction is premature, and that it should have been delayed for another three or four sittings of the Committee.
Mr. Harry Cowans: I am grateful to the Leader of the House for giving way and I apologise for being late. I dashed back from a Select Committee especially to hear the right hon. Gentleman's speech. When I came in I thought that he was doing very well as he seemed to be speaking on behalf of the Opposition. He has made all the points about why consideration of the Bill should take a long time.

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The right hon. Gentleman referred to "progress". We have repeatedly tried to find out what the Government regard as progress, but we have never received any answer. How can we make progress if no one will tell us what it is?
Mr. Biffen: I may be making all the points, but by Heaven I am making them a good deal more succinctly than the Opposition. Progress is in the eye of the beholder—or rather in the ear of the listener, in this context. As right hon. and hon. Members who have been in this place for some time know, timetable motions have been introduced in the past at a much earlier stage on equally important items of legislation.
Moreover, it is precisely because this Bill is of such importance that the motion is introduced now. Clearly, it is intended to facilitate the passage of the legislation. I would, however, emphasise a further point. It will also ensure that the significant matters covered in parts II and III, which I have described, receive adequate consideration. This would not have been possible had we deferred introducing this motion until a later date.
In that spirit, I now wish to assure the House that we do not intend to curtail debate on the Bill unreasonably. The timetable motion that the Government have now put before the House would permit the Standing Committee to meet for a further six days, giving another 12 sittings if the Business Sub-Committee decides to continue morning and afternoon sittings. Wisely allocated, that would allow plenty of time for thorough discussion of the remaining matters in the Bill and ensure that important areas are not neglected. At the conclusion of those discussions, two full days will be made available on the Floor of the House for Report and Third Reading.
It is evident that the Opposition do not wish to allow the Bill to make the progress needed to meet the timetable outlined, without the assistance of this motion. It is a measure of considerable importance to literally millions of ratepayers and a central part of the Government's programme. Therefore, I commend the motion to the House.
3.56 pm
Mr. Peter Shore: The Rates Bill is an odious and offensive Bill, as anyone who has taken the trouble to study it will be ready to agree. However, it is made doubly odious by the Government's decision to guillotine its further progress, particularly at this stage.
Having listened to the Leader of the House, I have a certain sympathy with him. I could not help but feel for him, in being put up to this unenviable task of justifying the unjustifiable.
Last week, during business questions — which he normally handles so admirably — when asked by my hon. Friend the Member for Tyne Bridge (Mr. Cowans) whether he was not ashamed of some of his actions or inactions, the right hon. Gentleman said:
"People with qualities of guilt and shame are never made Leaders of the House."—[Official Report, 21 February 1984; Vol. 54, c. 985.]
The tragedy is that the right hon. Gentleman has precisely those qualities of guilt and shame. It is self-evident this afternoon that the guilt and shame overcame his normal
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resilience and verbal felicity, and that he was reading his script with all the animation of a man addressing himself to a telephone directory.
The roles of the two right hon. Gentlemen have been curiously and wrongly reversed. The debate should, indeed, have been opened by the right hon. Gentleman the Secretary of State for the Environment, who is the author—or rather the office boy—of this measure. He is the man who, I would have thought, is almost totally without a sense of guilt and shame, because he lacks the basic understanding. It is only if one understands things, and then feels a conflict between what one's understanding tells one about an issue and what one knows and feels is the right thing to do, that problems of guilt and shame arise. One right hon. Gentleman is only too vulnerable to that, because he is capable of thinking in an imaginative way. The other right hon. Gentleman is entirely without such qualities, and is therefore admirably equipped to introduce this insensitive debate, and motion, and to be author—again, the office boy or messenger—of this odious Bill.
Of course all guillotines are objectionable, but no one will doubt that some are far more objectionable than others. If one thinks about it, this motion is self-evidently objectionable for several obvious and distinctive reasons. The first is that it is a quasi-constitutional Bill. We do not have a written constitution, so we neither define those issues which are in some sense constitutional nor, lacking such a definition, do we attempt to introduce any special procedures for obtaining consent. If we had a written constitution we should no doubt seek to deal with a Bill of this character in a special way and we would certainly seek some additional and weighted majority for its passage.
But if we do not have a written constitution we do have common sense—or rather we did have common sense. In the past, when Governments sought to make major changes affecting our democratic institutions at national and local levels, there was a general understanding and agreement that the maximum scrutiny and discussion should be allowed. No one can seriously doubt the Bill's importance. As the right hon. and learned Member for Hexham (Mr. Rippon) reminded us on Second Reading, since 1601, locally elected councils have had the right to raise revenues in England and Wales in order to cover those expenditures that they could lawfully undertake. Such powers are essential for the proper and responsible conduct of local democracy. In Britain, the areas in which local councils can lawfully spend money have traditionally been wide indeed, but nevertheless defined and circumscribed. Equally, their capacity to raise revenues, whether through rates, rents, fees, charges and loans, have been limited. But the heart of local government finance has been and is overwhelmingly the rates.
The Government, having abandoned their original pledge to abolish rates altogether, now seek to limit their exercise in this arbitrary and capricious way. In doing so, they are attacking the fundamental responsibility of locally elected councils. Rate capping takes us a giant step along the road to centralism. The area of choice—indeed, the fundamental choice—between the level of spending and the level of taxation, hitherto made by elected councillors, is now to be radically reduced. No longer will citizens be able collectively to decide through their local councils the level of services that they want. They may want better social services, more and improved educational services, better housing administration and the like, and be prepared

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to pay for them through higher rates. But henceforth it is not their wishes that will prevail. It is Big Brother in Marsham street who will decide just how much, collectively, every local authority will be allowed to spend.
The Government need take only one more step to abolish local government altogether. They need now only place a statutory ceiling on what they think is the correct expenditure of particular local authorities on all the different services that they provide. Indeed, on their philosophy, I can see no reason why the Government should not do that now. They have already worked out to the last decimal point what they think every individual authority should be spending on each service and given to it all the authority that the complex equation-making machinery of Marsham street provides.
Mr. Sydney Chapman: As a former Secretary of State for the Environment, will the right hon. Gentleman tell the House how he worked out the distribution of the rate support grant when he was in power if he is complaining about the present method?
Mr. Shore: Our one deliberate policy decision was not to try to make an individual value judgment about the needs of individual local authorities. That was the one thing that we did not do. The whole nature of the needs element, as it was then defined, was, as the hon. Gentleman will recall, based upon such factors as were thought to be, and tested as being, relevant. They were not allocated to particular authorities but were based on the general pattern of an authority's spending experience.
We are talking about the limitation of spending, not the distribution of spending. The Government work out in detail how to do all those things. As this great change is now about to be introduced, one must ask where is to be found the authority for so massive, so unwelcome and so historic a change. What study by serious and impartial men has taken place? What advice has been tendered by the practitioners of local government?
What is the Government's defence? What authority can they cite for the proposals? None at all, except what presumably moved those who cobbled together the Conservative manifesto in the last few days before the election.
Mr. John Heddle (Mid-Staffordshire): The right hon. Gentleman has criticised the Government for seeking to take powers to protect the ratepayer. Will he now tell the House where he stands on the issue of the Marxist-led Liverpool city council that seeks to cock a snook at the Government's wish to protect the ratepayers' interests? Does he condemn the behaviour of such Marxist councils which wish to defy the Government's rate-capping proposals and levy an illegal rate?
Mr. Shore: I am advised that that council is not even covered by part I of the Bill. My broad answer — a simple and direct answer—is that I have great faith in democracy. That is the real difference between us. I believe, and always believed when I was Secretary of State, that if there were to be major underspends as well as overspends, as they might be perceived centrally and at national level, the right place for them to be corrected, apart from the action that a Secretary of State might take through the rate support grant, was by local people deciding for themselves whether their locally elected
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councils were doing the job. If they were dissatisfied, they would have the remedy. That is the way that we have conducted ourselves, not just for the hon. Gentleman's short period in the House but for centuries. We have decided matters by the good sense of our people at a local and national level.
Mr. Heddle indicated dissent.
Mr. Shore: The hon. Gentleman should not shake his head over that, because he is shaking his head against the very purpose and heart of democratic practice in Britain
One would have thought that a Bill of this kind, which diminishes the rights of all elected councils throughout Britain, would have been taken on the Floor of the House so that every hon. Member would have an opportunity to debate it and to seek to amend it. Not only have the Government not given such an opportunity; they have hardly given it a chance to be debated, even in Committee.
It is difficult to believe—but it is true—that barely six weeks have passed since the Second Reading on 17 January. The Bill has been in Committee a mere four weeks and no more than nine days have been devoted to its consideration. But here we are faced with a guillotine. What makes that inexcusable is that the Opposition offered the Government a formal arrangement in Committee to complete the Committee stage by Easter. That offer was spurned and rejected. Now, as the Leader of the House knows better than most, under the stifling limitations of a timetable, we are offered a wretched six days before the Bill returns to the Floor of the House.
What excuse is there for the Government rushing through this most controversial and far-reaching measure? I do not think that the Leader of the House has given us a satisfactory explanation—nor does he—so let me give him one which not only fits the facts but goes to the heart of the matter and explains why we have a guillotine at this early stage. It was essential for the Government to guillotine the Bill before clause 9 was reached.
The Bill, as most hon. Members know, falls into two main parts. Part I gives the Government—the Secretary of State himself—great powers to rate-cap a minority of local councils which, according to his calculations and belief, are overspending. These are, of course, as he presently describes them, precisely those councils which govern the areas of greatest need in the country—in particular, the inner city areas, the very areas whose deep-seated social and economic problems have been so intensified and aggravated by the prolonged recession of the past four years. They are, as the Government well know, overwhelmingly Labour areas. They are, of course, to be rate-capped, come what may. Because they are Labour-controlled authorities, the Government hope, and hoped, that their own supporters will be indifferent to their fate—indeed, will positively support the Government's actions.
The second part of the Bill, the part that starts with clause 9 that must not be reached in Committee, gives the Government—the Secretary of State—that same power to rate-cap not just the Labour-dominated inner city overspenders, as they like to think of them, but to rate-cap all local authorities, the counties and the county districts, just as much as the metropolitan counties and the metropolitan districts. These councils are not run by Labour, of course; they are the councils that are run by the Conservative party.

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The full implications of what the Government are seeking to so, the circumstances in which these powers will be used and the incompetent brutalism of an ignorant Whitehall are among the things that would have been exposed most certainly if proper debate of the Bill were allowed in Committee. It is essential, therefore, for the Government to terminate free discussion of this measure before the poison that is in it can be demonstrated to the vast majority of Conservative Members of Parliament whose own local councils will be just as much prisoners of its provisions as the alleged overspenders in the Labour-controlled cities.
It is amazing how naive some Conservative Members can be, but they have only to read the resolutions, the speeches, the submissions, not from the Labour party, but from the Association of County Councils and the Association of District Councils, to understand what is in store for them. Some Conservative Members, of course, think that this will not happen, and that the right hon. Gentleman will be content to attack, further weaken and diminish the financial resources of the Labour-dominated inner cities. They are wrong. There is not enough money to be gouged out of the inner cities.
The House heard a Minister speak last Friday on the subject of London and ILEA, informing the House that ILEA was overspending against the GRE to the extent of £400 million—nearly twice the GRE that had been set for it. No hon. Member in his senses, not even the Minister himself, believes that that can begin to be effectively adjusted, except over a long period. Hon. Members who believe that the Treasury will wait for a timetable that will be acceptable in any way to the inner cities, before it starts getting back the £750 million of alleged overspend, are deluding themselves.
The Secretary of State for the Environment (Mr. Patrick Jenkin): The right hon. Gentleman said that one of the effects of the Bill would be to diminish the resources that would go to inner city areas. He must realise, of course, that, as the excessive spending of these areas comes down, so their share of rate support grant will go up, and they will get a good deal more rate support grant as they bring their spending under control. Therefore, far from the resources being diminished, the councils will get more from central Government funds to help them.
Mr. Shore: This is really disgraceful. The right hon. Gentleman knows, or should know, very well that the massive movement of money that has already taken place has been from the cities to the counties. We can argue about the relative needs. It is a question of swings and roundabouts. The right hon. Gentleman is saying that if the councils cannot raise money through the rates, they may get a little more through the Government grant, because they will not be penalised, punished and fined for overspending. The idea that they will get above the Government's defined GRE is not tenable. The Government have no insight into the real needs of the inner cities; they know it, and we know it.
Some Conservative Back Benchers think that there are safeguards against the operations of part II, and the Secretary of State likes to make a great deal of it, but what are the safeguards? There is the promise to consult. The Government ought to go and talk to the consultative council and local government to see what they think about
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the pledge to consult, and the reality of that pledge. They think it is a joke. The Government should ask Mr. Lovill, or one or two of the people who run the ADC, what they think of the Government pledge to consult before they trigger the general mechanism.
The second safeguard, it is suggested, is an affirmative resolution in the House of Commons. What a splendid one and a half hour debate that will be! Before the outrage has been expressed, it will be closing time, and that will be the end of that.
Mr. Patrick Jenkin: Both Houses.
Mr. Shore: I have used the word "poison" about the effect of the Bill, and I did so advisedly—because I believe that it will increasingly paralyse the working of local democracy. I also believe—I do not think that the Secretary of State has discovered this for himself—that the Bill will paralyse his Department. The Secretary of State may have the arrogance and the wish to impose his judgment, as the Bill allows, upon 23,000 elected councillors in over 450 elected councils. However, I do not believe that more than a tiny minority of his own civil servants, upon whom the responsibility will fall, and by whom the judgments will have to be made, have any wish to engage in such an exercise. Although civil servants have every confidence in their general powers of judgment, the one thing that they know they cannot do is to decide what is best, what is the right pattern of expenditure, in the varied councils and districts throughout the land. Whitehall does not know better than town hall what local services are in the best interests of local people.
This is a rotten Bill, and it is an ideological Bill. Its only purpose is to cut public expenditure, not to affect the PSBR, not to affect money supply and not to enter into any of the major macroeconomic arguments. It expresses two things only — the Government's detestation of public expenditure in principle, and the Government's total disregard of, and indifference to, the inner cities in particular, and local democracy in general. I urge the House to reject the guillotine motion, as I would have urged it to reject this odious Bill.
4.19 pm
Mr. Sydney Chapman: I am glad to have the opportunity to speak after the right hon. Member for Bethnal Green and Stepney (Mr. Shore) who has articulated his opposition to this controversial and important Bill. His hon. Friends have put forward their arguments in Committee against the measure with the eloquence that the House would expect of them and with a certain sense of exuberance, and they have certainly taken their time in deploying those arguments. The arguments on the other hand have been countered with eloquence, efficiency and conciseness, revealing a welcome clarity from my right hon. and hon. Friends.
In the few minutes available to me, I shall concentrate on the motion and leave, for another time, discussion of the Bill's merits. I have to admit to a profound sense of having been here before when it comes to debating guillotine motions. It is precisely 12 years since I first defended, in the House, a guillotine motion. The first 80 hours or so of the Committee's considerations on this Bill have amounted to nothing more or less than acting out a charade, or even a farce. There is a real sense of déjà vu—I make no apology for using a French term when talking about the guillotine.

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I must confess that long Standing Committees seem to follow me around. I do not know what I have done to deserve them. Twelve years ago I had the dubious distinction of serving on the Housing Finance Bill. After 200 hours and 45 sittings, the Government business managers felt it safe to suggest that that Bill should be guillotined. In all, we spent 257 hours examining that important Bill, and I believe that that is still a record. My right hon. Friend the Secretary of State has some impeccable precedents for guillotining this Bill. I shall pick out just one important Bill that was introduced by the then Labour Government. I refer to the Transport Bill 1967, which was introduced by the former right hon. Member for Blackburn, Mrs. Castle. The Government moved the guillotine on that Bill after only 20 sittings and 70 hours of debate. Mrs. Castle then allocated only three days to it, although it had 169 clauses.
Perhaps rather surprisingly the Standing Committee on the Rates Bill has been spiced with humour and remarkably free from rancour, not least because of the contributions made by hon. Members on both sides of the Committee, and in particular by the hon. Members for Tyne Bridge (Mr. Cowans) and for Newcastle upon Tyne, East (Mr. Brown). I now view that city, which was the home of my father, in a completely new northern light. When I listened to the hon. Member for Tyne Bridge, I was reminded of what Abraham Lincoln once said of a colleague of his who happened to be a lawyer. He said:
"He can compress the most words into the smallest ideas better than any man I have ever met."
Presumably, President Lincoln met quite a few men. However, I must also give a French quotation to maintain the flavour of the debate. It was Baron de Montesquieu's dictum that the less men think, the more they talk, and that sums up exactly what has happened in Committee.
Incidentally, my right hon. Friend the Leader of the House was being somewhat conservative when he spoke about having only reached clause 6 after 82 hours in Committee. The decision to apply for the guillotine must have been made some time between the end of last Tuesday's sittings and the beginning of last Thursday's sittings, and I calculate that the Committee had then been sitting for 70 hours and had taken up more than 700 columns of Hansard. By that time we had reached only clause 3, page 4, line 4. For the statisticians among us, that means that we had spent 70 hours examining the first 98 lines of an 18 clause Bill with two schedules, amounting to 1,052 lines. In other words, we had considered less than 10 per cent. of the Bill.
In my humble opinion, the serious point to be made is that our actions — and some would say our antics — upstairs at least call into question our parliamentary procedures. At worse, they seem to demean the purpose of Parliament, or the purpose and function of this Legislature. That must certainly be true in the eyes of those who have watched and studied our proceedings. The sad result is that we have been unable properly to scrutinise the Bill. To be more precise, we shall not be able to scrutinise the Bill properly.
Mr. Jack Straw: Who is the hon. Gentleman criticising when he says that we have not been able properly to scrutinise the Bill? How many of the hundreds of opportunities to speak has the hon. Gentleman taken?
Mr. Chapman: I shall respond as consisely as I can, because there seems to be some misunderstanding. The hon. Gentleman and his colleagues may have spent the vast majority of those 80 hours deploying their arguments, but the fact remains that we are still on part I. I was fortunate enough to catch the Chairman's eye at the first sitting, and in my five minute contribution I thought that I put forward my argument in favour of part I concisely. Indeed, I think that that also goes for most of my hon. Friends. With the greatest sincerity, I must say that there has been an over-indulgence in unnecessary verbiage on the part of the Opposition and a certain conciseness—I would like to think clarity—on the part of Conservative Members.
Mr. William O'Brien: Will not the hon. Gentleman agree that it was because several of us had served on local government for many years and the first two clauses of the Bill were so vital that we thought it necessary to make our points so that Conservative Members would be aware of the need for amendments to the Bill to ensure that local government was safeguarded? I am sure that the hon. Gentleman will agree that: it was unfortunate that the amendments so vigorously and painstakingly moved by Opposition Members were not accepted. In the main, that is why it took so long to get the business through.
Mr. Chapman: The hon. Gentleman says 'in the main". However, I listened to the contributions made by Opposition Members, and they were all at sea. It is beyond comprehension that Opposition Members seem unable to make their criticisms—it is not for me to say whether they are valid—more concisely.
Dr. John Cunningham rose—
Mr. Chapman: I shall give way, for the third and last time.
Dr. Cunningham: I am grateful to the hon. Gentleman for giving way, particularly at this stage in his remarks. Perhaps he would care to reflect on the fact that the longest Front Bench speech in Committee was made by his right hon. Friend the Secretary of State, who spoke for two hours in the middle of the night. He spoke for twice as long as I have ever spoken in Committee.
Mr. Chapman: Of course, we could start trading such statistics across the Chamber. However, I was there, so I think that I can confirm that my right hon. Friend the Secretary of State took just over an hour to answer in the detail expected by Opposition Members the valid points that they had raised on a series of amendments that had taken up much of our time.
I should like to develop my theme about the deficiency in our proceedings. When I spoke, 12 years ago, on the guillotine motion for the Housing Finance Bill, I said that a voluntary timetable should be agreed before any Bill went into Committee, so that there could be adequate time to examine and scrutinise all parts of the Bill. I also said that if a voluntary timetable could not be agreed the Government should propose one for the approval of the House. Perhaps, on reflection, a better option might be to recommend that the Committee of Selection should set a timetable after consultation with the interested parties.
I know the arguments against altering the existing procedures. In one of our adjournments I had a very eloquent discussion with my hon. Friend the Patronage

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Secretary and the Opposition Chief Whip. They pointed out as clearly as they could at 2 o'clock in the morning the virtues of the existing system. I believe that we should be prepared to change parliamentary procedures as our society and as the convenience and wishes of hon. Members change. That has happened in the past. My researches show, for example, that we have to thank one William Ewart Gladstone for introducing the guillotine, which was first used in the House in 1881. Lest it be thought that I am trying to make a political point, let me concede straight away that it was a Conservative Administration that formalised the guillotine procedure in 1887.
We should remember that it was only in 1888 that it was agreed that the sittings of the House should close at 1 am unless a particular motion was moved. By 1906 the House had devised what was known as the 11 o'clock rule. In 1946 under a Socialist Government it became the 10 o'clock rule. I think I am right in saying that it was only in 1947 that the guillotine was introduced for Standing Committees.
I have not heard any hon. Member say that there has been a lack of parliamentary democracy because, for example, Second Reading debates on important Bills, not least this one, are curtailed at 10 o'clock. Of course, we can spend four days, two days or one day on a debate on Second Reading, but it is for the convenience of the House that we agree to finish at a certain time. My point is simply that I do not believe that we would be denying democracy to anyone if there was a sensible timetable for the procedure upstairs on all Bills.
I am not concerned principally or essentially with the convenience of those of us who serve on Standing Committees; I am more concerned about the Legislature doing adequately and properly the job entrusted to it of scrutinising Bills. I hope very much that this brief contribution will not fall on deaf ears in the way that a similar contribution from myself apparently did 12 years ago.
4.32 pm
Mr. William O'Brien: The hon. Member for Chipping Barnet (Mr. Chapman) has given a brief outline of what has been taking place in Committee, but it is fair to point out that the majority of contributions have been from my hon. Friends, who have proposed constructive amendments with sincerity to try to bring some realism to the Bill. We have said, and it has been endorsed by all the local government associations, that the Bill as it stands will only undermine further the workings, activities and statutory responsibilities of local government.
The Rates Bill should be called the "Direct Rule Bill", because the Secretary of State is seeking by its application to rule local government direct from central Government. Another feature is that it is not the House but the civil servants in Marsham street who will make the major decisions that affect many councils. That is why we have been trying to impress upon Conservative Members the seriousness of the Bill as it stands. If the Government had accepted the amendments that we proposed, the Bill would have been more in keeping with the activities and spirit of local government.
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My view, which is shared by many hon. Members, is that the Bill is the most serious matter facing local government. It is a serious challenge to local government by central Government. Hon. Members who have served in local government for any length of time realise the seriousness of the challenge that is being made in the Bill. To introduce the guillotine at such an early stage in the Committee proceedings highlight, the unholy haste with which the Government wish to take a stranglehold on local government.
After four years of relentless pressure on the finances, the staffing and the services provided by local government, the Government have introduced this Bill. In addition, they have issued the White Paper attacking metropolitan county councils, which will affect the very future of local government. Therefore, we have been trying to impress upon the Secretary of State and upon hon. Members in Committee the importance of the amendments that we wish the Government to adopt. To bring the guillotine motion in at such an early stage is to deny to hon. Members who have at heart the interests of local government and ratepayers the right to put their case.
The Rates Bill and the White Paper were prepared hastily to fulfil an election manifesto promise. That was a commitment given by the Conservatives at the general election. As we saw on Second Reading, there is opposition to the legislation from all parts of the House and from all local government organisations, including Tory-controlled organisations, as well as the Labour-controlled Associaion of Metropolitan Authorities. All the organisations are united in opposing the legislation because of the impact that it will have on local government services. Right hon. and hon. Members in all parts of the House are opposed to the Bill because they believe that it is ill-conceived, brought in with haste and does not offer anything constructive to local government.
The system of financing is the main problem facing local government at all levels, from parish councils up to the GLC. On more than one occasion we have been promised that proposals would be brought forward to ease the problem of local government financing. Although that promise was made in both 1974 and 1979, it has not been met in any shape or form. The Bill is a substitute for keeping that promise. We have warned the Government, and will continue to warn them, that the Bill and the White Paper will not resolve the problem. The guillotine motion will not alter the system. It is a panic measure.
The stability of local government is threatened. I have had 30 years experience in local government and, together with other hon. Members with similar experience, I hope that our views will be heard. That is why we have spent so many hours in painstaking debate in Committee trying to provoke Conservative Members to ask questions about our amendments. They did not know what the Bill or the amendments were about. We took many hours explaining the measure to them—[Interruption.] That is true. Hon. Members who serve on the Committee will accept that point. They sat in Committee without making any contribution to the debate, so Opposition Members had to explain the Bill to them and also why the amendments were necessary to defend local government.
The people served by local government want their views to be heard, which is why the Opposition pursued their carefully considered and constructive amendments. Indeed, on more than one occasion the Minister accepted that our amendments were not intended to disrupt the Bill.

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We hoped that some of them would be taken on board and given favourable consideration by the Secretary of State. Unfortunately, that has not happened. We tried to influence the Secretary of State in an attempt to secure the provision of local government services.
The motion shows that the Government are committed to undermining the institution that has been valued for more than a century. The Leader of the House said that the Bill was intended to control high-rating authorities. Where do we go in the second round, and what about the implementation of grant-related expenditure? The former Minister for Local Government said that GREs were intended not to control local government expenditure, but only as a measure of guidance on rate support grant, but the Government are now using GREs to set expenditure levels, regardless of the services provided.
The decision about what services will be provided will no longer rest with local representatives elected through the ballot box. They will no longer be provided by agreement between the various parties serving on local authorities. Instead, they will be decided by the Secretary of State and the civil servants in his Department. No one in Whitehall can judge what services are necessary in the various local authorities, but the first three clauses of the Bill clearly outline that that will now happen.
The limiting of rate increases is a controversial matter. However the Bill refers not to limiting rate increases, but to limiting rate levels. That must mean that local authorities can be directed to reduce their current rate levels. Their income will be cut, so their services will be cut. Local authorities are opposed to the Bill because they fear that they will have to reduce their services. They fear that some of their statutory responsibilities will be denied to their electors because the Secretary of State will have the power to direct their levels of expenditure.
The local authority associations are united in their opposition to the substance of the Bill. That has been expressed on numerous occasions by their representatives and through declarations by their leaders and active members.
The short history of rate capping has all the hallmarks of hasty change without due consideration being given to the process. As I say, we are in this situation because of a hasty promise made during the election campaign in June of last year. Today, because of that commitment by the Conservatives, local authorities are having to face legislation which will create untold problems for those who serve in local government. The Tories have done nothing but undermine local government since they came to office.
The Secretary of State should not complain about a lack of progress in Committee. The first few clauses of the Bill govern the whole scheme of rate limitation, and although we tabled and discussed a number of amendments which, if accepted, would have taken some of the heat out of the problems that will be generated if the measure is passed unamended, the Government did not accept one of our proposals. Indeed, because the Government did not accept any of our amendments the debate had to continue, for we had to go on trying to impress on them the need for change.
Many of us consider that, in any event, the Bill was discussed with undue haste in Committee because, had there been more time, we should have liked to make further contributions. Amendments which were designed to secure greater parliamentary control over the rate-capping process were rejected. In the main, we were
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seeking to achieve a more democratic process. In much of what we said we were reflecting representations made to us or which we were sure would be made once the Bill was passed.
That opportunity has been denied us. In other words, we are being denied the right of democratically elected Members of Parliament to voice the views of our local authorities and constituents. As power is being centralised into the hands of the Executive, we should have the opportunity to make representations on behalf of the communities which we have been elected to serve.
Rather than guillotine debate on the Bill, more lime should be provided, because I can think of several amendments which I should move if there were time to do so. For example, clause 21 should be receiving our careful consideration because it will have a great effect on local government.
Is it not clear that a genuine approach is being adopted by local authorities in presenting reasonable rate increases for the coming year? If the levels of rates now being set by local authorities are reasonable, the guillotine is not necessary and we should have adequate opportunity to discuss all aspects of the Bill in depth. Only then should we feel that we had done our best to defend local government. Against that background, I oppose the guillotine motion.
4.55 pm
Mr. Colin Moynihan: I strongly support the need for a guillotine on the Rates Bill. It is now necessary to establish a timetable for further consideration of the Bill so that the due process of law can take place and this important and much-to-be-welcomed legislation may be placed on the statute book.
Opposition Members, here and in Committee, have argued on numerous occasions that successive measures have removed the freedom of local authorities to provide services according to local needs. That is palpable nonsense. Measures during the last four years — for example, changes to the rate support grant system — have consisted of stick and carrot measures to encourage councils to control their expenditure and make themselves more efficient. But so far—and, say many ratepayers in my constituency, regrettably — there has been no compulsion on local authorities to follow this course; they have been left free to order their spending priorities as they think fit.
We should all have liked the Government not to have had to introduce the Bill. We should all like the 30 or so authorities which are likely to be selected for rate limitation to put their houses in order in the coming months so that the selective scheme need not be applied. But the antics of ILEA, the present GLC and Lewisham council—all three of which dig deep into the pockets of the ratepayers of Lewisham — give cause for little such hope. I shall concentrate on the experience of those three, as their antics reflect the need for a guillotine on the Bill.
Mr. Allan Roberts: The hon. Gentleman referred to the possibility of 30 local authorities being penalised under the powers which the Bill seeks to take. Does that mean that he is opposed to the general powers, as he does not envisage many more than 30 local authorities having to be controlled by the Government?
Mr. Moynihan: I made it clear that I hoped that neither the selective nor the general powers would need to be

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used, although the hon. Gentleman will agree that that seems unlikely, to say the least. As a result, action must be taken now. In the view of the majority of my constituents, this guillotine does not come a day too soon, for Lewisham council continues to squander ratepayers' money on causes which have little relevance to the needs or aspirations of the overwhelming majority of local people.
There are, however, more important, indeed essential, reasons for urgent action on the Bill. Where Lewisham council has attempted to provide essential services, it has frequently done so by inefficient, ill-conceived, ill-executed and costly means. Every day that passes adds further to the inordinate rises in the rate bills of Lewisham's residents.
The need for a guillotine on the Bill has been implicitly recognised by Opposition Members, who on a number of occasions in Committee argued that as much time as possible should be given to councils to plan within their budget limits. The guillotine will assist them to do that.
At issue is the question of priorities of local spending. Sadly, Opposition Members argue that services are threatened by the Bill. Yet when it comes to making. savings, it is directly in the area of services that Lewisham council heads, partly for political expediency and partly for ease. If councillors in Lewisham wished to maximise the level of service, they would minimise the cost of labour, administration and overheads.
The Lewisham debate centres on the fact that, while, time and again in public, councillors talk about the rate burden and services, they do not tackle the fundamental reforms necessary to achieve greater efficiency and savings. The real issue for them is support for an index-linked, overweight, overmanned bureaucracy embracing public sector unions. How can it possibly be right for a council whose main budgetary item is manpower to be tied, on the one hand, by its own no redundancy policy and, on the other, by a union refusal to cover any jobs vacated by people moving on or retiring? This cannot pretend to be efficient management, or in the interests of the people of the borough. The urgency for this legislation is highlighted by this fact because it is the ratepayers who, year after year, have to foot this escalating bill.
I came to the House from the privileged position of running a Merseyside-based company in the heart of Speke, where every member of the 200 or so work force recognised the need to maximise his contribution so that the joint enterprise would survive. Management audits looking at work practices were a regular and welcome feature of the work. Despite the size of Lewisham council work force — about 7,500 — no external management audit has been undertaken. The local press report on a recent internal audit of the 400-strong team of council house repairmen said:
"Its findings confirm tenants' worst suspicions about the Council's direct labour organisation. Senior Council officers carried out a four week probe of the organisation, during which all its administrators were questioned at length.
They found: staff being told to lie to tenants about starting dates for repair work; workmen getting paid early by signing work-completion forms — then vanishing with the job unfinished; jobs being skipped by workmen knocking on the door too softly to be heard, then leaving a 'you were out when I called' card.
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The report says there has been a total breakdown in direct labour organisation/tenant communication, causing delays of four months or more. It slams the system—or lack of it—for workmen changing appointments with tenants.
The report concludes: 'Little time and attention has been devoted to ensuring a good service is provided to those who ultimately fund the direct labour organisation—the tenants'."
This guillotine motion is all-important in the light of such stories. They bear out the need for an end to rate rises from 58·9p in the pound
Mr. Cowans: I wish to clear my mind on one point. Is it not a fact that the ratepayers of Lewisham voted for the hon. Gentleman to be returned to the House? The answer to that is yes. Presumably they were right to do so, in the hon. Member's mind. Is it not passing strange, then, that the same ratepayers voted for the councillors of Lewisham but were wrong that time?
Mr. Moynihan: I am delighted to assist in clearing the hon. Gentleman's mind, as I always am. Those two factors are not at odds. On the contrary, this Bill, which was central to the legislative platform on which my party was returned to the House, points directly to the need, on behalf of the majority of my constituents and, without the shadow of a doubt, the majority of ratepayers in my constituency, to implement this legislation precisely to resolve that apparent contradiction.
Mr. Michael Meadowcroft: Does the hon. Gentleman accept that three out of five of those who voted in the general election voted against the Tory party policy for which he is claiming a mandate, and that only 40 per cent. of the electorate voted for the Tory party, which nevertheless comes back with a large majority of seats and claims a mandate?
Mr. Moynihan: Inevitably, the hon. Gentleman is walking down the path that leads to proportional representation. That would prove so inadequate to our system that we should not even be here discussing the Bill because it would have been lobbied in corridors by groups coming up with far more ineffectual compromises. The Bill would not have come before the House and we should not have the system of parliamentary Government which has served us so well for so long. I am delighted to see Labour Members agreeing with that point.
Mr. Heddle: I hope that my hon. Friend will prove the point that it is third time lucky. To substantiate the answer that he gave the hon. Member for Leeds, West (Mr. Meadowcroft), will he remind the House of the percentage turnout at the last general election, which rightly and overwhelmingly voted for him to represent Lewisham, East and of the turnout at the last local election?
Mr. Nicholas Brown: On a point of order, Mr. Deputy Speaker. I should like to discuss the timetable motion.
Mr. Deputy Speaker (Mr. Harold Walker): The hon. Gentleman has beaten me by a short head. I was about to remind the House that I could not see anything in the motion that would justify the intervention of the hon. Member for Mid-Staffordshire (Mr. Heddle).
Mr. Moynihan: I am grateful for your advice, Mr. Deputy Speaker. It is because of the points that I am making that such legislation is before us. If the House is not aware of the seriousness of some of the issues facing ratepayers, not only will there not be this guillotine, but

