Commons Sitting of 25 July 1984

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

    Human Rights (USSR)
    Mr. Sumbergasked the Secretary of State for Foreign and Commonwealth Affairs whether he has received any response to his representations to the Soviet Foreign Minister earlier in the current month regarding individual cases of abuse of human rights in the Union of Soviet Socialist Republics.
    The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): Regrettably there has been no Soviet response to my right hon. and learned Friend's representations.
    Mr. Sumberg: Is my hon. Friend aware that from 1 August the Soviet Union will abolish prepaid customs duty parcels from the United Kingdom, and that that will make it extremely difficult to send clothing to Soviet citizens? Will my hon. Friend undertake that that matter will be raised at the Universal Postal Congress in Hamburg at the end of July and that strong protests will be made about it?
    Mr. Rifkind: Several matters will be raised at the Universal Postal Congress. We shall give thought to my hon. Friend's suggestion.
    Mr. Bell: I accept the disappointing response that the Minister has given, but does he agree that while we require harmonious relations with the Soviet Union, they are not mutually exclusive from representations on human rights? Notwithstanding that disappointing response, will the Minister give the House an assurance that that subject will not be forgotten in future discussions?
    Mr. Rifkind: The hon. Gentleman is correct. Not only are those subjects not mutually exclusive, but, as Great Britain and the Soviet Union are signatories to the Helsinki agreement, it is right and proper that any failure to observe the responsiblities incurred under that agreement should be drawn to the attention of the country concerned.
    Mr. Harris: Will my hon. Friend bring to the notice of the Soviet authorities, particularly the ambassador in London, the concern felt by many Christian groups about the welfare of Valeri Barinov, a gentleman being held in Leningrad psychiatric hospital, and bring home the concern felt about people being held throughout Russia for their Christian views?
    Mr. Rifkind: My hon. Friend has rightly drawn attention to the persecution of individual Christians and Christian groups. When my right hon. and learned Friend
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    the Secretary of State was in Moscow, he raised the case of Father Gleb Yakunin with the Soviet authorities. We must also use available opportunities to draw to the Soviet Union's attention other individual cases that may be important.
    Mr. Campbell-Savours: While everyone should support Government representations to the Soviet Union, how consistent is the British position on this matter? Have we made representations to the Government of Oman on the treatment of Mr. Robin Walsh in a prison in Oman——
    Mr. Speaker: That is very wide of this question, I am afraid.
    Mr. Campbell-Savours: I spy strangers.
    Mr. Speaker: Order. If the hon. Gentleman persists, that will merely take time out of Question Time.
    Mr. Campbell-Savours: I spy strangers
    Notice being taken that strangers were present, MR. SPEAKER, pursuant to Standing Order No. 136 (Withdrawal of strangers from House), put forthwith the Question, That strangers do withdraw.
    Question negatived.
    Mr. Anderson: The Foreign Secretary will be aware of the change in the Soviet Union's penal code under which those who come to the end of a period of detention may be subject to automatic further custody. For example, that could happen to Vladimir Poresh, whose term of custody should finish on 1 August. Will the Minister make representations on that, and can he be specific about the precise representation at the Universal Postal Congress in relation to interference with mail from this country to the Soviet Union?
    Mr. Rifkind: The hon. Gentleman is right to draw attention to one of the more distasteful new policies introduced by the Soviet authorities — the automatic resentencing of those whose sentences have been properly and fully completed. With regard to the Universal Postal Congress, there have been allegations of interference with mail, and there are various other problems of the kind to which my hon. Friend the Member for Bury, South (Mr. Sumberg) referred. Not only the United Kingdom but other countries will use the opportunity of the Universal Postal Congress to draw attention to those abuses.

    Middle East
    Mr. Waltersasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress towards a comprehensive peace settlement in the middle east.
    The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): We are concerned at the continuing threats to stability in the middle east. As my right hon. and learned Friend and his European Community colleagues made clear in their statement on 27 March, we are ready to support any constructive steps by the parties to the Arab-Israeli dispute and to do what we can to help end the Gulf war and bring stability to Lebanon.
    Mr. Walters: My hon. Friend will no doubt wish to consider the implications of the Israeli election results. Bearing in mind that the United States' foreign policy will

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    continue to be paralysed until after the presidential elections, should Europe not now take a more active role and, in particular, should not the European Community reconsider the favoured treatment that is given to Israel while that country remains in defiance of international law both on the West Bank and in south Lebanon?
    Mr. Luce: I agree with my hon. Friend that it is too early to judge the outcome of the Israeli elections—we watch the elections with interest. In the meantime, he will know that the Foreign Ministers of the European Community issued a strong and clear statement on 27 March about the Arab-Israeli dispute. It made our position absolutely clear, not only about the principles which we regard as of fundamental importance for a settlement, but about the importance of non-acquisition of territory by force—that is resolution No. 242. My hon. Friend will find that statement robust and clear.
    Mr. Concannon: Is it the Government's view that progress towards a comprehensive peace settlement in the middle east means the involvement of the Palestine Liberation Organisation in any discussions?
    Mr. Luce: The statement of the European Community shows that the PLO should be associated with any discussions that take place. Everybody knows that the PLO is in an uncertain position. We are watching its developments carefully. I believe that a clear statement by it of the right of Israel to exist within secure boundaries and a clear renunciation of terrorism would help the peace process.
    Mr. John Mark Taylor: Will my hon. Friend bear in mind in any deliberations concerning the West Bank, or Judea and Samaria, that secure boundaries for Israel are of considerable importance and the fact that there is already a Palestinian state in the middle east, namely, Jordan?
    Mr. Luce: No, Sir. We have a clear view of this matter. It is absolutely true and right that Israel has a right to exist within secure boundaries, but we regard the West Bank and Gaza as occupied territories and the United Nations resolution No. 242 supports that view. At the same time, we regard it as of fundamental importance to any prospect for a settlement there that the Palestinians have the right to self determination. That is a cardinal principle.
    Mr. Janner: Has the Minister observed the curious attachment of the hon. Member for Westbury (Mr. Walters) and others to every totalitarian regime, feudal monarchy or other dictatorship in the middle east as opposed to the only democracy there? Will the Minister reaffirm that the Government's policy on the middle east is to create a bridge, where they can, between the United Kingdom and the democracy of Israel, whoever is elected to office in that country?
    Mr. Luce: The hon. and learned Gentleman is doing an injustice to my hon. Friend the Member for Westbury (Mr. Walters), who takes a close and keen interest in that part of the world. He, like the Government takes the view that Israel has a right to exist within secure boundaries. It surely must take more than one party to reach an agreement and it is surely in Britain's interests as well as those of Israel and Arab countries to see stability in that part of the world. That also means a stable Jordan. The Government believe that it is very important that the parties concerned, including the new Israeli Government, take a determined lead in the coming months to try to get a basis on which to have a dialogue.
    Mr. Marlow: Is it realistic for the EEC to continue to give favoured treatment to Israel while Israel continues to build settlements on the West Bank in defiance of international opinion, and to occupy the Lebanon, and while it ignores completely the rights of Arabs and Palestinians under its domination?
    Mr. Luce: I do not believe that it is true to suggest that we are giving Israel favoured treatment. Our posture and view about the basis for a settlement are clear. We have made our view clear about the occupied territories, the West Bank and Gaza. We do not believe in the acquisition of territory by force. That must be a cardinal aspect of any prospect of progress towards a peaceful settlement.
    Mr. Anderson: Is it not clear that, due to lack of progress, frustrations and danger are increasing in the middle east? Do the Government see a positive role for the Soviet Union in that process, and if so, what are they doing about it?
    Mr. Luce: I must agree with the hon. Gentleman's first remark. There is serious danger of continuing drift. To the extent that that happens, there will be increasing despair. I must state clearly that it must be in the interests of the Israelis, the Palestinians and the Arabs to make progress on this longstanding problem in the coming months. With regard to the Soviet Union, I have made the view known before that if there is to be a comprehensive peace settlement in that part of the world, I believe that it is in everyone' s interests that the Soviet Union should play a constructive role.

    Falkland Islands
    Mr. David Youngasked the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Spanish Government concerning their communiqué linking Gibraltar and the Falkland Islands.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Ray Whitney): We have expressed our regret to the Spanish Government at the terms of the joint Spanish-Argentine communiqué which was issued on 13 June.
    Mr.Young: Have not the Government rather fuelled such a statement by the difficulties of the people in Gibraltar and the Falklands in gaining British citizenship, and because we have not implemented the main recommendations of the Shackleton report or created the necessary economic climate in Gibraltar after the removal of the dockyard? Will the Minister consider that we should be talking about peoples and not land masses? Before we fall into the same folly overHong Kong, will he consider the lessons to be learnt from the two cases that I have mentioned?
    Mr. Whitney: The answer to the hon. Gentleman's first question is, no, Sir. We have taken care of the citizenship requirements of both those territories. We have followed the recommendations of the Shackleton report, about which we are frequently criticised by the Opposition, in terms of constructing the airfield on the Falkland Islands. We have consistently given great support to Gibraltar, notably in the civilianisation of the dockyard.
    Mr. McQuarrie: Will my hon. Friend make it perfectly clear to the Spanish Government that there is no question of the linkage of Spain and Gibraltar or the accession of Spain to the Common Market until Spain implements the Lisbon agreement in full? Can he give a firm undertaking, as given by the Prime Minister and other

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    Foreign Ministers, that this accession will not take place until the restrictions against the people of Gibraltar are completely lifted?
    Mr. Whitney: We accept that the Lisbon agreement is the basis of the way forward to resolving the differences between the United Kingdom and Spain over Gibraltar. I endorse the point made by my hon. Friend that, whilst we support Spanish accession to the Community, it would be inconceivable for Spain to join the Community while not allowing ordinary traffic to cross the frontier with Gibraltar.

    Diplomatic Immunity
    Mr. Andrew MacKayasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on his review of diplomatic immunity granted to representatives at the Court of St. James.
    Mr. Rifkind: My right hon. and learned Friend made a detailed statement on international terrorism and the Vienna convention to the Select Committee on Foreign Affairs on 18 July. A copy has been placed in the Library of the House.
    Mr. MacKay: When my hon. Friend reviews diplomatic immunity, will he take into account the fact that it is widely believed that substantial amounts of drugs are coming into the country through diplomatic bags? Anything that he can do to intervene helpfully will considerably aid the fight against this trade in death.
    Mr. Rifkind: My hon. Friend will be aware that Her Majesty's Government are worried about any abuse of the diplomatic bag that may be taking place. That is being considered as part of the review that my right hon. and learned Friend has announced.
    Mr. Maclennan: Has the Minister or any of his colleagues seen fit to make representations to the Government of Pakistan about this?
    Mr. Rifkind: I am not aware of any specific representations to the Government of Pakistan.
    Sir John Biggs-Davison: Are not the ranks of many foreign missions swollen by numbers of people who are not diplomats but subversive agents? Will Her Majesty's Government seek to ensure that the level of representation here is about the same as in the corresponding overseas country?
    Mr. Rifkind: We are naturally concerned if anyone in this country ostensibly as a diplomat is found to be carrying out functions inconsistent with his diplomatic status. However, it is not unreasonable that some missions should have larger numbers of staff in the United Kingdom than we have in their countries. London is a great international centre, and as such is often considered to be one of the most important areas of diplomatic representations in the world.

    Law of the Sea Convention
    Mr. Deakinsasked the Secretary of State for Foreign and Commonwealth Affairs what consultations he has had about the United Kingdom signing the United Nations law of the sea convention; and if he will make a statement.
    Mr. Rifkind: The United Kingdom has had consultations with a wide range of countries on this subject. Our policy towards the convention remains that
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    improvements to the mining regime are required. We shall be continuing efforts to secure these improvements at next month's meeting of the preparatory commission.
    Mr. Deakins: Is it not in our economic, strategic and political interests to sign the convention by 10 December 1984? Is the Minister not aware that the bulk of British industry would like us to sign? Why, therefore, does he alone continue to kow-tow to the White House?
    Mr. Rifkind: The hon. Gentleman has simply not studied the matter if he thinks that Britain is alone in this respect. No fewer than 35 countries have yet to sign the convention, including half the members of the European Community. We are seeking improvements to the convention. Even if we have not signed it by December, the treaty, once ratified, will be open to accession by any country. If in the future we are able to achieve substantial changes to the present convention, that will be the time to consider whether we shall be a party to it.
    Mr. Hill: Is my hon. Friend aware that only last week the Department of State in Washington stated that it would not be signing the convention and, furthermore, that it would put up various options to the private sector? Is he aware of this latest United States move?
    Mr. Rifkind: That statement is in accordance with what the united States has previously said. Many countries who have signed the convention will not necessarily be ratifying it. More than 100 countries have signed it, but so far only 12 have ratified. It is not the United Kingdom's normal practice to sign a convention unless we feel able to ratify it in due course.
    Mr. Douglas: Does the Minister accept that the major obstacle for the United Kingdom is the deep ocean mining provisions? Which firms in the United Kingdom are taking advantage of existing legislation, or are they waiting until the United Kingdom clears this matter up by acceding to the provisions of the treaty?
    Mr. Rifkind: I am not aware of any United Kingdom entity with an interest in deep seabed mining which would wish to take advantage of the law of the sea convention's final act enabling registration as a pioneer investor. While the hon. Gentleman is correct in saying that the controversial part of the convention is the deep seabed mining regime, the provisions for compulsory transfer of technology and the expense involved are deeply disliked by British industry, for reasons which the Government fully share.
    Mr. Cyril D. Townsend: Does my hon. Friend appreciate the Commonwealth support for this convention and the advantages that it will bring to the Department of Energy, the Department of the Environment in terms of pollution control and the Ministry of Defence? Does he agree that in this area we do not have to follow the United States slavishly, bearing in mind the number of extremely influential Americans who are wholly opposed to President Reagan's attitude to the convention?
    Mr. Rifkind: As I have already mentioned, no less than half the European Community, and about 35 countries in total, have not yet thought fit to sign the convention. My hon. Friend is correct in saying that, apart from deep seabed mining, many parts of the convention are perfectly acceptable to the United Kingdom as well as to other countries. The difficulty which this and many

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    other Governments face is that one must either accept the convention as a whole or reject it. It is not possible to accept only those parts that might be thought suitable.
    Dr. M. S. Miller: Is the hon. Gentleman aware that the convention is deficient in at least one aspect, in that no mention is made of the men and women who sail on the seas, nor is there any mention of their conditions or the dangers involved in their work? Before he signs the convention—and I urge him to do so—will he make representations on their behalf?
    Mr. Rifkind: If the hon. Gentleman believes that the existing provisions of the convention are inadequate, I hope that he will give full support to the Government's attempts to amend them.
    Mr. Anderson: Is the Minister aware that there are precedents when we have signed conventions and not gone on eventually to ratify. The Minister is well aware that this is a package, a balance of rights and a crucial element in the North-South dialogue. Does he place any weight on the fact that the CBI, BP, Shell and the General Council of British Shipping are very much in favour of our signing the convention? If we do not do so by 10 December, we shall lose our full voting rights in the preparatory commission. Is this not another example of us showing our indifference to the Third world, ditching United Kingdom maritime interests and following the narrow interests of United States mining concerns?
    Mr. Rifkind: The hon. Gentleman said that there are precedents when we have signed a treaty and not subsequently ratified it. That may be the case where there have been subsequent developments that have made it inappropriate to ratify a treaty or convention, but I am not aware of any precedent when Her Majesty's Government have signed a treaty or convention in the knowledge that they would be unable to ratify it because of its terms. That would be an unattractive principle in international law and not one which the hon. Gentleman would wish to commend to the House.