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ratepayers may have to go through yet another year of profligacy and unacceptable rate increases. For that reason, it is important that hon. Members and those outside this place should hear of the appalling mismanagement and overspending that is going on. That should persuade hon. Members when it comes to a vote.
I used one example, and I shall, to take your advice, Mr. Deputy Speaker, minimise the number of further examples that I give because, of course, I respect what you have said. Equally, I hope that you will fully understand and support my views about the fundamental issues at stake.
Mr. O'Neill rose—
Mr. Moynihan: In the interests of other hon. Members who wish to speak, I shall not give way. I apologise, but no doubt we shall have further opportunities to debate these matters in Committee.
The examples I quote are relevant. Week by week, Lewisham ratepayers have to finance such profligate and unnecessary spending as, for example, a new borough artist for £7,500, in addition to the celebrated marijuana-clouded jaunts to the West Indies for difficult youngsters, £100,000 going to the women's committee and £110,000 to a failed laundrette investment by the council.
Mr. Deputy Speaker: Order. I suspect that the hon. Gentleman is testing the patience of the House. I hope that he will relate his remarks more closely to the motion, or show how they are related.
Mr. Moynihan: I apologise, Mr. Deputy Speaker. I thought that I had done that lucidly.
The crucial point arising from these examples is that it is the failure of such authorities to respond to the repeated exhortations that have brought us to the present proposals for rate capping. In many respects, and particularly in respect of public expenditure, we are a unitary state and local authorities are not only responsible for a quarter of all public expenditure but have as much duty as the rest of us to recognise the mandates given to the Government to create the leaner and more efficient public sector which is so essential for our recovery.
I welcome the debate and the need for a guillotine because, above all else, local mandates, applied as they have been in Lewisham, cannot claim an automatic right to be set aside from national policies. The Government must safeguard the policies on which they were elected. The general election results of both Lewisham, East and Lewisham, West, with substantial swings, emphasise how vital it is to implement this legislation as soon as possible.
5.7 pm
Mr. Michael Meadowcroft: There appears to be a certain unreality about what hon. Members on both sides of the House have said. I am sure that sometimes they have their tongues in both cheeks at the same time.
The problem with the Bill is that the Government have based it on three premises, two of which are false, and one of which is true. The first is that the electorate are incapable of exercising a mature judgment at the ballot box and on the affairs of local government.
The hon. Member for Lewisham, East (Mr. Moynihan) regaled us with appalling stories of profligacy and enormous expenditure. It astonishes me that it is those same councillors who will have to carry out this legislation
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if it is passed. Unless the Bill is passed they will be able to continue as they are now after the next local election as well. Therefore, the Government's view must be that the electorate are incapable of turning those councillors out of office.
The Government's second erroneous premise is that local government spending is out of control. Whenever Conservative Members refer to rate rises, they miss out the fact that the rate rises have been so high because of the reduction of the grant to local government. Figures published recently in great detail in the Financial Times show that both revenue and capital expenditure of Local government at worst has been no higher than that of central Government, and at best far lower. Therefore, the Government's second premise, that local government expenditure is out of control, is also false.
The Government's third premise is true. Conservative councillors and local government candidates are so ineffectual that they must have a vote of no confidence in themselves and pass the buck to Big Brother in central Government to do what they should be doing at local level. It is fair to say that opposition to the Bill has not been confined to Labour, Liberal and SDP Members of the House. A number of Government Members have set out their principled objections to it and their more detailed objections to certain parts of it. One of them, the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), has played his part in expressing those views in Committee as well.
The point—and this is why I can understand the Leader of the House introducing the motion today — is that in 80 hours of debate there has been no sign that any other hon. Member on the Government side of the Committee has shifted his position on the Bill one iota That is a sad fact and one which it behoves Members of the Opposition to appreciate. My opposition to the Bill is of such a fundamental nature, in both principle and detail. that if I felt for a moment that it would be possible, by continuing until the small hours, and through night after night, to secure changes in the minds and hearts of Government Members—
Mr. Nicholas Brown: Will the hon. Gentleman tell the House how many nights he has attended the Committee?
Mr. Meadowcroft: If the hon. Member wishes to bring up absences, I can tell him that I have sat in Committee into the small hours with other hon. Members, but the fact is that the number of absences of all members of the Committee has been roughly the same. It comes down to similar totals for the three parties.
Mr. Robert B. Jones: As the hon. Member was present for only 17 out of 38 Divisions—quite the most deplorable record of any Back Bencher—is it not strange for him to say that?
Mr. Meadowcroft: I took the trouble to check on the attendance record of hon. Members, and I discovered chat Government Members had been absent from its deliberations twice as often as Liberal and SDP Members, while the absence record of Labour Members was the same as ours. All parties have equivalent duties to perform in the House. If it would achieve a change of mind or heart of any Government Member it would be worth continuing to debate the issues, but the fact is that some of the

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contributions in Committee—and this would be the case if we were to continue indefinitely — were counter-productive.
I agree with the hon. Member for Chipping Barnet (Mr. Chapman) that not only has the debate in Committee been carried on without rancour and with a certain humour at times, but that it has been a charade and a farce. For those of us who come from local government—the thing that is under attack in the Bill—it is ironic to consider that the farcial and calculated nonsense that has gone on in Committee would never happen in local government, not least because more members would be participating in the legislative and executive process.
What on earth the people from local government who have sat in the Public Gallery in Committee have made of this process, I hate to think. We have had the benefit of the presence, and of the counsel in the corridors, of a number of people of some eminence in local government, who have had to listen to this somewhat turgid debate going on hour after hour. They will not have been edified by our processes.
I accept that many Labour Members have taken part in the debate in Committee. I accept also that every one is sincerely and fundamentally opposed to the Bill. Nevertheless, whatever Labour Members say today is said with tongue in cheek. They know that, however much time was allowed for the Bill in Committee and however long the debate before the guillotine was applied, they would fill that time. Indeed, at times—and I have enjoyed his contributions immensely — I have felt that the hon. Member for Tyne Bridge (Mr. Cowans) could fill it singlehanded—doing it with great style and grace.
Mr. Cowans: I restrained myself.
Mr. Meadowcroft: For instance, when the Government brought a second sittings motion to the Committee, we debated that for two and a half hours. It says very little for our processes. The bizarre thing is that both sides of the Committee conform to the rules of the game. Government Members sit silent and wait for Divisions. Labour Members share out the time. I must commend the hon. Member for Normanton (Mr. O'Brien) for being able to say what he did with a straight face. It is an astonishing achievement to be able to suggest that a lengthy contribution is needed to persuade Government Members and explain to them successfully the points made, when that is not the case. They understand exactly what the Bill is about and are all in favour of it—a sad fact but true.
Mr. Cowans: It is not the length of the speech, or the fact that all Government Members agree with it, but the fact that the longer a speech went on the more could right hon. and hon. Members on the Government side see the point. After all, the Bill will eventually come back to the House, and a number of points have been drawn out to show that the authorities of those Members will eventually be capped. That has been the message.
Mr. Meadowcroft: I appreciate what the hon. Member for Tyne Bridge says, but I have not seen any signs, in either words or facial expression, that Government Members will succumb to the blandishments of those who are opposed to the Bill.
Mr. Allan Roberts: Except for the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), the Committee has been packed by the Government with adherents and supporters of the legislation, packed by voting fodder, by people who will mount support for the Government's position. The purpose of our debates and our arguments was not to convince those Conservative Back Benchers debating the Bill in Committee that their Government were intransigent and refused to accept reasonable amendments being put forward by Conservative local authority associations, but to demonstrate this intransigence to other Conservative Back Benchers and the Conservative-controlled local authorities—the Back Benchers who were not in the Committee—so that when we vote on Third Reading there will be even more Conservative MPs in our Lobby to vote against this draconian piece of legislation.
Mr. Robert B. Jones rose—
Mr. Meadowcroft: I ought to get on, Mr. Deputy Speaker, otherwise you will be unhappy about my taking too much time. I am not sure that the argument of the hon. Member for Bootle (Mr. Roberts) is not one for the guillotine, because the message to Back Benchers might be rather more favourable than if we had been sitting day and night for weeks on end. Nevertheless, he is entitled to his opinion.
I agree with the hon. Member for Chipping Barnet—and there is much support for his view on both sides of the House—that what is needed is a timetable from the beginning of the deliberations on each Bill. That is the view of Liberal and Social Democratic Members. I quote from the Commission on Constitutional Reform, produced by the two parties. It said that
"bills should be timetabled under a procedure involving all parties from an early stage, instead of being 'guillotined' at such a late stage that many clauses and amendments are not discussed at all."
That view is held not only by Liberal and Social Democratic Members, but by the hon. Member for Copeland (Dr. Cunningham) who leads for the Opposition in Committee, who said:
"I have always made it clear that I am happy to discuss how all Bills might have an agreed timetable. That has always been my view as a Member of Parliament". — [Official Report, Standing Committee G, 2 February 1984; c. 77.]
In this week's The House Magazine, the hon. Member for Milton Keynes (Mr. Benyon) says:
"In recent years there are few, if any, examples of an opposition successfully delaying contentious legislation. Every MP knows the pattern in Committee—early delaying stages followed by the inevitable guillotine and eventual Royal Assent."
The article goes on:
"A timetable for a particular piece of legislation could be suggested by a timetabling committee composed of senior Members of Parliament in proportion to the party strengths on the floor of the House. Their recommendation could then form part of a timetable Motion which would be moved immediately after the second reading had been passed."
In view of the substantial support for that view on both sides of the House, it seems strange that we cannot move towards that position today.
Given that situation, what should be done about the motion before us? There are two reasons why it is impossible to support it. First, as it stands it will not permit adequate debate on the remaining clauses. It is immaterial whether that is because of the time spent on the six that have already been discussed. Secondly, the Government

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are culpable for not timetabling the Bill from day one. For that, if for no other reason, it is impossible to support the motion.
I agree with hon. Members who have said that the Bill is probably more significant for our democratic health and structure than anything to be brought before the House in this Parliament, certainly in this Session. Anything that I can do to delay or defeat the measure, I shall willingly do. I would support any amendment that would wreck it. However, I do not for a moment believe that the tactics indulged in, both in Committee and on Second Reading, help to achieve that. Therefore, the best one can do is to vote against this timetable motion in the hope that by expressing that opinion something better will emerge in the end.
5.20 pm
Mr. John Heddle (Mid-Staffordshire): I rise with some hesitancy, because I have not had the privilege of serving on the Standing Committee considering the Bill. Not for me the good fortune of midnight beer and sandwiches with my hon. Friends, and not for me the pleasure of oysters and champagne on the Terrace with Opposition Members after those all-night sittings!
Nevertheless, I wish to put two points, one general and one particular, but before doing so I add my support to the views expressed by my hon. Friend the Member for Chipping Barnet (Mr. Chapman), which were clearly endorsed by Opposition Members.
This Bill would, perhaps, have been a classic candidate for taking evidence and opinions from those experienced in local government matters—from both the executive and elected councillors — before the Committee deliberated upon the clauses and schedules. Such a thing happened during my right hon. Friend's tenure as Secretary of State for Social Services, when the Mental Health (Amendment) Bill was considered in Committee.
Opposition Members have said that there is wholesale opposition to the Bill throughout the ranks of local government. That is not true. They should ask any Conservative councillor in Liverpool or in the Socialist republic of south Yorkshire whether he feels that those whom he has the privilege to represent get a fair deal and value for money. They should ask industrialists or commercial or business ratepayers whether a large number of local authorities respond to their needs and wishes. It should be remembered that such ratepayers have no voice, no vote, no say and no sanction in the way in which councils spend their money. The Bill seeks to give them that protection.
Mr. Terry Lewis: Would it not be more appropriate to ask the electorate in the people's republic of south Yorkshire?
Mr. Heddle: That is precisely my point. Industry and commerce pay a vast proportion of the bills of local government. The majority of money spent by local government—that which is not raised through the rate support grant — comes from industry and commerce, which do not have the opportunity through the ballot box to express their views on whether a local authority has been prudent.
Mr. Straw: The hon. Gentleman shows an uncharacteristic disregard for the facts. Only 40 per cent. of total rate income comes from industry and commerce.
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Moreover, the increase that has occurred above the rate of inflation has, according to the chambers of commerce, been entirely attributable to the changes in rate support grant. Is the hon. Gentleman saying that business men do not have votes as citizens, or is he suggesting that they should have two votes?
Mr. Heddle: The hon. Gentleman displays a characteristic disregard for listening to what I said. I said that industry and commerce contribute the largest proportion of that which local authorities do not receive via the rate support grant. That is undoubtedly a fact. Perhaps the hon. Gentleman will intervene and confirm whether or not that is true.
Mr. Straw: I have just given the hon. Gentleman the figure—40 per cent. for business and commerce. He suggested that it was a good deal more than half, which is not the case. It is often suggested that two thirds of rate income comes from industry, but that figure includes the amount that local authorities pay themselves by way of rates on such things as schools, technical colleges and swimming baths.
Mr. Heddle: When the hon. Member for Blackburn (Mr. Straw) reads Hansard tomorrow, I think that it will confirm that my recollection of what I said is nearer the truth than his.
To answer the hon. Member for Carlisle (Mr. Lewis), local government does not reflect the wishes of the ratepayers. That is borne out by the fact that in the local government elections last June only one in five of the electorate of Liverpool—indeed, a smaller proportion than that which gave that authority its wafer-thin majority of three, which it holds most tenuously—voted for the party in power.
That is why the question of local accountability is subjected to so much criticism. The trouble is that at local elections the electorate generally vote according to the popularity for the time being of the Government in power for the time being, not according to the prudence and performance of the local council. My general point is that the Bill seeks to protect hard-pressed ratepayers in cities such as Liverpool. Although Liverpool may not be on the Government's capping list at present, it inevitably will if that Marxist-controlled authority continues to pursue its kamikaze path to bankruptcy.
I invite my right hon. Friend the Secretary of State to consider my detailed point most seriously, if not during his reply, certainly after the Bill has been guillotined and before it comes back to the House on Report. It relates to void rating. I take no pleasure in admitting that I committed a small act of industrial vandalism about 12 months ago when I mounted the roof of a warehouse just outside Wolverhampton to display to my right hon. Friends the Prime Minister and the then Secretary of State for the Environment the absurdity of certain local authorities levying void rates on premises that were not capable of beneficial occupation. I am delighted that the Bill contains a specific clause — I believe yet to be considered by the Committee — which provides that local authorities will not have the power to levy void rates on industrial and commercial premises.
However, from the answer to a question that I tabled to the Under-Secretary, I gained the impression that that protection will be afforded only to the owners of factory premises, not to the owners or tenants of industrial premises,

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which includes a wider definition of warehouses and premises that are part-factory, part-warehouse and part-office. I therefore invite my right hon. Friend, before laying the order, to consider widening the definition of the type of premises that will enjoy this void rating protection—
Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will not pursue that point any further. We are now discussing a timetable motion, not the contents of the Bill.
Mr. Heddle: I have sat down, Mr. Deputy Speaker.
5.28 pm
Mr. Allan Roberts: I am pleased to follow the hon. Member for Mid-Staffordshire (Mr. Heddle). I do not wish to stray from the guillotine motion, but if the Minister accepts the proposal that empty fctories in the ownership and management of his hon. Friend should not be subject to rates, I take it the hon. Member for Mid-Staffordshire accepts that when they are set on fire, the local fire brigade will not put the fire out, and that when they are broken into the local police will not investigate who has broken into them. If the hon. Member for Mid-Staffordshire does not wish to contribute to the rates, I hope that he will not expect to receive any services in respect of those empty properties.
In opposing the guillotine motion, I wish to repeat a story that I told in Committee, which meets each Tuesday and Thursday when the House is sitting. Many people outside the House do not know how hard the Members of Parliament serving on Committees work. We meet on Tuesdays and Thursdays, in the mornings and afternoons, and sometimes sit into the night. I am reminded of the young couple who went out together every Tuesday and Thursday. He picked her up to take her out on those days for about 20 years. After that time, the woman took up courage, and said to the man, "Don't you think that we should get married?" He replied, "Don't be daft—and have nothing to do on Tuesdays and Thursdays?" Opposing the guillotine motion is rather like that. It would be a great personal relief not to have to be in Committee each Tuesday and Thursday, putting in the hours.
Leaving that aside, I oppose the guillotine motion because it will be necessary for the Opposition to be in Committee for much longer than the Government will allow to do justice to the legislation. The Committee has not adequately debated the major issue underlying the clauses dealt with so far. We have not dealt with the basis of the Bill, nor have Ministers given us the answers that we require. Only the specific powers have been dealt with, not the fundamentally important general powers.
The introduction of general powers is a major attack on local authorities and local government democracy. All that the Conservative members of the Committee have brought to the defence of the legislation is the sort of prejudice and myth that has already been displayed this afternoon.
Many inner city authorities have problems in meeting the real needs of their decaying areas, those of the elderly and handicapped, and the high proportion of one-parent families. Local authorities provide services for the black and Asian populations. The inner city authorities spend more than other authorities without such problems, yet they are accused of being profligate and wasteful. The Committee has had hearsay stories about small amounts of
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money being spent on possibly controversial, but financially insignificant matters, including grants awarded by the Greater London council.

The Committee has heard the usual myths, such as those trotted out by the hon. Member for Mid-Staffordshire, to the effect that industry does not have a vote. The Conservatives are using a strange and new constitutional argument that if people disagree with what their local authority is doing they should have two votes instead of one, so long as they are likely to vote Conservative or for the alliance, but certainly not for Labour.
We even heard the argument that local authorities, democratically elected through the ballot box, do not really represent the electorate that they serve, because there is a low turn-out at local elections. It is as though an election turn-out determines whether a candidate is rightfully elected. If the Government and the Conservative party believe that, they should alter the way in which local and national elections are conducted, perhaps moving towards the Australian system of compulsory voting. But abstention is an equally valid use of one's democratic right to vote. The argument about low turn-out at elections is nonsense. The Government do not object to a Conservative council being elected with a low turn-out, and exercising its power to run the council that it has been elected to run.
The Government, with the support of their often silent Back-Bench Members in Committee, have totally rejected a long series of reasonable amendments. One reason why we have had to debate the clauses at such length is that the Opposition have been forced to table many amendments to each clause. I have served on many Standing Committees, but never on one in which the Opposition have had to table so many amendments to each clause. We were trying to write in reasonable safeguards, put to the Opposition by a unified local government lobby of Labour, Conservative and Liberal councils, as well as by the Association of District Councils and the Association of County Councils, both of which are Conservative-controlled local authority associations, and by the Association of Metropolitan Authorities. We tried to get more consultation, to allay the fears of Conservative local authorities and local authority associations. The Government have said no to each amendment.
We have said, further, that if the Government attack the basis of local government democracy, and will not consult local authorities, there should be parliamentary scrutiny at each stage. Opposition Members speaking in the Second Reading debate said that the legislation will give draconian powers to the Secretary of State, his civil servants and the Department of the Environment's computer. Let there be parliamentary scrutiny at each stage. Whenever we have asked for it, being careful not to destroy the principles of the Bill, the Government have rejected it.
We have asked for the right of local authorities to use an appeals procedures that will enable them to present their side of the case, if they are to be rate-capped. We have tabled amendments to provide a proper system of local authority appeal, so that their case may be heard, but the Government have turned them down. It is like a plot by Lewis Carroll, in which the verdict came first and the evidence was brought later. That is how the Government have conducted the Committee stage.
Mr. Peter Pike: Will my hon. Friend tell the House, in relation to the Opposition's amendments, in Committee, whether that situation would apply to a council such as Burnley, where the grant-related expenditure assessment figure for the current financial year is £5·6 million, and with a cash target of £8·2 million the council is spending slightly in excess of that? If the council wished to appeal I am sure that it could put a strong case to the effect that the rates payable in Burnley are £62·92p per head of population per year, which is the second lowest figure in England. One one other district, Pendle—which is next door to Burnley—pays a lower rate per head of population, at £59·40p.
Mr. Roberts: That is an apt illustration. It is another reason why we should debate the Bill at length, and why the guillotine is not justified.
We managed to drag out of the Minister in Committee how the Secretary of State will operate the rate-capping procedures and use GREAs as measures for rate-capping, as well as decide on their adequacy for that function. We heard how the Secretary of State, with the powers that he seeks in the legislation, without a right of appeal for councils such as Burnley, or the necessary parliamentary scrutiny, can alter to suit himself the criteria for determining which authorities should be rate-capped, and engineer them in such a way that the local authorities that he wants to penalise, for political reasons, will finish up in the penalty box. Many anomalies have been revealed in Committee. Some local authorities are being penalised and not others, although on other criteria, the penalties should apply the other way round.
We discussed the serious matter whether Burnley would be rate-capped in the same way as would Liverpool, the Conservative-controlled city of Westminster, and a shire county, all of which are totally different sorts of authority under different political control, and with differing needs and circumstances. Different sorts of area will be included in the same report, and the same principles will apply to all of them. The report will be presented to Parliament without assurances of adequate time for a debate in which hon. Members representing all such areas can take part.
The Opposition tabled an amendment to ask the Secretary of State, if he used those draconian powers against local authorities, whether each authority that was rate-capped would be reported to Parliament and debated separately. Even that amendment was turned down.
The Bill's progress has not been as fast as it should have been, because of the Government's intransigence. They would not accept simple amendments relating to consultation, democratic control and safeguards that were requested by Labour and Conservative-controlled authorities and associations. All that we have heard from the Minister are vague assurances that the legislation will not apply to all local councils, and that the Secretary of State hopes not to use his specific powers, or even the general powers, as much as he might.
If that is the case, why is the Secretary of State taking those general powers? We are told that the Government's actions will not apply to all local authorities, and that the good boys will be all right. That is not true. We were told that about previous legislation on clawback and holdback. This year the borough of Sefton, the authority that covers my constituency, which is a paragon of underspending virtue that has done everything the Prime Minister and the
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Secretary of State have asked it to do—it has wielded the axe with relish, closed learner swimming pools and cut services to the bone—has been penalised and has lost nearly £2 million in the rate support grant settlement.
Mr. Straw: Does my hon. Friend accept that if what the Secretary of State says is correct—that rate-capped authorities get more rate support grant—there will be less rate support grant for the shire authorities, and that rates will increase even more in those areas?
Mr. Roberts: I am sure that that is the case. [Interruption.] The Secretary of State shouts "Treasury", but it is well known that he is battling with the Treasury. During one of our all-night sittings, some of his remarks percolated through to the Chancellor of the Exchequer, who is reported to be furious about them. The Treasury's plans for this legislation and the plans of the Secretary of State are entirely different. That is the danger, because the Secretary of State, or another Conservative Secretary of State, in defence of the assurances that he has given in Committee about the Bill not applying to good, Conservative local authorities, might have a row in the Cabinet and be sacked or moved to another job. Then the Treasury will have won, and can use this legislation in another attempt to cut public expenditure across the board. The general powers are in the Bill not necessarily because the Secretary of State for the Environment wants them, but because the Treasury wants them. When the figures do not add up and the PSBR has increased as a result of more unemployment and social security benefits that were not budgeted for, the local authorities will have to foot the bill and the general powers can be applied to rate-cap every local authority.
The Committee has had inadequate time to debate the traditional role of central Government in relation to local government, nor will it have adequate time because of this motion. Opposition Members have always admitted that local government should act within the framework of statutory law, and they have always accepted that it is within the remit of central Government to place duties and responsibilities on local authorities, to lay down minimum standards, to negotiate nationally a rate support grant settlement and distribute that to local authorities, and then to give local authorities the freedom to assess what services are needed in their areas, to balance that with what industry, commerce and the ratepayers in their areas can afford, and to decide on a level of service and local contribution through rates, rents and other charges. That has always been the traditional relationship. There is nothing wrong with it, yet it is being destroyed by this legislation.
We have not had adequate discussions or answers about local elections. I challenged the Leader of the House on this, but he seemed to miss the point. If local authorities have always acted within the framework of central Government legislation and of a nationally negotiated rate support grant settlement, what have local elections been about? The use of the local ballot has been about people in a locality voting once a year in some areas, or once every three or four years in other areas, to elect local councillors. They make a judgment about the level of services that they want in relation to the amount of rates or rents that they are asked to pay. Generally speaking, Conservative-controlled councils have lower rates and worse services, while Labour-controlled councils have

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higher rates and much better services. The voters judge which they want and vote in the local elections. However, there will be no point in voting in local elections in the future, because that assessment will be made not by local councils but by the Secretary of State and his civil servants, and will be imposed upon democratically elected local authorities.
The hon. Member for Leeds, West (Mr. Meadowcroft) and others mentioned law-breaking. This legislation will mean that some local authorities must choose between breaking this rating law or breaking other laws. Local authorities, including Liberal and Conservative-controlled authorities, break many laws, but the Secretary of State often turns a blind eye to them. When the Liberal party controlled Liverpool council, there were waiting lists of disabled people for telephones and services; they were illegal under the Chronically Sick and Disabled Persons Act 1970. Those waiting lists were drawn to the attention of Tory Ministers, who refused to take action because the council was breaking a Labour law, and it is only wrong to break Tory laws.
When the hon. Member for Hayes and Harlington (Mr. Dicks) was chairman of the housing committee of Hillingdon council he put a Bengali family in a taxi and sent them back to Heathrow airport, thus breaking the Housing (Homeless Persons) Act 1977—
Mr. Deputy Speaker: Order. It is difficult to relate what the hon. Gentleman is saying to the motion. I hope that he will try to stick more closely to the motion.
Mr. Roberts: I shall return to the terms of the motion. My point is that if we do not have time to debate all those matters and if the legislation is not amended adequately in Committee or by the House, local authorities will be forced, because of inadequate powers to raise revenue locally, to break laws that require them to provide services. We have tabled amendments in Committee on this matter, but we have had inadequate answers from Ministers.
The reason for the guillotine motion is that the Government know that the Bill is controversial. It is opposed by most members of the public, by Labour-controlled authorities, by Conservative-controlled authorities and by many Conservative Members. The Government are frightened of what will happen when the Bill goes to the House of Lords. They are frightened of how long it will take to get through the other place, and they want to get it there as quickly as possible. They want to kill discussion of this legislation, because it is almost as embarrassing to them as GCHQ has become. The Government have got themselves into a bunker—they have a bunker mentality—and they cannnot get out of it. They are in a difficult position, and that is one reason—if not the main reason—why they introduced this motion. However, the motion will be counterproductive, because everyone outside the Chamber, some Conservative Back-Bench Members and some members of the other place, understand that the motion is being used for that purpose. It will rebound on the Government.
5.47 pm
Mr. W. Benyon: I am grateful to the hon. Member for Leeds, West (Mr. Meadowcroft) for making such a splendid commercial for my article in The
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House Magazine, because I was about to congratulate my hon. Friend the Member for Chipping Barnet (Mr. Chapman) on his remarks on this subject. They needed to be said, and I hope that they will not fall on deaf ears. It would facilitate the process if the Labour party would speed up appointments to the Select Committee on Procedure, which could consider such matters.
I have been a Member of the House for a relatively short time, but during that time the changes in timetable motion procedures have been marked. When I first came here, debates on guillotine motions were major parliamentary occasions. There was oratory, or passion anyway, on both sides of the House and many comments in the press the next day. Now look at what we have: an almost deserted House, and tomorrow there will be hardly a paragraph in the newspapers about our deliberations.
As the hon. Member for Leeds, West has said, I make no secret of the fact that I am in favour of timetabling every piece of legislation, from Second Reading. It may seem, therefore, churlish to oppose the motion, but I feel so strongly about certain aspects of this legislation that anything that facilitates its progress must be opposed.
Any one of the thousands of microcomputers that the Government have so wisely distributed among our schools could have programmed the two speeches from the Front Benches that opened the debate. They were entirely predictable. However, there is a difference on this occasion. The Bill is a major constitutional measure. I know that the Government deny that, but plenty of people outside the House, and, indeed, inside it, take a contrary view. I think it is a scandal that the vital clauses should not be considered on the Floor of the House. The reason why I intervened to ask the Leader of the House a question was that, according to the timetable laid down in the Bill, the parliamentary process cannot start before the start of the next Session. There is really considerable time. Even taking into account the deliberations of the House of Lords, there is no need for such a rush.
Mr. Patrick Jenkin: My right hon. Friend the Leader of the House explained, in reply to my hon. Friend's intervention, that, according to the provisions of the Bill, which have been debated at great length upstairs, if local authorities are to have enough time to prepare for the passage of the Bill, they will have to embark on the administrative procedures at about the beginning of July. This House will not be involved at that stage. The opportunity for this House will arise much later. There is no suggestion that the proceedings can start only at the beginning of the new Session. We want them to start in July.
Mr. Benyon: I should like to have time to consider what my right hon. Friend has said. The bare bones of the legislation are already well and truly known, and so are the figures.
On the general question of the timetable motion, nothing could epitomise more clearly the perils of the elected dictatorship under which we now work. Whatever the ramifications of the speeches made in Committee, there can be no argument about the fact that a Bill of great consequence is to go to another place inadequately discussed. I do not know what will happen on Report, but — in passing — I hope that the Chair will give sympathetic consideration to amendments covering matters that have already been discussed upstairs.

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It now rests with another place, in all its anachronistic glory, to preserve the traditions and liberties of England, which are severely diminished by this legislation. When history comes to be written, the Bill and this motion will be seen as a watershed, not only because the Conservative party has embarked on a course completely contrary to its instincts and its history, but because the motion shows in all its stark clarity the faults of the procedures under which we work in this House.
5.55 pm
Mr. Harry Cowans: I agree with a tremendous amount of what the hon. Member for Milton Keynes (Mr. Benyon) has said. However, I slightly disagree with him, with the hon. Member for Chipping Barnet (Mr. Chapman) and with the hon. Member for Leeds, West (Mr. Meadowcroft) about the timetable motion. Nobody could object to the argument as it was presented by those three hon. Members. However, the reason why we are talking about the guillotine now is that the Bill was timetabled long before a word was spoken on it, because the Government had already determined the date on which they wanted the Bill to come out of Committee. The time was set. The die was cast. That will always be inevitable, because no Government will allow the setting of a timetable which does not reflect the date on which they consider a Bill should complete its Committee stage. The idea that everything will be cosy, that we will all get together, and a nice little timetable will make everything beautiful is very naive. That will not come about. The Government have arranged their business and fixed a date on which the Bill should complete its Committee stage.
Mr. Meadowcroft: Given that what the hon. Gentleman says is accurate, would it not be far better to timetable the Bill from day one rather than from the eighteenth day or the eightieth hour of the Committee?
Mr. Cowans: That argument will have a strong appeal, especially to the hard-working members of the Committee who sit there through the night, but I doubt whether agreement could be reached on that proposition. I have sat on both sides of the House. I have sat on the Government Benches in superior times, as well as on the Opposition Benches. One of the finest experts in prolonging a debate that I have ever heard—I have scarcely served my time compared with him — is the hon. Member for Eastbourne (Mr. Gow). He was so good at it that he became the Prime Minister's Parliamentary Private Secretary. One's view changes according to which side of the House one is on.
I agree with the Leader of the House about one thing. In extolling the virtues of the Bill, he said that it was very important. No one would disagree with that. He said—these are the right hon. Gentleman's words, not mine—that it was vital that it should be properly discussed and that every avenue should be explored. He did not go as far as the hon. Member for Milton Keynes in talking about constitutional issues, but he said that the Bill was vital. We all agree with that. Is it not therefore vital that it should have the fullest possible examination?
The Opposition did not start the argument. We supported those right hon. and hon. Members on the Government Benches who thought that the Bill was so important that it should be discussed on the Floor of the
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House. We voted for that, but the Government in their wisdom wished to hide the Bill away from the light of day in Committee. That was their motive.
Labour Members on the Committee are seeking to expose the Bill for what it is. It is a major piece of constitutional legislation. It is an attack on local government and local democracy. It is also—this point has been brought out in Committee—an attack on the fundamental rights of Members of Parliament. At a stroke—perhaps this is why the Bill has been guillotined—the Secretary of State has elected himself into every town hall in the country with a majority of one. Regardless of what local people may want, what local manifestos may state, or of what people are willing to pay, that will be the situation if the Bill is enacted unamended. That is the constitutional issue, and it should be examined in detail.
Not once in Committee—I have studied the records—has any Government Member stood up and said that any one of the amendments was irrelevant. Government Members have argued against amendments, but not once have they stood up—it has been exceedingly difficult to get some of them to stand up — and said that an amendment was irrelevant.
Each amendment has been debated. I noticed that when trying to answer a difficult question the Secretary of State prayed in aid his desire to give local authorities the maximum amount of time. The Opposition wanted to write into the Bill a definite date by which the Secretary of State had to come out with his decision, so as to give local authorities time. What happened? The man who prayed in aid the consideration of time refused our offer to put his words into action.
It is right that we have gone through the Bill in detail. It is not Conservative-controlled local authorities, but places such as Newcastle upon Tyne that will be rate capped originally. It is we who will have our services determined by the Secretary of State. We are the ones who will lose jobs. Moreover, those jobs will be lost, not for the 80 hours that it has taken us to discuss the Bill, but for a lifetime. Is it therefore any wonder that we get annoyed, raise issues and talk at length? Regardless of what the electors in Tyne and Wear or Newcastle want, their rights will be taken away because the Secretary of State has elected himself on to every council.
Another reason for defeating the guillotine motion is that local elections are to be held in May. Would it not be a fine thing not to carry the motion to see what happens and whether these matters are discussed by ratepayers in Lewisham and in other so-called spendthrift authorities? Labour councillors have not been thrown out in my area. Indeed, they have been re-elected because they protect the services that local people want. The Secretary of State does not like that. If he moves into my area he will have the chance to vote as a ratepayer. That would be right and proper.
A substantial argument that has falsely been used concerns commercial ratepayers. It is argued that commercial and industrial ratepayers foot most of the bill and do not have most of the vote. That is obvious. British elections have always run on the principle—perhaps it will be attacked in the Government's next Bill, we never know—of one person, one vote. However, is it not the case that much of industry disagrees with the way in which the Government spend their taxes? Is it intended therefore to give industry two votes? That is the only possible parallel. The answer is, "Certainly not".