    Hong Kong
    Mr. Parryasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the progress of the talks over the future of Hong Kong.
    Mr. Luce: The talks on the future of Hong Kong are progressing satisfactorily. The 19th round of formal talks was completed earlier today in Peking. They were once again described as "useful and constructive" by both sides. The working group continues to meet full-time between the formal rounds in order to consider documents submitted by the two sides. It will take a short recess between 31 July and the week beginning 13 August. My right hon. and learned Friend left on a further visit to Hong Kong and Peking earlier today.
    Mr. Parry: In future meetings with the Chinese authorities, will the Foreign Secretary make it clear that the views and statements by members of UMELCO do not represent the views of the people of Hong Kong, and that it speaks only for the ruling and wealthy classes? Should not more notice be taken of the ordinary grass roots organisations, because they represent the real people of Hong Kong?
    Mr. Luce: The hon. Gentleman is being extremely unfair to the members of UMELCO, who, under both Conservative
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    and Labour Governments, have been appointed to undertake certain responsibilities. They fulfill those functions with a high sense of duty and responsibility, and a tribute should be paid to them for that. Throughout the past several months the Government have been making, as the hon. Gentleman knows, a sustained effort to ensure that we are aware of the views of the vast cross-section of people in Hong Kong. Each time that I have gone out there I have taken the opportunity to meet a different part of that cross-section. Reports come back to us frequently from all parts of the Hong Kong community.
    Sir Peter Blaker: Is my hon. Friend aware that any agreement with China about Hong Kong w ill be unacceptable to the House unless it assures continuous British sovereignty and British rights of administration over Hong Kong until 1997?
    Mr. Luce: My right hon. Friend is right to refer to the fact that at the end of the day it is the British Parliament that has to take the decision whether the proposals that we hope to be able to recommend are acceptable. I can reaffirm clearly that it is the British Government' s firm intention to retain responsibility for Hong Kong until 1997.
    Dr. Bray: Does the Minister agree that it would not be in the interests of China to seek an agreement so weak that it would destroy confidence in Hong Kong? Will he deny reports that no substantive progress has been made towards a detailed agreement?
    Mr. Luce: On the latter point, the very fact that there is a working group that has been meeting day-by-day in Peking gives some measure of the fact that we are giving a lot of attention to the prospect of a detailed agreement. Progress is being made, but there is still a way to go. It is right, in order to reassure the people of Hong Kong about their future and the continuity of their way of life, that there should be as much detail as possible in any agreement that we can reach with the Chinese. That will provide the best assurance for them for after 1997.
    Sir Paul Bryan: Will my hon. Friend comment on reports in the papers of the proposal by the People's Republic of China that some Anglo-Chinese commission might be set up soon, presumably to supervise the gradual handover of power? Does he not agree that although this might be suitable 12 years hence, just before 1997, it is utterly inappropriate now and should be not just resisted but turned down?
    Mr. Luce: I have seen those alleged proposals from the Chinese. However, it will not come as any surprise to my hon. Friend to know that when I visited Hong Kong recently I found that the cross-section of the public with whom I was in touch had their own views to express on this subject. My right hon. and learned Friend the Foreign Secretary and I took them very carefully into account. This whole issue must be seen against the background of the British Government's very firm intention — which I cannot restate too often—to maintain responsibility until 1997.
    Mr.Canavan: Is the Minister aware that the recent Green Paper on the government of Hong Kong is seen by many democrats in Hong Kong and elsewhere as at best a sop and at worst an insult to the intelligence of the vast majority of the people of Hong Kong? Why are the British Government so unwilling to introduce an entirely directly elected legislative council fully to represent the views of the people of Hong Kong and why do they continue a

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    system of colonial patronage that is seen throughout the whole world as one of the last bastions of British imperialism?
    Mr. Luce: I do not think that the hon. Gentleman has fairly reflected the views of the people of Hong Kong. As a result of the Green Paper which the hon. Gentleman has in his hand they have now been given two months in which to give their views about the proposals. The hon. Gentleman will note that the Green Paper—green for consultation—takes the stages forward very gradually. The Government are committed to the evolution of representative government. There is an element of direct election at local government level, involving urban, district and regional councils, but we are looking towards two stages in the 1980s—not in the 1990s—which allow for a process of indirect election, and which we feel will fit the situation in Hong Kong in the next few years.
    Mr. Adley: Regardless of those who have a vested interest in trying to sow discord between Britain and China over Hong Kong, does my hon. Friend agree that, despite the difficulties, it would help if as much detail as possible could be written into the agreement between the two Governments? Does he further agree that, although the fears in Hong Kong are understandable, if some form of joint liaison commission were set up at a reasonably early date between the British and Chinese Governments it might ensure some sort of eventual smooth transition?
    Mr. Luce: I agree with my hon. Friend. As I have said, we strongly feel that the best assurance for the people of Hong Kong, who are naturally anxious and uncertain about their future, is that there should be as much detail as possible in that agreement so that they can see that the way of life which they are used to and which has created Hong Kong's prosperity and stability can continue. That is why we hold the very strong view that it is essential to go on working, week after week, to try to persuade the Chinese that it is in their interests to see that, let alone the interests of the people of Hong Kong.
    Mr. Healey: I agree with the hon. Gentleman that the confidence of the people of Hong Kong in the reliability of any agreement that is reached is of paramount importance both to our Parliament and to the Government of Peking. However, does the Minister agree that there may be some advantage in some sort of machinery through which Peking is made more directly aware of the state of feeling in Hong Kong? A commission composed of British and Chinese representatives might perform a useful role, provided that it is not given any effective authority before the handover takes place.
    Mr. Luce: I have noted the right hon. Gentleman's view, and I am sure that my right hon. and learned Friend the Foreign Secretary will also note it. I do not think that anything that the right hon. Gentleman has said contradicts our view that if there is to be any form of contact with the Chinese Government about the future with a view to contributing to a smooth transition in 1997, nothing must be done to undermine in any way the authority of the British Government, who firmly intend to remain in charge and to maintain responsibility until 1997.

    Argentina
    Mr. Yeoasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the United Kingdom's relations with Argentina.
    Mr. Whitney: As my right hon. and learned Friend told the House on 20 July, we regret that the Argentine Government brought the talks in Berne last week to a premature end. We shall obviously need to assess the implications of the Argentine attitude, which caused the breakdown. We continue to take the view that it is in the interests of all concerned to seek the restoration of more normal relations between Britain and Argentina and will stand firmly by our commitments to the Falkland Islanders.
    Mr. Yeo: As the strained relations between ourselves and Argentina are leading not only to the imposition of a severe financial burden on this country but are in danger of distorting our whole defence strategy, may we have an assurance that the Government will make every possible effort to bring about a resumption of discussions with Argentina, notwithstanding the fact that the Argentines were responsible for the breakdown of last week's talks?
    Mr. Whitney: I am glad that my hon. Friend recognises where the fault lay for the breakdown of the talks. We shall certainly seek the normalisation of relations with Argentina, as I said in my main reply, but we must also retain our commitment to the Falkland Islanders and proceed with the economic development of the Falklands.
    Mr. Dalyell: Should we not be deeply concerned about the authoritative reports coming out of Washington, from Dr. Robert Scheinn and others, that a formidable rearmament programme is going in Argentina? What are we to make of the battalion amphibious exercises at night? What we are to make of the Syhawks that are being armed with more Exocets? [Interruption.] Formidable rearmament is going on. What is the Government's assessment of that? As they will not give an assessment in answer to written questions, will the Minister give an undertaking to make a statement on the matter?
    Mr. Whitney: Our views on the continued sale of arms to the Argentine Government are well known. We keep the matter well under survey and we are satisfied that all our allies who are potential arms suppliers are well appreciative of our concerns—concerns which the hon. Member for Linlithgow (Mr. Dalyell) also expresses.
    Mr. Dalyell: In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

    East-West Relations
    Mr. Tom Clarkeasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on East-West relations.
    Mr. Rifkind: We and our allies and partners will continue to look for opportunities to make progress on arms control and on a whole range of other international issues with the Soviet Union and countries of eastern Europe. We continue to believe that openness and willingness to do business based on firmness and care for our security is the right approach.
    Mr. Clarke: While supporting the right to free trade unionism in this country as well as in Poland, may I ask the Minister whether he accepts that the recent amnesty in that country represents a step forward in reconciliation, nationally and internationally? Does it remove impediments to normal diplomatic and trading relations? Will Her Majesty's Government respond positivly to those actions and encourage the United States to do likewise?
    Mr. Rifkind: When martial law was first introduced in Poland, Western countries said that one condition which would make progress with our relations possible would be the release of political prisoners. If the amnesty which has been announced leads to the release of all political prisoners, that will undoubtedly help the normalisation of relations between the West and Poland. European Community heads of foreign ministries yesterday issued a statement welcoming the amnesty, and we look forward to all the Polish prisoners being released.
    Mr. Peter Bottomley: As the Helsinki agreement between East and West linked human rights with peace, should we not go on reminding those countries behind the iron curtain with which we have diplomatic relations that the way in which they are treating human rights—by saying that the matter is not only none of our business but is none of their own people's business — is an impediment to peace far greater than the question of armaments on either side?
    Mr. Rifkind: My hon. Friend is correct. Perhaps one of the most objectionable practices has been the incarceration in the Soviet Union of those who were seeking to monitor the observance by the Soviet authorities of the undertakings into which they had entered.
    Mr. Healey rose——

    Swedish Embassy, Tehran
    Mr. Johnstonasked the Secretary of State for Foreign and Commonwealth Affairs whether the British consular representative at the Swedish embassy in Tehran is involved in trade promotion.
    Mr. Luce: Yes. Two of the 16 United Kingdom based staff of the British interests section in Tehran are directly concernd with commercial work. This number is to be increased to four later this year.
    Mr. Johnston: The Minister will remember that he said in answer to an earlier question that the Government would do all that they could to end the Gulf war. Does he agree that our trade with Iran is now greater than it was in the days of the Shah—this trade is clearly being actively promoted by the Government—and that this strengthens the Khomeini regime and enables it more actively to pursue the war and its internal repression?
    Mr. Luce: It is true that our trade with Iran is quite strong, as it is with many other countries with the policies of whose Governments we do not necessarily agree. We have ordinary commercial trade with Iran, as we have incidentally, with Iraq, but it is not right to suggest that that in itself is contributing to the war. Nothing could be further from the truth. All our objectives and aims as a Government are concentrated on trying to work with other parties to bring peaceful mediation between the two parties. That is our priority. That is why we remain neutral and that is why we concentrate on not selling lethal equipment.
    Mr. Healey: On a point of order, Mr. Speaker. I think that you will recall that I rose——
    Mr. Speaker: Order. I do not want to pre-empt the right hon. Gentleman, but he was not in the Chamber when we had a good run on Question No. 1, which was concerned with human rights, in which the Opposition Front Bench intervened. I felt it right, in fairness to Back Benchers, to move on to the next question, the House having had a good run on Question No. 1.
    Mr. Healey: Further to that point of order, Mr. Speaker. Question No. 8 is concerned with East-West relations, the most important single issue facing Britain and the world, and not with human rights. You will be aware that I rose to intervene on that issue, having intervened only once in previous questions. Is it not contrary to precedent that you decided not to recognise my rising?
    Mr. Speaker: Order. We have done rather badly with questions today. We have taken only nine questions. The Opposition Front Bench has intervened no fewer than four times, which takes up rather more time. I think that the right hon. Gentleman will accept that I am concerned to ensure that Back Benchers have a fair share share of Question Time. We discussed human rights at some length on Question No. 1.
    Mr. Healey: On a point of order, Mr. Speaker.
    Mr. Speaker: I shall take the right hon. Gentleman's point of order later.
    Mr. Healey: When will you take my point of order, Mr. Speaker.?
    Mr. Speaker: Immediately after Question Time. It will take time out of Question Time if I deal with points of order now.

  EUROPEAN COMMUNITY

    Food Subsidies
    Mr. Lyellasked the Secretary of State for Foreign and Commonwealth Affairs what representations he has received concerning the need for the European Economic Community to phase out export subsidies on food; and if he will make a statement.
    Mr. Rifkind: We are well aware of the strength of feeling in the United Kingdom and among some of our trading partners about the level of export refunds made available by the Community. The United Kingdom has consistently argued that European Community agricultural prices should be brought more into line with those on the world market, which would reduce the need to dispose of surpluses by subsidised export.
    Mr. Lyell: When is this likely to occur in the grain market?
    Mr. Rifkind: My hon. and learned Friend will be aware that this year, for the first time, the decision taken by the Agriculture Ministers on prices involved the freezing of certain prices and the reduction of others. We hope to see the principle extended to areas that have not yet had the benefit of this much more sensible approach.
    Mr. Foulkes: What is the Minister's response to the increase in farm spending that was announced by the Commission yesterday? Does it not go against the

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    Government's policy? What do the Government think about the proposal to dump more cheap butter on world markets and the possibility of disputes with New Zealand and the United State that that will cause? Will the Minister confirm the reports that only a proportion of the cash due to farmers will be paid in the current year?
    Mr. Rifkind: In so far as the Commission's proposals, if implemented, would contradict the present 1 per cent. ceiling on Community expenditure, the United Kingdom is and will remain entirely opposed to them. The Commission has accepted that its proposals would contravene the position of the Council of Ministers on the 1 per cent. ceiling. We hope that the Commission will approach the matter in a responsible manner. Any expenditure incurred which goes beyond the ceiling that has been imposed should be unacceptable to the United Kingdom and to all other member states.
    Mr. Amery: While fully accepting my hon. Friend's reply, may I congratulate him on the remarkable success that he and his colleagues seem to have achieved in tapping the job promotion element of the social fund? Does this not more than compensate for any loss that we may have suffered on the subsidising of exports?
    Mr. Rifkind: For a number of years the United Kingdom has been a main beneficiary of the social fund, and much of the credit for that must go to those in the various Departments who have identified suitable schemes that have been fully in accordance with the criteria. The United Kingdom has been, and I hope will continue to be, a major beneficiary in this area.

    Co-operation and Harmonisation
    Mr. Dykesasked the Secretary of State for Foreign and Commonwealth Affairs when he expects the Council of Ministers to implement the decisions on greater cooperation and harmonisation in the Community following the Fontainebleau summit of 25 and 26 June.
    Mr. Rifkind: The Irish Presidency is consulting other member states about the formation of an ad hoc committee, as proposed at the Fontainebleau European Council, to look at ways of improving European co-operation. The United Kingdom will be participating in this work.
    Mr. Dykes: Notwithstanding the sudden absence of the shadow Foreign Secretary from the Opposition Front Bench—[HON. MEMBERS: "Where is he?"]—does my hon. Friend agree that, at least on the Conservative Benches, there is now a strong spirit of European co-operation? [Interruption.] Does he also agree, remembering that the Community was established in 1957, that to proceed with the rapid implementation of the European passport—as an option which countries may adopt in addition to their national passports—would not be too bold or rash a step?
    Mr. Rifkind: My hon. Friend will have been encouraged by the unanimous response from the Government Benches to his initial comment. I remind him that there is no proposal for a European passport. The British passport will be retained, as will the passports of all the other member states. There are proposals for a common format of the kind described by my right hon. and learned Friend the Home Secretary.
    Mr. Allan Rogers: When will the Conservative party drop its hypocrisy about Europe? We hear talk of co-operation and friendliness, but the Foreign Secretary could not negotiate his way out of a paper bag and the Prime Minister thrives on confrontation in all her actions. When will we hear the end of the continual claptrap which the Foreign Secretary brings back, and when will he turn his mind instead to sorting out the basic problems of the European Community?
    Mr. Rifkind: We need no lectures from the Labour party on co-operation and friendliness. Those qualities are not the characteristics of the Labour party that have most impressed themselves upon the general public.
    Sir Anthony Meyer: Does not the great success of the Departments in securing excellent contributions from the social and regional funds illustrate the importance of making the best of our membership of the EEC instead of whingeing ceaselessly about the colour of passports?
    Mr. Rifkind: The Government have always made it clear that we hope to see the United Kingdom's net contribution to the Community reduced, at least in part by additional expenditure within the United Kingdom. In so far as the items to which my hon. Friend refers help to meet this objective, they are to be increasingly welcomed.
    Mr. Johnston: Will the Minister confirm that the paper presented by the Prime Minister at Fontainebleau represents the Government's official policy on the matters referred to by the hon. Member for Harrow, East (Mr. Dykes)?
    Mr. Rifkind: Yes.