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The Government get upset when talking of rates paid by commerce and industry. There is no mention of the ratepayers who use the services. I take no exception to the Secretary of State speaking for one hour and 10 minutes. I would have welcomed a longer speech. We drew something out of his speech, as it brought up issues and enabled us to ask him questions. It was the first time that we had been able to flush him out and find out what is not written into the Bill, but is left to the Secretary of State to decide after the Bill is passed. He is being given power to make all sorts of orders. We are unable to discuss that. The matter is to be left to the ingenuity of one right hon. Member. Worse than that, everyone knows that those powers should not be left to the right hon. Gentleman with whom they will reside.
By passing the motion the House is handing over power to the Executive and relinquishing the chance to examine matters. If we are not here to represent our constituents and to examine legislation, what are we here for? Part of the Bill hands over the power of the House to examine constitutional issues. The Secretary of State is to become a powerful figure in every town hall in spite of the fact that he has not stood for election to those town halls. The House must want the right to examine what he does.
That is a tremendous reason why we should not talk about curtailing free speech. We should call it by its proper name. We should not hide behind some fancy name that came with the French revolution. We should call it what it is. It is the curtailment of the right of anyone who disagrees to say anything.
If the Government had a case they would not need a guillotine, as they would be capable of standing on their own feet and arguing the case, no doubt persuading people outside, if not in the House. The guillotine is necessary because the Government do not have a case.
The Secretary of State will undoubtedly go into the "Guinness Book of Records", as no one in my considerable time in local government has ever achieved what he has achieved. He has succeeded in uniting every local authority association, whether Labour, Conservative or any other, in opposition to the Government. The Secretary of State, marvellous man that he is, has united everyone. That is the nub of the problem.
Having united everyone, the right hon. Gentleman now wants to get out from under the heat. He does not want lengthy debates in which every fallacy of the Bill is exposd to daylight. That is a good reason for a guillotine. If one has a poor case, the best tactical move is to hide it. The way to hide the Secretary of State's case is to guillotine debate on the Bill to prevent discussion, care and attention and reasonable amendments such as have been tabled by the Opposition.
Hon. Members who appear to knock the Committee stage are doing themselves a disservice. I have news for them. Many people outside read the reports of the Committee, not because they want to read our speeches, but because they are the only source, bearing in mind the nature of the Bill, of information about what is in the Secretary of State's mind. I warn the House that most of the provisions of the legislation before us will come into effect after the Bill has been passed, as it allows Ministers to do things that are not discussed in Committee. The Committee is not getting a chance to examine the criteria
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or to write into the Bill the part of the criteria that has been examined from time immemorial. All that is being taken away.
If the House carries the guillotine motion it will kill local government stone dead and destroy many of the powers of the House. I plead with the House to defeat the motion, even if right hon. and hon. Members do not care about local government. The Opposition care about it passionately, as most of us came up with it and, having been at the sharp end, know what it is like to fix rates. Such decisions are not taken lightly. I remember going right through the night, not in Committee, but examining everything so as to fix the rates. It is a myth that Labour-controlled authorities are spendthrift.
The hon. Member for Mid-Staffordshire (Mr. Heddle) suggested that we should talk to certain local authorities. Unfortunately, all the examples that he gave were Labour-controlled. He should talk to the leader of Essex county council, who is not of my party, and who accuses the Secretary of State of pulling the plug from the boat. What happened there?
The sheep behind the Government Front Bench who will pour into the Lobby in support of the Government should heed my warning. If they carry the guillotine motion, as night follows day, their local authorities will also be rate capped. They should remember that, by supporting the motion, they took away from themselves the opportunity to stand up and be counted and to argue their case. If they support the motion, they will give away their own power to the Executive.
For that if for no other reason the guillotine motion should be opposed, because it is a negation of democracy. The power of elected representatives, both locally and nationally, is being handed over to the Executive who are not subject to the necessary examination whereby every hon. Member was elected to this House.
6.10 pm
Mr. John Wells: Much as I respect the sentiments of my hon. Friend the Member for Milton Keynes (Mr. Benyon), who is a thoughtful and constitutionally minded colleague, I believe that he has got this plumb wrong. I support the guillotine motion because, to put it bluntly, the Opposition have waffled on ad nauseam in Committee and I believe that they would continue to do so if given the chance.
My hon. Friend sought to make out that the Bill would bring about a great constitutional change, but local government is a flexible, fluid thing; with the exception of the City of London, it is scarcely 100 years old. To suggest that it will be ruined for all time is a load of junk.
Nevertheless, much as I support the guillotine in general, I have a very close reservation about schedule 2 to the Bill, which is a complete irrelevance dragged in by the bureaucrats. I doubt whether my right hon. Friend the Secretary of State even knows what it is about. It is three pages long, it contains more than 10 per cent. of the Bill and it is utterly irrelevant. It is disgraceful that no time has been allocated to discuss it under the timetable motion and I give my right hon. Friend warning that if time is not allocated to this by the Business Committee I shall table an amendment on Report to omit schedule 2 from the Bill.
6.12 pm
Dr. John Cunningham: The House has been using the guillotine procedure for almost 100 years,

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so today's timetable motion will come as no great surprise to anyone. During my time in the House, I have virtually always supported guillotine motions when my party has been in government. When we have been in opposition, I have always voted against the guillotine, and I shall do so again today.
As my hon. Friend the Member for Tyne Bridge (Mr. Cowans) rightly said, the reason for the motion is obvious. The present weakness of the House of Commons versus the Executive makes the tactic of debate and delay one of the few strong weapons in the hands of the Opposition. Conservative Members may smile at those words, but after the next general election when they are in opposition they will adopt exactly the same approach. That is the political reality of Parliament today in relation to the general use of the guillotine.
Viscount Cranborne: Will the hon. Gentleman give way?
Dr. Cunningham: I shall not give way, as we have agreed to have very short winding-up speeches and the hon. Gentleman has only just entered the Chamber.
I have considerable sympathy with the point made by the hon. Member for Milton Keynes (Mr. Benyon) about the fundamental constitutional issue involved. It is singularly inappropriate for the Government to take such action at this time. The Bill involves major constitutional issues. The Government had the opportunity to allow the Bill to be discussed in Committee on the Floor of the House. There are plenty of precedents for that. If they had adopted that approach, the Bill would have been subject to a timetable from the outset. It is for the Government to explain why they chose not to do that, if they now wish to sustain a case for a timetable. That procedure was proposed by Conservative Back Benchers as well as by Opposition Members, but it was rejected by the Government. The Government rejected the idea of a timetable at the outset, but they now say that they must have a timetable because of lack of progress in Committee. I make no apology for the way in which we have opposed this measure in Committee.
The Standing Committee in no way reflected the strength of feeling of the Conservative party in Parliament on this issue. With the honourable exception of the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), who has been unwell since the Committee proceedings began, Government supporters in the Committee have been utterly supine in their approach to the Bill. We have now considered six clauses and just one out of about 100 Opposition amendments has been accepted.
I shall explain why I make no apology for our slow and thorough scrutiny of the proposals. In my speech on Second Reading I pointed out that the principles governing the use of the powers in the Bill would not be subject to any control or amendment by the House of Commons. The Secretary of State intervened to say that that was not accurate. He said:
"Purely as a matter of accuracy, I hope that the hon. Gentleman recognises that the statement of principles has to be laid before the House and that, unless the spending limit is agreed, it is only with the authority of the House that the capping process can take effect."—[Official Report, 17 January 1984; Vol. 52, c. 180.]
That is right, but my point was quite different. It is now clear from our deliberations, as my hon. Friend the Member for Tyne Bridge rightly said, that the principles
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themselves will not be subject to any control whatever by the House of Commons. Nor will the criteria to be employed by the Secretary of State be amendable by Parliament. That, too, emerged from our deliberations on part I of the Bill.
We make no apology for spending so much time on part I, which contains eight clauses, because it contains the so-called selective powers, which we now know are not selective but wide-ranging general powers. It has become clear from our discussions in Committee that there is no control over the way in which the Secretary of State can exercise those powers. Calling them selective powers is a deliberate misnomer. They are wide-ranging, untrammelled powers and Parliament will have no say in how widely they are used. That is the reality that has come out of our discussions.
Other crucial facts have emerged. Not only will the Secretary of State alone determine the principles. If he decides to act against a number of authorities. he is required to lay just one report before Parliament, so a report encompassing 12, 15, 20 or more authorities may be dealt with in one debate. Does anyone really believe that Parliament will have a proper opportunity to scrutinise and debate—or even listen to—the cases of individual authorities in such a debate? It is nonsense to suppose that that could happen.
Even worse, the local authorities to be controlled will not even have the statutory right to be consulted. No statutory safeguard exists in the Bill for democratically elected councils to have their case properly put to the Secretary of State. In effect, they will be simply politically "fitted up" by the Secretary of State. He admitted in Committee that he would reserve the right to alter the principles to suit his own purpose. He made that absolutely clear in c. 568 of our Committee proceedings on 21 February.
The Secretary of State and his Under-Secretary, the hon. Member for Bristol, West (Mr. Waldegrave), are now on another hook. When we debated the report on the rate support grant settlement in January of this year, an unequivocal promise was made, on the record, that shire counties would be given more favourable treatment by the Government once this Bill had been enacted. That was used as a carrot to dangle before recalcitrant Conservative Members to bring them to the aid of the Government. It is quite clear from the Government's public expenditure White Paper that, whether or not this Bill is enacted, that promise cannot be kept.
It is clear from the White Paper that there will be further swingeing cuts in public expenditure. The Secretary of State smiles. Perhaps he will say, as he did in Committee, that we should not take too much notice of the Chancellor's most recent White Paper on public expenditure. The ink is hardly dry on the document, and the Secretary of State in Committee has been rewriting the expenditure totals. Is that what he wants us to believe?
It is now obvious from the Committee's examination of the issues that we are right to take our time to scrutinise the Bill as closely as possible. The Secretary of Stale has made long and important speeches, but he chose to make them in the middle of the night. That can be no accident. In fact, the hon. Member for Huntingdon (Mr. Major) determined that the Committee would sit through the night. Does the Secretary of State intend us to believe that

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it was by accident that he came along with two major prepared briefs? Was that really an accident? Was it not designed to hide from people the true content of the Bill?
Although a promise has been made on the record in the past that GRE would not be used to set targets for individual authorities, we now know that GRE will be central to the Government's approach, in spite of universal rejection by the local authority associations of that method of estimating needs. It has become clear beyond peradventure that the powers in part I can neither save significant amounts of public expenditure nor produce fairness for ratepayers. Those powers undermine local democracy, and they will be used to reduce services to the people who are most in need.
None of this information came to light as a result of the activities of Conservative members of the Committee. They demonstrated an almost total lack of concern for local democracy and for their constituents, as the hon. Member for Chipping Barnet (Mr. Chapman) candidly confessed. He was a little modest about his contribution. He said that he was able to dismiss part I—containing eight clauses—in a five-minute intervention. In fact, it took him 12 minutes to set aside the democratic rights of his constituents and ours. He may well regret the cavalier fashion in which he treated local democracy.
Mr. Chapman: The hon. Gentleman totally misunderstands what I said. It is grossly unfair to attribute those remarks to me. I accept that I made a 12-minute contribution instead of a five-minute contribution, which surely helps to destroy his case, but, according to the hon. Member for Tyne Bridge (Mr. Cowans), I made some telling interventions in the proceedings. The only difference is that they were concise and to the point, not rambling and filibustering.
Dr. Cunningham: The hon. Gentleman may have made some interventions—he intervened in the speech that I made the other day—but he took pride in saying that he only needed five minutes to deal with part I. He said that quite clearly, as the record will show.
As for telling interventions, some of the most telling—though not in the way that the hon. Gentleman means—were made by some of his hon. Friends. I have gone through our Committee proceedings, and I discovered that the hon. Member for St. Albans (Mr. Lilley) uttered five words. They were:
"His opposition has obviously subsided." — [Official Report, Standing Committee G, 21 February 1984; c. 637.]
The hon. Member for Lewisham, East (Mr. Moynihan), until tonight when he made a speech, uttered four words:
"We can see that."—[Official Report, Standing Committee G, 26 January 1984; c. 22.]
What he can see is not clear, but clearly he cannot see the threat that is posed to local democracy by the Bill.
My favourite quote from the Bill's proceedings comes from the writing of the Under-Secretary of State, the hon. Member for Bristol, West, who is responsible for taking the Bill through Committee. In his blue-chip phase, he wrote a book called "The Binding of Leviathan". In chapter six, he wrote the following:
"Conservatives know that ultimately the State must be supreme because, human nature being what it is, if there are equal powers in the land, civil war will eventually obtain. But Conservatives, like Liberals, should greatly fear the present tyranny of the House of Commons. Unchecked, in other than
296
trivial senses, by the House of Lords and the Monarch; dominating the courts and the traditions of common law with an ever-increasing volume of statute-law and an ever-increasing number of special administrative tribunals from which appeal lies only to a Minister and not to a court; brandishing the theory of the detailed mandate in the face of reasoned argument, the legal power of a majority in the British House of Commons has increased, is increasing and ought to be diminished."
That is what the hon. Gentleman wrote when he was in opposition. That is not what he is saying now, when he is responsible for taking the Bill through the House.
I repeat that my hon. Friends will make no apologies about the Committee proceedings. My hon. Friends have done an excellent job in exposing the fatal flaws—indeed the fraud—in the Bill. They have also done an excellent job in the defence of long-held and cherished local freedoms and democratic rights. They have done an excellent job in defence of services for those most in need — the elderly, the disabled, children in schools and nurseries, and the unemployed. They have done an excellent job in defence of local authorities and the people that they employ. Whatever the outcome of the debate, that is what we shall continue to do. That is why I invite the House to reject the motion.
6.30 pm
The Secretary of State for the Environment (Mr. Patrick Jenkin): I must start by correcting something that the hon. Member for Copeland (Dr. Cunningham) said when he attacked my hon. Friend the Member for St. Albans (Mr. Lilley) for not having spoken much in Committee. My hon. Friend is a parliamentary private secretary.
Dr. Cunningham: I was not aware of that; I apologise unreservedly.
Mr. Jenkin: I am sure that my hon. Friend will be most grateful for the hon. Gentleman's ready response.

It is just less than three hours since, in reply to my right hon. Friend the Leader of the House, the right hon. Member for Bethnal Green and Stepney (Mr. Shore), with his characteristic rasp which we now recognise, and with his usual inaccuracy which we also recognise, sought to rubbish the Bill's safeguards on the introduction of part II. He said that part II could only be introduced on an order passed by the House of Commons. I sought to intervene to correct him but he did not give way. He and the hon. Member for Copeland will know that an order from both Houses is needed. That is the importance of the safeguard on the introduction of part II.
The right hon. Member for Bethnal Green and Stepney made the strange proposition that as the Bill had constitutional implications it should have been taken on the Floor of the House. The implication was that that should somehow affect the decision to impose a guillotine. He said that the timetable motion was outrageous because the Government did not accept that the Bill should be dealt with on the Floor of the House. That is a curious argument. By the time the Committee finishes, it will have devoted 125 hours to the Bill. There is not the slightest chance that the Bill would have been allocated anything like so much time had it been dealt with on the Floor of the House. Indeed, a guillotine motion would have been necessary much earlier. Only about five minutes ago the hon. Member for Copeland admitted that had the Bill been dealt with on the Floor of the House it would have been

297
timetabled from the outset. I suggest that the right hon. and hon. Gentlemen should read their speeches before they respond to a debate of this sort.
Nobody denies that this is an important Bill. No one is arguing that it should not be properly debated. The question is what is proper debate. The simple fact is that we have already had 80 hours of debate in Committee and we now propose a further 42½ hours. In all, the Committee will have debated the Bill for more than 120 hours in 30 sittings spread over two months.
The Leader of the Opposition complained during business questions last week that the guillotine on the Bill was objectionable. I have given him notice that I would be referring to his remarks. In a debate when the guillotine was proposed for not one but two Bills—the Health Services Bill and the Dock Work Regulation Bill—the right hon. Gentleman said:
"there is greater danger to this Parliament from fatuous and superficial scrutiny of Bills than from the expedition of business which the people of the country demand".—[Official Report, 15 July 1976; Vol. 915, c. 912.]
As my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) rightly said, the British people are demanding the Bill. While I would not be so unkind as to accuse Labour Members of fatuity or superficiality, I have to say that they have gone on and on and on interminably.
My right hon. Friend the Lord Privy Seal made some kind references to the hon. Member for Tyne Bridge (Mr. Cowans). He is an engaging debater, but when one has to listen to the hon. Gentleman for no less than four and a half hours on the trot, even the well-known tolerance of my hon. Friend the Under-Secretary of State becomes strained. The hon. Gentleman managed to speak for 20 minutes on an amendment which had been withdrawn by the Opposition and replaced by another. He has great skill in talking to the Committee for 20, 30, or perhaps even 40 minutes before he comes to the point of the amendment to which he is speaking.
Dr. Cunningham rose—
Mr. Jenkin: No, I cannot give way.
I understand why the Opposition have sought to spin out the debate.
Dr. Cunningham rose—
Mr. Jenkin: They hope that it will become impossible for the Government to operate part I for 1985–86. They failed to stop the Bill on Second Reading and the only course left to them is to try to talk it out. The Government simply cannot allow that to happen.
My hon. Friend the Member for Lewisham, East (Mr. Moynihan) was right when he said that we would have yet one more year of irresponsible behaviour by the minority of local authorities at which part I is aimed. He spoke of his local authority of Lewisham. The London borough of Islington has now decided to spend so much that it will cease to be eligible for any rate support grant at all. It has promised a rate rise of 14 per cent. this year and, according to the Daily Telegraph, the leader of the council has admitted that
"the budget had a built-in rate rise for next year of about 15 per cent."
Are the ratepayers of Islington not to have the protection of the Bill at the earliest possible opportunity — 1985–86? How much longer must other ratepayers, such as those in the west midlands, put up with the loony
298
decisions of their county council. The West Midlands county council, if you please, set up a £25,000 rates kitty to finance peace propaganda. Lambeth council set up a creche for children of Lambeth council staff which is costing more than £5,000 per child per year, yet it claims not to have enough money. It is also in Lambeth that the arrears of unpaid rents doubled last year under Labour control and are now as much as the arrears in Birmingham, which has nearly three times as many tenants.
It is that kind of extravagance which brings local government into disrepute and forces the Government to implement the Bill. My hon. Friend the Member for Milton Keynes (Mr. Benyon) asked whether we had to have the Bill as early in 1984 as I have said. The timetable that we envisaged for applying the powers in part I must allow authorities adequate time to make economies from the outset of their budgeting cycle, and adequate time for the individual circumstances of each council to he considered. That is the way that we have constructed the Bill and it is essential that we have enough time after the Bill has become law for the administrative procedures to operate properly for the 1985–86 rating year. For that, the Bill must receive Royal Assent by midsummer. If we are to meet that timetable and allow for proper debate in another place, we must ask the House to pass the Bill before Easter.
We have had a good many arguments about whether the Opposition offered a timetable at the beginning of the process. The hon. Member for Blackburn (Mr. Straw) was remarkably frank about discussions which took place through the usual channels, which are normally conducted in private. But, of course, the hon. Gentleman made an offer which it would have been impossible for the Government to accept, because he offered nothing for the Report stage. My hon. Friend the Member for Huntingdon (Mr. Major), who served us splendidly on the Committee, was not going to fall for that one. The Opposition made an offer which they knew was bound to be refused.
The hon. Member for Tyne Bridge accused the Government of having timetabled the Bill before the House began to consider it. He is quite wrong. We could have had a splendid debate, and a timetable might not have been necessary—
Mr. Allan Roberts rose—
Mr. Patrick Jenkin: No, I will not give way.
What about the Opposition? The Opposition enjoyed themselves in Committee by quoting from documents in which I have sought to set out the arguments in favour of the Bill. Two can play at that game. I have before me the minutes of the Labour party's Back Bench environment committee, presided over by the hon. Member for Bootle (Mr. Roberts), dated 25 January 1984. Under the heading "Rates Committee", item 35 states:
"There was a discussion as to the wisdom of forcing a guillotine. No firm conclusions were reached."
However, the fact of the matter is that, by the time the Committee stage was under way, the Opposition had reached their conclusions, and they have talked and talked and talked, with the result that we have no — [Interruption.] We understand the Opposition's tactics. The debates in Committee have been characterised by an uneasy benevolence, but the Opposition have wasted time interminably. That is why the Government have been forced to table the motion, and that is why I must ask the House to support it.
Question put:—
The House divided: Ayes 333, Noes 196

Division No. 176]

[6.41 pm

AYES

Adley, Robert

Fairbairn, Nicholas

Aitken, Jonathan

Fallon, Michael

Alexander, Richard

Farr, John

Alison, Rt Hon Michael

Favell, Anthony

Amess, David

Fenner, Mrs Peggy

Ancram, Michael

Finsberg, Sir Geoffrey

Arnold, Tom

Fletcher, Alexander

Ashby, David

Fookes, Miss Janet

Asp in wall, Jack

Forman, Nigel

Atkins, Rt Hon Sir H.

Forsyth, Michael (Stirling)

Atkins, Robert (South Ribble)

Forth, Eric

Atkinson, David (B'm'th E)

Fowler, Rt Hon Norman

Baker, Rt Hon K. (Mole Vall'y)

Fox, Marcus

Baker, Nicholas (N Dorset)

Franks, Cecil

Baldry, Anthony

Fraser, Peter (Angus East)

Banks, Robert (Harrogate)

Freeman, Roger

Batiste, Spencer

Fry, Peter

Bellingham, Henry

Galley, Roy

Bendall, Vivian

Gardner, Sir Edward (Fylde)

Bennett, Sir Frederic (T'bay)

Garel-Jones, Tristan

Berry, Sir Anthony

Gilmour, Rt Hon Sir Ian

Best, Keith

Glyn, Dr Alan

Biffen, Rt Hon John

Goodhart, Sir Philip

Blaker, Rt Hon Sir Peter

Gorst, John

Body, Richard

Gow, Ian

Bonsor, Sir Nicholas

Gower, Sir Raymond

Bottomley, Peter

Grant, Sir Anthony

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

Greenway, Harry

Bowden, Gerald (Dulwich)

Gregory, Conal

Boyson, Dr Rhodes

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

Brandon-Bravo, Martin

Griffiths, Peter (Portsm'th N)

Bright, Graham

Grist, Ian

Brinton, Tim

Ground, Patrick

Brittan, Rt Hon Leon

Gummer, John Selwyn

Brooke, Hon Peter

Hamilton, Hon A. (Epsom)

Browne, John

Hamilton, Neil (Tatton)

Bryan, Sir Paul

Hampson, Dr Keith

Buchanan-Smith, Rt Hon A.

Hanley, Jeremy

Buck, Sir Antony

Hannam, John

Budgen, Nick

Hargreaves, Kenneth

Bulmer, Esmond

Harris, David

Carlisle, John (N Luton)

Harvey, Robert

Carlisle, Kenneth (Lincoln)

Haselhurst, Alan

Carttiss, Michael

Havers, Rt Hon Sir Michael

Chalker, Mrs Lynda

Hawkins, C. (High Peak)

Chapman, Sydney

Hawkins, Sir Paul (SW N'folk)

Chope, Christopher

Hawksley, Warren

Clark, Dr Michael (Rochford)

Hayes, J.

Clark, Sir W. (Croydon S)

Hayhoe, Barney

Clarke, Rt Hon K. (Rushcliffe)

Hayward, Robert

Clegg, Sir Walter

Heathcoat-Amory, David

Cockeram, Eric

Heddle, John

Colvin, Michael

Henderson, Barry

Conway, Derek

Heseltine, Rt Hon Michael

Coombs, Simon

Hickmet, Richard

Cope, John

Higgins, Rt Hon Terence L.

Couchman, James

Hill, James

Cranborne, Viscount

Hirst, Michael

Crouch, David

Hogg, Hon Douglas (Gr'th'm)

Currie, Mrs Edwina

Holland, Sir Philip (Gedling)

Dickens, Geoffrey

Holt, Richard

Dicks, Terry

Hooson, Tom

Dorrell, Stephen

Hordern, Peter

Douglas-Hamilton, Lord J.

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

du Cann, Rt Hon Edward

Howarth, Gerald (Cannock)

Dunn, Robert

Howe, Rt Hon Sir Geoffrey

Durant, Tony

Howell, Rt Hon D. (G'ldford)

Edwards, Rt Hon N. (P'broke)

Howell, Ralph (N Norfolk)

Eggar, Tim

Hubbard-Miles, Peter

Emery, Sir Peter

Hunt, David (Wirral)

Evennett, David

Hunt, John (Ravensbourne)

Eyre, Sir Reginald

Hunter, Andrew

300

Hurd, Rt Hon Douglas

Pattie, Geoffrey

Irving, Charles

Pawsey, James

Jackson, Robert

Peacock, Mrs Elizabeth

Jenkin, Rt Hon Patrick

Pink, R. Bonner

Jessel, Toby

Pollock, Alexander

Johnson-Smith, Sir Geoffrey

Porter, Barry

Jones, Gwilym (Cardiff N)

Powell, William (Corby)

Jones, Robert (W Herts)

Powley, John

Jopling, Rt Hon Michael

Price, Sir David

Joseph, Rt Hon Sir Keith

Prior, Rt Hon James

Kellett-Bowman, Mrs Elaine

Proctor, K. Harvey

Kershaw, Sir Anthony

Pym, Rt Hon Francis

Key, Robert

Raffan, Keith

King, Rt Hon Tom

Raison, Rt Hon Timothy

Knight, Gregory (Derby N)

Rathbone, Tim

Knight, Mrs Jill (Edgbaston)

Rees, Rt Hon Peter (Dover)

Knowles, Michael

Renton, Tim

Lamont, Norman

Rhodes James, Robert

Lang, Ian

Rhys Williams, Sir Brandon

Latham, Michael

Ridley, Rt Hon Nicholas

Lawler, Geoffrey

Roberts, Wyn (Conwy)

Lawrence, Ivan

Robinson, Mark (N'port W)

Lawson, Rt Hon Nigel

Roe, Mrs Marion

Lee, John (Pendle)

Rossi, Sir Hugh

Leigh, Edward (Gainsbor'gh)

Rost, Peter

Lennox-Boyd, Hon Mark

Rowe, Andrew

Lewis, Sir Kenneth (Stamf'd)

Rumbold, Mrs Angela

Lilley, Peter

Ryder, Richard

Lloyd, Ian (Havant)

Sainsbury, Hon Timothy

Lloyd, Peter, (Fareham)

St. John-Stevas, Rt Hon N.

Lord, Michael

Sayeed, Jonathan

Lyell, Nicholas

Scott, Nicholas

McCrindle, Robert

Shaw, Giles (Pudsey)

McCurley, Mrs Anna

Shaw, Sir Michael (Scarb')

Macfarlane, Neil

Shelton, William (Streatham)

MacGregor, John

Shepherd, Colin (Hereford)

MacKay, Andrew (Berkshire)

Shepherd, Richard (Aldridge)

MacKay, John (Argyll & Bute)

Silvester, Fred

Maclean, David John.

Sims, Roger

McQuarrie, Albert

Skeet, T. H. H.

Madel, David

Smith, Sir Dudley (Warwick)

Major, John

Smith, Tim (Beaconsfield)

Malins, Humfrey

Soames, Hon Nicholas

Malone, Gerald

Speed, Keith

Maples, John

Speller, Tony

Marland, Paul

Spence, John

Marlow, Antony

Spencer, D.

Marshall, Michael (Arundel)

Spicer, Jim (W Dorset)

Mates, Michael

Spicer, Michael (S Worcs)

Maude, Hon Francis

Squire, Robin

Mawhinney, Dr Brian

Stanbrook, Ivor

Maxwell-Hyslop, Robin

Stanley, John

Mayhew, Sir Patrick

Stern, Michael

Mellor, David

Stevens, Lewis (Nuneaton)

Merchant, Piers

Stevens, Martin (Fulham)

Meyer, Sir Anthony

Stewart, Allan (Eastwood)

Miller, Hal (B'grove)

Stewart, Andrew (Sherwood)

Mills, lain (Meriden)

Stewart, Ian (N Hertfdshire)

Mills, Sir Peter (West Devon)

Stokes, John

Miscampbell, Norman

Stradling Thomas, J.

Mitchell, David (NW Hants)

Sumberg, David

Moate, Roger

Tapsell, Peter

Monro, Sir Hector

Taylor, John (Solihull)

Montgomery, Fergus

Taylor, Teddy (S'end E)

Moore, John

Tebbit, Rt Hon Norman

Morris, M. (N'hampton, S)

Temple-Morris, Peter

Morrison, Hon P. (Chester)

Terlezki, Stefan

Moynihan, Hon C.

Thatcher, Rt Hon Mrs M.

Murphy, Christopher

Thomas, Rt Hon Peter

Neale, Gerrard

Thompson, Donald (Calder V)

Nelson, Anthony

Thompson, Patrick (N'ich N)

Neubert, Michael

Thorne, Neil (Ilford S)

Norris, Steven

Thornton, Malcolm

Oppenheim, Rt Hon Mrs S.

Thurnham, Peter

Ottaway, Richard

Townend, John (Bridlington)

Page, John (Harrow W)

Townsend, Cyril D. (B'heath)

Page, Richard (Herts SW)

Trippier, David

Parkinson, Rt Hon Cecil

Trotter, Neville

Parris, Matthew

Twinn, Dr Ian

Patten, Christopher (Bath)

van Straubenzee, Sir W.

301

Vaughan, Sir Gerard

Whitfield, John

Viggers, Peter

Whitney, Raymond

Waddington, David

Wiggin, Jerry

Wakeham, Rt Hon John

Wilkinson, John

Walden, George

Winterton, Mrs Ann

Walker, Bill (T'side N)

Winterton, Nicholas

Walker, Rt Hon P. (W'cester)

Wolfson, Mark

Wall, Sir Patrick

Wood, Timothy

Waller, Gary

Woodcock, Michael

Ward, John

Yeo, Tim

Wardle, C. (Bexhill)

Young, Sir George (Acton)

Warren, Kenneth

Younger, Rt Hon George

Watson, John

Watts, John

Tellers for the Ayes:

Wells, Bowen (Hertford)

Mr. Robert Boscawen and Mr. Alastair Goodlad.

Wells, John (Maidstone)

Wheeler, John

NOES

Abse, Leo

Eastham, Ken

Adams, Allen (Paisley N)

Evans, John (St. Helens N)

Alton, David

Faulds, Andrew

Anderson, Donald

Field, Frank (Birkenhead)

Archer, Rt Hon Peter

Fields, T. (L'pool Broad Gn)

Ashdown, Paddy

Fisher, Mark

Ashley, Rt Hon Jack

Foot, Rt Hon Michael

Ashton, Joe

Forrester, John

Atkinson, N. (Tottenham)

Foster, Derek

Banks, Tony (Newham NW)

Foulkes, George

Barnett, Guy

Fraser, J. (Norwood)

Barron, Kevin

Freeson, Rt Hon Reginald

Beggs, Roy

Freud, Clement

Beith, A. J.

George, Bruce

Bell, Stuart

Gilbert, Rt Hon Dr John

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

Godman, Dr Norman

Benyon, William

Golding, John

Bermingham, Gerald

Gould, Bryan

Boothroyd, Miss Betty

Gourlay, Harry

Boyes, Roland

Hamilton, James (M'well N)

Bray, Dr Jeremy

Hamilton, W. W. (Central Fife)

Brown, Hugh D. (Provan)

Harman, Ms Harriet

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

Hattersley, Rt'Hon Roy

Brown, Ron (E'burgh, Leith)

Healey, Rt Hon Denis

Bruce, Malcolm

Heffer, Eric S.

Buchan, Norman

Hogg, N. (C'nauld & Kilsyth)

Callaghan, Jim (Heyw'd & M)

Home Robertson, John

Campbell, Ian

Howell, Rt Hon D. (Sfheath)

Campbell-Savours, Dale

Hoyle, Douglas

Canavan, Dennis

Hughes, Dr. Mark (Durham)

Carlile, Alexander (Montg'y)

Hughes, Robert (Aberdeen N)

Carter-Jones, Lewis

Hughes, Roy (Newport East)

Clark, Dr David (S Shields)

Hughes, Sean (Knowsley S)

Clarke, Thomas

Hughes, Simon (Southwark)

Clay, Robert

Jenkins, Rt Hon Roy (Hillh'd)

Cocks, Rt Hon M. (Bristol S.)

John, Brynmor

Cohen, Harry

Johnston, Russell

Coleman, Donald

Jones, Barry (Alyn & Deeside)

Concannon, Rt Hon J. D.

Kaufman, Rt Hon Gerald

Conlan, Bernard

Kennedy, Charles

Cook, Frank (Stockton North)

Kilroy-Silk, Robert

Cook, Robin F. (Livingston)

Kinnock, Rt Hon Neil

Corbett, Robin

Lambie, David

Corbyn, Jeremy

Lamond, James

Cox, Thomas (Tooting)

Leighton, Ronald

Craigen, J. M.

Lewis, Ron (Carlisle)

Crowther, Stan

Lewis, Terence (Worsley)

Cunningham, Dr John

Lloyd, Tony (Stretford)

Dalyell, Tarn

Lofthouse, Geoffrey

Davies, Rt Hon Denzil (L'lli)

Loyden, Edward

Davies, Ronald (Caerphilly)

McCartney, Hugh

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

McCusker, Harold

Deakins, Eric

McDonald, Dr Oonagh

Dewar, Donald

McGuire, Michael

Dixon, Donald

McKay, Allen (Penistone)

Dormand, Jack

McKelvey, William

Douglas, Dick

Maclennan, Robert

Dubs, Alfred

Madden, Max

Duffy, A. E. P.

Maginnis, Ken

Dunwoody, Hon Mrs G.

Marek, Dr John

Eadie, Alex

Marshall, David (Shettleston)

302

Martin, Michael

Rowlands, Ted

Mason, Rt Hon Roy

Ryman, John

Maxton, John

Sedgemore, Brian

Maynard, Miss Joan

Sheerman, Barry

Meacher, Michael

Sheldon, Rt Hon R.

Meadowcroft, Michael

Shore, Rt Hon Peter

Mikardo, Ian

Short, Ms Clare (Ladywood)

Millan, Rt Hon Bruce

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

Miller, Dr M. S. (E Kilbride)

Silkin, Rt Hon J.

Mitchell, Austin (G't Grimsby)

Skinner, Dennis

Molyneaux, Rt Hon James

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

Morris, Rt Hon A. (W'shawe)

Snape, Peter

Morris, Rt Hon J. (Aberavon)

Soley, Clive

Nellist, David

Spearing, Nigel

Oakes, Rt Hon Gordon

Steel, Rt Hon David

O'Brien, William

Straw, Jack

O'Neill, Martin

Thomas, Dafydd (Merioneth)

Orme, Rt Hon Stanley

Thomas, Dr R. (Carmarthen)

Owen, Rt Hon Dr David

Thompson, J. (Wansbeck)

Park, George

Thorne, Stan (Preston)

Parry, Robert

Tinn, James

Patchett, Terry

Torney, Tom

Pavitt, Laurie

Wainwright, R.

Pendry, Tom

Walker, Cecil (Belfast N)

Penhaligon, David

Wallace, James

Pike, Peter

Wardell, Gareth (Gower)

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

Wareing, Robert

Powell, Raymond (Ogmore)

Weetch, Ken

Prescott, John

Welsh, Michael

Radice, Giles

Wigley, Dafydd

Randall, Stuart

Williams, Rt Hon A.

Redmond, M.

Winnick, David

Rees, Rt Hon M. (Leeds S)

Woodall, Alec

Roberts, Allan (Bootle)

Wrigglesworth, Ian

Robertson, George

Robinson, G. (Coventry NW)

Tellers for the Noes:

Rogers, Allan

Mr. John McWilliam and Mr. Frank Haynes

Ross, Ernest (Dundee W)

Ross, Stephen (Isle of Wight)

Question accordingly agreed to.
Resolved,
That the following provisions shall apply to the remaining proceedings on the bill:—
Committee
1. — (1) The Standing Committee to which the Bill is allocated shall report the Bill to the House on or before 20th March 1984.
(2) Proceedings on the Bill at a sitting of the Standing Committee on the said 20th March may continue until Eleven p.m., whether or not the House is adjourned before that time, and if the House is adjourned before those proceedings have been brought to a conclusion the Standing Committee shall report the Bill to the House on 21st March.
Report and Third Reading
2. — (1) The proceedings on Consideration and Third Reading of the Bill shall be completed in two allotted days and shall be brought to a conclusion at Ten o'clock on the second of those days; and for the purposes of Standing Order No. 45 (Business Committee) this Order shall be taken to allot to the proceedings on Consideration such part of those days as the Resolution of the Business Committee may determine.
(2) The Business Committee shall report to the House its Resolutions as to the proceedings on Consideration of the Bill, and as to the allocation of time between those proceedings and proceedings on Third Reading, not later than the fourth day on which the House sits after the day on which the Chairman of the Standing Committee reports the Bill to the House.
(3) The Resolutions in any Report made under Standing Order No. 45 may be varied by a further Report so made, whether or not within the time specified in sub-paragraph (2) above, and whether or not the Resolutions have been agreed to by the House.
(4) The Resolutions of the Business Committee may include alterations in the order in which proceedings on Consideration of the Bill are taken.
Procedure in Standing Committee
3. — (1) At a sitting of the Standing Committee at which any proceedings on the Bill are to be brought to a conclusion under a Resolution of the Business Sub-Committee the Chairman

303
shall not adjourn the Committee under any Order relating to the sittings of the Committee until the proceedings have been brought to a conclusion.
(2) No Motion shall be moved in the Standing Committee relating to the sitting of the Committee except by a member of the Government, and the Chairman shall permit a brief explanatory statement from the Member who moves, and from a Member who opposes, the Motion, and shall then put the Question thereon.
4. No Motion shall be moved to alter the order in which Clauses, Schedules, new Clauses and new Schedules are taken in the Standing Committee but the Resolutions of the Business Sub-Committee may include alterations in that order.
Conclusions of proceedings in Committee
5. On the conclusion of the proceedings in any Committee on the Bill the Chairman shall report the Bill to the House without putting any Question.
Dilatory motions
6. No dilatory Motion with respect to, or in the course of, proceedings on the Bill shall be moved in the Standing Committee or on an allotted day except by a member of the Government, and the Question on any such Motion shall be put forthwith.
Extra time on allotted days
7. —(1) On the first allotted day paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings on the Bill for two hours after Ten o'clock.
(2) Any period during which proceedings on the Bill may be proceeded with after Ten o'clock under paragraph (7) of Standing Order No. 10 (Adjournment on specific and important matter that should have urgent consideration) shall be in addition to the said period of two hours.
(3) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 10 stands over from an earlier day, a period of time equal to the duration of the proceedings upon that Motion shall be added to the said period of two hours.
Private business
8. Any private business which has been set down for consideration at Seven o'clock on an allotted day shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill on that day, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the conclusion of those proceedings.
Conclusion of proceedings
9. —(1) For the purpose of bringing to a conclusion any proceedings which are to be brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee or the Business Sub-Committee and which have not previously been brought to a conclusion, the Chairman or Mr. Speaker shall forthwith put the following Questions (but no others)—

(a) any Question already proposed from the Chair;

(b) any Question necessary to a a bring to decision a Question so proposed (including, in the case of a new Clause or new Schedule which has been read a second time, the Question that the Clause or Schedule be added to the Bill);

(c) the Question on any amendment or Motion standing on the Order Paper in the name of any Member, if that amendment or Motion is moved by a Member of the Government;

(d) any other Question necessary for the disposal of the business to be concluded;

and on a Motion so moved for a new Clause or a new Schedule, the Chairman or Mr. Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(2) Proceedings under sub-paragraph (1) above shall not be interrupted under any Standing Order relating to the sittings of the House.
(3) If an allotted day is one on which a Motion for the adjournment of the House under Standing Order No. 10 (Adjournment on specific and important matter that should have urgent consideration) would, apart from this Order, stand over to Seven o'clock—

(a) that Motion shall stand over until the conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion at or before that time;

(b) the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion after that time shall be postponed for a period equal to the duration of the proceedings on that Motion.

(4) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 10 stands over from an earlier day, the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion on that day shall be postponed for a period equal to the duration of the proceedings on that Motion.
Supplemental orders
10. — (1) The proceedings on any Motion moved in the House by a member of the Government for varying or supplementing the provisions of this Order (including anything which might have been the subject of a report of the Business Committee or Business Sub-Committee) shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings.
(2) If on an allotted day on which any proceedings on the Bill are to be brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee the House is adjourned, or the sitting is suspended, before that time no notice shall be required of a Motion moved at the next sitting by a member of the Government for varying or supplementing the provisions of this Order.
Saving
11. Nothing in this Order or a Resolution of the Business Committee or Business Sub-Committee shall—

(a) prevent any proceedings to which the Order or Resolution applies from being taken or completed earlier than is required by the Order or Resolution, or

(b) prevent any business (whether on the Bill or not) from being proceeded with on any day after the completion of all such proceedings on the Bill as are to be taken on that day.

Re-committal
12. — (1) References in this Order to proceedings on Consideration or proceedings on Third Reading include references to proceedings, at those stages respectively, for, on or in consequence of re-committal.
(2) On an allotted day no debate shall be permitted on any Motion to re-commit the Bill (whether as a whole or otherwise), and Mr. Speaker shall put forthwith any Question necessary to dispose of the Motion, including the Question on any amendment moved to the Question.
Interpretation
13. In this Order—
'allotted day' means any day (other than a Friday) on which the Bill is put down as first Government Order of the Day provided that a Motion for allotting time to the proceedings on the Bill to be taken on that day either has been agreed on a previous day or is set down for consideration on that day;
'the Bill' means the Rates Bill;
'Resolution of the Business Sub-Committee' means a Resolution of the business Sub-Committee as agreed to by the Standing Committee;
'Resolution of the Business Committee' means a Resolution of the Business Committee as agreed to by the House.

Consumer Protection
6.54 pm
The Under-Secretary of State for Trade and Industry (Mr. Alexander Fletcher): I beg to move,
That this House takes note of European Community Documents Nos. R/113/77 and R/134/78 concerning contracts negotiated away from business premises and of the supplementary explanatory memoranda submitted by the Department of Trade on 18th June 1980 and the Department of Trade and Industry on 9th November 1983, and supports the Government's intention to secure a satisfactory resolution of the outstanding points.
The debate is held on the recommendation of the Select Committee on European Legislation which has considered the proposal on three occasions since 1977. The early drafts of the proposal found no friends in this House. Both the Select Committee in its 1977 and 1978 reports and the House in its 1978 debate had considerable reservations about it. In the 1978 debate, the House resolved that it did not consider the proposal an acceptable basis for United Kingdom legislation. The Government of the day accepted that view.
In further discussions in Brussels, it emerged that the majority of member states were still anxious to proceed with a directive on contracts negotiated away from business premises. But it was generally felt that the original draft proposal was a dead letter. The Commission therefore produced a new and much simplified text and a further round of discussions began.
The present draft is a very simple document, on the same lines as the informal draft which the Select Committee considered in 1980, but with a number of changes. For the convenience of hon. Members I have placed an informal copy of the latest working draft, with the formal documents for this debate, before the House.
The central feature is the establishment of a cooling-off period of seven days for certain contracts which are concluded away from business premises. Article 1 lays down the circumstances in which the directive will apply and article 3 specifies certain types of contract which will be exempt from its provisions. The main exemption is for contracts with a value of less than 60 European units of account — about £35. Other exemptions cover the construction, sale and rental of immovable property, drinks and foodstuffs supplied by regular roundsmen, catalogue mail order trading, insurance contracts and contracts for securities.
Apart from these exceptions, the directive applies to all contracts concluded during an excursion organised by a
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trader away from his business premises or during a visit by a trader to a consumer's home or workplace, or to another consumer's home, when the visit does not take place at the express request of the consumer. The trader is required by article 4 to give the consumer written notice of his right to cancel the contract within seven days and the name and address of a person against whom he can exercise that right.
It may be convenient if I outline to the House the paints that are still under discussion in Brussels. The first concerns article 1.2 which applies the directive to contracts for the supply of goods or services other than those for which the consumer requested the visit from the trader. It has yet to be decided whether this provision will be mandatory or permissive.
The second is a proposal for an additional exemption in article 3 to cover cases where the trader is in good faith unaware that he is negotiating with a consumer.
Finally, there is a proposal to extend article 8 of the directive to ensure that the directive does not prevent member states from banning the doorstep selling of certain goods. The House will note that there are very few remaining points of difficulty.
I hope that the House will agree that the present draft of the directive is a considerable improvement on its predecessors. It exempts insurance and catalogue mail order contracts about which several hon. Members expressed anxiety in the 1978 debate. It sets a higher and more realistic value limit than the 25 European units of account limit in the 1980 draft. It also includes a provision designed to bring within its scope "supply and fix" contracts — covering such items as double-glazing installation or cavity-wall filling — which are an important feature of this method of selling in the United Kingdom.
In its 1980 and 1983 reports, the Select Committee drew attention to doubts expressed in the 1978 debate over whether the proposal could properly be put forward under the treaty of Rome. Although on broad grounds of principle it would still be possible to argue that way, we consider that, since major improvements to the draft have been achieved, it would be undesirable to reject the directive now on wires grounds.
It being Seven o'clock, and there being private business set down by THE CHAIRMAN OF WAYS AND MEANS, under Standing Order No.7 (Time for taking private business), further Proceeding stood postponed.

Barclays Bank Bill (By Order)
Order for Second Reading read.
7 Pm
Sir Anthony Grant: I beg to move, That the Bill be now read a Second time.
Mr. Speaker: I should announce to the House that I have selected the instruction on the Order Paper:
That it be an Instruction to any Committee to whom the Bill may be referred not to allow the Bill unless they are satisfied that no change in the pattern of trade union representation or in the terms of employment of staff in the banks affected by the Bill will occur as a result of the proposals of the Bill without the agreement of the staff and their trade union representatives.
Sir Anthony Grant: The Bill is designed to achieve three objects. The first is the transfer of Barclays Bank plc, which I shall refer to as Barclays, in the United Kingdom to Barclays Bank International, which for simplicity's sake I shall refer to as BBI, and to achieve the creation of a single bank, which will be the new Barclays. Secondly, the Bill is designed to re-register BBI as a public company under the Companies Act 1980 and to change the name of BBI and Barclays. Thirdly, it involves the adoption by BBI of a modern memorandum and articles and the repeal of existing BBI private Acts.
It might help the House if I gave a brief background to the measure. Barclays UK is a famous name in the banking world. It has 75,000 employees and 2,900 branches, and it controls assets in excess of £23 million. It was formed in 1896 by a merger of some 20 different banks, the history of some of which went back 200 years. In the meanwhile it acquired other banks, most notably Martins in 1968. Barclays has some 5 million customers in the United Kingdom. The whole group employs 135,000 people, operating in approximately 80 different countries. Barclays UK has more than 140,000 shareholders, none of whom holds more than a 2 per cent. holding.
BBI, the international bank, was created as a result of a merger in 1925 of the old Colonial Bank, set up by Royal Charter under William IV, which operated largely in the Caribbean, British Guyana and West Africa. It merged with banks in Egypt and Africa. The result was the creation of Barclays DCO. Today there are some 6,500,000 Barclaycard holders in this country. That is a new aspect of its business. Indeed, Barclays does substantial business in the United States where, of British banks, it has the largest presence. It has subsidiaries in over 35 states of the USA. Of course, Barclays is a household word in the United Kingdom. There are branches and customers in all our constituencies.
I shall give briefly the reasons for the merger. Barclays is primarily concerned as the United Kingdom clearing bank for clearing bank business in the United Kingdom. BBI deals with international and overseas business of the Barclays group. In recent years BBI has been expanding its business activities considerably, particularly in the United States, in Europe, in Asia and in the Pacific basin. With changing patterns of demand for banking services and changing constraints of fiscal and regulatory requirements, the time has been reached when banks can be more effectively and efficiently managed through a single corporate entity.
One of the most important developments in recent years has been the growth of large national and international companies, British and foreign, whose activities extend
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over many countries and currencies, and who need banking facilities wherever they work. These companies are responsible for a very great deal of employment throughout Britain and many people depend on their success or failure. It is almost always easier for a company to deal with a bank at a single point, and the artificial separation between sterling banks and international banks is not helpful in providing a satisfactory service in a reasonable time, although when there was exchange control it had some merit.
International customers consist not just of large corporations; some are small companies and some are individuals. People deal overseas much more than they used to and they expect flexibility, one-stop banking and a quick response from a single source. The new Barclays is intended to give just that. It will have the ability to standardise operational systems, including a computer network. This will lead to higher standards of service and customers will have easier access to the information they need about their accounts.
I have been asked why it is necessary to have a Bill brought before Parliament. It has long been recognised by Parliament that the only way in which a banking business can be transferred from one company to another without an unacceptable level of disturbance is for the transfer to be achieved by means of an Act of Parliament. It is for this reason that the Bill is being put before the House.
At first sight it might also appear to be logical for the business of the subsidiary, BBI, to be transferred to the parent, Barclays. However, in this case the considerations which make it necessary for Parliament to be concerned would also have imposed the need for legislation in all the countries, approximately 80, in which BBI operates in its own name. That is why the other course has been adopted of BBI acquiring Barclays UK; only one Bill is necessary, although Barclays is also promoting legislation in the states of Jersey and Guernsey and in the Isle of Man.
The essence of the Bill is to create the new Barclays. Its management will have the responsibility for directing and operating one of 10 largest banking businesses in the world. It is important to point out that the Bill will not change in any fundamental way the relation between the parent company and overseas subsidiaries and branches.
At this stage I should deal with anxieties expressed in some quarters; notably, one petitioner against the Bill is Mr. John Butcher, who is known to some hon. Members. I should like to set his anxieties at rest as far as possible by saying that the overall financial situations of the Barclays group will be unchanged as a result of the reorganisation. The management and legal structures are being changed, but the actual management is not. Barclays Bank plc, the clearing bank, would under the present structure always support other members of the group bearing the Barclays name if they were in any difficulty. A group-wide view would be taken. The same situation will exist after the reorganisation. Therefore, the security of individuals' accounts with Barclays will be no less after the reorganisation has taken place. In fact, one could go further and say that Barclays would support its subsidiaries even beyond its legal obligations to do so. In such action it would be encouraged by the Bank of England, which has a supervisory responsibility for British banks operating anywhere in the world.
The objective of the Bill is to transfer to BBI from Barclays the rights and responsibilities under all contracts to which Barclays is a party on precisely the same basis.

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There are precedents for this procedure in all the local Acts relating to the transfer of a banking business. The actual management of the Barclays group will remain unchanged following the merger, and Barclays managers are reasonable men. No customer of Barclays will find himself more at risk after the merger than he was before. I hope that that goes some way towards reassuring Mr. Butcher and any other customers who might have anxieties.
Since the clearing banks entered the home loans business they have competed among themselves in various ways, including interest rates. Competition between banks is keen. If one bank was significantly out of line with the others, it would quickly lose both new and existing business. Although Barclays does not have the power under home mortgage contracts arbitrarily to demand repayment if the borrower fails to fulfil the agreement, the borrower is at liberty at any time to repay the bank.
Another fear expressed was about whether the indebtedness of banks overseas, especially in Latin America, would be of any consequence. That is a misguided view. The overseas debts in Latin America have largely involved American banks. British banks are less involved, and Barclays is by no means the largest United Kingdom lender. No more than 2·7 per cent. of its assets have been loaned to those countries compared with 10·1 per cent. for some United States banks. Therefore, there is no need for anxiety.
I have described the customers' position and the benefits that may accrue to them. I now wish to say something about the staff who, quite naturally, are anxious about the consequences of the Bill. There will be an improved career structure and improved prospects because the merger will mean that interchangeability will be easier and more common between staff members. Currently, staff tend rigidly to work in this country or to work overseas. The merger will mean that it will be easier for United Kingdom staff to gain experience overseas and for staff overseas to gain experience here. That will assist the career prospects of staff and, I hope, make their work more interesting.
If the hon. Member for Motherwell, South (Dr. Bray) catches your eye, Mr. Deputy Speaker, we shall debate the instruction that he has tabled. Two unions are involved in the Barclays group: the Barclays Group Staff Union—which I shall call BGSU — which has some 37,000 members, and the Banking Insurance and Finance Union—which I shall call BIFU—which has 13,000 members. BIFU is a responsible union, with which the bank has excellent relations. It has put in a petition against the Bill, and negotiations are continuing.
I do not believe that the Floor of the House is the proper forum for conducting trade union negotiations, nor am I in the slightest way qualified to do so. However, I shall make four brief points about how the bank views the position. First, it states clearly that the merger can and will be achieved on 1 January 1985 without any enforced redundancies. Secondly, negotiations are continuing to ensure that no member of staff will be worse off either immediately or in terms of his expectations in his existing grade.
Thirdly, other terms and conditions will be sustained as far as is possible, and negotiations are proceeding on what I believe to be fairly narrow and not insuperable problems. Finally, there is the question of union recognition. Currently, there is joint recognition of the two unions in the clearing bank, and BIFU has sole recognition in BBI.
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After the merger, the bank proposes that there should be joint recognition in the new group. BGSU cannot be ignored, because it outnumbers BIFU by more than two to one. The bank considers that to be a reasonable proposal.
It is right broadly to express the bank's views during Second Reading. I emphasise that negotiations are continuing, and the bank is happy to continue those negotiations after the Bill receives its Second Reading and before it goes to Committee.
I wish briefly to explain the clauses of the Bill, although some are fairly obvious. Clause 2 deals with the transfer of property. In practical terms, all Barclays property will pass, with the exception of its investment in BBI. Under clause 3, subject to the Bill passing into law at a sufficient interval before the end of 1984, the appointed day should be 1 January 1985.
Clause 4 deals with the documentation procedure, all of which has been approved by the authorities and by the Department of Trade and Industry. Subsection (2)(b) is an unusual provision designed to save money by using the old stock of travellers cheques and international money orders. I was staggered to find that the bank had no fewer than 40,000 outlets in almost every country, with more than 70 million documents held in stock with a value in excess of £2,000 million. It would, therefore, be tiresome to have to destroy those and begin again.
Mr. John Page: I was wondering whether there was any discount on the old stock, as often happens in other circumstances.
Sir Anthony Grant: 1 am sure that the bank will always look favourably on any suggestion from my hon. Friend. However, it is unlikely that in his affluent position he would need to take advantage of such an offer. No doubt the bank will note his remarks.
Clause 5 provides for the transfer and vesting of the business of Barclays to BBI and provides further for the consideration that will consist of the issue by BBI to Barclays of fully paid shares in BBI. The precise number cannot be determined until after the appointed day and after the audit has taken place.
Clause 7, which is important, ensures continuance of existing contracts in the name of Barclays, the rights and obligations under which pass to BBI. Clauses 8 and 9 deal with the continuance of contracts of employment and staff pension funds. Clauses 10, 11 and 12 deal with the technical legal matter of the Bankers' Books Evidence Act.
Those are the only points on the drafting of the B al to which I need draw the attention of the House.
I wish to refer to a matter of some controversy, which may or may not concern some hon. Members. I know that the question of South Africa has exercised the minds of some hon. Members. Barclays and its predecessors have been in South Africa for more than 100 years. Their employment practices are in advance of those recommended in the EC code of conduct. Barclays reports annually to the Department of Trade and Industry, and has done so under both Conservative and Labour Governments ever since the Labour President of the Board of Trade recommended that.
The reports have shown that Barclays maintains equal pay for equal work, regardless of colour, it encourages staff of all races to join trade unions, its trading is on a

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multiracial basis and all facilities of the bank are available to all members of staff. Barclays lending policies in South Africa are concerned with the welfare of the whole community. Its interest in the South African bank is just over 50 per cent. It takes fully into account the interest and advancement of the black population. It is of interest to note that it has special training schemes for non-white staff so that they can be raised to managerial and executive levels.
Barclays is not one of the big lenders to South Africa; it is not in the first 10 in lending to that country. It is involved in projects concentrating on the needs of the black business sector. It has a team of specially trained black business development officers who give business education, training and advice to black business men in South Africa. Indeed, its policy is as stated by the right hon. Member for Plymouth, Devonport (Dr. Owen) last year, when he said that it was to
"practise no apartheid whatsoever and will positively discriminate in favour of developing black managers and executives"
to serve in the business.
BIFU did not, when it wrote its paper "Time to Choose," support demands for disinvestment by British banks or companies in South Africa until it was the policy of the British Government that that should happen; and that had not been the case under successive Governments.
Mr. John Heddle (Mid-Staffordshire): I believe that in a previous incarnation my hon. Friend held office at one of the great Departments of State. He will no doubt be aware of the considerable trade between Great Britain and South Africa. Will he confirm that Barclays National Bank in South Africa aids, abets and assists Great Britain in its trading relationship with that country?
Sir Anthony Grant: That is certainly the case; it is the policy of the bank, and it has been the policy of successive Governments. When I took responsibility in that sphere in a previous Conservative Government I carried on the policies of the previous Labour Administration in that respect. There was no difference whatever, and Barclays was involved at that time.
Mr. John Carlisle: Perhaps I have an advantage over other hon. Members, in that I had discussions with Barclays in Johannesburg recently. My hon. Friend might confirm that there are some misgivings among the white employees of the bank in Johannesburg, M that positive discrimination is now taking place in favour of black employees of the bank. In other words, Barclays is absolutely clean in this matter, and I fully support what my hon. Friend has been saying.
Sir Anthony Grant: I am grateful to my hon. Friend for that observation. I am not as up to date as he is on that, but he endorses the point I make in that Barclays is making positive efforts to encourage its black employees to raise their qualifications and thereby take on more managerial and executive positions.
Barclays is known and renowned nationwide, indeed worldwide. It is one of the biggest United Kingdom banking institutions, and those institutions contributed net earnings of £1·7 billion to our balance of payments in 1982. They help British industry to expand, to win exports and — this is particularly important — to create much needed employment.
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This modest and somewhat technical measure will allow Barclays to carry out its business more effectively. In the long run, many customers will benefit as a result, as will the country and the economy. The Bill deserves a Second Reading and I warmly commend it to the House.
Mr. Deputy Speaker (Mr. Paul Dean): It may be helpful if I remind the House that Mr. Speaker has selected the instruction. It will be appropriate for it to be debated with the Second Reading debate.
7.24 pm
Mr. Donald Anderson: I congratulate the hon. Member for Cambridgeshire, South-West (Sir A. Grant) on the clarity of his exposition. He took us through what he described as a modest and technical re-organisation with extreme skill and in a rational and cogent way, and he sought to allay a number of fears that had been expressed. He sought, of course, to look at the Bill—save for his final remarks on South Africa — within narrow parameters. I hope, together with a number of my hon. Friends, to look at it in a rather broader context and to develop some arguments as to why the Bill needs much closer scrutiny and should not proceed further.
At first sight it is a modest and technical Bill—a technical reorganisation with no wider implications—and we read in paragraph 1 of the statement put before the House by the promoters in support of the Second Reading that
"The purpose … is to merge the operations of the two banks in a single unified banking structure which can provide a better service to customers in the United Kingdom and overseas, make more efficient use of the resources of the two banks and combine in one undertaking the experience and specialist knowledge of staff engaged in domestic and international banking."
Put in that way, who could be against it? It would be like being against peace or apple pie or motherhood or any of those great things that all hon. Members support. It is, in a sense, a rather puzzling reverse take-over where the larger is swallowed up by the smaller, and I do not know whether this is a precedent.
The motive, as the hon. Member for Cambridgeshire, South-West cogently explained, is to co-ordinate the accountancy systems and avoid the duty that is currently payable because of the separate personae of the banks.
The hon. Gentleman anticipated one area of concern that will be raised by Opposition Members, and that is the whole question of South Africa, the relationship of the bank with South Africa, and indeed with the system in that country. We believe that in the process of this reorganisation the opportunity should have been taken by the bank to divest itself of its South African interest, and particularly of its holding—currently of 55 per cent. but shortly to be reduced to 50 per cent. — in Barclays National bank of South Africa.
Hon. Members will be aware of the series of shadow reports that have been published by people in this country who have been monitoring the progress of the banking affiliate in South Africa, and I recommend hon. Members who are disposed to accept Barclays' protestations at their face value to glance through the allegations that are made in those documents and that are substantiated factually in the reports about the operations of the bank in South Africa.
Clearly the operations of Barclays in South Africa are second only to its operations in the United Kingdom. Barclays remains the largest bank in South Africa and

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Namibia, with assets of over £8 billion. Its profits in 1983 rose by nearly one third over the previous year, to 200 million rand, about £107 million, or one seventh of the bank's world-wide profits. That represented a tripling of Barclays annual gains since 1980, when profits were only 75 million rand. Barclays has an extensive network of over 1,000 branches in the Republic and controls over one third of all banking deposits. It is also the largest bank in Namibia, but more of that later.
The work practices—the industrial relations questions that were dealt with by the hon. Member for Cambridgeshire, South-West—need closer scrutiny than he gave them. I have with me the response of the bank to an EEC code of conduct questionnaire for companies with interests in South Africa and a report for the 12 months ended 30 June 1982, the latest available.
As to the point made by the hon. Member for Cambridgeshire, South-West about the work force, I have from that date the following figures on the total work force and the proportion in it of the various races within South Africa. Among the several bank companies of Barclays in South Africa, the total work force was 23,193 persons. Of that figure 16,465 were classified as white and 3,369 were classified as black. In a country where the black population accounts for about 82 per cent. of the total population, 12 per cent. of the work force of the bank, just over 3,000 persons, is of black origin. That puts into perspective the points made by the hon. Member for Cambridgeshire, South-West on positive discrimination and about shared facilities and opportunities for promotion.
Mr. Jerry Wiggin: I understand the hon. Gentleman's point, but some local knowledge of the situation is required to persuade us of his arguments. Has he been to South Africa?
Mr. Anderson: Not only have I never been there, I would refuse to go, although I have some relatives there. I have met a number of people with extensive knowledge of South Africa, but although I have had opportunities to travel there I have refused them and shall continue to refuse them as long as apartheid exists there.
Sir Peter Blaker: The hon. Gentleman has given us figures of the work force of Barclays, but these figures have no meaning to us, who perhaps have in our minds similar figures for British banks here. Can the hon. Gentleman give us figures for other banks operating in South Africa?
Mr. Anderson: I cannot give figures for other banks in South Africa because we are dealing with Barclays and the extent to which it projects the image of being a bank that is progressive in its working practices in a country of which 82 per cent. of the population is black. As to the point about whether I have personally been to South Africa, I am reminded of the argument, which perhaps I should not use as I am not a woman, that I have never been raped but I should certainly condemn it. If I can give a masculine equivalent of that, I shall raise that argument as well.
Sir Anthony Grant: I think that the misunderstanding arises because the hon. Gentleman is quoting the figures for 1982.
Mr. Anderson: Those are the latest figures that I have.
Sir Anthony Grant: I have the more up-to-date figures for 1983, which show that of the 25,000 staff, some 7,500 are non-white. There has been a substantial increase—I make it almost double—in the number of staff who are non-white, which shows that there is a progressive trend.
Mr. Anderson: It is always difficult to argue figures, but the answer is clear. The improvement that the hon. Gentleman suggests, if it be an improvement, is not as dramatic as he says because the figures that I gave are for black employees and the figures that he gave are for non-white employees. That is significant because the blacks account for 82 per cent. of the population and my figures show that 3,369 of the bank's employees are black. If the hon. Gentleman wishes to have the other figures, those for coloureds are 2,352 and for Asians 1,007. If one acids together those three categories of non-whites, that is well over 6,000 in any event, which is not very far from the figure that the hon. Member for Cambridgeshire, South-West has given and claims as a substantial improvement. If he has the current figures for black employees I should be ready to give way and let him give those figures.
Mr. John Carlisle: On a point of order, Mr. Deputy Speaker. I am searching in vain in any of the remarks made by the hon. Member for Swansea, East (Mr. Anderson) for something that is of relevance to the Second Reading. If he pursues the argument, I suggest that we are straying a long way from the purpose of the Second Reading.
Mr. Deputy Speaker: On a Bill such as this it is in order to discuss on Second Reading the general conduct and the operation of the bank at home and abroad. As I understand him, the hon. Member for Swansea, East (Mr. Anderson) is doing that.
Mr. Anderson: I am delighted by that ruling, Mr. Deputy Speaker, because when a bank seeks to reorganise in this way, I understand that we are in order in looking at the form and the extent of the organisation. My point is that the opportunity offered by reorganisation should have been taken by the bank, which should have divested itself of that part of its operations that sullies the bank's image elsewere.
Mr. Toby Jessel: I am grateful to the hon. Member for Swansea, East (Mr. Anderson) for giving way to yet another intervention. He referred to that part of the bank's activities that relates to his line of argument. Can he help us with some figures that show the extent of that and thereby enable the House to put it into perspective? Can he give figures to show what proportion of the profits of a new bank, as merged, would be derived from South Africa?
Mr. Anderson: I do not have the total proportion. However, the interests of the bank in South Africa are second only to those of the bank in the United Kingdom. Although I cannot give the exact figures, that is a sizeable proportion of the bank's operations and profits. I cannot go further than that, and it broadly answers the hon. Gentleman's point.
Mr. Heddle: Before the hon. Gentleman leaves this point about South Africa, can he confirm, from the information with which he has been provided, that the policy of Barclays National Bank is to give equal opportunity for borrowing to all members of the community in South Africa?
Mr. Anderson: Everyone has the right to dine and live at the Ritz hotel. There may or may not be discriminatory practice on the part of Barclays, but I should be surprised if there were a discriminatory practice of that nature. If, in that system, a black who somehow, almost by a freak of the system, had managed to train himself for a suitable business opportunity came to the bank and was considered sufficiently credit-worthy, I assume that he would be considered on the same credit-worthy criteria as other customers. I do not make claims about that. However, I do claim—this is substantiated by the shadow reports on the operations of the bank—that the bank is mightily involved in the apartheid system. [HON. MEMBERS: "No."] Before we have more noes, I shall go on to develop this point if I am invited to do so, although I am being as brief as I can.
Sir Paul Bryan (Boothferry): Accepting that the racial policy of the bank in South Africa is open to criticism, which I do not, why is that an argument against the union of the two banks?
Mr. Anderson: I have explained the relevance of the points that I am making. I cannot look at this proposed merger simply in the technical and narrow way that the hon. Gentleman is suggesting. To take a reductio ad absurdum of the point—and I do not put a bank of Barclays' standing in this category—it it is rather like looking at proposals by construction companies of gas chambers in Nazi Germany purely on their technical and legal merits.
The apartheid system is an affront to the civilised world. This is a British bank, which has very extensive interests in South Africa and which draws substantial profits from that system. I believe that it would be morally wrong and remiss of the House if we were to allow ourselves to be "cabin'd and confined" to the clauses of the Bill, as the hon. Member suggests, and not lift our eyes to the other important considerations — important, certainly, to those who suffer under the apartheid system and to world opinion, which ranks Barclays' operations there as among the worst of the Western banks.
Mr. Deputy Speaker: Order. The hon. Gentleman is beginning to stray a little. It is not in order to discuss the apartheid system. It is in order to discuss the trading operations of the bank but debate must be restricted to that.
Mr. Anderson: Of course, I accept your ruling, Mr. Deputy Speaker.
Mr. Robert Hughes: On a point of order, Mr. Deputy Speaker. I do not understand how it is possible to discuss the activities of Barclays bank in South Africa without reference to its involvement with and support of the apartheid system, the loans that it makes to the Government and so forth. I suggest that it is perfectly in order to do so.
Mr. Deputy Speaker: I think that I have made it clear that references to trading activities are in order in the confines of what is a fairly narrow Bill, but I must also make it clear to the House that it will not be in order to stray into the merits of apartheid or any other system.
Mr. Anderson: Any mention that I made of the apartheid system in itself was inferential from the points relating to the trading pattern and policies of the bank in South Africa, but you will understand very readily, Mr. Deputy Speaker, how difficult it is to speak of the
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operations of any company in South Africa and divorce them from the apartheid context in which such a company operates.
For example, relating to the trading operations of the bank in the republic, in September 1979 SASOL, the South African Coal, Oil and Gas corporation, issued 263 million 2-rand shares in order to raise funds for the construction of the SASOL III plant. The share issue was handled and underwritten by five merchant banks, including Barclays National Merchant bank. Since Barclays is the largest bank in South Africa, it is likely that it handled a substantial proportion of the total share issue.
Barclays also purchased its own holding of 10 million SASOL shares worth 20 million rands — about £11 million sterling—at issue price. The bank, therefore, owns one of the largest single blocks of shares in SASOL.The SASOL oil-from-coal plants that are pioneering in this area are being built to enable the regime to resist international sanctions. This is an example of how difficult it is in that country to divorce what here would, like North sea oil, be totally commercial operations from the context of the apartheid system in which they operate.
Similarly, for example, in relation to its links with the system in South Africa, Barclays still operates in the independent bantustans, the artificial states created by South Africa for its own internal racial policies, despite the fact that these bantustans are not recognised by the British Government. Indeed the British Government have voted in favour of a United Nations resolution which requests
"all states to take effective measures to prohibit all individuals, corporations and other institutions under their jurisdiction from having any dealings with the so-called independent Transkei or other Bantustans."
The bank has a network of branches in Transkei and Bophuthatswana. When Venda became "independent" in September 1979 Barclays also continued to operate in that country. So much for that link with these fictional states that are not recognised on the world stage and that this country seeks to dissuade its own companies from operating in.
Mr. Ian Lloyd: The hon. Member has raised very interesting points in relation both to SASOL and the supply of energy in South Africa and to the so-called independent states, whether or not we approve of them. I would like to ask whether he is arguing that if Barclays had closed down all the branches which it has had in these parts of South Africa, many going back 40 or 50 years, it would have improved the welfare of the African people in those areas. Is he also arguing that, if a major energy shortage was aggravated by the withdrawal of Barclays' support of the policy of development of an independent energy source, the welfare of the African people would be improved by a desperate shortage of gasoline?
Mr. Anderson: I hear the hon. Gentleman. I fear that if I were to answer him at any length, Mr. Deputy Speaker, I would be subjected to your criticism. His reasoning resembles the argument about sanctions against South African oranges and other produce, that it is the blacks who suffer first and most and that, therefore, we should do nothing about our trading relationships with that country. If I were to go down that path I would be stopped—and properly so—at a very early stage by you.
A well-documented feature of the South African regime is the increasing militarisation of politics in that country. Again one notes the relationship of Barclays with that