    Common Market Reforms
    Mr. Teddy Taylorasked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made in seeking Common Market reforms since the conclusion of an outline agreement at the Fontainebleau summit; and if he will make a statement.
    Mr. Rifkind: At the Economic and Finance Council on 9 July Finance Ministers set in hand the work to implement the agreed text on budgetary discipline. The Foreign Affairs Council on 23 and 24 July examined the Commission's draft text of a new own resources decision embodying the budgetary corrective mechanism. Work on both these issues will continue in parallel.
    Mr. Taylor: A third of every penny spent by the Commmon Market is spent on destroying or dumping surplus foodstuffs. Is my hon. Friend not concerned about the decision of the Commission yesterday to agree to even more spending on the dumping of cheap butter and other foods in Russia and elsewhere when the Commission has no authority from the Council of Ministers for such spending? What powers do our Government or any other national Government have to prevent the Commission spending illegally?
    Mr. Rifkind: I share my hon. Friend's anxiety about the Commission's proposals. In regard to powers to prevent action such as it contemplates, in so far as its proposals go to the Council of Ministers, the United Kingdom is able to take action in the normal way. Some of its proposals might be dealt with by the Management Committee, in which decisions can be overturned only by

    981
    a two thirds vote against. I assure my hon. Friend that the United Kingdom will oppose the proposals, but I cannot anticipate whether the two thirds requirement with regard to decisions by the Management Committee will be achieved.
    Mr. Kilroy-Silk: If huge surpluses continue to be amassed, can we not at least ensure that food that is stored in Britain is distributed to people in this country who need it, such as my constituents, who have so little income that food stores in Kirkby are closing down, or is given to the poor of the Third world who are dying of malnutrition and starvation?
    Mr. Rifkind: There are already schemes for the sale of much cheaper butter to hospitals and orphanages in Britain. The Community also has a major food aid programme, which now amounts to about £280 million.
    Mr. Forth: I congratulate my hon. Friend on the Government's firm stand in the latest round of financial negotiations in the EEC. Will he confirm that it is, therefore, all the more important that the financial mechanism for the future control of Community expenditure is made even tighter and more viable, to ensure that we do not have the same runaway expenditure in future?
    Mr. Rifkind: That is our objective. It is worth noting that the Commission's original estimate for expenditure this year of 2·6 billion ecu has already been reduced by one half as the Presidency's request is for only 1·35 billion ecu. We still believe that that is unacceptable and that the Commission should be trying to make further reductions to ensure that the Community's spending stays within its legal ceiling.
    Mr. Buchan: Will the Minister confirm that the cost to Britain of the common agricultural policy is about £6 billion to £7 billion a year above what it would be if we could operate our own agricultural policy? Does that not add up to about £78 a week for the average family's food costs? Is it not time that this nonsense stopped?
    Mr. Rifkind: I cannot accept the hon. Gentleman's figures. He will be aware that if Britain returned to a deficiency payments system that would impose a massive economic burden on British taxpayers.
    Mr. Moate: Has something gone seriously wrong with the Foreign Office? [HON. MEMBERS: "Yes."] Were we not going to stop all this nonsense about cheap food exports to Russia by being tough about Community own resources? Why are we now proposing an increase in those resources when the Commission's proposals increase cheap food exports to Russia at the expense of the British taxpayer?
    Mr. Rifkind: The Commission is free to propose what it wishes. The Government believe that the Council of Ministers must take firm action to ensure that any Commission proposals that are contrary to the legal limits of Community spending are not accepted. The Government intend to take seriously their responsibility in that regard and hope that other Community Governments will do the same.
    Mr. Robin Cook: Is not the reality that the Commission has just decided to ignore the Council of Ministers? Does not its decision to go ahead with unauthorised expenditure, for which the money does not
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    exist, demolish all the promises that we have heard about greater financial discipline? Has the Minister noted that a Commission official is quoted as saying that the decision was taken as a trial of strength? If the Commission believes that being financially irresponsible is a means of showing strength, why on earth should the House agree to vote even more money for the Commission to be even more irresponsible?
    Mr. Rifkind: If the Community Governments respond as the Government intend to respond to this proposal, it will not take effect. The Council of Ministers and member Governments have the power to prevent any of the Commission's proposals which they believe are undesirable and unacceptable.

    Federalism
    Mr. Proctorasked the Secretary of State for Foreign and Commonwealth Affairs what representations Her Majesty's Government have received calling for increased federalism in the European Economic Community.
    Mr. Rifkind: None from European Community member states. But the then President of the European Parliament formally handed my right hon. and learned Friend a copy of the European Parliament's draft treaty on European union on 11 July.
    Mr. Proctor: As my hon. Friend has received no representations from within Britain to go down the road to European federalism, and as there was no mandate last year from our general election for increased measures of European federalism, will it be the Government's policy not to head further down the road to federalism in Europe during the lifetime of this Parliament?
    Mr. Rifkind: The Government have always made it clear that we do not support moves towards European federalism. We believe that the Community has a substantial number of practical problems to address itself to and that it could do a great service to all the people of the Community if it concentrated on those matters for the foreseeable future.
    Mr. Spearing: Will the resolution of the European Assembly, to which the Minister has just referred, be considered by the new ad hoc committee of personal representatives? Will the hon. Gentleman confirm that the establishment of that ad hoc committee was in paragraph 6 of the unpublished presidential communiqué? Was that paragraph expressly assented to by the Prime Minister at Fontainebleau?
    Mr. Rifkind: The agenda of the committee to which the hon. Gentleman referred has not been finalised. The Government are perfectly happy to participate in that committee and to play a constructive part in its deliberations.
    Mr. Jackson: My hon. Friend has made several references to Britain's success in obtaining money from the European social fund. Is there not a risk, in the Government's position on the cost overruns in the 1984 budget, that payments from the social fund may be cut in future?
    Mr. Rifkind: No, there is not such a risk. The sort of expenditure that would be incurred if the overruns were to

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    be financed would not help to reduce the imbalance in the present expenditure of the Community in the way that the United Kingdom believes appropriate, as my hon. Friend knows. The overspend would be caught purely by agricultural expenditure, which already takes far too high a proportion of Community spending.

    Commissioners (United Kingdom Appointees)
    Mr. David Marshallasked the Secretary of State for Foreign and Commonwealth Affairs whether Her Majesty's Government will press for the retention of the right to appoint two commissioners to the EEC.
    Mr. Rifkind: In the interest of a greater effectiveness we believe that, on Portuguese and Spanish accession, the number of commissioners should be limited to 12, that is one per member state. If we cannot secure agreement for this proposal, we shall retain the right to nominate two commissioners.
    Mr. Marshall: The Minister's reply is just not good enough. Does he not agree that Britain really needs two commissioners? Will he confirm that if we have two commissioners he will adhere to the practice of appointing one from the Government and one from the Opposition? When will he announce the appointment or reappointment of our commissioners?
    Mr. Rifkind: The right to nominate commissioners is the prerogative of my right hon. Friend the Prime Minister. That has been true under successive Governments. The Government believe that if Spain were to achieve two commissioners and Portugal one, a total of 17 commissioners would be substantially in excess of what the Community requires and would create difficulties in attracting people of a suitable calibre to the work. I have emphasised that our willingness to reduce the number of commissioners is dependent upon other member states making a similar response.
    Mr. Budgen: Is that not another example of the proposition that an enlarged Community will be a weaker and less cohesive Community?
    Mr. Rifkind: No, it is not. The number of commissioners is a relatively marginal matter compared with the major benefits that will accrue to the European Community as a whole when it represents the greater part of western Europe.
    Mr. Robin Cook: In view of the satisfaction that the Minister took earlier from how well Britain is doing from the social fund, would it not be sensible for the Government to reappoint the commissioner for the social fund, who happens to be the Labour nominee?
    Mr. Rifkind: We always note with interest the Opposition's recommendations in such matters. The hon. Gentleman will be aware of the precedent that the Prime Minister of the day, whether Conservative or Labour, reserves the right to make his or her own decision in the knowledge of the views of the other parties concerned.

    European Union
    Mr. Knoxasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about progress made towards achieving the objectives set out in the solemn declaration on European union made by the Heads of Government at the Stuttgart summit.
    Mr. Rifkind: The recent European Council discussed the future development of Europe and agreed that two ad hoc committees would be set up, which will look at ways of improving European co-operation.
    Mr. Knox: Does my hon. Friend agree that it is essential that Britain should play a full and constructive part in implementing the solemn declaration and that it will be disastrous if we stand on the sidelines while others act?
    Mr. Rifkind: The Government intend to play a full and constructive part in the deliberations on these matters. I assure my hon. Friend that that will continue to be our priority.
    Mr. Marlow: Will the Government review their decision to ask the House to approve an increase in European own resources? As it is patently obvious to everyone that the Community has no wish to live within its current ceiling, what faith can we have in the new ceiling?
    Mr. Rifkind: As my hon. Friend well knows, the Government's recommendation for an increase in own resources will take place only if we are satisfied that the agreement still to be reached on proposals for budgetary discipline meets our requirements and what we believe to be necessary in the interests of the Community.
    Mr. Bowen Wells: Will my hon. Friend describe the form of budgetary discipline currently under discussion?
    Mr. Rifkind: We are concerned that the general statement on the need to control expenditure should be implemented by means of budgetary procedures that will ensure that in future years Community expenditure is kept within the sums determined by the Budget Councils.
    Sir Peter Blaker: What proposals are the Government putting forward for further liberalisation of the internal market?
    Mr. Rifkind: The Government attach substantial importance to the creation of a genuine common market. We believe that there is scope for progress not only in the simplification of frontier controls, but in liberalisation of services throughout the Community.
    Mr. Spearing: The Minister mentioned two ad hoc committees. Will he now answer my earlier question? Did the Prime Minister approve paragraph 6 of the document which, among other things, established those two committees?
    Mr. Rifkind: So far as I know, that paragraph did not specifically establish committees, but I have made it clear that we welcome the appointment of the committees and intend to play a full and constructive part in their deliberations.
    Sir John Biggs-Davison: Does my hon. Friend agree that the solemn declaration raises important constitutional issues for the United Kingdom? Before the committees do too much and before any further progress is made on this, may we have a full debate on the matter in this House?
    Mr. Rifkind: The solemn declaration to which my hon. Friend refers is what is often known as the Genscher-Colombo proposal, which has no constitutional implications for the United Kingdom. The committees have been established to look at practical ways to improve the workings of Community institutions and co-operation between member states.

Points of Order
3.32 pm
Sir John Farr: On a point of order, Mr. Speaker. Today 35 minutes were allowed for 84 Foreign and Commonwealth questions and 20 minutes to deal with only six EEC questions. As there is clearly far too little time for the many Foreign and Commonwealth questions and far too much time for the very few EEC questions, may I suggest that we have a full hour for Foreign and Commonwealth questions and relegate EEC questions to a vital, critical time, such as a Friday morning?
Mr. Speaker: As the hon. Gentleman well knows, the allocation of time for questions is not for me but for the usual channels. I am sure that his comments will have been heard.
Mr. Donald Coleman: On a point of order, Mr. Speaker. In business questions last Thursday I raised with the Leader of the House the subject of the serious drought in Wales, especially in south-east Wales, and asked for a statement. Is it possible for that matteer to be raised today?
Mr. Speaker: I have had no notification of such a statement today, but I am sure that the matter will be borne in mind.
Mr. Peter Bottomley: On a point of order, Mr. Speaker. Today, as on other days, right hon. and hon. Members have been disappointed at not being called during Question Time or at not being able properly to put their questions when they were called. If Members of Parliament come to believe, rightly or wrongly, that bullying and blustering will allow them to obtain preference, Question Time will deteriorate. Having tried to facilitate the normal progress of questions by not pushing my claim on Question No. 1, may I put it to you, Mr. Speaker, that I and others like me will no longer be inclined to do that if others, such as the right hon. Member for Leeds, East (Mr. Healey), manage to get away with the behaviour that I have described?
Mr. Speaker: Order. I hope that the House will not feel that any hon. Member is getting away with anything.
In relation to what was mentioned earlier, we did not get very far in Question Time today. I make a judgment every day on which questions are of major interest to the House. With four interventions from the Front Bench, I felt that it was right to move on.
Mr. Brynmor John: On a point of order, Mr. Speaker. Next week the industrial valleys in south Wales will be cut off from water for 17 hours out of every 24 hours. Is it too much to expect the Government to make a statement in the House before that comes about?
The Secretary of State for Wales (Mr. Nicholas Edwards): I hope to make a statement in the House on Monday.
Mr. Allan Rogers: On a point of order, Mr. Speaker. I object so strongly that you refused a Private Notice question on this issue of the drought——
Mr. Speaker: Order. The hon. Gentleman knows that he must not mention in the House anything relating to the refusal of a private notice question.
Mr. Rogers: How can we——
Mr. Ray Powell rose——
Mr. Speaker: The Secretary of State has intervened about water. If the point of order is about water, I cannot say anything. It will not be a matter for me.
Mr. Rogers: The right hon. Gentleman should resign.
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. Arising directly out of questions, Question No. 1 today asked whether the Secretary of State had received
"any response to his representations to the Soviet Foreign Minister earlier in the current month regarding individual cases of abuse of human rights"
Mr. Speaker: Order. I said to the hon. Gentleman yesterday, and I repeat to the House again, that we cannot prolong Question Time by raising points of order. We have come to the end of Question Time. There have been a number of points of order about the fact that we moved on to another question, and that I did not give the right hon. Member for Leeds, East (Mr. Healey) an opportunity to ask his question. I cannot take any further points of order on that.
Mr. Campbell-Savours rose——
Mr. Speaker: Order. I am not taking it, I am sorry.
Mr. Campbell-Savours: This is a genuine point of order.
Mr. Speaker: It is not. The hon. Gentleman started his point of order by drawing attention to Question No. 1. I draw to his attention to what I said to him yesterday and again today. I am not prepared to allow any further extension of Question Time.
Mr. Campbell-SavoursOn a point of order, Mr. Speaker.
Mr. Speaker: Order.
Mr. Hugh Dykes: On a point of order, Mr. Speaker. I apologise for dwelling on this point. Bearing in mind that you said that the right hon. Member for Leeds, East (Mr. Healey), the shadow Foreign Secretary, could raise a point of order at the end of Question Time, can you guide the House and say——
Mr. Speaker: Order. It is July, and we do not want anything further of that kind.
Mr. Campbell-Savours rose——
Mr. David Marshall: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply to Question No. 89, I wish to give notice that I shall seek to raise that matter on the Adjournment.
Mr. Speaker: That is too late.
Mr. Campbell-Savours rose——
Mr. Speaker: Order. I have been very patient with the hon. Gentleman. I must ask him, please, not to refer to Question Time or any further extension of that. If he has a point of order on a matter on which I can rule, I shall of course hear him, but if it is not a matter on which I can rule, I shall have to ask him to sit down.
Mr. Campbell-SavoursIn column 981 in questions to the Foreign Secretary on 27 June—[Interruption.]
Mr. Speaker: Order.
Mr. Campbell-SavoursThis is unfair.
Mr. Speaker: The House must allow me to hear what the hon. Gentleman has to say, and then I shall rule.
Mr. Campbell-SavoursOn 27 June my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) asked the Secretary of State for Foreign and Commonwealth Affairs
"how many British subjects are currently detained in Saudi Arabia; how many complaints he has received about the lack of assistance given to those subjects by the British authorities; and if he will make a statement."
Later the hon. Member for Christchurch (Mr. Adley) asked:
"Have the Government objected to the recent detention of a British military attaché by the Israeli Government?"
The Minister replied
"Yes, Sir." — [Official Report, 27 June 1984; Vol. 62, c. 981.]
The hon. Member for Christchurch was allowed to ask a question on Israel on the back of a question tabled as No. 5 on that day in relation——
Mr. Speaker: Order. I have been patient, but that is not a matter on which I can rule. The hon. Member for Workington (Mr. Campbell-Savours) is abusing the opportunity that I gave to him.
Mr. Campbell-Savours: This a matter for you, Mr. Speaker.
Mr. Speaker: Order.
Mr. Alan Williams: Further to that point of order, Mr. Speaker. I recognise your difficulty. None of us want to encourage the abuse of points of order. I believe that when you read Hansard tomorrow you will discover that my hon. Friend the Member for Workington (Mr. Campbell-Savours) had not, at this point, developed his point of order. He knows that he will be condemned by both sides of the House if he fails to make a proper point
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of order. In retrospect, you might feel that you had been less than fair to him if you discovered that you ruled him out of order without allowing him to develop his case.
Mr. Speaker: I appreciate that the right hon. Member for Swansea, West (Mr. Williams) is defending his hon. Friend the Member for Workington (Mr. Campbell-Savours). I think that I have been more than generous. However, if the hon. Gentleman's point of order is valid today it would have been valid on 27 June when the question was first raised. I cannot imagine that anything he is likely to say today will be a point of order for milt:, but if the the hon. Gentleman puts his case briefly I shall listen.
Mr. Campbell-Savours: My point of order is that you, Mr. Speaker, allowed the hon. Member for Christchurch to ask his question on the Israeli Government as a supplementary question to a question about Saudi Arabia. My point of order arises directly out of Question Time(today when I did the same, based upon that precedent, but was ruled out of order by the Chair. What is consistent about the two decisions?
Mr. Speaker: I shall look into what was said on 27 June. If that is what I allowed to happen, evidently I was in the wrong. I am certain that I was in the right today.
Mr. Ray Powell: On a point of order, Mr. Speaker. I do not wish to abuse the privilege of the House, but I envisage great difficulty as a result of you allowing the Secretary of State for Wales to state, on a further point of order, that he planned to make a statement about water in Wales on Monday. The situation is critical and needs a statement——
Mr. Speaker: Order. I think that the Secretary of State rose to help the House when a point of order was put to me. It was not a matter for me. The Secretary of State voluntarily said that he would make a statement on Monday. That is fair enough.