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process. It is symbolised by the presence of one of its directors on the defence advisory board. In May 1980 Prime Minister P. W. Botha appointed a 13-man defence advisory board to advise the armed forces on best business methods and other matters, including arms manufacture. The Prime Minister said that he hoped that this initiative would unite the private sector and industrial leaders behind the country's defence effort. Again we have the problem of distinguishing between the normal trading, lending and commercial operations of a bank and its role as a pillar of a regime that is criticised by most people in the world.
Namibia is very much in the news at the present time. It is to be hoped that at long last the process of the withdrawal of South Africa from that area is under way. Barclays is operating in Namibia in contravention of rulings by the United Nations, the legal administrative body for the territory. The chairman of Barclays bank admitted at the bank's 1982 annual general meeting:
"we do conduct normal banking business there, and to that extent we possibly do support the administration there."
Barclays remains the largest bank in Namibia with a network of 47 offices. The new Barclays chairman is, therefore, deeply involved in operations in Namibia, and indeed in mining, which is the most exploitative sector of the Namibian economy.
These are all examples of the bank's activity as a backer of the current political, administrative and financial structures in the republic. It is deeply involved in the whole of the apartheid system. I have seen the answers of bank spokesmen when the point has been made, as indeed I make it now, that they should seek to divest themselves of their interest, now 55 per cent. but shortly to be reduced to 50 per cent., in the South African affiliate.
For example, in August 1982, Barclays said that its policy was "constructive engagement". It gave the ritual statement that, of course, it deplored apartheid. It thought that the holding on to its South African investment—less than 1·5 per cent. of all British investment in South Africa—was preferable to disinvestment for two main reasons.
First, it was said that if Barclays were to sell that substantial stake in BarNat, it would probably be unable to remit the proceeds because of exchange control. The argument ran that Barclays would thereby be giving a big loan to the South African Government. The remittance and exchange control problems totally evaporated when exchange controls were removed for foreigners in South Africa in February last year. Barclays can now freely remit the proceeds of any sale, although it can expect a bill for capital gains tax. Therefore, there is no major problem in Barclays divesting itself of its share in that South African bank.
It was also claimed at the time that any new owner of BarNat might be less liberal than Barclays. As the bank will be a minority shareholder, its influence is likely to be marginal, and in any event there will be very little scope for Barclays to be constructively liberal.
Mr. John Carlisle: The hon. Gentleman must answer the question put to him by my hon. Friend the Member for Fareham (Mr. Lloyd). What message would he give to the 7,000 non-white employees of Barclays Bank in South Africa if Barclays divested itself of that interest virtually overnight, which is what the hon. Gentleman seems to be suggesting?
Mr. Anderson: There was no suggestion of doing it overnight, but the South African economy is such that it could absorb such employees. In any event, when a decision is made on moral or proper international grounds, some individuals may, for short or temporary reasons, be inconvenienced. We believe that the system in South Africa is such that this British bank should decide that it is wrong—for its own image and operations elsewhere—to operate in the way that it does now, because that clearly means that it is a major support of a system that is criticised by all right-thinking people.
One cannot say that what is right in economic terms must necessarily be wrong because 7,000 people may be inconvenienced.
Mr. Carlisle: Would the hon. Gentleman adopt that same policy with other banks with British interests in South Africa and extend it to the other 350 British companies in South Africa?
Mr. Anderson: Major questions remain about the extent of British commercial investment in South Africa. We are simply considering this one bank. I hope that I have shown that its so-called commercial operations involve close links with that regime in key sectors. I have referred to the military links and to the bank's policies in the bantustans. Therefore, it is a major support. If the same arguments applied to other companies, I would arrive at the same conclusion.
This bank is deeply involved in the apartheid system. We believe that it is wrong lo allow the Bill to proceed without making these key points. There are other objections to the Bill. My hon. Friend the Member for Thurrock (Dr. McDonald) will give a Treasury perspective of the points made by the hon. Member for Cambridgeshire, South-West, and other of my hon. Friends wish to refer to the trade union matters which the hon. Member for Cambridgeshire, South-West touched on when seeking to allay the fears that had been expressed.
The arguments advanced by the hon. Member for Cambridgeshire, South-West are not accepted by the trade unionists who are at the sharp end. It would have been far better had the trade union issues been settled before the Bill was brought before the House. However, that is not my brief and interest. I shall leave that to my colleagues, having introduced the vital foreign policy perspective of the debate.
7.55 pm
Mr. Eldon Griffiths: I shall try to avoid saying anything much about the deplorable speech that the House has just had the misfortune to hear from the hon. Member for Swansea, East (Mr. Anderson) who, I take it, spoke as the representative of the Labour Front Bench. I am astonished by what he said.
The hon. Gentleman came very close to enunciating a doctrine of racial discrimination. He has virtually said that he wishes to go into the Lobby to protect—rightly—the jobs of the white employees of Barclays bank in this country, but does not care if the bank's black employees are sacked in South Africa. That is an extraordinary proposition for the hon. Gentleman to advance while criticising the apartheid system.
Mr. Anderson: I would take the hon. Gentleman's points a little more seriously if I ever heard escape from his lips any criticism of the South African regime.
Mr. Griffiths: The hon. Gentleman shall hear it now. Like Barclays bank, I abhor apartheid. I have said so frequently in South Africa.
I have visited South Africa in conjunction with many of the trade delegations sent there by Labour Governments, with the support of trade unionists in this country, who are anxious to promote trade with South Africa to safeguard their jobs. In South Africa I have seen the way in which many British companies, of which Barclays is an outstanding example, have moved as rapidly as the laws of that country permit towards the dismantling of apartheid in employment and social practices. I have seen that happening in South Africa.
The hon. Member for Swansea, East had the effrontery to say that not only had he never been to South Africa but that he had no intention of going there, yet he purports to be an expert on this matter.
Mr. Anderson: I have never had my house burgled, but I condemn burglary.
Mr. Griffiths: I was unwise. I said that I would say very little about the hon. Gentleman's speech, and the sooner I close this chapter and get on to the Bill, the better.
Mr. Robert Hughes: In addition to his travels in South Africa, about which he has always been open, how many iron curtain countries has the hon. Gentleman visited, how often has he been there, and did his visits, such as they were, change one whit his view of the regimes of eastern Europe?
Mr. Griffiths: I might be straying a little from the Bill, but I think that I am entitled to answer that question. I have been to the Soviet Union nine times. I am chairman of the Anglo-Polish parliamentary group in the House and have visited Poland frequently. I was a prisoner of the Red Army in Hungary in 1956. I have visited Czechoslovakia, Bulgaria and Yugoslavia so I go behind the iron curtain frequently. I am influenced by what I see in the Soviet bloc, and judge it on that basis, as I do wherever I travel in the world.
It is important to move on to the Bill. I apologise to the House for being waylaid by some of the hon. Gentleman's fantasies, and for moving away from the point. The Bill should be given a Second Reading, and be sent to the appropriate Committee to be moved on its way quickly for two powerful reasons.
First, the British banking industry is vital to our economy and to the jobs of many of our people, and for our exports and invisible earnings. It is unnecessary for me to proclaim the virtues of the City of London, save to say that I have no personal interest in it, although I wish that I had, but I recognise the contribution to Britain of the City of London, and of Barclays bank to the City.
Secondly, as a layman, I am impressed by the performance of Barclays. With other United Kingdom clearing banks, it has been at the centre of the creation in London of the world's most efficient money transfer system, and as such it has greatly helped Britain's ability to earn her living.
Barclays bank has been innovatory, and, heaven knows, this country needs innovation. In recent years, Barclays has taken the lead in Britain in developing the credit card system. Not everyone is a fan of credit cards, but the system has been helpful to people. The bank pioneered the first automatic cash machine in this country
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and masterminded the management buy-out of the National Freight Corporation, which has been a great success for economic democracy. The bank has wisely returned to Saturday opening. I was very critical of the bank cartel when it agreed to close on Saturday mornings, and I am glad that Barclays was the first bank to bring back Saturday opening, which has been of immense benefit to many of my constituents.
Barclays has also recognised and discharged its social obligations. During the recession, it kept many middle-sized, and some large, companies in business by lending them large sums of money. I like the bank's phrase, used in its recommendations to the House, that it lent that money
"at levels that go beyond the bounds of normal prudence in banking practice."
That was done as a social and economic obligation in the recession. The bank deserves the recognition of the House for doing so.
Barclays bank has encouraged hundreds, perhaps thousands, of small businesses to get off the ground, and to benefit from the many Government schemes introduced for that purpose. As the bank says in its memorandum to the House, Barclays has seconded 50 of its senior staff to assist with job creation schemes, community projects and small business undertakings.
On a personal note, may I say that the manager of the Barclays bank branch in my constituency plays a very active part in all sorts of community projects, which help to make Bury St. Edmunds worth living in.
I am impressed by Barclays' policies overseas. I believe that the Bill will assist the bank most of all in international development. Having lived and worked in the United States for about 14 years, I have seen the British banking industry move into a prominent position in the past two decades in many American states, such as California, Texas and New York. Barclays has been in the van. Its biggest overseas investment, although one would never have thought so after listening to the hon. Member for Swansea, East, has been in the United States, where it has offices in 35 states.
It is also worth recording, from personal experience, that the Barclays sign, seen by British travellers on many billboards in California and elsewhere, gives them a sense of pride as Englishmen. They are able to see that our banking industry is making inroads into the American economy.
My hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) mentioned the criticism levelled at the bank for becoming over-extended in some of the underdeveloped countries that have fallen into difficulty during the world recession. That is a difficult point to argue, because the Opposition will contend that our lending institutions should be doing more in the Third world. However, when those countries run into difficulty, our banks are instantly criticised because they have to face the consequential problems. The American banks were grossly over-extended, notably in Latin America, for broadly political reasons. The German banks were also grossly over-extended, notably in Poland and Turkey. By contrast, the British banks have mostly avoided such imprudent lending. Barclays, for example, has not exposed more than 1 per cent. of its assets in any country except Mexico, where the figure is slightly above 1 per

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cent. So there is no ground for the criticism that Barclays bank, or any British bank, has become over-extended in its international lending during the world recession.
Barclays' note to the House shows that, at home, too, the bank is moving in a direction that should be welcomed throughout the country. The bank says that the merger will enable it to provide better customer service. I hope that hon. Members on both sides of the House are in favour of that. The note also says that the Bill will enable the bank to make more efficient use of the reserves in the Barclays group. That, too, must be right for any part of British industry and commerce. It will also enable the group to compete more effectively against international banking competition.
I can think of no three objectives that make more sense in the context of British industry and commerce today. A Barclays customer will benefit from the Bill, because his requirements for sterling or foreign currency facilities will be efficiently accommodated within the unified banking structure brought about by the Bill. The same goes for multinational customers who expect flexibility front a bank—what is known as "one-stop banking" — and a quick response from a single source in relation to a wide range of services.
The merger will enable the bank greatly to improve its services to such customers, which will in turn greatly improve its ability to earn part of our country's living.
It is worth saying, too, that technological benefits will result from the merger, such as better co-ordination of computer operations and accounting systems. That will achieve savings in capital expenditure, and higher standards of customer care. All those matters are important, and well worth pursuing.
I conclude, as, in some ways regrettably, I began, with a final comment on the matter that the hon. Member for Swansea, East sought to bring to the attention of the House. Barclays bank is probably doing more good for black people in Africa than any other British institution. It is doing so in many black African countries, the best example of which is the great nation of Nigeria. It is a turbulent country, but Barclays bank is in the lead in procuring the necessary arrangements for refinancing Nigeria's extensive debts, notably to ECGD.
Moreover, in many other African countries, as I have seen for myself, Barclays bank and other British banks are helping to provide loans for African housing, for African small businesses, and for the transport structure that helps the African to improve his standard of living. All those things are as true in South Africa and Namibia as they are in other African countries. The hon. Member for Swansea, East has failed to recognise the changes that are taking place in the Union of South Africa, to some extent as a result of international pressure, and to some extent because of improving educational standards of South Africans of all colours and races. These changes are profound. Barclays bank is helping to implement them.
As the hon. Member for Swansea, East read out his cases, including SASOL and other investments that Barclays bank has made in South Africa, I was reminded of the other investments made by Barclays bank, and other banks—in black housing in Soweto and in the small firms that black people have been able to get off the ground in many parts of South Africa.
I conclude with a quotation from an African whom I hope the hon. Member for Swansea, East, although he will never go to South Africa, will one day meet in London.
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Chief Buthelezi, the leader of the Zulu people, said that if a policy of ceasing to trade with and invest in South Africa were pursued by any British Government, the greatest losers would be Africans. That view, which the hon. Gentleman put to the House tonight, will, I hope, be rejected by the same vote that carries the Bill.
8.12 pm
Dr. Jeremy Bray: The hon. Member for Cambridgeshire, South-West (Sir A. Grant) introduced the Bill lucidly and explained its declared purpose. My hon. Friend the Member for Swansea, East (Mr. Anderson) did the House a signal service by putting the Bill in a wider perspective which could not have been introduced without the sort of reaction that we had from Conservative Members. The Conservative Members present this evening are not the usual ones that one expects to see when the House is debating banking and financial matters. I do not see the right hon. Members for Worthing (Mr. Higgins), and for Taunton (Mr. du Cann), or the hon. Members for Winchester (Mr. Browne) and for Birmingham, Selly Oak (Mr. Beaumont-Dark) The Conservative Members present this evening are more interested in the features of Barclays bank that were so eloquently dealt with by my hon. Friend the Member for Swansea, East.
The main issue tonight is the effect of the Bill on those who live and work in Britain. I must declare an interest, in that I act as an adviser on parliamentary affairs to the Banking, Insurance and Finance Union. I hope that Conservative Members will be equally frank and inform the House of the extent to which they are financially involved in or have any interest in this area.
The House has debated several bank reorganisation Bills, the latest of which—the Standard Chartered Bank Bill—was discussed in Committee only this afternoon. No previous bank reorganisation Bill has been objected to by hon. Members. They have had a smooth and uninterrupted passage through the House. Therefore, we must ask why this Bill has been objected to, and I draw the attention of Conservative Members to the instruction on the Order Paper in the names of myself and my hon. Friends. For reasons best known to it, Barclays has not followed the action of other banks, which have brought similar Bills to the House, in, first settling matters with its staff.
The declared purpose of the Bill is to create the unified banking structure which the hon. Member for Cambridgeshire, South-West rightly said is appropriate in the world today. That unified structure is unexceptionable, and United Kingdom customers certainly need efficient overseas banking facilities and the best possible advice from people who are accustomed to trading in world markets. It is right to combine in one undertaking the experience and specialised knowledge of staff involved in domestic and foreign banking.
However, in a people-centred business — which is very much what banking is—it is all the more surprising that Barclays did not take the trouble to carry its staff with it. I refer especially to Barclays Bank International. I do not understand why the bank chose to go down the path that it did, and it is sowing dragon's teeth for future staff relations.
Mr. Terry Dicks: Is it not true that the Barclays Group Staff Union is satisfied with the

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assurances given by the bank with regard to its members' future prosperity and security? Since that union represents 37,000 bank employees, compared with the 16,000 represented by BIFU, should not BIFU have followed its lead?
Dr. Bray: On the contrary, the staff association to which the hon. Gentleman refers, which is not a trade union, represents no one in Barclays Bank International and has no negotiating rights in that bank.
The Floor of the House is not the place to conduct industrial relations negotiations, and the hon. Member for Cambridgeshire, South-West was right to make that clear, but, by our consideration of the Bill, we are doing precisely that. Barclays bank has created a position in which the inevitable consequences of the passage of the Bill will interfere, in a heavy-handed way, with sensitive industrial relations matters that affect the pay, prospects, working conditions and conditions of representation of employees in Barclays bank as it will be after the merger.
The Barclays Group Staff Union has 40,000 members. However, there is some mystery about the numbers, because the total income of the BGSU is incompatible with its declared membership. There must have been some massaging of the figures. The Banking, Insurance and Finance Union has 15,000 members in Barclays Bank plc and 4,000 members—60 per cent. of the total staff—in Barclays Bank International.
The effect of the Bill will be to impose uniform conditions of employment across the two banks. The bank proposes to impose the inferior conditions with respect to the salary scales and conditions of employment in Barclays Bank plc. The higher pay scales of Barclays Bank International will not be preserved. Individual salaries will be preserved only so long as people remain in their present positions. If people move out of those positions, they will move on to the Barclays Bank plc scales. Their prospects are therefore blighted by the adoption of the new structure. This is not an issue for legislation by way of a private Bill. I am sure that when a fair-minded Standing Committee on private Bills sees the evidence and the arguments in detail, it will be bound to advise Barclays bank to reach agreement with its staff on a structure which is acceptable to them and to those who represent them.
There is also a specialised job evaluation scheme in BBI, introduced on the initiative of the management and with the close co-operation of BIFU. It is appropriate to the particular nature of international banking. It will be scrapped, and forced into the straitjacket of a staff structure designed for the existing clearing bank operation in this country. No attempt has been made to take account of changes in the occupational structure of banking or to ask whether there is a new pattern suitable to both banks, which could have been negotiated with the unions before the merger took place, so that an agreement could have been reached before Barclays bank decided to ask for the blessing of the House on an imposed solution.
There are substantial differences in pay between comparable jobs in the two banks. My examples are of comparable jobs selected by Barclays Bank International to put to an arbitrator in the latest wage negotiations. The comparisons were made by Barclays bank and not by BIFU.
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First, there are the lowest technical grades — for example, trainees and people operating machines. On the BBI scale the minimum salary is £3,309. The Barclays bank salary is £3,207. That is £100 less. Grade eight includes clerical officers in charge of small departments. The maximum salary in BBI is £15,162. In a comparable job in Barclays bank the maximum is £13,807. That is a difference of some £1,300. The difference in maximum pay for a typical cashier job is in the range of £1,400 to £1,700.
The job of a shorthand typist is—heavens above—fairly standard. However, the minimum on the BBI scale is higher than the maximum on the Barclays bank scale by some £700. For computer operations staff, the difference between the salary quoted for comparable jobs is £1,900. Overtime provisions also differ. The salary level up to which overtime is applicable in BBI is £15,162. In Barclays bank it is £11,717—£3,000 less. Salary scales in the two banks cannot be compared. However, Parliament is being asked to intervene and impose scales in a totally improper way on the staff of BBI.
There is also the question of downgrading. It is estimated that one BBI job in five will be downgraded in the merged organisation. In the case of clerical jobs, 72 per cent. of BBI secretarial jobs will be downgraded.
The working week in BBI is 34 hours and 10 minutes. In Barclay bank it is 35 hours. There is a difference of 50 minutes a week.
Mr. Dicks: That is not how things work.
Dr. Bray: On the contrary. Clearly the hon. Gentleman has no industrial background.
Mr. Dicks: The hon. Gentleman knows as well as I do that, with lunch breaks and tea breaks, the difference of an hour is not important. The hon. Gentleman is making a mountain out of a molehill.
Dr. Bray: On the contrary, the question of an hour a week has brought many industrial disputes to a head.
The action that Barclays bank has taken on the matter shows, I agree, that the bank attaches importance to it. It has negotiated with BIFU to the last minute. The bank met union representatives the day before yesterday, and yesterday too. However, the bank is clearly relying on the steamroller on the Government Benches to put through a totally improper Bill to impose industrial relations practices and structures which are contrary to the interests of those concerned.
Sir Anthony Grant: I should like the hon. Gentleman to agree with me on two points. First, on his latter point, does he appreciate that, as I have told the House, Barclays bank will still be open to negotiate as the Bill takes its course through the House?
Secondly, will the hon. Gentleman agree that, taking the figures he has quoted, no one in the clerical, computer or any other grades will be worse off by a penny in his existing grade as a result of the merger?
Dr. Bray: Yes — in his present job and grades. However, taking the industry as a whole, the average length of stay in any grade or job is perhaps four years. On average, people will now be halfway through that period. The guarantee will therefore hold for no more, on average, than two years. That is not a very substantial

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commitment. Of far greater importance to the interests of the employees are the salary structures into which they will move.
It is sensible to ask what factors have led to the substantial differences in pay and conditions between the two organisations. There are two main factors. The first has already been referred to. In Barclays bank the majority of workers are represented by a token staff association which is not affiliated to the TUC and whose officers have a right to return to employment in Barclays bank. That staff association has not seen fit to act in support of BBI employees, whose conditions are being severely prejudiced by the Bill. A union such as that does not deserve to be called a union. It is a cypher.
Mr. Dicks: With great respect to the hon. Gentleman, that is a grave insult to the union. The union acts reasonably in negotiations. It is prepared to take into consideration the assurances given by the bank. It represents by far the majority of members of staff in Barclays bank. It is a disgrace for the hon. Gentleman to refer to the union in such a way.
Dr. Bray: The reward for such loyal service is the substantially lower salary scales that they enjoy. That is the obvious practical experience of every trade unionist and everyone who has negotiated with trade unions. On the contrary, it is found that the practical salary scale, the structure and the job evaluation scheme are modern and efficient in BBI. That results in co-operation between a trade union and a management and the proper conduct of industrial relations.
Why can that not be applied in the merged bank? The answer is that Barclays bank says that it would like to see it applied. It says that it would like there to be a single trade union. I do not think that even Conservative Members would expect such a single trade union not to be affiliated to the TUC and effectively to have staff seconded from the bank as its principal officers. They would expect it to operate as a proper trade union and to take an independent line in the representation of the interests of its members.
As compensation for the substantial loss of salary prospects, BBI initially offered no compensation at all to its staff in the merged bank. In successive concessions it has now moved up to offering a once-and-for-all payment of 7·5 per cent. of salary. On average that will be a miserable £465. A maximum has been set at £900, which can be achieved only on a salary of £12,000. That is compensation for people whose jobs are rated differently in the two banks to the extent of £1,700 in some cases. Not even that compensation is being offered to BBI managerial, senior clerical and non-clerical staff. It is only reasonable that, in such circumstances, BIFU should have sought a levelling up and Barclays bank should have pointed out the costs of levelling up. That is exactly the substance of industrial relations in collective bargaining. That is the matter that should have been, but has not been, dealt with before the Bill came to the House.
The hon. Member for Cambridgeshire, South-West has a great deal of influence with Barclays bank. I hope that he will point out to it that the feeling on, I believe, both sides of the House that we should not intervene in the detailed industrial relations and salary structures of banks is quite strong, and that it would be strongly in the interests of the bank to reach agreement with its employees and the
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unions before the Bill comes back to the House. It will be difficult easily to complete the Bill's passage unless such an agreement is reached.
The changes that banking has been through will not stop with this merger. Many changes will face some people and some banks. It is an area in which trade unionism has a vital role to play. We have seen how much better BIFU has done than BGSU. BGSU is not independent and is not affiliated to the TUC. Its officers have the right to return to Barclays' employment and it has given no support to BBI employees in the deterioration of their employment conditions. It has loyalties to Barclays bank. All employees and their representatives have such loyalties. It is not an independent trade union.
Barclays bank has offered joint representation. The best solution would be an agreement to the merger of the unions as a free and independent union. I hope that Barclays bank will make more articulate its encouragement of that objective. Until that is achieved, it is a case of what joint representation means. Just as a phrase, it will not satisfy the House later in its proceedings on the Bill. It requires a practical agreement. When the House has dealt with mergers in the past—the biggest that it has dealt with have been the nationalisation statutes—the experience has been that the merger of managements has had a repercussion on the integration of union representation.
Back in 1940, in regard to the National Coal Board, integration on the union side took place quickly and enormously for the benefit of the industry and the people who worked in it. I was concerned with the Bill on the steel industry. We were not able to achieve integration on the union side during or before the passage of the Bill. I think that the steel industry and the people who work in it recognise that they paid a price for the lack of integration of trade union organisation institutions in the steel industry when the managements were merged. In banking, precisely that lesson applies. Having merged the management, to try to divide the trade unions is to store up big trouble for the future. A wise management in these circumstances would have sought the proper modern personnel policy that is appropriate to a big, powerful and important bank such as this, which faces the changes that will continue to take place. The employment issues should have been settled. They always have been in previous bank Bills. Barclays bank has made no real attempt to reach agreement. Agreement must be reached before the House can consider the Bill further.
Mr. Ian Wrigglesworth: Before the hon. Gentleman leaves his point about joint representation, will he tell us how he can justify the claim that BIFU is making? I have no antagonism towards it and have some sympathy with what the hon. Gentleman has said about conditions of service. Nevertheless, if 50 per cent. of staff at the Barclays group have decided to join the Barclays Group Staff Union, how can it be claimed that BIFU should have sole negotiating rights? Irrespective of whether the hon. Gentleman likes it, what he has claimed has not been accepted by 50 per cent. of the staff. If that is the case, they must surely have negotiating rights through BGSU.
Dr. Bray: There is great force in what the hon. Gentleman says. The reality is as I have outlined—there must be joint representation. It is in the nature of merged unions that the merged union which I hope will develop

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will come about by agreement. I think the hon. Gentleman will agree that the product of that, merged union must be a genuine trade union which is independent of the employer. It cannot be a staff association. That is the hurdle which neither BGSU nor Barclays bank has faced. If they were to see the reality of that, the way would be open to a rationalisation of union representation which would be strongly in the interests of Barclays bank and its employees.
Mr. Dicks: I am grateful to the hon. Gentleman for giving way to me yet again. Surely if the employees of Barclays bank decide that an organisation best represents their needs and wishes, that organisation should be seen as their proper representative. There is almost a case to be made for BIFU merging with the other union.
Dr. Bray: If the result was to merge BGSU with BIFU, I am sure that BIFU would be happy, as it has about 170,000 members and would be well able to absorb and improve on the service provided by BGSU. It would be within the wider trade union organisation for the banking and financial community that the future would lie.
I have been trying to conclude my speech for some time. The weight of the argument must lead the House to have grave misgivings about whether the Bill can proceed. I therefore hope that the House will oppose its Second Reading.
8.39 pm
Mr. Neil Hamilton: The hon. Member for Motherwell, South (Dr. Bray) began his remarks in a manner that was most unfair and rather disparaging of Conservative Members. Few Members can have more of a constituency interest in relation to Barclays bank than I have. At Radbroke hall near Knutsford in my constituency there are between 1,300 and 1,400 Barclays bank workers and one of the petitioners against the Bill is a constituent of mine. Therefore, I entirely reject the hon. Gentleman's claim that we are not qualified to take an interest in the Bill.
To the extent that employees of the bank may be concerned about their future as a result of the Bill, I share the hon. Gentleman's concern. On consideration, however, I am not so concerned as to believe that the Bill should not be given a Second Reading. I am content to rely on the Committee that will be appointed to consider the Bill to take account of the objections raised by the hon. Gentleman, and I have no doubt that, if appropriate, the Bill will be amended.
If the shareholders of Barclays have resolved to promote a Bill to secure the reverse takeover of the bank by its subsidiary, I believe that, so long as the legislation does not override anyone's rights, the House should give the bank what it seeks. Nevertheless, there must be appropriate safeguards to protect the interests of those who may be affected. It is a great pity that the objections voiced by the Opposition today have been of a hysterical, party political nature and wholly irrelevant to the purposes of the Bill and to the bank's role in the world as that rather devalues the real arguments that fall to be; considered.
If the Bill goes through its Committee stage I believe that the concerns expressed by the Opposition today will be taken into account. I am worried, however, that, unless
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there is some change, the concerns of my constituent who wishes to petition against the Bill will not be taken into account.
The role of the House in relation to private legislation is quasi-judicial in that the promoter and those petitioning against the legislation have to be heard in the same way as parties to litigation, so that both sides have a fair hearing in the Committee. The Standing Orders relating to private business provide that the promoter of the Bill may object to a petitioner's right to be heard on the ground that he has no locus standi—that is, no direct interest in the Bill. Such an objection must be heard by the Court of Referees. In the case of public Bills Members of Parliament can and do raise objections in the Chamber and in Committee. Private Bills, however, are delegated to a small Committee on which we must rely to ensure that the Bill is satisfactory both to the promoter and to any petitioners against it, if the latter are allowed to appear before the Committee. That is in accordance with the principles of fairness that are dear to all Members of the House.
For that reason, it is especially important that the Committee on a private Bill should ensure that the legislation contains proper safeguards to protect the interests of all persons whose rights may be affected. It follows that the Court of Referees should be careful not to allow a promoter's objection to a petitioner if the petitioner can show that his rights will be affected. In my view, any petitioner who can show that the Bill will directly affect his rights, regardless of whether the immediate effect would be adverse, should be granted the right to petition against it. As my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) has said, Mr. Butcher seeks to petition against the Bill but Barclays objects to his case. No doubt the Court of Referees will bear my comments in mind when it considers his right to be heard by the Committee.
The central purpose of the Bill is to transfer the whole of Barclays' undertaking to Barclays Bank International. This will involve the wholesale transfer of millions of accounts and other contracts held by customers. Without the legislation, that operation would entail an enormous burden for the bank. Thus, in addition to the other benefits that the Bill would confer on the Barclays group, it would save enormous expense and I certainly do not object to that.
It is not unreasonable to inquire about safeguards in the Bill to protect the interests of the millions of people who have contracts with Barclays bank. I regret to say that there are no such safeguards. Unlike the position with British Telecom, it is not intended to set up any organisation to protect customers' interests and no such organisation now exists. It may be argued that customers who feel that they may have suffered as a result of the changes can take their business to other banks and any customer who can do that easily and at no significant expense does not need safeguards. I am sure that many of my hon. Friends will agree that there is no better safeguard than genuine competition. In that context, I regret the lack of competition between the banks in certain areas of activity. As my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) has pointed out, however, Barclays has introduced a fair amount of competition by reopening on Saturday mornings, which I am sure that the whole House welcomes.
Nevertheless, at least one class of customer may find it difficult and expensive or even, in some cases,