Rate Support Grant (Wales)
3.44 pm
The Secretary of State for Wales (Mr. Nicholas Edwards): With permission, Mr. Speaker I wish to make a statement about my proposals for the 1985–86 rate support grant settlement for Wales.
Local authorities have started to plan their budgets for the next financial year. For this reason, I am today circulating my proposals for the key elements of the 1985–86 RSG settlement to each local authority in Wales. Copies of the comparative material sent to them have been placed in the Library and the Vote Office.
I have decided not to make use in 1985–86 of the new powers given me by the Rates Act to set rate limits for high-spending authorities, preferring to rely on the existing measures to influence local spending decisions. Whether the new powers are used in Wales in later years to protect the ratepayer depends entirely on authorities' responses to the present voluntary arrangements.
Before outlining my proposals for the 1985–86 settlement, it is useful to consider what has been achieved to date in Wales, as this has a major bearing on my strategy for 1985–86.
In 1981–82, the excess over the Government's planning total for local authority current expenditure in Wales was £41 million, or 4 per cent. Budgets for the present year reveal a cash excess amounting to only half that figure. Furthermore, three quarters of the total overspend against targets arises in just three counties—Clwyd and Mid and West Glamorgan. The overwhelming majority of councils are budgeting moderately and responsibly, with all the benefits that such a policy brings to their ratepayers. Between 1979–80 and the present year average general rate poundages in Wales have risen by about seven percentage points less than the rise in the retail price index. The performance on rates since 1981–82 has been even better, with the average increase amounting to only about two thirds of the rise in inflation.
We have therefore reached a position in Wales where aggregate spending is within striking distance of the Government's plans, and where the vast majority of councils are budgeting to spend at or below target. That outcome has not been achieved painlessly. It has required most authorities, even low spenders, to contribute savings, and to make difficult choices of priority. It continues to be necessary for all authorities to maintain a tight grip on their spending, but provided they do so, it should not be difficult for them to meet the targets that I am proposing for 1985–86. In order to maintain the pressure for economies in the area of current expenditure and the housing revenue account, I intend to retain the target system, which has worked so well in recent years. However, I intend increasing the weight attached to GRE in the current expenditure component from 60 to 70 per cent.
Once again I intend to apply limiters to produce minimum and maximum cash increases on 1984–85 budgets. The minimum increase for the highest spenders will be 2 per cent.—which is 1·5 per cent. higher than the minimum increase allowed in the current year. The maximum increase on this year's budgets will be 4 per cent. In addition, for authorities spending at or below their 1984–85 targets, I propose to add a quarter of 1 per cent. to the current expenditure total otherwise calculable.
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Thus, the maximum increase for low-spending authorities spending at or below target in 1984–85 is 4·25 per cent. so real terms cuts in current spending should not be required in those authorities.
In total, those targets add up to £1,342 million, which implies an increase in current expenditure provision of £25 million. That increase in provision will be contained within the established aggregate public expenditure plans. After allowing for the abolition from next April of the national insurance surcharge payable by local government employers and the greater role proposed for the Manpower Services Commission in funding certain elements of further education, the target aggregate for 1985–86 represents a 4·1 per cent. increase on 1984–85 budgets.
It is extremely important that the more generous target package for 1985–86 must not be seen as a signal to relax the search for economies. The resources that I have made available are the maximum that the rate and taxpayer can afford. That being so, I am proposing to introduce a far tougher grant holdback schedule next year.
In the current year, grant holdback ranges from 40 per cent. of any excess up to 1 per cent. over target, to 90 per cent. for any excess over 5 per cent. For 1985–86 I propose that up to 1 per cent. over target grant should be withheld at the rate of 100 per cent. and thereafter at a rate of 150 per cent. In addition, I consider that the limiter that reduces holdback in low resource authorities is cushioning the impact of overspending to too great an extent. Accordingly, I propose to halve the effect of the present limiter in the coming year. There will be no other changes in the grant arrangements.
Aggregate grant will be £1,013 million. That represents a grant percentage of about 67 per cent. compared with 69·1 per cent. this year. What counts for rating purposes, however, is the increase in grant between that built into the authorities' budgets for the present year and that available for 1985–86. On that basis, the increase is about £41 million, or 4·2 per cent. If all authorities spend at target—there is absolutely no reason why they should not — and apply only half the reserves used in the present year, ratepayers can look forward to rate increases in 1985–86 no higher, on average, than the presently projected rise in costs for the economy as a whole, of 4·25 per cent.
The final ingredient of my proposed package for 1985–86 is a £15 million addition to the existing provision for local authority capital investment in 1985–86. This enhancement is linked directly to Welsh authorities' efforts to contain their current expenditure in 1984–85.
I shall consult the local authority associations in my proposals for 1985–86 before presenting a rate support grant settlement to Parliament at the end of the year. I shall also consult them on the possibility that from 1986–87 onwards, targets will be calculated on the assumption that targets in the previous year have been achieved. I am very attracted to this proposition, as breaking the link with budgets would eliminate the tendency for the higher spenders to increase their share of resources at the expense of low-spending authorities. However, I shall not make a final decision on this aspect until after I have had the opportunity to disuss the important issues involved with the associations during the autumn.
I commend my proposals for the 1985–86 settlement to the House.
Mr. Barry Jones: The Secretary of State is wise not to use his rate-capping powers, but fundamentally the general thrust of his statement is that he is always threatening to do so. Regrettably, he seems to have Clwyd, Mid-Glamorgan and West Glamorgan in his sights. These authorities face fearsome social and economic problems, especially the industrial valley councils who arguably face some of the worst social and economic conditions in Great Britain.
On targets, the local authorities had hoped for a £75 million increase at least. The Minister's targeting therefore falls short, and an increase in current expenditure in the order of only £25 million represents another failure to deliver. As for holdback, by more than doubling the penalty for local authorities incurring penalty, he is heaping a catastrophic punishment on hard-pressed councils, especially those who try to cope with major unemployment problems.
On his inflation forecast, will the right hon. Gentleman explain his thinking regarding the 4·5 per cent. prediction for inflation in the next financial year, when many City forecasters point to between 5·5 and 7·5 per cent?
The right hon. Gentleman attempted to paint a rosy picture of a statement which will not be welcomed generally in Wales. My review of recent years does not in any way agree with his review. Has the right hon. Gentleman forgotten that in 1981–82 the overall rate of Exchequer grants stood at 73·4 per cent., while today it is only 69·2 per cent? Has he forgotten that this year he reduced the percentage level of grant for 1984–85 from 70·4 per cent., to 69·2 per cent? Does he recollect that he has shifted grant away from rate support towards specific and supplementary grants? Is he aware that he reduced the Welsh target in real terms and increased the penalties for exceeding targets? Is he not increasing the ratepayers' contribution to local spending and reducing that from the Government? Logic implies that this can be done only by increasing rate bills and then luring local authorities into the rate-capping trap.
Does the right hon. Gentleman understand that the Welsh Consultative Council on Local Government Finance rejects his selective and general rate limitation schemes on the grounds that they will result in the growth of central bureaucracy? I predict that the right hon. Gentleman will have great difficulty in persuading Welsh local authorities to discuss the proposals. Even at this late hour, will he recognise the supreme importance of proper local choice and restore to local government its ability to make proper decisions as county and district councils?
This statement is a negation of local democracy. It effectively tramples underfoot the record of co-operation between the Welsh Office and local government oranisations in Wales. The right hon. Gentleman has downgraded local government.
Mr. Edwards: Taking up the hon. Gentleman's last point, I remind him that between 1976 and 1979 the Labour Government cut the percentage share of rate support grant on the argument that to do so would give a greater say to local democracy because it would mean that more of the burden on local government was borne by ratepayers rather than general taxpayers. I believe that that argument stands as strongly today as it did when it was advanced by the previous Labour Government.
The hon. Gentleman at the outset referred to my decision not to use rate-capping powers. That, of course,
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is because local authorities have discussed these rating matters with me consistently over the period and, as I have said, have come close to achieving the targets that we have set for them. The result is that we do not have such high overspenders as have been rate-capped in England.
The hon. Member referred to the position of Clwyd, Mid-Glamorgan and West Glamorgan. Those local authorities are spending well above GRE. West Glamorgan is currently budgeting to spend some 7·6 per cent over GRE, and it is hard to see why it should find it difficult to achieve the targets that we have set when Gwent and South Glamorgan — counties with similar problems—are achieving the targets that we set.
I emphasise that we are talking about a percentage increase in budgets prepared by local authorities in the current year. If one takes the additional capital that is being made available as result of the relatively good performance of Welsh local authorities and takes into account the substantial additional capital allocation that I have been able to make in recent years for the same reason, it will be seen that Welsh local authorities are not just being set reasonable objectives but being given the proper reward for containing current expenditure.
The hon. Gentleman asked me about inflation forecasts. Our record on forecasting inflation—we ate talking about the next financial year for local authorities —has been consistently better than that of most of our critics in recent years. The hon. Gentleman talked about my record of dealing with Welsh local authorities. Because Welsh local authorities have co-operated in the past, as I believe they will in future, they have gained a relatively easier settlement than local authorities in England. Welsh local authorities have obtained additional capital and the Welsh share of grant has increased.
Sir Anthony Meyer: Is my right hon. Friend aware that he has earned the grudging respect of every local authority in Wales by the clarity with which he has set out his aims and the firmness with which he has pursued them? He is to be congratulated on not having had to apply the rate-capping mechanism anywhere in Wales. Does he agree that, until local government finance is reformed so as to make local authorities responsible for raising all the money that they thereafter spend, we shall continue to hear the absurd claim that the Government are starving local democracy?
Mr. Edwards: We are, of course, making a further move to place the burden on the ratepayer rather than on the general taxpayer, which will mean that the realities of spending are brought home to local ratepayers.
Secondly, I always listen with interest to suggestions that we should introduce an alternative to the present rating system—in the hope that those who raise the point will come forward with positive and workable proposals.
Mr. Dafydd Wigley: Will the Secretary of State look again at his claims about the increases implicit in his statement? Is not the rate-borne expenditure increase, from 30·9 per cent. to 33 per cent., an increase within that element of 7 per cent. rather than the 4 per cent. to which he referred? Will he give an assurance that if inflation moves ahead much faster than his present assumption—we are dealing with figures applicable for the year beginning next April—he will reassess these figures upwards to take account of that?

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Will he clarify the position of the MSC taking over further education? Are there any further intentions over and above what has aready been announced? Will he confirm that the Welsh district councils will not be able to meet their commitments on housing repair grants which have already been given and that people with an entitlement to money will not get it? He said that greater weight has been given to GRE in the current expenditure component, from 60 per cent. to 70 per cent. Will he confirm that that will be of assistance to those counties whose target is below GRE?
Mr. Edwards: On the first point, I confirm the figures that I have already given. The Government stand by the inflation forecast that they have already given and point to their record in the recent past. We have spelt out our proposals on the MSC and have no further announcements to make in that connection.
The hon. Gentleman also referred to housing renovation grant. If specific grants are taken into account, we are providing grants nearly 5 per cent. higher than the amounts included in the 1984–85 budgets — or about 0·75 per cent. more than the projected growth in inflation. We are therefore making special provision in those areas to which the hon. Gentleman specifically referred.
Mr. Keith Raffan: I thank my right hon. Friend for this early announcement, which will allow local authorities to budget more sensibly and carefully. I also congratulate him on obtaining so favourable a settlement for Wales, particularly the £15 million capital addition. Is it not true that the rate of grant offered for 1985–86 is identical to the effective rate of support in the present year?
Mr. Edwards: Yes. If one takes account of the actual grant obtained by local authorities at present—taking account of the penalties and so on which have been incurred—this is an effective grant, in line with the effective grant this year. As to the relative performance of Welsh authorities and the additional capital, I remind my hon. Friend that we have been able to make available additional capital amounting to £16 million, £19 million and £45 million in the three preceding years because the Welsh local authorities have come so much closer to achieving our targets than local authorities elsewhere in the United Kingdom. I emphasise that connection. If we can get current spending down, we can make available additional capital resources.
Mr. Donald Coleman: When will the right hon. Gentleman recognise that everyone else believes that the problems of local government finance in Wales have arisen from the policies of Conservative Governments in 1970 and 1979? In fact, the Government smashed up the county of Glamorgan and are now creating the problem in the Glamorgans. Why does not the right hon. Gentleman leave the local authorities to their own electors? Does he not recognise that every action taken by him in local government means worse education provision, poorer social services, hopelessness in housing and deterioration in the environment of Welsh communities?
Mr. Edwards: As the hon. Gentleman cited Glamorgan, I should point out that South Glamorgan—a Labour authority—has convincingly shown that one can
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meet targets and objectives, arrive at proper priorities and maintain services. That lesson should be followed by other authorities. The great majority of Welsh local authorities have been able to meet the targets that I have set and to maintain a high level of services.
Mr. Gwilym Jones: Does my right hon. Friend accept that his statement will be warmly welcomed throughout Wales, particularly by hard-pressed ratepayers? However, may I add the cautionary note that, so long as the rating system persists, my constituents will look to him to exercise his new-found powers if we have a repetition of 1982, when local councils in Cardiff, controlled by Left-wing parties, forced up the rates by 54 per cent. solely to finance a reduction in 1983 in time for the elections—which I am glad to say they lost?
Mr. Edwards: I am glad that, under the policies we have followed, we have on average been able to hold rate increases in Wales to below the increase in the cost of living, but I confirm that we have the powers to use rate capping and I shall not hesitate to use them if local authorities produce very high-spending policies.
Mr. Gareth Wardell: I thank the Secretary of State for coming here this afternoon in person to make this statement, which is quite different from what happened a week ago. Can he assure us that he will not repeat last week's farce, whereby, on Monday 16 July, he said that consultations were continuing with local authorities on capital expenditure and on 18 July a midnight moratorium was more or less announced? When he says that consultations on current expenditure will occur in the autumn, can he assure us that we will not have the same farce as occurred last week on capital expenditure?
Mr. Edwards: We have, of course, been discussing these matters with local authorities for some time, and some of the systems that we have introduced take account of local authority representations. Last year we were not able to give these preliminary indications at this time, and we have done so on this occasion very much at the request of local authorities. I shall, of course, make the formal statement in the normal way in the autumn.
Mr. Peter Hubbard-Miles: Does my right hon. Friend agree that his statement that Welsh local authorities are at last showing some restraint will be welcomed in my constituency of Bridgend, not only by the domestic ratepayers but particularly by the industrial and commercial ratepayers who for too long have borne the excessive burden inflicted on them by the most profligate and extravagant county in Wales?
Mr. Edwards: My hon. Friend knows a great deal about local government in his area and is well qualified to speak. He made a notable speech the other night in which he drew attention to the fact that economies were possible if efficient methods were pursued by local government. I hope that local government, not only in his area but elsewhere in Wales, will take account of his wise words on that occasion.
Mr. Allan Rogers: How I wish that we had a Secretary of State for Wales who really wanted to do something for the people of Wales rather than the pathetic show that we have had this afternoon. What does the additional capital of £15 million mean in real terms? The right hon. Gentleman's slavering "brownie points"