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impossible, to transfer their business if they believe that they are suffering as a result of the transfer provided for in the Bill. I refer to borrowers who cannot easily repay their loans or transfer them to other banks or lenders. One such class is the relatively new type of borrower from Barclays—the customer who has financed the purchase of a home under the Barclays home mortgage scheme. It is very difficult for a mortgagor to transfer the loan to another lender and such a transfer will in any event involve the expense of a new surveyor's valuation and significant legal costs.
As my hon. Friend the Member for Cambridgeshire, South-West has said, the transfer of borrowings from Barclays to Barclays International will have no adverse effect on borrowers, and I am content to accept that assurance. As has also been pointed out, Barclays International has the good fortune to be less exposed than some other major banks in this country to the dubious loans that have been made to sovereign borrowers in the Third world. Nevertheless, it has loaned substantial sums to countries such as Nigeria and the Philippines and although the bank looks financially healthy today there is always the risk, however small, that the balance sheet may look less healthy in years to come. If that happens, the bank may find that it has to put pressure on borrowers to reduce their loans or to pay extra interest.
Even if such pressures do not arise, who is to say that Barclays International may not decide to withdraw from the home loans market in the future? As we all know, the banks have blown hot and cold about this in the last couple of years. If it withdrew from the home loans market it could charge interest above market rate to its remaining mortgagors. No doubt it would not be very much above market rate because if it were there would no doubt be a stampede to redeem existing mortgages and find lenders elsewhere. Nevertheless, the House may feel that such risks, however remote, should be taken into consideration. There is no reason why the Bill should not contain a modest provision to protect customers against any unreasonable changes in the terms and conditions of loans, the interest on borrowings, and so on.
Under the home mortgage scheme, Barclays may vary the rate of interest. That is commonplace and entirely right and proper as market rates change from time to time. But is it fair to customers that their mortgages should be transferred to another bank, which they may be less happy to trust not to impose rates above market level? Mr. Butcher has tried to deal with Barclays on this but in my view he has not so far been treated as fairly as he might have been. He tried to discuss the matter with an assistant general manager at Barclays and did so over the telephone but was told that a meeting was not considered appropriate as the assurances given over the telephone should be enough.
Sir Anthony Grant: I want to make it absolutely clear that the last thing that the bank wants to do is to be discourteous to Mr. Butcher. It was more than willing to speak to him and the telephone seemed to be the most convenient method to do so. The bank has assured me that it would always be prepared to see Mr. Butcher and discuss matters with him, but that does not necessarily mean that it would agree with him. I have spoken to Mr. Butcher on the telephone, and I would be prepared to see him, but that does not mean that I would necessarily agree with him.
Mr. Hamilton: I thank my hon. Friend for that information, and I am sure that Mr. Butcher, too, will be glad to hear it.
I do not oppose the Bill. I merely seek to put the views of my constituent, who is one of the few petitioners against it. I am sure that the assurances given by my hon. Friend the Member for Cambridgeshire, South-West will make us rather more enthusiastic towards his proposals.
With that conciliatory approach, I end my speech on a happy note. I hope that it will be possible during the coming weeks for my constituent to petition against the Bill, if he desires to continue to do so. In any event, I hope that Barclays will be able to accommodate him. I shall not, therefore, oppose the Bill this evening.
8.50 pm
Mr. Paddy Ashdown: We have had a relatively wide-ranging debate — at least from the Labour Front Bench — on what seems to me to be a fairly specific subject.
May I first dispose of the issue of apartheid? I yield to no one — nor does my party — in detestation of the apartheid system of South Africa, but while it may be proper and appropriate to deal with the matters that were raised by the hon. Member for Swansea, East (Mr. Anderson), we should not allow ourselves to become unbalanced in that direction. This debate is about a specific merger, which has consequences for the efficiency of one of our major institutions and the employment of a large number of people, and which seems to have little relevance to the more general questions.
Mr. Robert Hughes rose—
Mr. Ashdown: Perhaps the hon. Gentleman will allow me to finish what I am saying. One must look at the matter dispassionately and objectively, because in this House we sometimes have rather more knee-jerk politics than politics that involve thought. I take pride in attempting to make objective judgments.
Mr. Hughes rose rose—
Mr. Ashdown: Perhaps the hon. Gentleman will allow me to develop the point.
There is much to be said for the fact that Barclays has done a great deal to improve its operations in South Africa. It may even be one of the best British companies operating in South Africa in terms of what it is attempting to achieve, but that does not mean that I necessarily agree with it.
Before I give way, I want to say that, although about 80 per cent. of the speech of the hon. Member for Swansea, East was on this subject, he was not very serious about those interventions. Indeed, his speech may have been more the instructions of his own party than his own beliefs, because although it was almost wholly dedicated to that subject, there is no evidence of it on the Order Paper. There is no instruction or amendment to include, for instance, the principle that we should not pass the Brill unless Barclays sold its 55 per cent. holding in South African banks. It seemed to me to be more rhetoric than action.
Mr. Hughes: I am always glad to hear members of the Liberal party—or whichever party the hon. Gentleman represents—talking about their own ideological security and casting doubts on the bona fides of others who take a different view. What view does the hon. Gentleman take of the possibility, if Barclays continues its current

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involvement in South Africa and its current support for the South African Government, that the Barclays assets in this country may well be set at risk when the downfall comes of Barclays in South Africa? Is that not putting his constituents' money at risk?
Mr. Ashdown: If I thought that that was happening, I should be worried about the matter. I take the view that that is not what is happening, and that therefore those assets will not be placed in any risk.
I represent my party—the Liberals and the Social Democratic party—and I want to express my view on the subject that has been raised. [Interruption.] I have done a calculation, and, even with one hon. Member on these Benches, we still have nearly twice the percentage of our party present than does the Labour party, which seeks to oppose the Bill.
I come to the Bill itself. On Second Reading we deal with the principle of the Bill, and it is the principle of rationalisation. I shall not spend too long on this subject, because it has been dealt with by other hon. Gentlemen on both sides. We are talking about a curious anomaly—perhaps even an anachronism — in the structure of Barclays whereby it suffers a competitive disadvantage because of its current structure. It therefore wishes to change its structure. We should be in favour of such rationalisation, because it will create greater efficiency, a greater return on profits, greater job security for its work force, and so on.
Moreover, viewing the matter in a slightly wider context, as there is now a shift — which I do not necessarily welcome — away from manufactures into invisibles, we must take all necessary steps to ensure the efficiency of the banking sector as one of those vital and important invisibles. The hon. Member for Cambridgeshire, South-West (Sir A. Grant) said that Barclays had contributed towards that about £1·7 billion in the total of invisibles on which our country is coming to depend more and more. Therefore, in so far as this is a rationalisation—perhaps overdue—that will provide greater efficiency and flexibility, I greatly welcome the broad principle of the Bill, with some reservations to which I shall come in a moment.
Mr. Gerald Bermingham: Although I concede that the merger may create greater efficiency and so on, should that efficiency be at the expense of the terms and conditions of the employees? Does he agree that in any merger the position of employees should be protected and that the more favourable terms that currently exist in one banking system should be applied to the whole of the merged group?
Mr. Ashdown: I thank the hon. Member for raising that matter, because it introduces the next part of my speech, to which I shall come in a moment.
There is undoubtedly a considerable financial advantage for Barclays in carrying through this reorganisation. I spoke to Barclays today. It could not give me a quantification of the total amount of money that it might save, but the transfers between two of its branches alone cost Barclays £1,250,000. So there will be substantial savings for Barclays in the Bill. While that is a reason for welcoming the Bill, and why I and my party will vote for it this evening, it is nevertheless another
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reason it can be viewed in another light: is it not therefore a reason for being more generous with its work force than Barclays has so far been?
There is a curious anomaly. If this were a straight takeover — the larger taking over the smaller — there would have been legislative safeguards to protect the terms and conditions of Barclays' employees. But because it is a reverse takeover, no such safeguards exist. In their absence one would have hoped that an organisation of the probity, standing and efficiency of Barclays would have been much more generous with its work force than it appears to have been, particularly as it stands to gain such large sums.
The terms and conditions of employment give me considerable cause for concern. As the hon. Member for Motherwell, South (Dr. Bray) said, some of the work force have been significantly disadvantaged by the reorganisation. The hours worked by employees of Barclays Bank International are reduced—perhaps by only an hour a week, but on the shop floor of British industry that is important. I do not know what the hon. Gentleman's profession was before he became a Member. Perhaps he was a self-employed business man to whom such things do not matter, but on the shop floor of British industry they rightly do.
The reorganisation will also mean a diminution in standards of pay with BBI' s scales being higher. The hon. Member for Cambridgeshire, South-West said that that did not affect current rates of pay, but he went a bit further when he said that it would not affect prospects. In reality, it will. He knows and I know that, although current rates of pay will remain the same, on promotion rates of pay will be lower. That will be a considerable diminution in the prospects — to use the hon. Gentleman's words — of some of the members of BBI on the transfer. Indeed, as was said to me today, it will probably result in some of the cheapest promotions in any part of the banking industry.
I understand that holidays within BBI are also better, as are overtime conditions. Although BBI has given an assurance that there will be no redundancies before 1 January 1985, it has nevertheless admitted that it has identified places where such redundancies would occur and has refused to give such an assurance beyond 1 January 1985.
I was greatly reassured when the hon. Member for Cambridgeshire, South-West said that those matters are still open for negotiation. I note that the brief that was received from the BIFU today said that on the merger Barclays proposed unilaterally to apply Barclays' conditions. I was reassured by the hon. Gentleman's comments on that.

In the light of the advantages and savings that Barclays bank could achieve as a result of the reorganisation, I should have hoped, as the hon. Member for Motherwell, South said, that, before bringing the matter to the Floor of the House, Barclays would have made a rather better fist of solving those essential problems relating to terms and conditions. I hope that those matters can now be put right.
On Second Reading we are dealing with the principle, not the detail, of the Bill. Other hon. Members have said that this is not an appropriate time to conduct such negotiations. It is sad that the Bill has been brought to the House under conditions where perforce such matters must be discussed, but we hope that they will be discussed in a slightly less public and difficult atmosphere. As the hon. Member for Motherwell, South conceded—his precise

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words will appear in Hansard tomorrow—no reasonable Committee would allow the terms and conditions before us to pass without a strong recommendation to Barclays. I take the same view. Those matters can be properly resolved in Committee, and I hope that that will be done.
To put it bluntly, I have little or no sympathy with the case that the BIFU is putting forward on union representation. It is seeking to impose, suggest or recommend—the words can be as strong or as weak as one likes — that the representation enjoyed by the minority shall be imposed on the majority. It is that which stops me voting in favour of the amendment in the name of the hon. Member for Motherwell, South. He says that he wishes to see
"no change in the pattern of trade union representation".
If those words were omitted, or if he were talking about employment conditions before agreement with the work force, I should have agreed, but
"no change in the pattern of trade union representation"
seems to give the ultimate veto to BIFU—the smallest union. That would ensure that when the reorganisation came about it would either contain the current anomalies in a strange hybrid organisation where one union had sole rights in one area and part or joint rights in another, or alternatively it would place the smaller union in a position whereby it could effectively veto any further action. That would be bad in terms of common fairness, and in terms of what we are trying to achieve, which is a rational reorganisation.
Dr. Bray: The hon. Gentleman is correct in pointing to the absurdity of allowing the situation to develop that he described. In negotiations, a readiness must be shown to move from such a position, but Barclays bank has not yet offered the circumstances in which this could be done. I take the point made by the hon. Member for Cambridgeshire, South-West (Sir A. Grant) that discussions can continue.
Mr. Ashdown: I am grateful to hear the hon. Gentleman's reassurance, but I shall have to vote according to the wording on the Order Paper. Although what the hon. Gentleman says may well be the intention, the wording on the Order Paper, in my judgment, gives a veto to the smallest of the unions to impose conditions of representation on the larger unions. I have to disagree with the hon. Gentleman on those grounds. If he had said that the terms of employment of staff in the bank should not be changed, and the merger should not go ahead until that had been agreed, I would have accepted that, but what is proposed opens up too wide a gap for obstruction in the future.
It is difficult to oppose the principle of the Bill, which is what the House is discussing on Second Reading. I believe that it could have a beneficial effect on the efficiency of Barclays bank and, as a result, on the efficiency of an important sector of our banking industry. I believe that the anomalies, difficulties and areas of concern to which I have referred can be tidied up in Committee. I am sad that Barclays bank has sought to bring the Bill to the House with those outstanding areas of concern unresolved. Nevertheless, I believe that, in general, the principle is worth supporting.
I place it on record, however, that, should the Bill return to the House with those areas of concern about
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employment rights and conditions unresolved after the Committee stage, I and my party may take a different view.
9.6 pm
Mr. Toby Jessel: I am glad to support my hon. Friend the Member for Cambridgeshire. South-West (Sir A. Grant). We live in a free country, and I believe that, in a free country, people should be allowed broadly to do what they like, unless there is some compelling reason for not allowing them to do so. Barclays bank wants to carry out this merger. I see no strong reason to stop it doing so, and I believe that it should be allowed, in broad outline, to go ahead although there is ample opportunity for discussion and amendment on points of detail.
The hon. Member for Motherwell, South (Dr. Bray) said that hon. Members should declare their interests. I have no interest in Barclays bank, except as a customer. I have been a customer of Barclays bank for some 22 years at the Cheapside branch in the City. I have always been treated with efficiency, courtesy and patience, a quality that I am afraid has often been needed by the Cheapside branch.
Your predecessor in the Chair, Mr. Deputy Speaker, said an hour and a half ago that the House could debate the general conduct of the bank. I want to refer to the bank's support for the arts, because, in my capacity as chairman of the Conservative party's parliamentary arts and heritage committee, I know of the splendid record of Barclays bank, which is second to none in its sponsorship of the arts, and in its donations to arts causes. I made inquiries to obtain further details only this evening, although I know of much that it has done previously. It spends approximately £750,000 a year on sponsorship and support of the arts. Sponsorships total about half that amount, between £300,000 and £400,000 annually, and include a particular emphasis on tours by musical, operatic and ballet companies — tours by the London Festival ballet, the Glyndebourne Opera company, Opera North, the Kent Opera, the Bournemouth symphony orchestra all over the south-west of England, and performances not on tour by the Hallé orchestra. Barclays bank supports the national eisteddfod, concerts for children at the Royal Festival hall in London, and concerts of the Royal. Philharmonic society. It also supported a Shakespeare season last year at the Young Vic and has provided for overseas tours by the Royal Ballet company. I know that my hon. Friend the Member for Cambridgeshire, South-West is aware that Barclays bank also supports the Fitzwilliam museum in Cambridge with special exhibitions, and has supported the local theatre in Cambridge, just as it has in Guildford.
Barclays bank has also provided for a postgraduate award of £10,000 to enable a promising postgraduate student from one of the main art colleges in London, such as the royal college of art, the Chelsea college or the Slade, to paint abroad for a year and to display his works of art in a gallery on returning. For many decades Barclays bank sponsored the D'Oyly Carte Opera company and the Gilbert and Sullivan operas that it used to perform. which spread joy and happiness throughout Britain and the United States of America.
Mr. Bermingham: Does not the hon. Gentleman agree that, although such benevolence towards the arts is quite

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worthy and acceptable and we would all praise that, it would be just as worthy if the bank, in its proposed merger Bill—which is very much in its interests—was equally fair to its employees in ensuring that their wages were not diminished and that their promotion prospects were not damaged? After all, employees will be on the lower scales of wages after promotion in the future.
Mr. Jessel: What the bank has done in support of the arts is far more than merely acceptable or commendable; it is highly praiseworthy, and deserves a full and heartfelt commendation by both the House and the country. I have not received any representations on the trade union side. That may be due to the fact that the man who I believe to be the general secretary of the trade union concerned is Mr. Leif Mills. He and I were undergraduates together at Balliol college, Oxford, 25 years ago doing the same course on economics for three years. We were two of the seven who, week after week, attended the same tutorials. I used to argue with him then and I suspect that he knows better than to send me his views now.
Dr. Oonagh McDonald: Is the hon. Gentleman saying that the general secretary of BIFU knows that the hon. Gentleman is much too hard-hearted to be at all concerned about the employment conditions, promotion prospects, salaries and job structure that will result from the proposed merger, and so decided not to approach him? The hon. Gentleman referred to the bank's efficiency, but is not he aware that the negotiations have been going on since November 1982? Surely it is high time that Barclays bank managed to sort out a proper salary structure with its employees?
Mr. Jessel: I only know that I have not received any representations from the trade union side, and I can only speculate as to the reason for that. That is what I have done. I am sure that such matters can all be dealt with in detail in Committee. But, if it is necessary for the House to intervene, it will probably do so.
The most important event that Barclays bank has sponsored was the Everest expedition, which under British leadership was the first to climb the highest mountain in the world. I do not recall any complaint being made then by Sherpa Tensing, one of the two men to scale Everest, or by any of the brave company of Gurkhas who provided the expedition's back-up, about racial discrimination on the part of the bank. Opposition Members who have dwelt on the subject simply want to punish the bank in some way. That sort of attitude does not help. Of course there may be some people employed by the bank who have mixed feelings about that. It would not be surprising. The proposed merger will make no difference whereas the removal of the activities of the bank from South Africa would cause unemployment and suffering. To go back to D'Oyly Carte, as was said of
"the flowers that bloom in the spring"
it has nothing to do with the case.
At local level in my constituency Barclays bank provided £1,500 at the time of the Queen's silver jubilee to landscape an area outside its training centre at Teddington.
Dr. McDonald rose—
Mr. Jessel: I am not giving way again. As I said, the bank provided £1,500, which is what I asked it to give, and I was grateful that it did so. That was all that was needed, and it was a satisfactory exercise.
I have only one complaint against Barclays bank. In Twickenham the principal town clock is on the wall of the bank's main office, which is in a prominent and obtrusive position in the town. The clock is often out of order; it seldom shows the correct time. People would like to be able to rely on it. If my hon. Friend the Member for Cambridgeshire, South-West, who I understand is in touch with Barclays bank, can tell me that he will attempt to persuade the bank to overhaul the clock and put it into proper working condition so that people can tell the time, I shall without restraint vote for the Bill.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Harold Walker): Order. Has the hon. Gentleman concluded his speech?
Mr. Jessel: No, Sir. My hon. Friend is intervening.
Sir Anthony Grant: I am most grateful to my hon. Friend. He is so persuasive, as he always is, that, although I cannot undertake to repair the clock myself, I shall certainly use my best endeavours to ensure that the bank does so.
Mr. Jessel: Then I shall support the Bill.
Mr. Dave Nellist: He gets £16,000 a year for that.
9.17 pm
Mr. Robert Hughes: The hon. Member for Twickenham (Mr. Jessel) was very entertaining. May I disagree with my hon. Friend the Member for Coventry, South-East (Mr. Nellist) and say that the hon. Gentleman is worth £16,000 a year for that entertaining speech?
I apologise to the hon. Member for Cambridgeshire, South-West (Sir A. Grant), because, as he will know, I was not present for the whole of his speech when he was introducing the Bill on behalf of the promoters. He will know from his long experience how difficult it is to be in two places at once. Constituency business called me away.
Let me begin in the time-honoured tradition of the House by declaring an interest, because I am a member of an organisation known as Barclays shadow board. I hasten to say that I receive no remuneration whatsoever for being a part of this purely voluntary body, nor do any of the shadow directors. The shadow board seeks to examine Barclays involvement in South Africa to see how it deals with its business there and to expose its involvement in the apartheid system. In the 1983 annual report of the shadow board, the chairman finished by saying:
"The shadow board is united in its belief that the bank does not have a liberalizing effect on the apartheid system. It actually helps to maintain minority rule."
Once more I should like to stress that only by pulling out of South Africa can Barclays end its financial support for apartheid.
I can understand why Conservative Members and members of Barclays bank feel that it should be allowed to carry on its lawful business without let or hindrance, that it is nothing to do with Parliament how it behaves itself outside this country and that there is gross interference with its liberty to maximise its profits. The bank is entitled to take that point of view, but Parliament

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has a right and a duty to examine the conduct of British companies in overseas territories, and especially in South Africa, because Parliament and Governments have been very concerned with events in South Africa over many years. It will be within the memory of most hon. Members, certainly Conservative Members, that it was found necessary to set up a code of conduct to regulate the way in which British companies operated in South Africa. I contend that the Bill should not be given a Second Reading unless and until Barclays agree to dispose of its 55 per cent. share in Barclays National of South Africa.
The hon. Member for Yeovil (Mr. Ashdown) said that he did not think Opposition Members were serious about the issue because there was no relevant instruction on the Order Paper. I assure him that I am absolutely serious. There are many other things that I could be doing this evening rather than making a speech about Barclays.
I do not believe the instruction on the Order Paper to be good enough. We have had long arguments about the effect of instructions that are translated from the Order Paper into a Bill. I recall a long debate on the British Railways Bill. The British Railways Board was asked under instruction to give certain guarantees on how it intended to keep open a certain railway line. It had to admit that, while it would do its best to ensure that the undertaking written into the Bill would be fulfilled, there was no guarantee for all time.
I suspect that even if there were a relevant instruction on the Order Paper, and even if the eloquence of hon. Members persuaded the House to pass that instruction for inclusion in the Bill, there would be no way in which we could guarantee that Barclays would fulfil its undertaking.
It was argued earlier that Barclays' involvement in South Africa was such a minimal part of its business that it was not worth bothering about. The facts show that that is not the case. Barclays remains the largest bank in South Africa and Namibia, with assets of more than £8 million. Its profits in 1983 rose by almost one third over the previous year to 200 million rand—about £107 million. That is a considerable increase in its return and is one seventh of the bank's worldwide profit. It represents a tripling of Barclay' annual gains since 1980, when profits stood at only 75 million rand.
Mr. Nellist: Does my hon. Friend agree that not only does Barclays as an individual operation in South Africa have a considerable stake in apartheid, but is the main bank to Anglo-American, which, as one of the largest companies in South Africa, owns about 60 per cent. of all shares quoted on the Johanesburg stock exchange? Therefore, is not Barclays one of the main planks supporting the apartheid system, not only in finance, but across the whole range of manufacturing and industrial companies?
Mr. Hughes: I intend to deal with the way in which Barclays operates in the broader area outside simply the making of profits. It is clear that Barclays has invested heavily in loans especially to ESCOM.
One aspect of its operations especially concerns me, although I accept that the bank has changed its practice in that respect. In 1977 Barclays purchased £6 million worth of defence bonds specially raised by the South African Government to finance their war effort. Nothing was needed to persuade Barclays to invest in war bonds, except that at the time Barclays defended that decision by saying
338
that it was necessary for Barclays to play its part in developing South Africa. It is clear that that development of South Africa meant the development of its war machine.
Barclays does a lot of business in Namibia. I appreciate Barclays' problem to some extent on the wages front—I do not agree with it—and 1 concede that its defence of how it deals with trade unions and various people is that it must operate in South Africa within the law. That defence can perhaps stand up, depending on how closely one examines it but the international Court of Justice has ruled that South Africa's presence in Namibia is illegal, and United Nations resolutions ask business organisations not to take part in the business of running Namibia. Yet Barclays is happy to breach international law where it thinks that it can raise profits.
Barclays is happy to support the military, because that is where the money is. [Interruption.] I think that I heard the hon. Member for Havant (Mr. Lloyd) say that Barclays was investing in a business interest in Afghanistan If that is what he said, albeit from a sedentary position, let him vote with me in the Lobby. If he wishes to make that point, I will gladly give way to him. As I think he referred to Afghanistan, let me say that the way in which the South African Government run their affairs in South Africa is no more and no less than an occupation of that country. It may be an internal occupation, but it is an occupation nevertheless.
Mr. Ian Lloyd: The hon. Gentleman suggests that it is an occupation of South Africa. He knows well that the European population have been in that country for nearly four centuries. There is no occupation. Nor is it a regime, because the Government there were set up by this Parliament. He should bear that in mind.
Mr. Hughes: I am only too well aware of the responsibility which this Parliament has for the present state of affairs in South Africa. If we had not allowed it to get its independence, on the basis that there was no proper representation for the non-whites of South Africa, it would be a different matter. However, the hon. Gentleman is right to say that this Parliament has absolute responsibility for the present state of affairs in South Africa.
As for the proposition of the hon. Member for Havant that the whites have been there for 400 years, is he suggesting that 400 years of presence entitles one totally to dominate a country and refuse any rights of citizenship and democracy to those who form the majority?
Mr. Ian Lloyd: It entitles them, most certainly and absolutely, to be there and to play a proportionate part in the Government of that country—[Interruption.]
Mr. Hughes: That is a revealing statement, because I have never argued—
Mr. Ian Lloyd: On a point of order, Mr. Deputy Speaker. From a sedentary position, the hon. Member for Coventry, South-East (Mr. Nellist) said, "He is well paid to say that." That is a disgraceful statement, is totally untrue and is a parliamentary slander. If the hon. Gentleman repeats it outside the House, he will pay for it.
Mr. Deputy Speaker: Order. I did not hear the hon. Member for Coventry, South-East (Mr. Nellist) make the

339
remark that the hon. Member for Havant (Mr. Lloyd) claims he made. I hope that he did not make it. If he did, he must withdraw it.
Mr. Nellist: I did make it, Mr. Deputy Speaker, and I do not withdraw it. I consider someone who accepts a sponsored visit to an apartheid machine such as South Africa to have been bought and paid for. All I said was that he was bought and paid for. Indeed, that is in a motion which is before the House, which has been signed by many hon. Members and which Mr. Speaker has allowed to go through.
Mr. Deputy Speaker: That remark is contrary to the customs of the House, where courtesy and restraint in language are characteristics of our parliamentary debates. I am sure that the hon. Member for Coventry, South-East is sufficiently experienced to be able to communicate his meaning in better language. Mr. Nellist.
Hon. Members: Withdraw.
Mr. Deputy Speaker: I hope that the hon. Member for Coventry, South-East will not make life too difficult for the Chair and will think of other ways to express himself.
Mr. Nellist: The words that I used were, "He is well paid for that." That is clear, and without any swear words or unparliamentary language. There are many hon. Members who have directorships, some of whom do not declare them when they rise to speak. The hon. Member for Havant—
Mr. Deputy Speaker: Order. If the hon. Gentleman is merely confirming that he used the words, I must ask him to withdraw them otherwise he is leaving me with no option but to ask him to withdraw from the debate.
Mr. Nellist: Perhaps, Mr. Deputy Speaker, you will explain why, "He is well paid for that," is unparliamentary.
Mr. Deputy Speaker: Order. Unless the hon. Gentleman is prepared to withdraw the expression that has given offence to the House and to me, I must warn him that I must ask him to leave the Chamber for the rest of the day's sitting.
Several Hon. Members: Withdraw.
Mr. Deputy Speaker: I warn the hon. Gentleman again that if he does not withdraw I must ask him to leave the Chamber for the remainder of this day's sitting.
The hon. Member, having used a grossly disorderly expression, was ordered by MR. DEPUTY SPEAKER to withdraw the same, but he declined to comply with that direction; whereupon MR. DEPUTY SPEAKER, pursuant to Standing Order No. 24 (Disorderly conduct), ordered him to withdraw immediately from the House during the remainder of this day's sitting, and he withdrew accordingly.
Mr. Dicks: And do not come back.
Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will withdraw that expression.
Mr. Dicks: I withdraw it immediately.
Mr. Hughes: I make it clear to the hon. Member for Havant, who raised the point about the rights of whites in
340
South Africa to live in South Africa, that I uphold that right. I do so, I suspect, with rather more vehemence than he does. People have a right to a place in society in proportion to the size of the population, if that is how he puts it. If the South African Government—the whites—would allow blacks the rights of citizenship and the right to vote, there would soon be some progress. That is what is wrong.
If Barclays bank continues to deal with its employees as it dealt with Bradley Potgieter, who was sacked after he was charged in the courts with wearing a T-shirt advertising a black movement because Barclays said that it did not want its personnel to be engaged in political activities, there will be trouble. What about white employees? Do not the white directors take part in political activities? The bank is still misusing its position and its funds. It is clear that it should be—
Dr. Bray rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly,
That the Bill be now read a Second time:—
The House divided: Ayes 181, Noes 72.

Division No. 177]

[9.32 pm

AYES

Alexander, Richard

Evennett, David

Amess, David

Eyre, Sir Reginald

Ashdown, Paddy

Fairbairn, Nicholas

Aspinwall, Jack

Fallon, Michael

Atkins, Rt Hon Sir H.

Farr, John

Atkins, Robert (South Ribble)

Favell, Anthony

Atkinson, David (B'm'th E)

Fletcher, Alexander

Baker, Nicholas (N Dorset)

Fookes, Miss Janet

Baldry, Anthony

Forman, Nigel

Banks, Robert (Harrogate)

Forsyth, Michael (Stirling)

Batiste, Spencer

Forth, Eric

Beaumont-Dark, Anthony

Fox, Marcus

Beggs, Roy

Franks, Cecil

Bennett, Sir Frederic (T'bay)

Glyn, Dr Alan

Benyon, William

Grant, Sir Anthony

Berry, Sir Anthony

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

Biffen, Rt Hon John

Griffiths, Peter (Portsm'th N)

Blaker, Rt Hon Sir Peter

Ground, Patrick

Bonsor, Sir Nicholas

Hamilton, Neil (Tatton)

Bottomley, Peter

Harris, David

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

Hawkins, Sir Paul (SW N'folk)

Bowden, Gerald (Dulwich)

Hayhoe, Barney

Braine, Sir Bernard

Heathcoat-Amory, David

Bright, Graham

Heddle, John

Brinton, Tim

Henderson, Barry

Bruce, Malcolm

Hickmet, Richard

Bryan, Sir Paul

Hicks, Robert

Buchanan-Smith, Rt Hon A.

Hind, Kenneth

Bulmer, Esmond

Hirst, Michael

Carlile, Alexander (Montg'y)

Holt, Richard

Carlisle, John (N Luton)

Howell, Rt Hon D. (G'ldford)

Carttiss, Michael

Howell, Ralph (N Norfolk)

Chalker, Mrs Lynda

Jackson, Robert

Chapman, Sydney

Johnson-Smith, Sir Geoffrey

Chope, Christopher

Jopling, Rt Hon Michael

Clark, Dr Michael (Rochford)

Kershaw, Sir Anthony

Clark, Sir W. (Croydon S)

Key, Robert

Clarke, Rt Hon K. (Rushcliffe)

Knox, David

Conway, Derek

Lee, John (Pendle)

Cormack, Patrick

Lennox-Boyd, Hon Mark

Corrie, John

Lightbown, David

Couchman, James

Lilley, Peter

Cranborne, Viscount

Lloyd, Ian (Havant)

Dicks, Terry

Lloyd, Peter, (Fareham)

Douglas-Hamilton, Lord J.

Lord, Michael

Durant, Tony

McCurley, Mrs Anna

Emery, Sir Peter

MacKay, Andrew (Berkshire)

341

MacKay, John (Argyll & Bute)

Silvester, Fred

Maclean, David John.

Sims, Roger

Malins, Humfrey

Smith, Sir Dudley (Warwick)

Marland, Paul

Soames, Hon Nicholas

Mawhinney, Dr Brian

Speller, Tony

Maxwell-Hyslop, Robin

Spencer, D.

Meadowcroft, Michael

Spicer, Jim (W Dorset)

Miller, Hal (B'grove)

Spicer, Michael (S Wows)

Mills, lain (Meriden)

Stern, Michael

Mills, Sir Peter (West Devon)

Stewart, Allan (Eastwood)

Mitchell, David (NW Hants)

Stewart, Ian (N Hertf'dshire)

Molyneaux, Rt Hon James

Stradling Thomas, J.

Monro, Sir Hector

Sumberg, David

Morrison, Hon C. (Devizes)

Tapsell, Peter

Moynihan, Hon C.

Taylor, John (Solihull)

Murphy, Christopher

Taylor, Teddy (S'end E)

Neale, Gerrard

Terlezki, Stefan

Normanton, Tom

Thompson, Patrick (N'ich N)

Oppenheim, Philip

Thorne, Neil (Ilord S)

Page, John (Harrow W)

Thornton, Malcolm

Page, Richard (Herts SW)

Thurnham, Peter

Parris, Matthew

Townend, John (Bridlington)

Peacock, Mrs Elizabeth

Trotter, Neville

Penhaligon, David

van Straubenzee, Sir W.

Pollock, Alexander

Waddington, David

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

Walden, George

Powley, John

Walker, Cecil (Belfast N)

Prentice, Rt Hon Reg

Wallace, James

Proctor, K. Harvey

Ward, John

Pym, Rt Hon Francis

Watson, John

Raffan, Keith

Watts, John

Raison, Rt Hon Timothy

Weetch, Ken

Rathbone, Tim

Wells, Bowen (Hertford)

Renton, Tim

Wells, John (Maidstone)

Rhodes James, Robert

Whitfield, John

Rhys Williams, Sir Brandon

Whitney, Raymond

Robinson, Mark (N'port W)

Wolfson, Mark

Roe, Mrs Marion

Wood, Timothy

Rossi, Sir Hugh

Woodcock, Michael

Rowe, Andrew

Wrigglesworth, Ian

Ryder, Richard

Younger, Rt Hon George

Sayeed, Jonathan

Shaw, Giles (Pudsey)

Tellers for the Ayes:

Shaw, Sir Michael (Scarb')

Mr. Jerry Wiggin and Mr. Toby Jessel.

Shepherd, Colin (Hereford)

Shepherd, Richard (Aldridge)

NOES

Anderson, Donald

Gould, Bryan

Archer, Rt Hon Peter

Hamilton, James (M'well N)

Barnett, Guy

Haynes, Frank

Barron, Kevin

Heffer, Eric S.

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

Hogg, N. (C'nauld & Kilsyth)

Boyes, Roland

Hoyle, Douglas

Bray, Dr Jeremy

Hughes, Robert (Aberdeen N)

Brown, Hugh D. (Provan)

Jones, Barry (Alyn & Deeside)

Brown, Ron (E'burgh, Leith)

Lambie, David

Buchan, Norman

Lamond, James

Campbell, Ian

Lewis, Ron (Carlisle)

Campbell-Savours, Dale

Lewis, Terence (Worsley)

Canavan, Dennis

Lloyd, Tony (Stretford)

Clark, Dr David (S Shields)

Lofthouse, Geoffrey

Cocks, Rt Hon M. (Bristol S.)

Loyden, Edward

Craigen, J. M.

McCartney, Hugh

Crowther, Stan

McDonald, Dr Oonagh

Dalyell, Tam

McKay, Allen (Penistone)

Davies, Ronald (Caerphilly)

McKelvey, William

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

McWilliam, John

Dixon, Donald

Madden, Max

Duffy, A. E. P.

Marek, Dr John

Eadie, Alex

Martin, Michael

Eastham, Ken

Mason, Rt Hon Roy

Evans, John (St. Helens N)

Maxton, John

Faulds, Andrew

Maynard, Miss Joan

Fields, T. (L'pool Broad Gn)

Miller, Dr M. S. (E Kilbride)

Fisher, Mark

Oakes, Rt Hon Gordon

Freeson, Rt Hon Reginald

O'Brien, William

George, Bruce

Patchett, Terry

Gilbert, Rt Hon Dr John

Pike, Peter

Golding, John

Powell, Raymond (Ogmore)

342

Robertson, George

Thomas, Dafydd (Merioneth)

Rogers, Allan

Thompson, J. (Wansbeck)

Ross, Ernest (Dundee W)

Rowlands, Ted

Tellers for the Noes:

Skinner, Dennis

Mr. Gerald Bermingham and Mr. Bob Clay.