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supporters have welcomed this £15 million, but what does that mean, given that the Rhondda valley has a sewage problem which will cost £21 million to cure so that people can live through next winter in houses free from flooding?
The proposals for increased capital expenditure are quite ridiculous. When will the Secretary of State wake up to the fact that Clwyd and Mid and West Glamorgan are the largest spenders because they have the biggest problems, both socially and economically? If those counties build a school they have the greatest on-costs because it is built on the side of a mountain. They have the worst transport facilities and services. Far from standing still, these counties require positive discrimination. Does not the Secretary of State accept that he should be fighting for Wales rather than attacking the people of Wales——
Mr. Speaker: Will the hon. Gentleman finish his question?
Mr. Rogers: Yes, Mr. Speaker. Should not the right hon. Gentleman be supporting the hundreds of decent people who participate in local government in Wales and who give much of their time and services, rather than attacking them, in the same way as the Prime Minister attacks the miners?
Mr. Edwards: The hon. Gentleman has given a vivid account of the results of Labour-controlled local government in his part of Wales. As for what I have done for Wales, Welsh local authorities will know that they have had a settlement that compares well with other parts of the United Kingdom, and I suspect that we shall be attacked by English local authorities on those grounds. I emphasise that this is because of the sensible co-operation of Welsh local government in achieving the targets that I have set. The hon. Gentleman dismissed the extra capital that had been made available on top of capital that has already been announced. He dismissed the new money on top of what has been announced in the Government's spending plans so far. I do not think that local authorities will dismiss the fact that over the past four years they have gained an additional £95 million in capital expenditure out of the settlement because they have been able to hold down current spending.
Dr. John Marek: The Secretary of State is very keen on telling us what happened under Labour Administrations, but is he aware that, unless he changes course, his administration in Wales will be seen as an ugly blot on the development of the Principality? Does the Secretary of State realise that his announcement of grant holdback of 150 per cent. will be viewed with alarm and great concern within the Principality, and that the councils, rather than keeping rates down, know where their first duty lies—to the people whom they represent and for whom they provide services. That means that rates will go up by more rather than less. Will the Secretary of State realise that there is a chance for him to be viewed by history as a statesman? He could do that if he changed course and fought for the people in Wales rather than being a puppet of the Prime Minister.
Mr. Edwards: The last occasion I heard a speech on this subject from the hon. Member was in our debate on rates in February 1984. He said then that rate support grant was about whether one could have an adequate supply of teachers and enough meals on wheels, and not about
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formulas. However, we have a record pupil-teacher ratio in Wales, and the number of meals on wheels served in Wales increased by 7,000 in 1983 over the 1979 figure. Despite all the gloom that the hon. Gentleman is portraying, services are being improved. His local authority of Wrexham should consider, if it is worried about penalties, whether it is really necessary for it to have the lowest rents charged to local authority tenants anywhere in Wales. That local authority should look seriously at its priorities.
Mr. Ron Davies: Will the Secretary of State reconsider his statement that parallels can be drawn between Mid-Glamorgan and South Glamorgan? Does he not realise that in Mid-Glamorgan we have the greatest concentration of social problems in the Principality? Does he not understand that this rate settlement, coming on top of the declining rate base that is a result of the destruction of industry and commerce in the valleys, will compound the problems that already exist? Does he accept that today's settlement will mean more unemployment, worse education standards, worsening provision of social services and an increase in our housing problems?
Mr. Edwards: No, I accept none of that. I note that Mid-Glamorgan is being asked for a cut in expenditure that is attainable and will still leave it with spending that is well above GRE. The GRE takes account of the priorities that the hon. Gentleman has spelt out. It is of vital concern in his area to keep rates down to attract industry, and the Audit Commission has drawn attention to the substantial savings in efficiency costs that can be achieved if local authorities set about it. The other five county councils in Wales that are achieving their targets have shown that it can be done in Wales while maintaining services.
Mr. Roy Hughes: In his original statement, the Secretary of State made no mention of the districts. What do his tender mercies have in store, for instance, for the borough of Newport, about which I am concerned? Bearing in mind the figures quoted by my hon. Friend the Member for Alyn and Deeside (Mr. Jones) can the Minister not see that the target exercise in which he has engaged is a sick joke on the part of the Government, as they have pledged themselves to ease the burden on ratepayers? Can he not see that he is driving our local authority into a corner, putting them in an impossible position, and that they are faced with terrible social problems because of the mass unemployment that has been created by the policies of this Government? Can he not see that what is needed now is some compassion and understanding, and a bit more help? If this is not forthcoming, our authorities will be forced to fight back:. There will be revolts and the Government will have only themselves to blame.
Mr. Edwards: The hon. Gentleman asked about the districts. I can tell him that 28 out of the 37 districts are budgeting to spend, at or below target and that they represent a wide cross-section of different, social and economic positions; that shows perfectly well that the targets that we set are attainable. Almost all the districts that are faced with real reductions are those whose spending is substantially above the GRE. I note that every year at this time, the Opposition spokesmen say the same thing and forecast substantial rate increases. On every occasion on which they have done that they have been

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proved wrong and the rate increases implemented have been well below their forecasts. I hope that the same will happen on this occasion.

British Shipbuilders
4.16 pm
The Secretary of State for Trade and Industry (Mr. Norman Tebbit): With permission I will make a statement about British Shipbuilders.
The corporation today published its annual report and accounts for 1983–84, and copies have been laid before the House. The corporation made a trading loss of £161 million, of which £75 million was contributed by Scott Lithgow, which is now in the private sector, following the successful rescue operation in March.
The chairman has stated, and I agree, that the corporation cannot accept a continuation of the past two years' performance. I welcome his assurance that policies have now been established to ensure that the principal losses should not be repeated. I also welcome the steps that the corporation has begun to take on the rationalisation and restructuring of its activities.
On 4 June, I received the corporation's proposed corporate plan for the period 1984–85 to 1987–88 and I am placing in the Library a version with commercially confidential information deleted. The Government endorse the corporation's primary aim of concentrating resources on a stable, cost-effective mainstream merchant shipbuilding business.
The corporation is well aware that the key to its future depends on improving the efficiency of production of merchant ships. It sees the primary need as being the concentration and integration of its production, service and administrative facilities to increase efficiency, flexibility and productivity. In all this a further key element will be the implementation of the flexible working practices agreed with the work force earlier this year.
The history of such attempts to save, let alone revitalise, merchant shipbuilding is not encouraging. The new programme is ambitious in its scope but it is essential, and it is supported by the Government. The corporation plans to be able to accept orders at a rate of up to 180,000 to 210,000 compensated gross registered tonnage a year. This contrasts with the 117,000 CGRT of orders won in 1983–84.
The House will appreciate that the corporation's ability to win orders at such a rate will depend on a number of factors. These include the state of the world market; the agreement of the European Commission to an enhanced rate of subsidy through the intervention fund; the size of that fund; the degree to which productivity is improved; and the extent to which competitiveness is increased.
The Government will take decisions on funding levels in the autumn in the light of the negotiations in Brussels. I have already warned the corporation that a tight financial regime will have to apply, and that funding levels will depend on the overall public expenditure position at the time.
In the light of our manifesto commitment to privatise a substantial part of British Shipbuilders, the Government have decided that British Shipbuilders should sell its warship building interests, making substantial progress towards privatisation by 31 March 1985 and completing it by 31 March 1986.
The corporation will also continue to dispose of other saleable assets. Accordingly, I have today asked the corporation to set in hand action to dispose of those parts of the corporation engaged mainly or wholly in warship

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building. To secure the maximum practical extent of fair competition we would prefer to see the yards sold separately or in small groups.
I have, however, also asked the corporation to set in hand contingency preparations for a flotation of the Stock Exchange of all or some of the companies in case individual sales may not be achieved. I believe that this will enable the corporation to pursue single-mindedly its aims for its merchant shipbuilding business and to take the steps to improve efficiency on which its long-term future depends, while providing an assured competitive warship building capability.
Mr. Peter Shore: The Secretary of State is again playing his practised role as the principal gravedigger of British industry. Can he at least assure the House that there are no matters of importance that he has deliberately excluded from his statement, such as he instructed Mr. Graham Day to withhold last week from the Select Committee? Is it not a fact that this new corporate plan for shipbuilding, based on 180,000 to 210,000 tonnes output per annum, is simply not sufficient to maintain British Shipbuilders at its present size? If that is so, how many more redundancies and closures are in prospect?
Does not the Secretary of State agree that the only time that British Shipbuilders has approached viability in the past six or seven years was in 1981–82, with an output of some 400,000 tonnes? What is the right hon. Gentleman doing to ensure that British shipowners—what is left of them—place a larger proportion of their orders for new vessels with British yards? Is it not a disgrace that in recent years, on a comparable basis, only 26 per cent. of British shipowners' new orders have been placed with British yeard, as compared with 87 per cent. of French shipowners placing orders in French yards, 97 per cent. of Belgium shipowners placing orders in Belgian yards and over 75 per cent. and 85 per cent. of Danish, Dutch and West German shipowners placing orders in their yards?
Does the Secretary of State know of any other country that gives so little support through its merchant marine to its own shipbuilding industry? How can any sense of security be left in British Shipbuilders when the Secretary of State intends to strip away, by the spring of 1986, the most profitable part of the industry, the warship yards? Will he at least list those yards that he classifies as being engaged mainly, as well as wholly, in warship building? Finally, can he assure the House that we shall have an early debate in the autumn, and with the interim strategy report before us, before final decisions are taken on the future level of financial support for the British shipbuilding industry?
Mr. Tebbit: I am sorry that the right hon. Gentleman has had to go through the old gravedigger routine. I must say, he seems to be doing another performance of Jorrocks to my gravedigger— [Hon. Members: "Yorick."] The right hon. Gentleman plays the role of Jorrocks very well, too. I must stress that I am not closing any yards or making any workers redundant.
Mr. Shore: Yes, the right hon. Gentleman is.
Mr. Tebbit: If the right hon. Gentleman could just manage to hold his tongue for a moment, it would help. If any yard closures or redundancies occur, it will be because our yards fail to compete effectively with other
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yards, despite the fact that, since 1979, British taxpayers have subsidised them to the tune of well over £1 billion. If British shipowners find that, despite that subsidy of well over £1 billion to British Shipbuilders, they still cannot obtain competitive quotations, the fault must lie at the door not of the Government or of British shipowners but of British Shipbuilders.
The right hon. Gentleman has rightly said that the warship builders have been profitable, but I notice that he takes the view that in removing them, we are damaging the merchant shipyards. Is he suggesting that the British defence budget should cross-subsidise the production Of merchant ships even more?
Mr. Shore: Yes.
Mr. Tebbit: I am glad that the right hon. Gentleman has made it plain that merchant shipbuilding should be subsidised by the defence budget. I do not recollect him taking that view when he was in government. He asked which yards I categorised as being mainly in warship building. The two yards concerned are Cammell Laird and Swan Hunter.
Sir David Price: Will my right hon. Friend confirm that it is his and British Shipbuilders' intention to attempt to sell off the warship building division yard by yard first and then, if that fails, to try to sell it as a whole? Will British Shipbuilders entertain the possibility of a management-employee takeover bid, as happened with the National Freight Corporation? Are my right hon. Friend and the board of British Shipbuilders seized of the need for speed, and of the fact that a delay would corrode the morale of the work force and of that of potential customers?
Mr. Tebbit: Yes, I can assure my hon. Friend that the intention is to seek to sell the warship builders yard by yard. The yards in question are Vickers in Barrow in Furness, Yarrow on the Clyde, Vosper Thornycroft at Southampton, Hall Russell at Aberdeen and Brooke Marine at Lowestoft, plus the mixed yards of Cammell Laird at Birkenhead and Swan Hunter on Tyneside. The preferred option is to sell those yards individually, or possibly in packages of two, or something of that kind. Of course, a buy-out by the management and work force would be more than welcome, provided that commercial offers were made. I certainly agree that there should be no unnecessary delay, and that is why I have given Mr. Day —and he has accepted—quite a tight schedule. I know that he will seek to carry out those sales as expeditiously as possible.
Sir Peter Mills: Will my right hon. Friend confirm that this will not include——
Hon. Members: Two Tories.
Mr. Speaker: I apologise to the House for having called two Conservative Members one after the other, but I shall make amends.
Sir Peter Mills: I should point out that there is shipbuilding in my constituency. Will my right hon. Friend confirm that Appledore Shipbuilders, which produces mixed types of ships, will not be included? It is a very small yard and if it was included it would have to be grouped with another yard in order to remain viable. That is an important point for the 300 or 400 workers there, and I should be grateful if my right hon. Friend would clarify the position.
Mr. Tebbit: My hon. Friend is quite correct. We do not classify Appledore as one of the mixed yards for this purpose. However, its future might well be better in the private than in the public sector. Should an opportunity arise for a transfer to the private sector, I hope that it would be taken advantage of.
Mr. Bruce Milian: Is the right hon. Gentleman aware that he has today announced a prescription for further decline in an already shattered merchant shipbuilding sector? Is he aware that the targets for orders that he has announced are well below the present capacity of merchant shipbuilding and will inevitably involve further closures? Is he further aware that even those targets will not be achieved unless we can do better on the intervention fund side, remembering that the amount given to British Shipbuilders by way of intervention fund has gone down from £64 million in 1979–80 to only £13 million in 1983–84? Does he appreciate how essential it is that the level of intervention fund assistance should now be increased?
Mr. Tebbit: The output of British Shipbuilders last year was 210,000 tonnes, so talk of further massive cuts —when I have said that the ambition of the corporation will be to take orders in the 180,000-to-210,000 tonnes area—is quite wrong. Despite all the efforts of Mr. Day and his colleagues, they were able to take orders for only 117,000 tonnes last year. I am not sure whether the right hon. Gentleman feels that a subsidy of £1 billion in the last six years was the limiting factor or whether he thinks that some of the industrial disputes, such as those at Cammell Laird and Scott Lithgow, may have had something to do with it, too.
Mr. Paddy Ashdown: Does the Secretary of State realise that many will regard his plans to privatise the warship yards as an act of grand folly on the scale of his plans to privatise the royal ordnance factories, from which he has suffered so much recently? Will he explain why the break-up of those yards will not result in the loss of those savings of scale which were achieved before? Is it not true that the cross-operating and cross-funding which was beneficial to the civil and military sectors will now vanish? How are we to go about the difficult, complicated and potentially expensive business of disengaging the military from the civilian sectors? Is the right hon. Gentleman aware that this seems to be yet another example of the Government's blind dogma acting against the best interests of the industry and the Royal Navy, which it serves?
Mr. Tebbit: The right hon. Gentleman is wrong on every point that he puts. He talks about benefits as though there were clear, assured benefits to be seen. The benefits have been that our warships have been so expensive that we have not been able to export any for many years. That is regrettable, not only because we have lost jobs that we need not have lost but because the Navy has paid more for its ships that it need have paid and has had fewer ships than it might have had, and those ships have been delivered later than need have been the case. Thus, I see no benefits there. I see no difficulty in disengaging the yards.
Mr. Robin Maxwell-Hyslop: What restrictions, if any, is my right hon. Friend putting on British Shipbuilders in its disposal by way of giving interest-free loans, as happened in the case of Tyne Shiprepair, so enabling the new firm, once privatised, to
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undercut all firms already existing in the private sector? May we be assured that that will never be permitted to happen again?
Mr. Tebbit: We shall look at these matters case by case. I think it unlikely that any such deals will be arranged for the sale of the warship yards. The subsidy to Tyne Shiprepair did not begin at the time of privatisation. It had been subsidised to a large extent for a long time. The alternatives were to continue that subsidy, with damage to the private sector yards; to close the yard, with the loss of all the jobs; or to offer a degree of subsidy, through the finance which was offered, for a finite time during which the yard could seek to establish itself. I believe that the last course was right.
Mr. Don Dixon: Is it not a fact that Mr. Day has secured no orders since being appointed chairman of British Shipbuilders because he has been too busy carrying out the Secretary of State's instructions to dismantle the British shipbuilding industry? It is nonsense to suggest that the taxpayer will be saved money by flogging off the warship yards, which last year made £44 million profit. The right hon. Gentleman is simply putting more money into some of his friends' pockets. Is it not also a fact that the sale of the warship yards will mean that merchant shipbuilding in Britain will not be viable? The right hon. Gentleman is carrying out the Government's policy towards public enterprise: if it is in the black, flog it back; if it is in the red, bleed it dead. Is the Secretary of State aware that this will be the only maritime nation in the world without a maritime policy, without a shipping industry and without any capacity to build the ships it needs?
Mr. Tebbit: The hon. Gentleman takes a slightly jaundiced view and goes over the top in some of what he says. The answer to his remarks about the privatisation of the warship yards is that, in my view, no harm will come from having warship building yards which are keenly competitive, both for MOD orders and for orders from overseas, and which are turned around in the way in which the private ownership of Scott Lithgow has already begun to turn that yard around. The hon. Gentleman takes a narrow and bigoted attitude towards these matters, if I may put it to him in such a kindly fashion.
Several Hon. Members rose——
Mr. Speaker: Order. I remind the House that this is an important Back Bench day, with the Consolidated Fund Bill to follow. I propose to allow questions on this matter to continue for a further 15 minutes, and I hope that in that time all hon. Members who wish to put questions will be called.
Mr. Kenneth Warren: Will my right hon. Friend place any inhibition on foreign investment in the purchase of the warship yards? Will he give an assurance that, in consultation with the Secretary of State for Defence, the Trident contract will not be downgraded or degraded in any way and that it will not cost any more if it is passed through Vickers into private ownership?
Mr. Tebbit: In the event that I think it desirable, in the national interest, to place restrictions on foreign ownership or foreign part-ownership in any of these yards, I shall do so. The answer to my hon. Friend's question about the Trident programme is that the Secretary of State for