Spearing, Nigel

Question accordingly agreed to.
Bill read a Second time and referred to the Examiners of Petitioners for Private Bills.
Motion made—[Dr. Bray]—and Question put,
That it be an Instruction to any Committee to whom the Bill may be referred not to allow the Bill unless they are satisfied that no change in the pattern of trade union representation or in the terms of employment of staff in the banks affected by the Bill will occur as a result of the proposals of the Bill without the agreement of the staff and their trade union representatives.
The House divided: Ayes 77, Noes 196.

Division No. 178]

[9.44 pm

AYES

Anderson, Donald

Hogg, N. (C'nauld & Kilsyth)

Archer, Rt Hon Peter

Hoyle, Douglas

Barnett, Guy

Hughes, Robert (Aberdeen N)

Barron, Kevin

John, Brynmor

Bermingham, Gerald

Jones, Barry (Alyn & Deeside)

Boyes, Roland

Lambie, David

Bray, Dr Jeremy

Lewis, Ron (Carlisle)

Brown, Hugh D. (Provan)

Lewis, Terence (Worsley)

Brown, Ron (E'burgh, Leith)

Lloyd, Tony (Stretford)

Buchan, Norman

Lofthouse, Geoffrey

Campbell, Ian

Loyden, Edward

Campbell-Savours, Dale

McDonald, Dr Oonagh

Canavan, Dennis

McKay, Allen (Penistone)

Carter-Jones, Lewis

McKelvey, William

Clark, Dr David (S Shields)

McWilliam, John

Clarke, Thomas

Madden, Max

Clay, Robert

Marek, Dr John

Cocks, Rt Hon M. (Bristol S.)

Martin, Michael

Cook, Frank (Stockton North)

Mason, Rt Hon Roy

Craigen, J. M.

Maxton, John

Crowther, Stan

Maynard, Miss Joan

Dalyell, Tarn

Oakes, Rt Hon Gordon

Davies, Ronald (Caerphilly)

O'Brien, William

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

Patchett, Terry

Dixon, Donald

Pike, Peter

Duffy, A. E. P.

Powell, Raymond (Ogmore)

Eadie, Alex

Robertson, George

Eastham, Ken

Rogers, Allan

Evans, John (St. Helens N)

Ross, Ernest (Dundee W)

Faulds, Andrew

Rowlands, Ted

Fields, T. (L 'pool Broad Gn)

Skinner, Dennis

Fisher, Mark

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

Foulkes, George

Spearing, Nigel

Freeson, Rt Hon Reginald

Thomas, Dafydd (Merioneth)

George, Bruce

Thompson, J. (Wansbeck)

Gilbert, Rt Hon Dr John

Williams, Rt Hon A.

Golding, John

Hamilton, James (M'well N)

Tellers for the Ayes:

Haynes, Frank

Mr. Andrew F. Bennett and Mr. Hugh McCartney.

Heffer, Eric S.

NOES

Alexander, Richard

Benyon, William

Amess, David

Berry, Sir Anthony

Ashdown, Paddy

Biffen, Rt Hon John

Aspinwall, Jack

Blaker, Rt Hon Sir Peter

Atkins, Rt Hon Sir H.

Bonsor, Sir Nicholas

Atkins, Robert (South Ribble)

Boscawen, Hon Robert

Atkinson, David (B'm'th E)

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

Baker, Nicholas (N Dorset)

Bowden, Gerald (Dulwich)

Baldry, Anthony

Braine, Sir Bernard

Banks, Robert (Harrogate)

Brandon-Bravo, Martin

Batiste, Spencer

Bright, Graham

Beaumont-Dark, Anthony

Brinton, Tim

Beggs, Roy

Bruce, Malcolm

Bennett, Sir Frederic (T'bay)

Bryan, Sir Paul

343

Buchanan-Smith, Rt Hon A.

Hawkins, Sir Paul (SW N'folk)

Bulmer, Esmond

Hayhoe, Barney

Carlile, Alexander (Montg'y)

Heathcoat-Amory, David

Carlisle, John (N Luton)

Heddle, John

Carlisle, Kenneth (Lincoln)

Henderson, Barry

Carttiss, Michael

Hickmet, Richard

Chalker, Mrs Lynda

Hicks, Robert

Chapman, Sydney

Hind, Kenneth

Chope, Christopher

Hirst, Michael

Clark, Dr Michael (Rochford)

Hogg, Hon Douglas (Gr'th'm)

Clark, Sir W. (Croydon S)

Holt, Richard

Clarke, Rt Hon K. (Rushcliffe)

Howell, Rt Hon D. (G'ldford)

Conway, Derek

Howell, Ralph (N Norfolk)

Cope, John

Hunt, David (Wirral)

Cormack, Patrick

Jackson, Robert

Corrie, John

Johnson-Smith, Sir Geoffrey

Couchman, James

Jopling, Rt Hon Michael

Cranborne, Viscount

Kershaw, Sir Anthony

Currie, Mrs Edwina

Key, Robert

Dicks, Terry

Knox, David

Douglas-Hamilton, Lord J.

Lang, Ian

Durant, Tony

Lee, John (Pendle)

Emery, Sir Peter

Lennox-Boyd, Hon Mark

Evennett, David

Lightbown, David

Eyre, Sir Reginald

Lilley, Peter

Fairbairn, Nicholas

Lloyd, Ian (Havant)

Fallon, Michael

Lloyd, Peter, (Fareham)

Farr, John

Lord, Michael

Favell, Anthony

McCurley, Mrs Anna

Fletcher, Alexander

MacKay, Andrew (Berkshire)

Fookes, Miss Janet

MacKay, John (Argyll & Bute)

Forman, Nigel

Maclean, David John.

Forsyth, Michael (Stirling)

Major, John

Forth, Eric

Malins, Humfrey

Fox, Marcus

Marland, Paul

Franks, Cecil

Mates, Michael

Garel-Jones, Tristan

Mawhinney, Dr Brian

Glyn, Dr Alan

Maxwell-Hyslop, Robin

Goodlad, Alastair

Meadowcroft, Michael

Grant, Sir Anthony

Miller, Hal (B'grove)

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

Mills, Iain (Meriden)

Griffiths, Peter (Portsm'th N)

Mills, Sir Peter (West Devon)

Ground, Patrick

Mitchell, David (NW Hants)

Hamilton, Hon A, (Epsom)

Molyneaux, Rt Hon James

Harris, David

Monro, Sir Hector

344

Morrison, Hon C. (Devizes)

Spicer, Michael (S Worcs)

Moynihan, Hon C.

Stern, Michael

Murphy, Christopher

Stewart, Allan (Eastwood)

Neale, Gerrard

Stewart, Andrew (Sherwood)

Neubert, Michael

Stewart, Ian (N Hertf'dshire)

Normanton, Tom

Stradling Thomas, J.

Page, John (Harrow W)

Sumberg, David

Page, Richard (Herts SW)

Tapsell, Peter

Parris, Matthew

Taylor, John (Solihull)

Peacock, Mrs Elizabeth

Taylor, Teddy (S'end E)

Penhaligon, David

Terlezki, Stefan

Pollock, Alexander

Thompson, Donald (Calder V)

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

Thompson, Patrick (N'ich N)

Powley, John

Thorne, Neil (Ilford S)

Prentice, Rt Hon Reg

Thornton, Malcolm

Proctor, K. Harvey

Thurnham, Peter

Pym, Rt Hon Francis

Townend, John (Bridlington)

Raffan, Keith

Trotter, Neville

Raison, Rt Hon Timothy

van Straubenzee, Sir W.

Rathbone, Tim

Waddington, David

Renton, Tim

Wakeham, Rt Hon John

Rhodes James, Robert

Walden, George

Rhys Williams, Sir Brandon

Walker, Cecil (Belfast N)

Robinson, Mark (N'port W)

Wallace, James

Roe, Mrs Marion

Ward, John

Rossi, Sir Hugh

Wardle, C. (Bexhill)

Rowe, Andrew

Watson, John

Ryder, Richard

Watts, John

Sainsbury, Hon Timothy

Wells, Bowen (Hertford)

Sayeed, Jonathan

Wells, John (Maidstone)

Shaw, Giles (Pudsey)

Whitfield, John

Shaw, Sir Michael (Scarb')

Whitney, Raymond

Shepherd, Colin (Hereford)

Wilkinson, John

Shepherd, Richard (Aldridge)

Wolfson, Mark

Silvester, Fred

Wood, Timothy

Sims, Roger

Woodcock, Michael

Smith, Sir Dudley (Warwick)

Wrigglesworth, Ian

Soames, Hon Nicholas

Speller, Tony

Tellers for the Noes:

Spencer, D.

Mr. Jerry Wiggin and Mr. Toby Jessel.

Spicer, Jim (W Dorset)

Question accordingly negatived

Consumer Protection
Resumed debate
9.57 pm
Mr. Alexander Fletcher: I have to conclude my opening remarks by referring to the principle of the measure. On the question of principle, our main concern has been to ensure that, in future, proposals by the Commission in the consumer affairs field should be limited to subjects that have a more obvious Community-wide dimension than is the case with the directive that we are considering. As a result of our representations on this point, we have reached an understanding with the Commission and other member states that Community action will concentrate on those areas in which measures are necessary to attain the Community's objectives in connection with the functioning of the Common Market as they are defined in the Treaty.
In its 1983 report, the Select Committee also refers to the mention in my Department's supplementary explanatory memorandum of the need for compatibility with United Kingdom legislation in the fields of consumer credit and hire purchase and with the proposed EC directive on consumer credit. We shall cover the first aspect in the implementing legislation. With regard to the link between this proposal and the proposed consumer credit directive, may I reassure the House that we are fully aware of the points at which these two proposals are liable to overlap. We shall make every effort to ensure that any provision relating to doorstep selling in the consumer credit directive is compatible with the doorstep selling directive.
I hope that the House will agree that these points are not in themselves sufficient grounds for blocking a proposal which, though limited, represents a very useful measure. Although the majority of traders who make unsolicited visits to homes are reputable and honest, there are nevertheless pitfalls for consumers who buy goods or services as a result of this method of trading. Some salesmen indulge in high-pressure selling techniques or other dubious practices, which can be frightening to many householders—especially the elderly and those living alone. As a result of their fears, or simply because they are under pressure, consumers can and do sign contracts for goods that they may not really want or may be unable to afford.
Mr. William Benyon: Reputable doorstep organisations fear that the pass may be sold in the Community because of those countries — Denmark in particular—where doorstep selling is not allowed at all. Can my hon. Friend reassure me that Her Majesty's Government will not consider such a move?
Mr. Fletcher: I am happy to reassure my hon. Friend. Our complaint about the directive has not been about the principle of doorstep selling. What we have questioned, rightly, is whether such an issue requires Community-wide legislation. That is why the directive has been before the Council of Ministers for some time. We hope that it will be given a shape and form that is acceptable not just to ourselves but to those who trade in this manner in our country.
Mr. Tony Marlow: Does my hon. Friend consider that it is necessary that this sort of legislation should be provided on a Community-wide basis? If so, why?
Mr. Fletcher: We do not agree that such legislation has to be Community-based. That is why I have just discussed the point of principle. We have made that point to the Commission in suggesting amendments to the directive which would make it suit the requirements of the United Kingdom in this field. We do not want more legislation such as this to be presented to us by the Commission as Community legislation. This is essentially a domestic matter, and there are other issues of greater importance affecting trade within the Community on which the Commission could better spend its time.
Mr. Marlow: If the Government believe this directive to be unnecessary, why have we accepted it? There is plenty for us to do without accepting unnecessary legislation.
Mr. Fletcher: I have already said that we accepted this legislation because we have successfully amended it to suit trading practices in Britain. It is not at all far out of step with the type of domestic consumer credit legislation that we pass. Having made the point of principle that my hon. Friend has rightly drawn attention to, we were able to accept it. We are now saying, "Please let us leave it at this and get on with other more important matters and not legislate on matters that are at least doubtful in regard to Community-wide business or trading."
Mr. Marlow: Why not veto it?
Mr. Fletcher: These are decisions that must be made according to the circumstances in any piece of legislation. If it is harmless in United Kingdom terms, in that it does not upset the method of trading here and affords some useful protection to consumers, we can accept it. I am not disagreeing with my hon. Friend. We are telling the Commissioners that we do not want to spend time on such legislation in the future. I do not think that my hon. Friend and I are far apart on that.
Consumers who sign contracts in these circumstances which include a hire purchase or—when the Consumer Credit Act 1974 comes fully into force next year—a regulated credit agreement, already have the benefit of a cooling-off period, a period of reflection in which they can consider carefully and without pressure whether their original decision was correct. The proposal that we are considering will ensure that similar protection is available to people who pay in cash or by cheque and that the cooling-off period is extended to seven days.
10.1 pm
Mr. Alan Williams: I join the Minister in saying that we trust that this will be the last measure of its type that Brussels dares to impose on member countries. It is a type of directive that Brussels showed a tendency towards in the mid-1970s. The Government then told Brussels—I know that this is the Government's view — that when internal action constrained trade between countries that was a legitimate matter for the EC to consider but that the type of protective legislation such as we are discussing today is domestic consumer legislation. I suspect that if it had not come forward so early we should not have contemplated it but

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blocked it at the outset. The House is at one in that the EC must understand that we want no more directives of this type.
I say that it should go through because I am favourably disposed to the EC. Perhaps I am in the minority tonight. Nevertheless, I have never felt that the EC is a particularly beneficial influence on consumer legislation. It is an institution that has frequently led to delays when we could have acted more rapidly and appropriately domestically. In so far as accepting the directive will make it easier for the Government to go ahead with their own proposals, we shall give it our blessing.
The Minister knows the detailed points that worry me. We are especially anxious about the anomalies between the directive on doorstep selling, a proposed directive on consumer credit and the Consumer Credit Act, which I took through the House in 1974. Thresholds differ between the three, as do ceilings. The Minister has said that he intends to ensure that those deharmonising factors can lead to a harmonious outcome. Nevertheless, I note that under these proposals it would be possible for the contract to purchase to be declared invalid while the contract for the credit to carry out that purchase would remain valid. That seems somewhat inconsistent and unfair.

I hope that, bearing in mind our reservations about the possible conflicts between the directive, other proposals from the EC and our own legislation, the Minister will try to ensure that we do not wander into this type of position again. I hope also that he will ensure that the EC is left in no doubt that this is the last of such legislation. On that basis, and on that basis alone, we shall support it.
10.4 pm
Sir Dudley Smith: My hon. Friend the Under-Secretary of State is certainly right about this directive. I did not intend to speak when I heard his opening comments, but I am somewhat alarmed at the background information that has emerged. I am sure that my hon. Friend has taken the right attitude on behalf of the Government and I agree with the right hon. Member for Swansea, West (Mr. Williams) that it is quite wrong for proposals of this kind to emanate from the EEC.
A politician is perhaps the last person to talk about doorstep selling and canvassing, but we know that it is a sensitive issue, as we have been round the course so many times. It is a difficult subject and there are mixed feelings about it. On the whole, however, I tend to be against doorstep selling because the bad people get the good ones a bad name and it is difficult and intrusive for people living alone and for elderly people. Be that as it may, as my hon. Friend has said, it is certainly a matter for domestic consideration and decision. I am sure that we can regulate our own affairs correctly in this regard. Indeed, I believe that in the past few years we have more or less got it right and Members no longer receive many complaints about abuses.
This is the kind of thing that has given the EEC a bad name. Having listened to my hon. Friend in this short debate, I stand by the view that until we can reform the bureaucrats, this excellent and essential institution in Europe will continue to go the wrong way. We must do something to stop this kind of thing emanating from Brussels. I support the attitude of my hon. Friend today
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and I am sure that he and his colleagues will continue to take that view if further unreasonable missives come to the House from Brussels.
10.6 pm
Mr. Teddy Taylor: I am sure that the Minister and the House accept that we are suffering from a flood of harmonising legislation from the EEC which is achieving very little. It is sad to hear Ministers say time and again that they have introduced domestic legislation to try to reduce the damage caused by the various directives.
Why is this directive being introduced as a harmonising measure when it is no such thing? Article 8 provides that member states may make their own legislation even if it is wholly different from the directive. I have never seen such a thing before. What is the point of harmonising legislation which allows national Governments to make their own completely different national laws? How can anything be harmonised if we can go ahead and pass legislation entirely different from that of France, Germany, Italy or Denmark?
Mr. Marlow: Does my hon. Friend agree, however, that allowing member states discretion to introduce their own legislation is a very positive move, which should be supported?
Mr. Taylor: My point is that we could go that way without any directive at all. This is one of the most ridiculous examples of EEC attempts to interfere with British domestic legislation. It is a harmonising proposal which harmonises nothing.
Secondly, I have never before seen a note from the Department to the effect that we are discussing
"an informal copy of what is believed to be the latest text of this proposal."
Do the Government mean that this may not be the right text as there may be a different one? If that is so, would it not be simpler to postpone the debate until we have a proper text? It is straining the patience of the House too far to expect us to debate what the Government merely believe to be the latest text of legislation.
Thirdly, and more generally, I have been concerned that in the rush to answer the consumer brigade or the consumer campaigning industry we may be going too far and causing real damage to genuine, honest traders who simply want to get on with their jobs. We have had a little too much legislation which, although apparently designed to help consumers, in my view has been introduced in such a way as to do real damage to honest traders. Indeed, we shall have the opportunity to discuss one such measure in a Committee of the House next Wednesday.
If this directive had been implemented by the Government through domestic legislation, it could have affected a recent transaction in my own home. We had a storm in Southend in which my house was damaged, and some slates fell off the roof. It happened three weeks ago. I telephoned a gentleman called Mr. Fenn and asked him to come round and sort out my slates. When he arrived at my home, he seemed to be an extremely pleasant and competent tradesman. So I drew his attention to a problem that had arisen in the interim. I had been trying to carry out some do-it-yourself repairs to a window, but unfortunately I dropped my hammer, and the hammer had broken the cistern in the downstairs bathroom. So when Mr. Fenn came to talk about mending my slates, I said to him, "Do you by any chance also mend broken toilets and

349
cisterns which silly people drop hammers on?" He replied, "I am an expert on the job." So I concluded with him on the spot an agreement for him to supply and fit a new toilet and cistern.
Although Mr. Fenn, being an honest and reputable tradesman, went out and straight away ordered, at his firm's expense, the necessary parts and organised labour to carry it out, as far as I can see, under this directive, when Mr. Fenn came back with the materials, I would be entitled to say to him, "Get lost. I am sorry, but I have changed my mind. I do not want you to do the job." Clearly, that would mean a serious loss for Mr. Fenn.
I have looked at the directive to see whether there is a letout for Mr. Fenn. I find none. Although the directive does not apply to contracts for the construction of immovable property, it apparently applies to the supply of goods and their incorporation in immovable property. Clearly, a cistern and a toilet are goods that can be incorporated in immovable property, and are contracts for repairing the property concerned.

I wondered whether there might be a way out for Mr. Fenn on the basis that there was some connection between toilet cisterns and slates. Article 3(3) says that
"Member States may refrain from applying this directive to contracts for the supply of goods having a direct connection with the goods or services concerning which the consumer requested the visit of the trader."
I do not think it would be possible for me to argue that a toilet or a cistern has a direct connection with slates that fall off the roof.
I therefore wondered whether any other provision might help. The only one I could think of was article 3(2) (f), which says that the regulation does not apply to
"cases where the trader is in good faith unaware that he is negotiating with the consumer."
Could the Minister tell me precisely what is meant by that? How are we to gauge what is meant by saying that a trader who calls at a house to negotiate a deal is not aware that he is negotiating with the consumer? If we approve this directive, does it mean that someone in the position of Mr. Fenn, who is an honest and reputable trader, could find himself in the position of having a contract that he freely negotiated with me cancelled by me, and thereby lose a great deal of money? That is a specific case. I hope that my hon. Friend the Under-Secretary of State will not say that it can only be resolved by going to the European court or by consulting my MEP.
I fear that we are in real danger of introducing new legislation which, while allegedly protecting consumers, is unfair to good tradesmen. That is one particular case, but I could produce hundreds of similar hypothetical cases. If this directive had been in operation, could I have told Mr. Fenn that I did not want the goods that I had asked him to provide?
10.15 pm
Mr. Tony Marlow: The next time my hon. Friend the Member for Southend, East (Mr. Taylor) picks up a hammer and goes up to his loft he should remember the words of Hilaire Belloc that
"It is the business of the wealthy man to give employment to the artisan."
He will then avoid the problems that he has described.
I am grateful to my hon. Friend for the reassuring reply that he gave to my intervention. I find the measure disturbing. As anybody on the Scrutiny Committee will realise, the Community wishes to put many measures
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before national Parliaments and there is a strong tendency for the Community to increase its powers, competence, areas of influence and those policies over which At has some control.
Conservative Members believe in minimising bureaucracy, government and taxation. Since we have been in the Community—I believe that the Government will address themselves to the problem with great vigour—we do not just have one Government, we have two. We do not have just one Civil Service producing policies, ideas and various measures to put before the people, which have to be paid for by taxation, but two such bodies, hungry for power, ideas and money. It is the taxpayer who has to pay for their pet projects.
The measure has been generated by that massive motor of incompetence, intervention and bureaucracy in Brussels. My hon. Friend rightly said that the measure is unnecessary, unimpressive and unimportant. Why was a decision reached despite the Committee's recommendation that we should have a debate beforehand on the important and serious issue of ESPRIT, information technology and large European investment, in which many hon. Members would have been interested? Reasons were given for the decision being made before the House debated that issue. Surely it could not have been for lack of time. We have time to deal with this piffling measure this evening. Surely time should have been found in the parliamentary programme for something as important as that. One wonders, although one does not know, whether it is more convenient for non-controversial measures to be put before the House, whereas there are other ways of dealing with those measures that might cause problems, wrinkles or disruptions between Britain and other members of the Community, particularly during the present budget negotiations.
I know that the Direct Selling Association Ltd. has looked at the measure carefully. It, as everybody knows, regulates direct selling within the United Kingdom. It believes that the directive will provide a valuable level of trading standards for direct sellers although far below the standards that apply in Britain. As my hon. Friend the Member for Milton Keynes (Mr. Benyon) has said, there is a feeling that the Danes are concerned that there should be no direct selling in Denmark, and it is they who have put pressure on the Community and on the Commission to ensure that article 8, the article about which my hon. Friend the Member for Southend, East was complaining so loudly, was incorporated. Article 8 states:
"This Directive shall not prevent Member States from laying down or maintaining more favourable provisions to protect consumers in the field covered by this Directive."
One can take one's choice, and do it the way one wants. It would be nice if, when some of the directives come forward that people would like to foist upon us — Vredeling and other such directives—we had similar discretion in the United Kingdom. It might draw some of the horns from the directives.
I know that the Direct Selling Association, and I think sensibly, would prefer that article 8 should be changed, and should be more in line with the realm of Community legislation so as to read:
"This Directive shall not prevent member states from maintaining other provisions to protect consumers in the field covered by this Directive insofar that such provisions are in accordance with the Treaty."

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In my view, that is a fair point. We in this country, rightly or wrongly, abide by the provisions of the treaty. It is only right and fair in those circumstances that other countries should do likewise.
10.21 pm
Mr. Alexander Fletcher: I agree with the comments of my hon. Friend the Member for Warwick and Leamington (Sir D. Smith), and I think that he agrees with mine. It is just as well that politicians are excluded from the draft directives.
I understand the points made by the right hon. Member for Swansea, West (Mr. Williams) about the harmonising effects of existing legislation in the United Kingdom. As I said in opening, we shall take the earliest opportunity to bring the five-day and seven-day cooling off periods into line. There will still be some difference in the amounts of money in the Consumer Credit Act that will be at variance with the sum of money that affects doorstep selling. There is a draft directive on consumer credit, but I think it is still some years away, under consideration by the Commission.
My hon. Friend the Member for Southend, East (Mr. Taylor) said that member states appear to be able to go their own way, which is true. My hon. Friend the Member for Northampton, North (Mr. Marlow) said that there is discretion to individual countries. I think that this is an admission by others of the success that we have had in pointing out that in principle this is not a matter for Community legislation. That is why there is a specific discretion in this draft.
I wish to tell my hon. Friend the Member for Southend, East that this is the latest text. We thought that there might be further amendments, but the document before the House is the latest text. My hon. Friend asked about the effect on honest traders. No honest trader has anything to fear from such a directive, but in the circumstances of his own unfortunate mishap, I can say only that the terms of
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the directive would apply. As to my hon. Friend's constituent who was willing to do a deal on the spot, if my hon. Friend decided, for whatever reason, during the cooling-off period that he wanted to change his mind, under the terms of the directive he would be entitled to do so. His constituent, the tradesman, would be aware of these provisions, and I am sure would be able to continue with the contract, knowing that my hon. Friend is the last person in the world who would ever repudiate anything he said to a tradesman or any other person.
Mr. Teddy Taylor: Does the Minister not think it is unreasonable that a tradesman can go along in such circumstances to proceed with an emergency job, be commissioned by the person who has called him to do a job, go out and buy the goods concerned, arrange for labour, and then find that the contract is torn up and that he loses a great deal? Surely this is an example not of protecting consumers but of putting at risk the funds of decent, honest tradesmen who want to act in a responsible way? What possible justification can there be for that provision?
Mr. Fletcher: I think that there must be some misunderstanding. I assumed that my hon. Friend was referring to calling in a tradesman to repair one item and then asking him, while on the premises, to look at something quite different. If he was looking at something quite different, the terms of the draft directive could apply, but it would not if the addition was connected with the original request for the tradesman to visit his home.
Question put and agreed to.
Resolved,
That this House takes note of European Community Documents Nos. R/113/77 and R/134/78 concerning contracts negotiated away from business premises and of the supplementary explanatory memoranda submitted by the Department of Trade on 18th June 1980 and the Department of Trade and Industry on 9th November 1983, and supports the Government's intention to secure a satisfactory resolution of the outstanding points.

Food Aid
10.25 pm
The Minister for Overseas Development (Mr. Timothy Raison): I beg to move,
That this House takes note of European Community Document No. 11003/83 on a proposal for a Council Regulation on the implementation in relation to food of alternative operations in place of food aid; and endorses the Government's intention to work for the early adoption of such a Regulation to reinforce the Community's ability to help developing countries in their quest for food security by improving their own agricultural production.
I welcome the Select Committee's recommendation that this document should be debated by the House. The Commission's proposal is constructive. It should help to promote the transition from food aid to direct assistance for agricultural development in developing countries. The House's support for this would be most welcome to the Government in their discussions within the Council of Ministers.
Document No. 11003/83 contains a proposal from the Commission to the Council for a draft regulation which would provide a legal basis for the use, in certain circumstances, of resources originally earmarked for food aid to finance alternative operations in support of agricultural and food projects. If a country were prepared to forgo an allocation of food aid, it could receive instead assistance to aspects of its agricultural development programme, such as applied research or rural credit operations. Budget appropriations would be transferred from the relevant food aid budget line to the budget line
"food projects in place of food aid".
The draft regulation describes the circumstances in which this might be done and the procedure to be followed for deciding on individual cases. No additional money will be required, because costs will be met from existing appropriations already provided for food aid.
Mr. Tony Marlow: If money is given instead of food, what will happen to that food? Will it not clutter up the whole panoply of stores up and down the Community which are bulging at the seams with Community surpluses? If so, will it not cost money and reduce still further the price of the food kept in those stores? If that food is then put on the world market, will not the world market price fall still lower and cause even greater problems to the countries we are trying to support?
Mr. Raison: Only a part of the food that goes to food aid comes from intervention. A substantial proportion comes from elsewhere. Of course, my hon. Friend is right, and we are unhappy about the way in which the common agricultural policy tends to encourage the creation of surpluses. We are trying separately to tackle that.
The Government have always accepted that there is a role for food aid in famine relief in emergency situations; but most food aid is not provided for this purpose and, although the Community is trying to improve the developmental impact of food aid, the Government believe that food aid is not the best way of helping developing countries to achieve food security. I think that the House and informed opinion in this country take a fairly sceptical view of food aid. Food aid can have a disincentive effect on agricultural production in developing countries by distorting market forces and delaying the
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introduction of necessary, but in the short-term unpopular, policy reforms. It can also accustom people to new diets and create a demand for imports which did not previously exist. It is a difficult form of aid to handle efficiently and it is, in some circumstances, more susceptible to misappropriation and waste than other forms of aid. In some cases, and without proper supervision, it can also be a health hazard.
The Community food aid programme began in 1963 and was inspired by the need to dispose of agricultural surpluses more than the wish to help developing countries. This thinking still stronly influences the attitude of some member states and is the main reason why such a large part of the Community's development budget relates to food aid. In the 1984 budget 502 million ecu, about £293 million, is allocated for food aid out of an overall development budget of 960 million ecu, about £560 million. Nearly half of this goes as dairy products, which are generally a particularly inappropriate form of food aid. It would, in my view, be better to spend most of this money in helping developing countries to implement national food strategies or. in some other way, to seek greater food security by developing their agriculture and related sectors. This draft regulation, if approved, wall go some way towards facilitating this.
None the less, despite the new proposal, we have to accept Community food aid as a fact of life for some time to come and the Government have been anxious to promote policy guidelines for Community food aid. Such guidelines were adopted by the Development Council in November 1983. These call for greater integration of food aid into agricultural development policies of the recipient countries, a dialogue with recipients, multiannual food aid programmes within defined circumstances, criteria for the choice of products, increased use of products from other developing countries and more checks on the use of counterpart funds.
Some hon. Members may ask whether, in view of the large food shortages in Africa, this is not the wrong time to cut food aid. Agricultural production per capita in developing countries taken as a whole has been slightly but steadily increasing over the past decade and there is, therefore, no prima facie case for contemplating a larger overall food aid programme. Some African countries are tragic exceptions to this general trend. That is not a reason for increasing overall tonnages of food aid but may be a reason for redistributing it towards Africa and away from other countries which are now growing more themselves; and that, in fact, has happened. I have already said that most food aid does not go for emergency relief. Moreover, no developing country would be obliged as a consequence of the draft regulation before us to give up its food aid. Such a country would, however, have the possibility of asking for some other form of assistance to agriculture instead of food aid, if its Government judged that to be in its own best interests.
The Commission's proposal is presently being discussed by working parties of officials of member states before going to the Committee of Permanent Representatives, probably in early April. The European Parliament will consider the document in committee and then in plenary, and I hope that it will be able to express a formal opinion in April. On receipt of the report from the Committee of Permanent Representatives the Council of Ministers should take a final decision on the regulation in April or May, taking account of the opinion of the

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European Parliament. In terms of the trialogue agreement between the Council of Ministers, the European Parliament and the Commission of 30 June 1982, draft regulations of this nature providing a legal basis for new budget lines should be decided not later than the end of May.
Already it is evident that some member states who look at food aid as a convenient means of disposing of agricultural surpluses are adopting a restrictive attitude to the regulation. I should like to have a regulation sufficiently wide in its scope to enable developing countries to make the maximum use of this new instrument for assistance to agriculture. I hope, therefore, that the House can give its wholehearted support to a proposal to make more flexible and efficient use of Community aid resources to support the development of agriculture in developing countries.
10.34 pm
Mr. George Foulkes: I am glad that the spokesmen on Europe do not normally deal with the detailed matters in the large number of directives that we receive from the European Community, which the hon. Member for Southend, East (Mr. Taylor) knows so well. These are usually dealt with by the appropriate Department spokesmen. I am pleased to be speaking this evening in the absence of my hon. Friend the Member for Vauxhall (Mr. Holland). The Opposition consider this matter to be of great importance.
We welcome the directive and the attitude taken by the Government. Of course, we welcome the opportunity of a debate, as suggested by the Select Committee. But we are somewhat bemused by the Government's enthusiasm for this strategy because they have not always been noted for that enthusiasm. Indeed, I am sure that my hon. Friend the Member for Greenwich (Mr. Barnett) will recall that the Government have not been the greatest advocates of a move in this direction.
We support the general goals of the European Community on food aid—to relieve distress in urgent cases, to contribute to economic development and to raise the level of nutrition. However, food aid until now has failed to meet those goals. Starvation still persists—it has increased in those countries that we have tried to help.
The Community document "Food Strategies" shows that the state of food supplies in the Third world, especially in Africa, far from improving in recent years has deteriorated, and will be even more disastrous in 20 years. It states:
"The food situation is critical in most African countries owing to the lack of progress in socio-economic development in general and rural development in particular."
The document illustrates that with a number for figures. It states:
"In Africa, per capita food crop production fell by an average of 1·2 per cent. a year in the seventies … Per capita agricultural producion, which during the sixties had remained constant, fell even more rapidly by an average of 1·4 per cent. a year."
Far from improving, the position was deteriorating during the period that we were increasing our food aid. We argue that food aid does not solve the root problems of starvation. It does not deal with a country's lack of infrastructure.
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I wish to quote the European Commissioner responsible for development co-operation, Edgar Pisani, who is the architect of the move that we are discussing. He said that:
"hunger will not be vanquished by temporary expedients, but rather by a process of economic development, which will be slow and difficult, because development is not just building roads, dams, hospitals, schools, irrigation systems and factories: it is all those things, but it is first and foremost the mobilization and the organization of an entire nation which wishes finally to take in hand its economic and social destiny after it has taken its political destiny in hand."
We have seen so many countries that have taken their political destinies in their hands, but, for reasons upon which we will touch tonight, have not yet taken their social and economic destinies in their hands.
The document "Food Aid for Development" states:
"This problem cannot be solved merely by food handouts, which are often difficult to organize anyway when they have to reach scattered, unorganized groups of people; the solution lies in promoting food production in countries where this state of poverty is rife."
My hon. Friend the Member for Greenwich, in a debate in May last year, described his experiences of dealing with the matter and the problems that can arise.
We accept, and the Government accept, that food aid is right and appropriate in emergencies and for countries in turmoil where the organised development and progress of agriculture is clearly difficult. I hope that the Minister will give an assurance that there will be no diminution in the aid and no lack of willingness to supply quickly and generously food aid in all cases of emergencies. Where there are surpluses, as there are in the European Community, and where they can be speedily mobilised to help in emergencies, that must be done.
We accept that food aid has, in many cases, been counter-productive. It decreases initiative within a country and increases its dependence on food from the European Community and the developed world in general.
Sometimes food is provided that is not traditionally known in developing countries. In that case they can enjoy and become dependent on foods that they cannot themselves supply, and that can create difficulties in those countries.
We agree that the motivation behind the supply of food in many cases has not been so much the need of the country concerned as the desire to get rid of food surpluses, and the hon. Member for Northampton, North (Mr. Marlow), who is no longer in his place, seemed to have that motivation behind his philosophy. We are not in favour of providing food aid simply to move food mountains. We are anxious to prevent those mountains arising in the first place, and to do that we need more sensible food production.
We, like the Government, are anxious to wean the developing countries off food aid and towards food projects, and we hope that the projects that we are discussing tonight and that are to be identified by the Community and approved by the Commission will be used to develop indigenous agriculture and that there will be a positive policy to encourage the form of agriculture that is appropriate in each country.
It is to be hoped that there will be co-operation between the Community donor countries and the recipients. May we have an assurance that in the contracts or pacts that are envisaged in the development of food projects, the interests of the recipient rather than the donor countries will be paramount and that there will be a clear understanding and acceptance of that in the Community?