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Defence and I are both of the opinion that privatisation will help rather than hinder the taxpayer getting proper value for money. It will, at the same time, get rid of the peculiar system under which, as the right hon. Member for Bethnal Green and Stepney (Mr. Shore) would have it, the defence budget is called upon to subsidise merchant shipbuilding yards— [Interruption.] If that position has obtained up to date, I am surprised that Opposition Members have not been more keen on the Trident programme.
Mr. Bernard Conlan: When the Secretary of State extols the virtues of competitiveness, is he incapable of understanding that to hive off the profitable elements, the warship yards, will make the industry less competitive? Is he aware, therefore, that his policy is not only self-defeating but patently daft?
Mr. Tebbit: Again, the hon. Gentleman has the wrong end of the stick. I assure him that the operations, for example, of Vickers do not gravely affect the competitiveness of Govan, and that Vosper Thornycroft's military building programme is not of crucial importance to Sunderland Shipbuilders. That is a fact of life. If the hon. Gentleman is muddled, I am sorry for him; he will have to get down to trying to understand the position.
Sir Peter Emery: Has my right hon. Friend noted that in their statement to him, the auditors have had to qualify the accounts by saying that they do not
"give a true and fair view of…the state of affairs of the Corporation…the loss of the Corporation and…the source and application of funds of the"
corporation? Is that not a most dramatic qualification for auditors to give on any accounts? How does my right hon. Friend interpret that? What, therefore, does he think the real loss would be so as to avoid that qualification? When or if the warship divisions have been sold, how much more public funds does he believe will be necessary for the merchant shipping division to break even?
Mr. Tebbit: I understand that the principal cause of the auditors' reservation was the Scott Lithgow accounts. The accounts of that subsidiary were not able to be presented in an audited form and there has been some discussion about that. I know that my hon. Friend will be looking forward to the opportunity to pursue these matters in more detail in another forum, where I understand the auditors will be able to explain in more detail their reservations. I hope that that will be helpful to my hon. Friend. Secondly, there is a need for greater skill in extracting the best from the investment that has already been made in the merchant shipbuilding yards rather than for large amounts of extra new investment.
Dr. Norman A. Godman: Most observers will readily acknowledge that the centre of new shipbuilding activity will remain firmly in south-east Asia, with perhaps some developments in south American countries. Against that backcloth, which is, for western shipbuilding nations, unbeatable competition, I ask a question about the corporation's restructuring of its engine-building operations. Has Harland and Wolff addressed itself to the serious issue of over-capacity in engine building to the same extent that British Shipbuilders seems to have done in recent months? Is it feasible that the engine builders in Ulster and the engineering division of British Shipbuilders can come together in some form of partnership?
Mr. Tebbit: The hon. Gentleman is right to say that the super-competitiveness of yards in south-east Asia, but more especially in Korea and Japan, is a world problem. these yards have been taking a larger and larger share of the world market, which has been an extremely difficult one in recent years. That is why we have an intervention fund and subsidies, merely to maintain a shipbuilding industry in the face of that competition. I fully understand what the hon. Gentleman says about the difficult position of the engine-building sector. We would all welcome a rationalisation plan to ensure that both Harland and Wolff and British Shipbuilders arranged their affairs in a way that would be to their mutual benefit. There is still severe overcapacity in the United Kingdom.
Mr. Cecil Franks: Is my right hon. Friend aware that his statement will be warmly welcomed in Barrow, especially by the management of Vickers Shipbuilding and Engineering Limited, which looks to the future with great confidence? Will he take into account the unique nature of Vickers Shipbuilding and Engineering Limited in its part of the Trident programme and the large capital sums that are involved, not least the £250 million investment in the covered construction hall for the building of Trident? Will he take that into account specifically when determining the method to be followed for privatisation?
Mr. Tebbit: I am sure that my hon. Friend is right. I believe that there will be a great deal of support for privatisation on the part of the warship building yards. I do not think that they have had an especially happy life in British Shipbuilders and I think that many of them would like to return to the days when they were sufficiently competitive to export on quite a large scale. They were able to do so some years ago but not, unfortunately, in recent years. Exports are to the benefit of all those who work in the yards.
I understand my hon. Friend's concern about the large capital investment that will be required to ensure that the facilities are available for the building of Trident submarines. There are various ways in which that can be arranged. I can assure my hon. Friend that we shall ensure that that issue is taken care of in the sale.
Mr. Eddie Loydon: Even if the right hon. Gentleman does not agree with the result, does he accept that industrial action in the shipyards arises from the insecurity that has attended the industry for many years? The major decline of the industry took place in the post-war period when it was in the hands of the private sector. What assurances can he give the House that there will not be a repeat performance when the industry is handed back to private enterprise?
Mr. Tebbit: I understand that the work force in the yards has had a feeling of great insecurity on many occasions. If that has led to industrial action, I am sure that the hon. Gentleman will agree with me that that was a misguided reaction. There is no doubt that industrial action has led to even greater insecurity, when customers who cannot get their ships delivered on time decide not to go back to British yards to order again.
The future of employment in the industry is governed principally by the level of world orders—over which, I must tell the hon. Gentleman, I do not have complete

1005
control. Secondly, it is governed by the competitiveness of our yards. What we can do by subsidy is small compared with the effects of those factors.
Mr. Christopher Chope (Southampton, lichen): Will my right hon. Friend congratulate the employees of British Shipbuilders in Southampton on once again contributing a profit to BS? Is he able to confirm that it is the employees of the warship building yards who will be the principal beneficiaries of privatisation? They will benefit because they will no longer have the millstone of loss-making yards hanging around their necks and keeping down their pay.
Mr. Tebbit: I congratulate all those in British Shipbuilders who have been doing their best to eliminate losses or to increase profits. Those who have been behaving in that way have done the most that they can to ensure their jobs. My hon. Friend is right to talk about the extra freedom that will be given to the yards. It is much better when a work force knows that it is responsible for its survival and that it is competing for its jobs under fair conditions. I am sure that the work force in the yards will want to do that as keenly as it can, both at home and abroad.
Mr. Robert C. Brown: Is the Secretary of State aware that, when he remonstrated with my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) for referring to him as the gravedigger of British industry, he was remonstrating about an understatement? My right hon. Friend should have referred to him as a funeral director—he looks like one, too—arranging for the funeral of British merchant shipbuilding. After 31 March 1986, when naval shipbuilding will be privatised, the rapid decline of British merchant shipbuilding will set in as surely as night follows day. It will be a terminal illness, thanks to the Secretary of State.
Mr. Tebbit: I thank the hon. Gentleman for his kind personal remarks.
Sir Kenneth Lewis: Is my right hon. Friend aware that more years ago than I care to remember the industry was courageous enough to give me a job, which is more than my Front Bench has ever done? I managed to survive, so my right hon. Friend will not be surprised to hear me say that I care for the industry. We are an island nation and maritime matters continue to be important to us. If we privatise the warship sector of the industry, what will the Treasury be left with and how much will it cost to keep the rump going? Secondly, does he think that the moment is right for selling the shares on the Stock Exchange?
Mr. Tebbit: I am grateful to my recently ennobled hon. Friend for his reminiscences about his early days in shipbuilding. I am glad that he had a job in those days at least. It would cost no more to maintain the merchant shipbuilding yards as a separate operation than they cost at the moment within the totality of the present British shipbuilding operation. I understand what my hon. Friend says about the difficulty of selling on the stock exchange at the moment, but on the other hand I have made it clear that the yards are most likely to be sold by direct sale on an individual basis from next March, when I am sure that things will look much more cheerful in all manner of ways.
Mr. Ted Garrett: The Secretary of State accused my hon. Friend the Member for Jarrow (Mr. Dixon) of being jaundiced and bigoted. In view of my hon. Friend's knowledgeable approach to the industry — no one here has a superior knowledge of that industry —were not those comments rather unfair and would not the right hon. Gentleman, on reflection, care to retract them? The area of Tyneside which I represent—Wallsend—has the biggest yard and the largest number of employees within British Shipbuilders. Would the right hon. Gentleman care to reconsider his decision about the Wallsend yard, which is a mixed yard specialising in merchant ships, warships and specialist vessels? If the yard is limited exclusively to warship building, a large area of land which could be used for building some of the largest ships in the world will not be put to full use. In the United Kingdom, Harland and Wolff is the only other yard which can build ships on that scale, now that the yards on Clydeside have virtually gone. Should not the Minister reconsider the possibilities involved in the reorganisation of the yard, and could he give us an early decision so that the people of Tyneside will not remain in a state of confusion?
Mr. Tebbit: I made no comment on the degree of knowledge of the hon. Member for Jarrow (Mr. Dixon). I do not wish to argue about the extent of his knowledge or information. However, I thought that he was rather narrow-minded about these matters.
I understand the hon. Gentleman's concern about Swan Hunter. This is a very difficult matter. My view—and, I believe, that of the management—is that the future of the yard would be best assured in warship building rather than as a mixed yard. I am sure that warship building will be the predominant feature, although to some extent the yard will look at other civil work on a minor scale. When one looks at the position in the United Kingdom as a whole, one wonders how many of the very large yards to which he has referred, such as Harland and Wolff and Swan Hunter, we can afford to maintain.
Mr. Gordon A. T. Bagier: I fully understand the right hon. Gentleman's reasons for selling off the profitable warship section, but what did he mean when he referred in his statement to "other saleable assets"? Did he mean the other profitable sections of the British shipbuilding structure? If so, how does that leave the merchant shipbuilding sector? The right hon. Gentleman said that merchant shipbuilding must become more efficient and dedicated. Is he aware that the work force at Sunderland Shipbuilders are forgoing their annual holidays to launch a ship so that it can be delivered on time? Sunderland is one of the largest shipbuilding towns in Britain. Can the right hon. Gentleman tell me what will be the future for Austin and Pickersgill and Sunderland Shipbuilders under the statement that he has made today?
Mr. Tebbit: First, when I referred to other disposals, I was referring principally to the remaining ship repair businesses such as Falmouth, and businesses which are peripheral to the main business of the corporation.
I am glad to hear about the efforts made by the work force at Sunderland to launch their ship on time. Such an attitude is the best safeguard that they could conceivably have for their jobs. I join the hon. Gentleman in praising the attitude of the work force.

1007
The yards in the north-east, including A and P, will be among those grouped together in one of the two main groupings of British Shipbuilders—those on the Clyde and those in the north-east—to try to strengthen their competitive capacity. I hope that A and P will have a future within the north-east group.
Mr. Teddy Taylor: I was an employee of the shipyards on the Clyde in the days when they were profitable. In view of this depressing report, and in view of the auditors' qualifications, do the Government have a firm policy commitment to retain a merchant shipbuilding industry on strategic or other grounds, or is their survival a matter for themselves and their own efforts, together with the help which the Government provide?
Mr. Tebbit: We certainly want merchant shipbuilding to survive in this country, but the matter is not entirely in the hands of the Government. It is also in the hands of those who work in the industry. I hope that together we will be able to ensure the survival of the industry. However, there is nothing that the Government can do by way of subsidy to persuade people to buy ships unless they are of the requisite quality, unless they are delivered on time, and unless there is confidence on all the other points which will be so familiar to my hon. Friend from his experience in the shipbuilding industry in what we must now call the good old days.
Dr. David Clark: In view of the lack of clarity of one of the Secretary of State's earlier answers, could he tell the House whether or not it is the Government's intention to allow our warship yards to be owned wholly or partially by foreign owners"
Mr. Tebbit: I repeat that, in any case where I think it is in the national interest to exclude particular persons or companies from taking holdings, I will do so. The hon. Gentleman, and his right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore), will recollect what I said at the time of the wild accusations made about my intentions on INMOS. I will leave the formula where I have put it.
Mr. Mike Woodcock: Does not my right hon. Friend agree that the so-called profitability of the warship yards is the direct result of the cost-plus system of pricing, and that if those yards had to compete in the same world markets as the merchant yards, they would probably appear no more efficient or profitable?
Mr. Tebbit: Who can be sure about these things? There may be some significance in the fact that our warship yards have been unable to sell warships of a substantial size in world markets for many years now.
Mr. Roland Boyes: People will not believe a word of what the Secretary of State has said about the effect on employment. This is just another example of the behaviour of this uncaring Government, who are prepared to line the pockets of their friends from the profits of one section of the shipbuilding industry at the expense of another section. Those massive profits could have been used to subsidise further shipbuilding, rather than to make the right hon. Gentleman's pals even richer than they already are.
Mr. Tebbit: I did not detect a question in what the hon. Gentleman has said, but I would observe that there are those who would dispute the right of the hon. Gentleman to speak for people as a whole.
Mr. Kenneth Carlisle: Would not my right hon. Friend accept that his announcement is welcome because the scale of losses suffered by British Shipbuilders in recent years is unacceptable? However, when the warship yards are denationalised, they will depend to a considerable extent on export markets. Is it not important that the Ministry of Defence should order ships of a type which is also acceptable overseas? It has not often done so in the past.
Mr. Tebbit: My hon. Friend is right. The losses that we have suffered, and the total subsidy of well over £1 billion in six years, are unacceptable. My hon. Friend is also right to say that, if the warship building yards are to do as well as we hope they will, they will have to look overseas for orders. Steps taken by the Royal Navy in some of its new frigate orders and designs are helpful, but the yards themselves may have to urge even more change upon the Navy.
Mr. Harry Ewing: As the statement deals with the future of British Shipbuilders to 1987–88, why did the Secretary of State instruct Graham Day to withhold certain information on the future of British Shipbuilders from the Select Committee on Trade and Industry? Is the Secretary of State aware that we do not believe that this is the full story? Bad enough though the statement is, we are apprehensive about what is in the interim strategy plan that he instructed Graham Day to prepare for consideration by him and his Department.
As to the £1 billion to which the Secretary of State has continually referred, how does it compare with the support given to shipbuilding industries in our competitors' countries? The Secretary of State must know the figures. He must be aware that a vast amount of that £1 billion was used not to restructure or expand the industry but to buy out 42,000 jobs, with the result that the number of people employed in the shipbuilding industry has declined by about 47,000. Why is the Secretary of State so grudging in his tributes to the work force who have co-operated in this exercise for several years, have reduced their bargaining units from 161 to just one and have introduced flexible bargaining as no other industry has introduced it recently?
Is the Secretary of State aware that we find it astonishing that, following his experience of the Falklands war, he seems unable to link merchant shipping with warship building? He of all people must realise that there is a connection between warship building and merchant shipping. As my right hon. and hon. Friends have said, the stripping away of the warship building division will seriously damage the merchant shipping industry. Will he confirm that, once the warship building division is privatised, there will be included in the sale conditions an obligation on the Government to carry the risk in the contracts that prevail at the time of the sale of any warship yard? It is important for the House and the country to understand that. The Secretary of State could easily sell warship yards, whether at Yarrow or anywhere else, while still carrying the risks for the contracts that go with their

1009
sale. There is now the greatest doubt about his ability to discharge his duties in the best interests of the British people.
Mr. Tebbit: If I may respond to the hon. Gentleman's winding-up speech, perhaps I might observe that it was made perfectly clear in the Government's reply to the first report of the Liaison Committee in the 1983–84 Session that there is always the possibility that differences of opinion may arise between Ministers and Select Committees as to whether it would be in the public interest for some information, whether relating to nationalised industries or any other public matter, to be disclosed to a Select Committee.
The Government remain of the view that it is not in the best interests of the good management of nationalised industries or of their relationship with sponsoring Departments that documents such as those which were requested should be supplied to Select Committees. None the less, in the final analysis, it is for the House to decide whether the power of a Select Committee should be enforced. The Select Committee was given the documents for which it asked. I assure the hon. Gentleman that the corporate plan contains no specific plans to close shipyards. He must just take it that I asked Mr. Day to withhold the information because I thought that it was in the best interests of British Shipbuilders for it to be withheld. In regard to the warship yards, I assure the hon. Gentleman that I shall act in what I believe to be the best interests of Britain.
Mr. Dixon: On a point of order, Mr. Speaker. All right hon. and hon. Members who have been here since I was elected in 1979 have grown accustomed to the personal abuse of the Secretary of State.
Mr. Speaker: Order. Raise a point of order for me, please.
Mr. Dixon: Yes, this is a matter for you, Mr. Speaker. I believe that your job is to safeguard the interests of Back Benchers in statements and during questions. When the
1010
Secretary of State referred to me, I did not hear what he said because I had my deaf side turned to him—not that I am worried about what he says about me. However, I heard him say in reply to my hon. Friend the Member for Houghton and Washington (Mr. Boyes) that he doubted my hon. Friend's ability to speak for the people he represents. The matter is in order as we are discussing parliamentary language. If an hon. Member tells lies, we are not allowed to call him a liar. I can understand that, but is it right for the Secretary of State for Trade and Industry to say that he doubts the ability of an hon. Member, who has one of the highest majorities in the north of England, to speak for those whom he represents?
Mr. Speaker: Many rough things are said in this House. We just have to be robust in our attitude to them.
Mr. Tebbit: Further to the point of order, Mr. Speaker. I would say to the hon. Gentleman that if Hansard records my saying what the hon. Gentleman accuses me of saying, I shall be only too willing to apologise, but I am pretty certain that it will not do so. The hon. Gentleman will recall that, last time a fake point of order such as this was raised, I was proved right and Opposition Members were proved wrong.

BILL PRESENTED
  ACCESS TO PERSONAL FILES (No. 2)
  Mr. Chris Smith, supported by Mr. Nicholas Brown, Mr. Jeremy Corbyn, Mr. Derek Fatchett, Mr. Jerry Hayes, Mr. Sean Hughes, Mr. Ian Mikardo, Mr. Norman Miscampbell, Mr. Peter Pike, Mr. Allan Roberts, Ms. Clare Short and Mr. James Wallace, presented a Bill to provide access for private individuals to information relating to themselves maintained by certain authorities, institutions and persons; to allow individuals to obtain copies of, and require corrections to be made to such information; and to provide for the enforcement of these provisions; And the same was read the First time; and ordered to be read a Second time upon Thursday 26 July and to be printed. [Bill 225.]

  Standing Charges (Abolition)
  5.6 pm
  Mr. Jeremy Corbyn: I beg to move,
  That leave be given to bring in a Bill to abolish standing charges for gas, electricity, water and telephone services for pensioners and persons in receipt of certain State benefits.
  This issue has been debated in the House many times and I imagine that virtually all right hon. and hon. Members have, during various election campaigns, met pensioners on doorsteps and tut-tutted at the appalling size of standing charges for basic services and promised to do something about them. The House has still failed to pass any Bill that abolishes that monstrous inequality.
  I am told by the Brent Pensioners Group that more than 130 right hon. and hon. Members have written to it supporting such a proposal as this. I imagine that many more will do the same if asked. It is regrettable that standing charges still remain. I have deliberately included standing charges for gas, electricity, water and telephones in the Bill because I believe that they are basic services and are vital for pensioners and recipients of supplementary benefits.
  Standing charges are expensive. They amount to £9·90 for gas, £7·45 for electricity and £16·27 for telephones per quarter. If we add the standing charges for water and sewerage, the bill comes to more than £40 per quarter for most people. In other words, pensioners must pay £160 a year, or £3 a week, in standing charges for basic necessities.
  In reply to my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) last year, the Department of Energy said that abolition of standing charges would cost about £300 million a year. The calculation applied only to gas and electricity. I have examined the annual reports of the gas and electricity boards. They are difficult to understand, because of the calculations of the number of people who pay standing charges and how much they pay, but it appears that in 1982–83 British Gas made profits of more than £660 million and paid a levy to the Government of £527 million. This year, the levy has increased to £750 million. That is a tax on a state-owned industry, yet the Government have the temerity to say that they cannot afford to abolish standing charges.
  In the last year for which figures are available the Central Electricity Generating Board made a profit of more than £330 million. Therefore, in the Government's own terms, it is feasible and possible for them to abolish standing charges and not to tax pensioners and the poorest people in Britain in the way that they do at the moment.
  Another reason for bringing forward the Bill is that a fundamental principle is at stake. Britain has a graduated taxation system and graduated benefit system— albeit graduated and adjusted in the wrong way — but in standing charges for gas, electricity, water and rental for telephones we have a head tax — a tax on consumers irrespective of their ability to pay. That is obviously and blatantly unfair.
  I can give many examples of hardships in my constituency and in many others. People are frightened to use enough gas to heat their homes in winter and enough electricity to cook a decent meal, and they are frightened of the quarterly bills for the telephone and water. Yet at the same time they are told by the Government that the
  1012
  scheme that was introduced in 1983, whereby the Government sought to limit the size of standing charges to no more than 50 per cent. of the Bill, has, in effect, subsidised the owners of second homes and country cottages. Those are the people who have benefited most. It is the small consumers who are deliberately away from those homes for nine or 10 months of the year who receive subsidies on their gas and electricity bills as a result of Government policy.
  The only way to be fair is to abolish standing charges for pensioners and people in receipt of supplementary benefits. I have also deliberately included in the Bill the abolition of the rental cost for telephones for pensioners. I do that for two reasons. First, for pensioners, access to a telephone is not a luxury but a necessity. I recently addressed a meeting of severely disabled people in my constituency. When I talked to them about the dial-a-ride scheme or dialling for a taxi subsidised by the GLC to take them anywhere they wanted to go, they said that those schemes were not a lot of good. Because of the difficulties of obtaining a telephone from the social services departments of some London boroughs, they were completely housebound and imprisoned in their own home. We should abolish telephone rental charges for such people.
  This is probably the last opportunity that there will be for the House to abolish rental charges for telephones, because of the Government's plans to privatise British Telecom. A privatised industry would be hell-bent on making huge profits out of its consumers rather than concerned about providing the vital service that telephones give to so many people in Britian. That is the price of privatisation.
  I also draw to the attention of the House the frightening fact that every year 48,000 more elderly people die during the winter than during the summer. Many of them suffer and die from hypothermia because they are frightened to turn on the heating during the winter months. There are stories of people going to bed at 5 o'clock in the afternoon because they were afraid to turn the heating on to keep the house warm. They are frightened of the bill that will arrive at the end of the quarter. There are so many people in that terrible and frightening situation that action is demanded.
  In Britain there is an average consumption of 400 therms in a manual worker's household. There is an average consumption of 330 therms in a pensioner's household. Is that because pensioners like to have their houses colder than people in work, or is it because they are frightened of the bill that will arrive? For a manual worker's household — not the best paid people in the country and not represented by Conservative Members, but nevertheless people in work—standing charges make up 2·2 per cent. of their household bill. For a pensioner couple it is 5·2 per cent. of their household bill. For a single pensioner, nearly 10 per cent. goes in this monstrous charge.
  The electricity and gas boards are conscious of the odium that is heaped on them because of the size of standing charges. They are conscious of the criticisms that they receive because of them, so they have all introduced an increase in the number of prepayment meters or in the number of people paying by fuel-direct schemes. According to the London electricity board, in 1980–81 22·5 customers per thousand were disconnected because of their inability to pay the bill. In 1982–83 that figure had dropped to 11·5. During the same period the number of

  1013
  people on prepayment meters had gone up from 64 per thousand to 75 per thousand and the number of people on fuel-direct schemes had gone up from 6·4 per thousand to 11·7 per thousand. That shows to me the determination of the energy councils to collect the standing charges and the bills. That such action has to be taken to drag money from people shows me the desperation to which so many are driven. That means that many household bills go unpaid. Food bills go unmet as people starve and try to keep themselves warm during the winter. That is the reality of life for many people in Britain.
  Fuel bills are often three times higher during the winter than in the summer. Action is urgently needed. There is a tremendous feeling of anger among pensioners and people in receipt of state benefits about this head tax on the poorest people in Britain. Indeed, I recently attended a meeting of the Tufnell Park Pensioners Action Group in my constituency. I thought that its members would want to talk about many issues, but the only issue they wanted to talk about was what we could do to abolish standing charges. We have one opportunity to remove the fear of cold and poverty that haunts so many pensioners and claimants by supporting and passing the Bill to abolish standing charges today.
  Question put and agreed to.
  Bill ordered to be brought in by Mr. Jeremy Corbyn, Mr. Chris Smith, Mr. Harry Cohen, Mr. Tony Banks, Mr. Mark Fisher, Mr. Tony Benn, Dame Judith Hart, Mr. Ron Davies, Mr. Clare Short, Mr. Eddie Loyden, Mr. Ron Brown, and Mr. Dennis Skinner.

  STANDING CHARGES (ABOLITION)
  Mr. Jeremy Corbyn accordingly presented a Bill to abolish standing charges for gas, electricity, water and telephone services for pensioners and persons in receipt of certain State benefits: And the same was read the First time; and ordered to be read a Second time upon Thursday next and to be printed. [Bill 217.]
Orders of the Day

  Consolidated Fund Bill
  Order for Second Reading read.
  Question, That the Bill be now read a Second time, put forthwith pursuant to Standing Order No. 113 (Consolidated Fund Bills):—
  The House divided: Ayes 249, Noes 39.

  Division No. 432]

  [5.20 pm

  AYES

  Alexander, Richard

  Forth, Eric

  Alton, David

  Fowler, Rt Hon Norman

  Amery, Rt Hon Julian

  Fox, Marcus

  Arnold, Tom

  Franks, Cecil

  Ashby, David

  Freeman, Roger

  Atkins, Rt Hon Sir H.

  Fry, Peter

  Atkins, Robert (South Ribble)

  Gale, Roger

  Atkinson, David (B'm'th E)

  Gardiner, George (Reigate)

  Baker, Nicholas (N Dorset)

  Garel-Jones, Tristan

  Baldry, Anthony

  Goodhart, Sir Philip

  Banks, Robert (Harrogate)

  Goodlad, Alastair

  Beith, A. J.

  Gorst, John

  Benyon, William

  Gow, Ian

  Berry, Sir Anthony

  Gower, Sir Raymond

  Biffen, Rt Hon John

  Greenway, Harry

  Biggs-Davison, Sir John

  Gregory, Conal

  Boscawen, Hon Robert

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

  Bottomley, Peter

  Griffiths, Peter (Portsm'th N)

  Bottomley, Mrs Virginia

  Ground, Patrick

  Brandon-Bravo, Martin

  Gummer, John Selwyn

  Brinton, Tim

  Hamilton, Hon A. (Epsom)

  Brown, M. (Brigg & Cl'thpes)

  Hamilton, Neil (Tatton)

  Browne, John

  Hancock, Mr. Michael

  Bruinvels, Peter

  Hanley, Jeremy

  Buchanan-Smith, Rt Hon A.

  Hannam, John

  Buck, Sir Antony

  Hargreaves, Kenneth

  Budgen, Nick

  Harris, David

  Burt, Alistair

  Harrison, Rt Hon Walter

  Butcher, John

  Harvey, Robert

  Carlisle, Kenneth (Lincoln)

  Haselhurst, Alan

  Carlisle, Rt Hon M. (W'ton S)

  Hawkins, Sir Paul (SW N'folk)

  Carttiss, Michael

  Hayhoe, Barney

  Cartwright, John

  Heathcoat-Amory, David

  Cash, William

  Heddle, John

  Chapman, Sydney

  Henderson, Barry

  Clark, Sir W. (Croydon S)

  Hickmet, Richard

  Clarke, Rt Hon K. (Rushcliffe)

  Hicks, Robert

  Clegg, Sir Walter

  Higgins, Rt Hon Terence L.