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Food projects are being welcomed by the developing countries. For example, African countries have already expressed interest, and if that sort of enthusiasm is there, particularly from the less developed countries, we should move in that direction. Will the priorities of the Government and the Community be towards the least developed countries? It is generally accepted that the developing countries fall into a wide spectrum of need and that in recent years the poorer countries have become even poorer, showing that our development strategy has not been working.
I hope that the Minister will take this opportunity to reconsider a previous response that he made to a report of the Overseas Development Sub-Committee of the Foreign Affairs Committee. My hon. Friend the Member for Newham, South (Mr. Spearing) will recall the occasion well. If we are moving from food aid towards food projects, certain specialist units of the Overseas Development Administration could be particularly helpful in providing assistance for developing countries; for example, the tropical products institute, the land resources development centre and other specialist units on which the Government have cut back, against the recommendations of the Foreign Affairs Committee. They are the type of units that should be providing more assistance. If we are genuinely moving towards food projects and if there is a real commitment on the part of the Community to the concept, I hope that the Government will reconsider their attitude to these specialist units.
Mr. Nigel Spearing: I am grateful for what my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) said about the Select Committee. It was, of course, the Foreign Affairs Committee, although the report came originally from the Sub-Committee. He did not mention the centre for overseas pest research. It is about to be joined with the tropical products institute to form a coherent whole. I am sure the Minister will agree—and perhaps he will say so when he winds up the debate—that this research centre is very important for the tropical world in the prevention and eradication of tropical pests and its expertise, particularly in entomology, in this country may in some respects be unique.
Mr. Foulkes: I do not dissent in any way from what my hon. Friend has said. As usual, he is much more precise. We both served on that Sub-Committee and Committee, but he did most of the work and knows more of the details. I occasionally spent more time on the wider strategies than on the specific details. I hope that the Minister will reply to the general question of the recommendations of the Overseas Development Sub-Committee.
I hope the Minister will appreciate that rural development in the developing countries, which is what we are discussing, in terms of food projects and agricultural projects is linked with industrial development, and that it is important also to encourage industrial development in the developing countries, even though this poses challenges for us. After all, it was important in our own early development that rural and industrial development went hand in hand. It would be wrong to see the developing countries continuing with just a rural economy without encouraging their industrial development also.
Mr. Raison: Is the hon Gentleman really saying that he believes that this document that we are studying should be changed to allow for assistance to industrial development? That would rather undermine its point.
Mr. Foulkes: No, certainly not. I was putting the document in a much wider context rather than looking at the specifics of it. I hope that the Government in their development strategy—and the Minister must consider the development strategy in a wider context—will bear that in mind.
I also appreciate and support one of the points made by the Government, that it is important, where we are moving away from direct provision of food, to make sure that aid in the form of money is carefully scrutinised and monitored, as in the past we have been concerned that some of the food aid has not reached its destination. I am sure that the Minister will be concerned about that.
I ask the Minister for an assurance about the change-over procedure. Can he confirm that there will be no hiatus in the support for a particular country? The procedure as described in the document seems to envisage a cancellation of the aid before the introduction of a food project. I hope that there will be some kind of overlap and that it is not envisaged that there will be a gap in the procedure.
The Opposition generally welcome the direction in which this document moves the Government, and are pleased to see that the Government are moving in that direction. We hope that they will continue to do so with renewed and increased enthusiasm.
10.48 pm
Mr. Teddy Taylor: It is most unusual for a constructive and sensible proposal to come from the European Community, but there is no doubt whatsover that the proposal before us tonight is a very sensible one indeed.
I have one basic question to put to the Minister. It serves the interests of the underdeveloped countries much better if we can help them to build up their own agriculture and thereby go on to develop their own industries. this is obviously the way in which they can best provide for themselves and also enjoy the benefits of the higher living standards which ensue. Is there any way in which the money for food projects, as opposed to food aid, could be used for collectives or for consortia, for creating some price guarantees for agriculture in these underdeveloped countries?
I say that because it is to our eternal shame that we have inflicted so much damage, distress, hardship and starvation on the countries of the underdeveloped world through the policy of dumping massive quantities of surplus food on the world market at knockdown prices. When considering the total budget of the European Community, it is interesting to note that 40p out of every £1 is spent on the disposal of surpluses — about £7 million every day—simply to subsidise the dumping of food in the Third world. That provides great benefits to the Soviet Union, which gets the cheap food, but it does immense damage to the poorer countries which are struggling to get a decent return for their own produce.
I draw particular attention to sugar. Many under-developed countries could provide sugar production—Pakistan is one country and we are all aware of many others — but at present the price they can get in the

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world market is £112 a tonne. From that must be deducted the cost of transporting the sugar to the markets where it is in demand.
On the other hand, the internal Common Market price available to British farmers and others is about £360 a tonne—more than three times as much. There is not much point in our helping Third-world countries to build a sugar industry if we keep the world price quite so low simply in consequence of the irresponsible dumping of food surpluses by the European Community on the world market.
It would be splendid if we gave those countries the means to provide food more efficiently, but I am sure that the Minister — who, irrespective of his ministerial position, has always taken an immense interest in the underdeveloped world — will accept that there is not much point in doing so if they are denied a reasonable return for their produce.
Would it not be possible for some of the EEC's resources to go towards a procedure to protect the Third world against the irresponsible dumping policy? However, dumping is a much wider subject which we cannot discuss under the regulation. But I am sure the Minister will accept that until we can find an answer to this general question, sensible proposals such as this will not achieve all that they should.
As well as providing cash to develop agricultural production, might there not be some way in which advice or cash aid could be given as a means of ensuring that Third-world countries get a reasonable return for their. produce—which I hope the regulation will enable them to improve?
10.53 pm
Mr. Guy Barnett: I am grateful to the Minister for his explanation of the regulation, and I agree with much of what he said about food aid policy in general. However, I must admit to having less faith than he appeared to have in its likely effectiveness. I say that partly in the light of the context in which we are discussing the regulation and the nature of the problem to which, presumably, it addresses itself—food shortages, with which food aid is concerned.
After all, there are two overriding factors, one of which has received no attention and to which I wish to draw attention—the growth of population, particularly in the Third world. The world's population is now moving towards 5 billion people. While that is happening, the production of many basic commodities is falling. Meanwhile, global economic growth has fallen in recent years from 4 per cent. to 2 per cent. a year.
The effect has been to divide the countries of the world into two groups—those where economic growth exceeds population growth, and those where it does not. For the first group, living standards are improving, if on average only slowly, while for the second group they are falling. We should not speak, as we have done in the past, about the rich world and the poor world. but we should underline the divide between that part of the world which is becoming richer, and that part which is facing increasing poverty and the despair that goes with it.
It is worth pointing out in the debate the obvious fact that food shortages are a function of poverty. People are hungry because they are poor. It is possible to live well and
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to get plenty to eat in any country provided that one has the money to buy what one needs. There are millions of under-nourished and starving people in the world because they do not have money. The unthinking reaction is to send them food and turn many of them into beggars, instead of recognising the basic injustice which determines the distribution of the world's resources. Food aid is often a palliative, and not a satisfactory one. It fails to tackle the basic problem.
On the supply side, there are numerous factors, but the only one that I shall mention tonight is the record of unpredictability in climatic conditions which has recently affected large parts of the African continent as well as ether parts of the world. Sub-Saharan Africa must be a matter of special concern in this debate, because the resulting tragedies there have been so devastating, and because many of the countries concerned are ACP countries, and are therefore of special concern to the European Economic Community. Of course, European food aid is not limited to ACP countries, but the EEC claims a special responsibility, through Lomé, for those countries. Initiatives on food aid should be related to the activities of the European development fund and the Lomé convention if they are to be genuinely concerned with development.
In the light of the worsening crisis on the African continent, the EEC response must be described as a mouse of a scheme. It does not begin to measure up to the problem, and it gives no guarantee that many of the well-known abuses of the Common Market's food aid policy, which have been mentioned in the debate, will not persist. I say "Common Market" advisedly, because food aid policy is not the responsibility of the European development fund, although it is associated with the needs of the common agricultural policy.
I have quoted in the House previously, and I shall quote again, a statement by Katharina Focke, a Member of the European Parliament:
"The European Community's food aid policy is still dictated by agricultural interests rather than any intention to promote development; it is an inefficient way of distributing European surplus production to the poor countries, associated with high costs, countless mishaps, delays, wrangling over responsibility and bureaucratic obstacles; there is scarcely any control over how it works and what effects it achieves and, to the extent that it actually involves aid, it is the balance of payments or the budget that is aided more than anything else.".
The Select Committee in another place which considered this matter said a couple of years ago that the benefits of food aid
"can only be realised if food aid programmes are carefully and efficiently administered and are related to the recipients' development needs."
One witness to the Committee said in evidence:
"Although the dangers of food aid can be avoided, the way in which the EEC proceeds to give food aid makes it as difficult as it can be to ensure the negative effects are avoided and that positive effects are attained."
The question that the House must consider this evening, in examining the regulation, is whether there is a guarantee of improvement, 'despite the words of the explanatory memorandum, which states that food aid policy is
"designed to … contribute towards the balanced economic and social development of the recipient countries."
What chance is there of that, given that the policy is inevitably dictated by agricultural interests whose prime objective is the disposal of surpluses? What chance does the Minister think there is that the Community budget—that, I believe, is what we are discussing—will be spent

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with the no doubt laudable aim of initiating food projects designed to enable countries to become self-sufficient in food? I wonder whether the Community budget will be spent in such a way—in the same kind of way as the EDF is presumably concerned directly with the needs of development in the Third world.
I have grave doubts—and I wonder at the Minister's keen acceptance of the proposals—about his welcome for a proposal which seems likely to be doomed from the start. Am I right in believing that it is the agriculture budget of the European Community that is involved? I hope that the Minister will answer that question. If I am right, I cannot believe that the powerful agricultural lobbies which operate on the continent would permit anything but minimal expenditure, under the head which covers the cost of dumping or disposal of surplus food outside the Market, on the support of indigenous agriculture in the Third world.
On of the most iniquitous consequences of the common agricultural policy—it has been mentioned today—is the subsidised dumping of surpluses on world markets. It depresses certain commodity prices to the detriment of the farmers of the Third world who are endeavouring to make a living and want to be able to sell their own surplus and plough back the profits into the productivity of their farms.
This proposed regulation hardly represents a serious change of direction; nor does it measure up to the frightening and growing problems of, in particular, sub-Saharan Africa. A vast and growing number of people in the Third world face the possibility of increasing food shortages as the population grows, unless the decline in food production can be halted and reversed.
11.2 pm
Mr. Raison: I believe that, in this short but useful debate, the House has given the Government the endorsement for which I asked. I believe that that is a fair statement of the tone of the debate in general. The hon. Member for Greenwich (Mr. Barnett) was rather more carping about the value of the proposal than the Opposition Front Bench spokesman or, indeed, the general mood of the House.
I will attempt briefly to answer the specific points that have been made. The remarks of the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) were a little hard. He said that he was bemused by our enthusiasm and surprised that I should advocate such a development. However, I have had responsibility for overseas development for rather more than a year and, in that time, one of the arguments that I have pressed hardest on my colleagues in the European Community has been the need to switch from crude food aid to positive development strategies. The British Government played some part in the significant decision of the development council, taken towards the end of last year, to plump for a more enlightened approach to the use of food. We have worked effectively within the Community, and I hope that, with the backing of the House, we will be able to expand our support of this document into something that is shared by the other member countries of the Community.
The hon. Member for Carrick, Cumnock and Doon Valley asked me for one or two assurances. By and large, I can give them. He wanted an assurance that there would be no diminution of the supply of food in emergencies. I can certainly give that assurance. I understand that about 20 per cent. of food aid goes on emergencies. I believe that
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the actions that we have taken and continue to take domestically show that we take the problem of food emergencies seriously. It is a high priority for the EC and for the Government.
The hon. Gentleman also asked for an assurance that in the contracts, as he put it, what happens will he in the interests of the recipient country. The procedure is that the recipient country puts proposals to the Community for the implementation of this document in regard to food aid. I cannot believe that what will happen will be in interests other than those of the recipient country if we accept, as we must, that the countries concerned know what is good for them. That has to be the basis on which the development programme works.
The hon. Gentleman also asked for an assurance that priority would be given to the least developed countries. I think that I can give that assurance. Of the Comniunity's 1982 food aid programme, 92 per cent. by value went to low income food deficit countries, a category defined as a priority by the committee of food aid policies' procedure. In other words, the overwhelming bulk of food aid goes to areas where the need is greatest.
The hon. Gentleman asked whether we would reconsider our decision about the scientific units. He will not be surprised to learn that the answer is no. However, I can tell him that, in its new guise, the tropical development research institute and the land resources unit will be able to continue their traditionally valuable work. The element of the TDRI which was the tropical products institute was renowned for its work on the handling of stored food. I see every reason why that work should continue, as will the work on pest research which has also been referred to.
Mr. Foulkes: Is the Minister giving us a clear assurance that there will be no more studies by Rayner or anyone else on those units? They have been plagued by study after study. I should have liked the Minister to go further, but if he gave us that assurance it would be helpful.
Mr. Raison: I accept the hon. Gentleman's point that, as they now know what they are doing, there should be no more studies. I am not sure whether I ought to apply that to Select Committees as well. It would be a rather daring thing for a Minister to do. Nevertheless, I accept the tenor of the hon. Gentleman's argument. I am sure that the units will be successful.
The hon. Gentleman also asked for an assurance about what he called the changeover procedure and asked that there should be no hiatus. It should be possible to achieve the switch from food aid to the new form of development approach without hiccup.
My hon. Friend the Member for Southend, East (Mr. Taylor) did an amazing thing, and blessed my actions. As he said, it is not often that, when we discuss the activities of the EC, he sings its praises. I was hoping that my hon. Friend the Member for Northampton, North (Mr. Marlow) might join in that blessing, but perhaps that would be too much to expect. Nevertheless, I am grateful to my hon. Friend the Member for Southend, East for what he has said. Article 3 lists what might be financed and he will find that it mentions financing "inter alia", so the list is not necessarily exclusive. I was not quite clear what he was after, but I think that the types of thing for which he is looking would be permitted.

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My hon. Friend also considered whether we can use this measure as a protection against dumping. He answered that question in the negative. I do not believe that he saw it in those terms. He also mentioned sugar and sugar prices. Although I accept that sugar producers would like higher prices than they get at the moment, the fact remains that the protocol that we have with them gives them a guaranteed market and a price level that, speaking from memory, is about double the present world price. Although they might like something better, the sugar deal, which is not up for renegotiation as part of the Lomé negotiations, is thus of considerable value to the sugar-growing countries of the Caribbean and elsewhere.
The hon. Member for Greenwich was a little more sour in his approach than others who have spoken. He said that he agreed in general with what we were doing but then tried to cast doubt on its effectiveness. I hope that in my speech I did not claim any enormously grand results from the measure. I was not saying that it would revolutionise development in the Third world or anything of that kind. I did not try to pretend that it was other than a useful measure. How useful it will be, assuming that it is accepted, will depend very much on the response of the recipient countries. Nevertheless, it gives them the chance to say that, instead of food aid, they would like resources to use for the improvement of their indigenous agriculture and we all agree that that is a valuable objective.
Mr. Spearing: Perhaps the Minister will help me to come down on either the sweet or the sour side of this happy debate. In case he is not about to come to my hon. Friend's other point, may I ask him again from what financial source the food aid funds come and who authorises them? Is it largely a developmental consideration or is it a matter for Finance Ministers or Agriculture Ministers? That authorisation will be the acid test of much of the activity.
Mr. Raison: I intended to deal with that, but I do not begrudge the hon. Gentleman raising it now. Perhaps, however, I may take the points in the order that I intended.
The hon. Member for Greenwich then asked about the European Community's response to the food shortages in the world. I believe that through its food aid mechanism the Community has shown a very strong response. In 1983 the EC food aid programme provided nearly £70 million. Despite the doubts that we have all expressed about how that can best be used, in some countries in Africa and elsewhere sheer starvation is the problem to be faced and food aid is essential. There is no immediate alternative
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there. I believe that it is generally accepted that the Community has a good record on this and we can be proud of that.
As to whether there is any chance of improvement in food strategies, I believe that there is. I believe that Mr. Pisani has shown that the Commission now takes a more enlightened view of this. As I have said, the British Government have been pressing an enlightened view and I believe that the gospel is gradually spreading. I know that there are difficulties in countries which are heavily wedded to the common agricultural policy and do not fuss too much if surpluses are created, but we are pressing our point and making headway in the Community and we shall continue to do so.
On the question of which budget the funds come from, the answer is the development budget. That is as it should be because this is—we hope that it will increasingly be so — a genuine development activity. That is the emphasis of my remarks and of the document. I hope that the House will not only give us the backing that I believe that it has given today but will publicly give us further support when the matter comes before the Council. I am sure that that will be very helpful.
Mr. Barnett: Will the Minister clarify the last point a little further? Is it the money spent through this regulation that comes out of the development budget? Surely the whole of food aid does not come out of that budget?
Mr. Raison: I understand that food aid is paid for out of the development budget. As the House knows, it does not come out of the European development fund side. It is budgetised expenditure and is dealt with not by Agriculture Ministers—they do not make the decisions about the allocation of food aid—but by my colleagues and myself in the Development Council, which is as it should be.
Question put and agreed to.
Resolved,
That this House takes note of European Community Document No. 11003/83 on a proposal for a Council Regulation on the implementation in relation to food of alternative operations in place of food aid; and endorses the Government's intention to work for the early adoption of such a Regulation to reinforce the Community's ability to help developing countries in their quest for food security by improving their own agricultural production.

ESTIMATES
Resolved
That this House agrees with the Report [28th February] of the Liaison Committee.—[Mr. Hayhoe.]

Value Added Tax (Construction Work)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hayhoe.]
11.14 pm
Mr. John Heddle (Mid-Staffordshire): I am most grateful to you, Mr. Deputy Speaker, for having selected this motion for a brief debate this evening, and I am especially grateful to my hon. Friend the Minister of State for kindly attending the House to listen to my remarks on this rather obscure-sounding motion on the EEC sixth directive on value-added tax on non-domestic construction work. I am also pleased to have the support of my hon. Friend the Member for Warwick and Leamington (Sir D. Smith), who takes a close interest in the affairs of the construction industry and I look forward to the contribution which—with your permission, Mr. Deputy Speaker—he wishes to make after I have spoken.
I begin by declaring an interest. It is a very obscure interest, but it is right that I should declare it. I am a consultant partner to a firm of chartered surveyors and although I do not know whether this is currently the case I have no doubt that at some time in the future that firm might have among its clients builders and pension funds and insurance companies investing directly or indirectly in real estate, which is the particular matter to which I wish to draw attention.
I should not seek to raise this matter on the Adjournment but for a somewhat sensational article in The Sunday Times, Business News section, of 13 November last. Its front page lead read:
"A Common Market move to force Britain to levy value added tax on commercial and industrial property development could put thousands of jobs at risk".
The following Thursday 17 November, there was an article in the Financial Times which said:
"The European Commission is inquiring into the desirability of maintaining the zero value-added tax rating for commercial and industrial property development in Britain."
This is a serious matter, and the purpose of my debate is twofold: first, to highlight this obscure but substantial threat to jobs in the private sector of the construction industry; secondly, to secure from my hon. Friend the strongest possible assurances that the Government will do all they can to resist that threat robustly. There is no doubt that if the threat were carried out, now or in the future, it would create a crisis of confidence in that most crucial sector of our economy, the construction industry, which employs the largest element of skilled labour in the country's work force.
Inevitably, the threat potentially comes from the European Commission in Brussels. If successful, it would abolish the zero-rating for value added tax at present applied to certain types of construction work. I stress the word potentially because, in the words of the illustrious and, sadly, late-lamented coach of the victorious 1971 British Lions team in New Zealand, Carwyn James, "I am getting my retaliation in first." It is important to put that on the record.
No doubt, my hon. Friend will tell me in his reply that no formal proceedings have yet been taken by the Commission, and I hope that he will be able to assure me that they never will be taken. However, we know that informal signals have been transmitted across the channel from Brussels to the effect — in the Eurojargon that seems to crop up in our parliamentary proceedings from
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time to time—that it is forced to consider what are called infraction proceedings against the United Kingdom for our VAT zero-rating of non-residential new construction work.
Since the introduction of VAT in this country more than 10 years ago, it has been clearly established and accepted on both sides of the channel that all new construction work should be zero-rated for VAT purposes. Goodness knows what our constituency mailbags would be like if we woke up one morning and found that new homes, domestic construction work, had a 15 per cent. VAT price tag placed on them. I hasten to add that these infraction proceedings, which are the subject of immediate concern to the construction industry, have nothing directly to do with new homes or residential construction work. No. The proceedings would apply specifically to industrial and commercial building and also to all public works, which includes Government buildings, hospitals, schools, old people's homes, sheltered housing and other similar accommodation. Were it not for the fact that the construction industry is just beginning to emerge from the depths of a recession, much leaner, fitter and more efficient, it would not be pressing my hon. Friend the Minister of State as hard as it undoubtedly is.
Let us forget for the moment that all the housing investment for which the construction industry is responsible is not likely to suffer that threat in future. Let us concentrate purely and simply on the vast amount of investment, public and private, that goes into offices, factories, shops, hospitals and schools. About £8 billion of capital, public and private, is spent each year not only on new works but on major renovations and refurbishments. That activity creates jobs directly in the building process and indirectly in the related activities, employing about 1 million skilled people. That is the size of the market that could be vulnerable to any attempt by the European Commission to remove VAT from zero-rating on non-residential new construction work.
Let me clearly admit that not all that work would be hit. Indeed, the Building Employers Federation, anxious riot to exaggerate the potential damage that the Euro-threat could cause it, commissioned an independent consultants' report entitled "The impact of levying VAT on industrial and commercial buildings". It was produced by the economists advisory group. That group was commissioned to undertake some detailed analysis of what is undoubtedly a highly complex and often tortuous estimate. Everyone concerned has nothing but praise for the expert advice, guidance and comments that Customs officials gave within the limits of confidentiality to the consultants who prepared the report. As no doubt my hon. Friend will be able to confirm from his reading of that research, the ultimate impact of any move to abolish VAT zero-rating on non-domestic work is still a difficult matter to estimate accurately.
At the bottom end of the scale, if the EEC threat were to become a reality but were to be implemented with every possible mitigating factor and with a smooth transition in the market place, the consultants estimate that between £120 million and £175 million could be added to the net costs of construction. At the top end of the scale it was reckoned that around £350 million could be added if the threatened proposals were implemented with no Government attempts to mitigate their effects.
The issue goes much deeper and wider than the bare statistics. Above all else, the independent report shows

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that market confidence and the reaction of the construction market will play a crucial role. To take an example to illustrate my point, if every pension fund, insurance company and financial institution presently involved in construction developments in the United Kingdom decided to halt all its building activities for six months after the introduction of this complex VAT on new construction work in order to sort out the implications of that tax regime on the industry, it could cost the construction industry £1·25 billion worth of work which could put at risk, albeit temporarily, 100,000 jobs. That is the scale of the threat according to the economists advisory group.
We have lost enough jobs in the construction industry over the past few years. Much of the public sector work has been cut heavily so that it should play its part in bringing the economy back to life. The construction industry has lifted itself off the ground by boosting its private sector work load and has shown enterprise and new ideas and has taken risks. Private housing starts have risen and commercial building activity has also taken off again, particularly with the development of small workshop units to give first-time industrialists the opportunity to get on the ladder of opportunity. What the Government want to happen has happened. The private sector has taken up the challenge. Can we now afford to allow that precious private sector flower to wither on the vine of any failure on our part to defend the vital interests of the non-domestic sector of the construction industry against this threat? Can we afford to risk many of the excellent inner city initiatives by private sector institutions, backed by solid Government investment in recent years?
One aspect of concern to me is that, if a 15 per cent. VAT price tag is put on building works in those areas of the inner cities where the line between profitability and loss is so marginal, 15 per cent. will have to come off the value of the land. If the land has a negative value in the first instance, the money has to be made up to bring the inner cities back to life by increasing by 15 per cent. the amount that Government give to encourage the private sector to breathe fresh air into the inner cities through the urban development grants and the derelict land grants. It has a knock-on effect. I therefore seek the assurance of the Minister that he has taken full account of how damaging this threat could be, and that he will do all in his power to persuade the Commission in Brussels against bringing it to pass.
I ask the Minister to appreciate that, if this impost occurred, the effect on the public sector borrowing requirement could be considerable, bearing in mind the amount that the Government invest in schools, hospitals and old people's homes. Whereas £100-worth of new building is zero-rated today, if this threat remains, only £85-worth of bricks and mortar will be zero-rated tomorrow.
11.26 pm
Sir Dudley Smith: My hon. Friend the Minister knows of my interest as a consultant with the newly named Building Employers Federation, formerly well-known as the National Federation of Building Trades Employers. I do not believe in special pleading, and rarely indulge in it, particularly when I have a professional interest. However, I believe that this is something of an exception. It has widespread
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implications for the public, as my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) explained in his most able speech.
I have found, as, indeed, I am sure my hon. Friend has, because he moves in these circles in the course of his activities as a Member of Parliament, that big and small builders are deeply worried about the implications of the case that he has deployed before the House. They are worried that VAT will be applied to construction development in this country. As my hon. Friend said, it would be wildly inflationary, and would do considerable damage to the industry, which is now showing such good signs of recovery.
I urge my hon. Friend to take a positive approach to the problem. The impression has been gained in some quarters that he may be not entirely opposed to the move that my hon. Friend the Member for Mid-Staffordshire has predicted. I am sure that that is incorrect. I realise the difficulty in which Treasury Ministers find themselves at this tight-lipped season of the year. I hope that the Minister will be positive in British industry's interests. If he is not positive it could have formidable and harmful effects on British industry. I very much hope that the Government will resist these effects.
11.29 pm
The Minister of State, Treasury (Mr. Barney Hayhoe): While congratulating my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) on using the Adjournment debate to raise an important question of national importance, I know that he and my hon. Friend the Member for Warwick and Leamington (Sir D. Smith) will appreciate the particular sensitivities applying to any Treasury Minister talking about tax matters some two weeks before the Budget. I must, therefore, begin with the traditional disclaimer that I cannot anticipate, and I am not anticipating, the Budget Statement of my right hon. Friend the Chancellor of the Exchequer in any way.
It may be helpful to my hon. Friend the Member for Mid-Staffordshire and the House if I start by setting out the general background to the present position on the United Kingdom's zero rates in relation to our EC obligations and the sixth directive. That directive lays down the permanent ground rules for the operation of the tax including the harmonisation of reliefs but not the harmonisation of rates. The sixth directive contains no permanent relief from construction services whether in the course of new building, alteration, repair or demolition. Apart from Greece, which has no VAT, all the other member states tax these services at the standard rate, except Ireland where the rate is 5 per cent. Likewise, the directive contains no permanent relief for sales of new buildings and the land on which they stand. All the other member states tax such sales at positive rates—mostly the standard rate—except for Germany, which exempts them as a transitional measure.
As I have said, the directive lays down a structure of permanent reliefs from the tax and those reliefs—at any rate so far as internal as opposed to export transactions are concerned — take the form of exemptions rather than zero-ratings. That difference is particularly important. Exemption, unlike zero-rating, confers no right to deduct input tax on purchases and general overheads. However, it was recognised in 1977 that there would have to be transitional provisions which allowed member states some latitude in continuing with their existing liability

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structures, both for reliefs over and above those provided for in the permanent provisions of the directive and for taxing activities which the directive said should be relieved.
Article 28 is the provision in the directive containing the transitional provisions. It is under paragraph 2 of that article that we are maintaining our existing zero rates.
The conditions attaching to the continuation of the zero rates are, first, that they were in force on 31 December 1975 and, secondly, that they satisfy the conditions that they are, to quote from the directive—
"for clearly defined social reasons and for the benefit of the final consumer"
On the basis that those two conditions are satisfied, our zero rates can be maintained for an unspecified period. This is because it requires the unanimous decision of the Council of Ministers to alter or abolish these transitional provisions. Nevertheless, the directive lays a duty on the Commission to review the transitional reliefs every five years and to propose measures required to ensure their progressive abolition. The Commission has been carrying out its first five-year review, but so far it has made no formal proposals to the Council. Any such proposals would take the form of a draft directive, but, as I have indicated, the United Kingdom Government would not agree the directive if it contained any unacceptable measure.
The immediate challenge to some of our zero rates, including that applying to non-domestic construction, does not come from the Commission's review of the transitional provisions but from its belief that these particular zero rates do not satisfy the condition in the second directive that exemptions with refund must be
"for clearly defined social reasons and for the benefit of the final consumer".
The Commission argues that supplies of new office blocks, shopping centres, and so on are not for clearly defined social reasons and that they are for the benefit of other businesses—the financial and property sectors in particular—rather than for the benefit of the consuming public generally. The Government — I stress this—do not accept those assertions and arguments. We have reminded the Commission that nothing was said in 1977 about any of our existing zero rates being contrary to the directive, and indeed the United Kingdom accepted the sixth directive on the basis that all our zero rates might continue, if we so wished, until the end of the transitional period, whenever that might be. Our zero rates pre-dated our accession to the Community and nothing was said then, on accession, about any of them being in breach of Community requirements.
The Government's views to this effect have been made fully clear to the Commission, and there the matter rests at present. It is for the Commission to decide the next step. If it wished to proceed with a challenge to any of our zero rates, its next step would be to issue a reasoned opinion under article 169 of the treaty of Rome.
We have strongly urged the Commission not to take this formal step, which would lead to proceedings against us in the European Court. Nevertheless, unlike the position on the ending or phasing out of the transitional provisions which requires unanimous consent, this is essentially a legal matter, the proper interpretation of the directive, and neither the United Kingdom Government nore any other Government of the Community can prevent the Commission going forward to the court if it so decides. We
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hope that it will not, but it is not within my power to give the assurance that my hon. Friend has sought, as I am sure he will understand. I do not propose to speculate about the Government's reaction if our hopes — that the Commission takes no action—are not realised.
My hon. Friend has spoken about the possible effect on the construction industry and its clients if it were to lose the zero rate for non-domestic work. Having seen a reference in Monday's edition of The Times to builders and developers facing a possible tax bill of £700 million, I asked for that report to be checked urgently. I am advised by Customs that that is an unrealistic figure because it takes no account of the ability of the construction industry's customers to deduct the VAT charged as input tax. Moreover, much would depend on the precise arrangements in any regime to replace the existing zero rate structure.
Again, I do not think that it would be appropriate to speculate on the various possibilities. Like my hon. Friend, I have seen the recent report by the economists advisory group, consultants to the National Federation of Building Trade Employers, and noted its conclusion. Although estimates are very uncertain partly because of the lack of basic data and partly because of all the variations on a theme that are possible, I would not quarrel to any major extent with the figures in the report, which showed that charging VAT on non-domestic construction would yield tax in a range of £120 million to over £300 million per annum. Having mentioned the National Federation of Building Trade Employers, perhaps I should add that I am in touch with it and that I have agreed to meet a deputation from it in about a fortnight's time, when I shall be willing to discuss all these matters.
As I am sure my hon. Friend will recognise, I can give no assurances or make any other comment about the future tax treatment of non-domestic construction with the Budget less than a fortnight away. But the Government are fully seized—I say that with great deliberation—of the importance of this issue to the construction and property industries, and my right hon. Friend the Chancellor of the Exchequer will not make any move to change the present VAT regime without the most careful consideration of all the arguments and implications. I shall let my right hon. Friend know what has been said in this debate about the construction industry, an important section of our economy.
Mr. Heddle: My hon. Friend's reply will give the construction industry the assurance for which it is looking, that it has in my hon. Friend a doughty fighter, who is clearly aware of the value of the construction industry to the entire economy. He argued fairly that under the directive the EC is bound to review the matter every five years. Five years from 1977 brought us to 1982, and we are now in 1984. Would he be kind enough to speculate—if that is the right word in the circumstances—if the form of proceedings did take place, about the number of years' grace that would be given before the VAT would be levied? Would there be a further five-year review, or would the VAT be levied some time between the date of the infraction proceedings and the end of the five years?
Mr. Hayhoe: My hon. Friend tempts me to venture into interesting pastures, but I think that he will appreciate the unwisdom of my moving in that direction. I do not think I can ponder on what may or may not happen. I

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thought it was important to say what options are open to the Community and what the requirements are under the various provisions of the treaty and the directives, and also
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to make absolutely clear the position of the United Kingdom. It would be wrong for me to go beyond the specific points I made on those matters.
Question put and agreed to.
Adjourned accordingly at twenty minutes to Twelve o' clock.