  Cockeram, Eric

  Hill, James

  Colvin, Michael

  Hind, Kenneth

  Conway, Derek

  Hirst, Michael

  Coombs, Simon

  Holt, Richard

  Cope, John

  Howard, Michael

  Cormack, Patrick

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

  Corrie, John

  Howarth, Gerald (Cannock)

  Cranborne, Viscount

  Howell, Ralph (N Norfolk)

  Currie, Mrs Edwina

  Hunt, David (Wirral)

  Dicks, Terry

  Hunt, John (Ravensbourne)

  Douglas-Hamilton, Lord J.

  Hunter, Andrew

  du Cann, Rt Hon Edward

  Irving, Charles

  Durant, Tony

  Jackson, Robert

  Dykes, Hugh

  Jessel, Toby

  Eggar, Tim

  Johnson Smith, Sir Geoffrey

  Emery, Sir Peter

  Jones, Gwilym (Cardiff N)

  Eyre, Sir Reginald

  Jones, Robert (W Herts)

  Fairbairn, Nicholas

  Kellett-Bowman, Mrs Elaine

  Fallon, Michael

  Kennedy, Charles

  Farr, Sir John

  Kershaw, Sir Anthony

  Favell, Anthony

  Key, Robert

  Fenner, Mrs Peggy

  Kirkwood, Archy

  Finsberg, Sir Geoffrey

  Knight, Gregory (Derby N)

  Fookes, Miss Janet

  Knight, Mrs Jill (Edgbaston)

  Forman, Nigel

  Knox, David

  Forsyth, Michael (Stirling)

  Lang, Ian

  1015

  Latham, Michael

  Rathbone, Tim

  Lawler, Geoffrey

  Renton, Tim

  Lawrence, Ivan

  Rhodes James, Robert

  Leigh, Edward (Gainsbor'gh)

  Rhys Williams, Sir Brandon

  Lennox-Boyd, Hon Mark

  Roberts, Wyn (Conwy)

  Lester, Jim

  Roe, Mrs Marion

  Lewis, Sir Kenneth (Stamf'd)

  Ross, Wm. (Londonderry)

  Lilley, Peter

  Rossi, Sir Hugh

  Lloyd, Ian (Havant)

  Rowe, Andrew

  Lloyd, Peter, (Fareham)

  Sayeed, Jonathan

  Lord, Michael

  Shaw, Sir Michael (Scarb')

  Luce, Richard

  Shelton, William (Streatham)

  Lyell, Nicholas

  Sims, Roger

  McCrindle, Robert

  Smith, Sir Dudley (Warwick)

  McCurley, Mrs Anna

  Smyth, Rev W. M. (Belfast S)

  Maclean, David John

  Speed, Keith

  Maginnis, Ken

  Speller, Tony

  Major, John

  Spencer, Derek

  Malins, Humfrey

  Spicer, Jim (W Dorset)

  Maples, John

  Spicer, Michael (S Worcs)

  Marshall, Michael (Arundel)

  Stanbrook, Ivor

  Mates, Michael

  Steel, Rt Hon David

  Mather, Carol

  Stern, Michael

  Maude, Hon Francis

  Stevens, Martin (Fulham)

  Mawhinney, Dr Brian

  Sumberg, David

  Maxwell-Hyslop, Robin

  Tapsell, Peter

  Mayhew, Sir Patrick

  Taylor, John (Solihull)

  Merchant, Piers

  Taylor, Teddy (S'end E)

  Miller, Hal (B'grove)

  Tebbit, Rt Hon Norman

  Mills, Iain (Meriden)

  Temple-Morris, Peter

  Mills, Sir Peter (West Devon)

  Thomas, Rt Hon Peter

  Miscampbell, Norman

  Thompson, Donald (Calder V)

  Mitchell, David (NW Hants)

  Thompson, Patrick (N'ich N)

  Moate, Roger

  Thurnham, Peter

  Molyneaux, Rt Hon James

  Tracey, Richard

  Montgomery, Fergus

  Trotter, Neville

  Moore, John

  Twinn, Dr Ian

  Morris, M. (N'hampton, S)

  van Straubenzee, Sir W.

  Murphy, Christopher

  Viggers, Peter

  Neale, Gerrard

  Waddington, David

  Needham, Richard

  Wainwright, R.

  Neubert, Michael

  Wakeham, Rt Hon John

  Nicholls, Patrick

  Waldegrave, Hon William

  Nicholson, J.

  Walden, George

  Norris, Steven

  Wallace, James

  Onslow, Cranley

  Wardle, C. (Bexhill)

  Oppenheim, Philip

  Warren, Kenneth

  Osborn, Sir John

  Watts, John

  Ottaway, Richard

  Wells, Bowen (Hertford)

  Owen, Rt Hon Dr David

  Wells, Sir John (Maidstone)

  Page, Richard (Herts SW)

  Wheeler, John

  Parris, Matthew

  Whitfield, John

  Patten, John (Oxford)

  Whitney, Raymond

  Pattie, Geoffrey

  Wiggin, Jerry

  Peacock, Mrs Elizabeth

  Wood, Timothy

  Penhaligon, David

  Woodcock, Michael

  Pollock, Alexander

  Yeo, Tim

  Porter, Barry

  Younger, Rt Hon George

  Powell, William (Corby)

  Powley, John

  Tellers for the Ayes:

  Price, Sir David

  Mr. Tim Sainsbury and

  Proctor, K. Harvey

  Mr. Douglas Hogg.

  Raffan, Keith

  NOES

  Anderson, Donald

  Eastham, Ken

  Ashton, Joe

  Evans, John (St. Helens N)

  Atkinson, N. (Tottenham)

  Farr, Sir John

  Barron, Kevin

  Fatchett, Derek

  Beckett, Mrs Margaret

  Fields, T. (L'pool Broad Gn)

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

  Flannery, Martin

  Boyes, Roland

  Hoyle, Douglas

  Bruinvels, Peter

  Lamond, James

  Callaghan, Jim (Heyw'd & M)

  Lewis, Terence (Worsley)

  Campbell-Savours, Dale

  Litherland, Robert

  Clark, Dr David (S Shields)

  Lloyd, Tony (Stretford)

  Clwyd, Mrs Ann

  Loyden, Edward

  Cohen, Harry

  McKelvey, William

  Corbyn, Jeremy

  Marek, Dr John

  Cunliffe, Lawrence

  Maynard, Miss Joan

  1016

  Michie, William

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

  Parry, Robert

  Young, David (Bolton SE)

  Pendry, Tom

  Roberts, Allan (Bootle)

  Tellers for the Noes:

  Roberts, Ernest (Hackney N)

  Mr. Ron Davies and

  Rogers, Allan

  Mr. Peter Pike.

  Skinner, Dennis

  Question accordingly agreed to.
  Bill read a Second time.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 238, Noes 29.

  Division No. 433]

  [5.30 pm

  AYES

  Alexander, Richard

  Fowler, Rt Hon Norman

  Alton, David

  Fox, Marcus

  Arnold, Tom

  Franks, Cecil

  Ashby, David

  Freeman, Roger

  Atkins, Robert (South Ribble)

  Fry, Peter

  Atkinson, David (B'm'th E)

  Gale, Roger

  Baker, Nicholas (TV Dorset)

  Gardiner, George (Reigate)

  Baldry, Anthony

  Goodhart, Sir Philip

  Banks, Robert (Harrogate)

  Goodlad, Alastair

  Beith, A. J.

  Gorst, John

  Bennett, Sir Frederic (T'bay)

  Gow, Ian

  Benyon, William

  Gower, Sir Raymond

  Biffen, Rt Hon John

  Greenway, Harry

  Biggs-Davison, Sir John

  Gregory, Conal

  Boscawen, Hon Robert

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

  Bottomley, Peter

  Griffiths, Peter (Portsm'th N)

  Bottomley, Mrs Virginia

  Ground, Patrick

  Brandon-Bravo, Martin

  Gummer, John Selwyn

  Brinton, Tim

  Hamilton, Hon A. (Epsom)

  Brown, M. (Brigg & Cl'thpes)

  Hamilton, Neil (Tatton)

  Browne, John

  Hancock, Mr. Michael

  Bruinvels, Peter

  Hanley, Jeremy

  Buchanan-Smith, Rt Hon A.

  Hannam, John

  Budgen, Nick

  Hargreaves, Kenneth

  Bulmer, Esmond

  Harris, David

  Burt, Alistair

  Harrison, Rt Hon Walter

  Butcher, John

  Haselhurst, Alan

  Carlisle, Kenneth (Lincoln)

  Hawkins, Sir Paul (SW N'folk)

  Carlisle, Rt Hon M. (W'ton S)

  Hayes, J.

  Carttiss, Michael

  Hayhoe, Barney

  Cartwright, John

  Heathcoat-Amory, David

  Cash, William

  Heddle, John

  Chapman, Sydney

  Henderson, Barry

  Clark, Sir W. (Croydon S)

  Hickmet, Richard

  Clarke, Rt Hon K. (Rushcliffe)

  Hicks, Robert

  Clegg, Sir Walter

  Higgins, Rt Hon Terence L.

  Cockeram, Eric

  Hill, James

  Conway, Derek

  Hind, Kenneth

  Coombs, Simon

  Hirst, Michael

  Cope, John

  Holt, Richard

  Corrie, John

  Howard, Michael

  Cranborne, Viscount

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

  Crouch, David

  Howarth, Gerald (Cannock)

  Currie, Mrs Edwina

  Howell, Ralph (N Norfolk)

  Dickens, Geoffrey

  Hunt, David (Wirral)

  Dicks, Terry

  Hunt, John (Ravensbourne)

  Douglas-Hamilton, Lord J.

  Hunter, Andrew

  du Cann, Rt Hon Edward

  Irving, Charles

  Durant, Tony

  Jackson, Robert

  Dykes, Hugh

  Jessel, Toby

  Eggar, Tim

  Johnson Smith, Sir Geoffrey

  Eyre, Sir Reginald

  Jones, Robert (W Herts)

  Fairbairn, Nicholas

  Kellett-Bowman, Mrs Elaine

  Fallon, Michael

  Kennedy, Charles

  Farr, Sir John

  Kershaw, Sir Anthony

  Favell, Anthony

  Key, Robert

  Fenner, Mrs Peggy

  Kirkwood, Archy

  Finsberg, Sir Geoffrey

  Knight, Gregory (Derby N)

  Fookes, Miss Janet

  Knight, Mrs Jill (Edgbaston)

  Forman, Nigel

  Knox, David

  Forsyth, Michael (Stirling)

  Lang, Ian

  Forth, Eric

  Latham, Michael

  1017

  Lawler, Geoffrey

  Oppenheim, Philip

  Lawrence, Ivan

  Osborn, Sir John

  Leigh, Edward (Gainsbor'gh)

  Ottaway, Richard

  Lester, Jim

  Owen, Rt Hon Dr David

  Lewis, Sir Kenneth (Stamf'd)

  Page, Richard (Herts SW)

  Lightbown, David

  Parris, Matthew

  Lilley, Peter

  Patten, John (Oxford)

  Lloyd, Ian (Havant)

  Peacock, Mrs Elizabeth

  Lloyd, Peter, (Fareham)

  Penhaligon, David

  Lord, Michael

  Pollock, Alexander

  Luce, Richard

  Porter, Barry

  Lyell, Nicholas

  Powley, John

  McCrindle, Robert

  Price, Sir David

  McCurley, Mrs Anna

  Proctor, K. Harvey

  Maclean, David John

  Pym, Rt Hon Francis

  Maginnis, Ken

  Raffan, Keith

  Major, John

  Rathbone, Tim

  Malins, Humfrey

  Rhodes James, Robert

  Maples, John

  Rhys Williams, Sir Brandon

  Mates, Michael

  Roberts, Wyn (Conwy)

  Mather, Carol

  Roe, Mrs Marion

  Maxwell-Hyslop, Robin

  Ross, Wm. (Londonderry)

  Mayhew, Sir Patrick

  Rossi, Sir Hugh

  Merchant, Piers

  Rowe, Andrew

  Miller, Hal (B'grove)

  Sainsbury, Hon Timothy

  Mills, Iain (Meriden)

  Sayeed, Jonathan

  Mills, Sir Peter (West Devon)

  Shaw, Sir Michael (Scarb')

  Miscampbell, Norman

  Shelton, William (Streatham)

  Mitchell, David (NW Hants)

  Shersby, Michael

  Moate, Roger

  Sims, Roger

  Molyneaux, Rt Hon James

  Smith, Sir Dudley (Warwick)

  Montgomery, Fergus

  Smyth, Rev W. M. (Belfast S)

  Moore, John

  Speed, Keith

  Morris, M. (N'hampton, S)

  Speller, Tony

  Murphy, Christopher

  Spencer, Derek

  Neale, Gerrard

  Spicer, Jim CIV Dorset)

  Needham, Richard

  Spicer, Michael (S Worcs)

  Neubert, Michael

  Stanbrook, Ivor

  Nicholls, Patrick

  Steel, Rt Hon David

  Nicholson, J.

  Stern, Michael

  Norris, Steven

  Stevens, Martin (Fulham)

  Onslow, Cranley

  Sumberg, David

  1018

  Tapsell, Peter

  Walden, George

  Taylor, John (Solihull)

  Wallace, James

  Taylor, Teddy (S'end E)

  Wardle, C. (Bexhill)

  Tebbit, Rt Hon Norman

  Warren, Kenneth

  Temple-Morris, Peter

  Watts, John

  Thomas, Rt Hon Peter

  Wells, Bowen (Hertford)

  Thompson, Donald (Calder V)

  Wells, Sir John (Maidstone)

  Thompson, Patrick (N'ich N)

  Wheeler, John

  Thurnham, Peter

  Whitney, Raymond

  Tracey, Richard

  Wiggin, Jerry

  Trotter, Neville

  Wood, Timothy

  van Straubenzee, Sir W.

  Woodcock, Michael

  Viggers, Peter

  Yeo, Tim

  Waddington, David

  Wainwright, R.

  Tellers for the Ayes:

  Wakeham, Rt Hon John

  Mr. Douglas Hogg and

  Waldegrave, Hon William

  Mr. T. Garel-Jones.

  NOES

  Ashton, Joe

  Loyden, Edward

  Barron, Kevin

  McKelvey, William

  Beckett, Mrs Margaret

  Marek, Dr John

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

  Maynard, Miss Joan

  Boyes, Roland

  Michie, William

  Callaghan, Jim (Heyw'd & M)

  Parry, Robert

  Campbell-Savours, Dale

  Pike, Peter

  Clark, Dr David (S Shields)

  Roberts, Allan (Bootle)

  Cohen, Harry

  Skinner, Dennis

  Corbyn, Jeremy

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

  Davies, Ronald (Caerphilly)

  Wardell, Gareth (Gower)

  Fatchett, Derek

  Young, David (Bolton SE)

  Fields, T. (L'pool Broad Gn)

  Hoyle, Douglas

  Tellers for the Noes:

  Lewis, Terence (Worsley)

  Mr. Allan Rogers and

  Litherland, Robert

  Mrs. A. Clwyd.

  Lloyd, Tony (Stretford)

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

  Housing
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sainsbury.]
  5.40 pm
  Mr. Robin Corbett: The best comment on the Government's policy on housing expenditure is as follows:
  "the facts are that since Mrs. Thatcher first gained office in 1979 we have increasingly been subjected to an extreme form of disruptive and damaging `stop-go' cycle, we have seen truly massive cuts in our capital construction programmes, a serious reduction in training opportunities and appalling unemployment."
  That statement was made last month by Mr. Bruce Chivers of the Building Employers Confederation, a body not noted for its sympathy with the Labour party.
  The Government are presiding over a deliberately created disaster in both public and private housing, but it is not as if they recognise that. The Secretary of State for the Environment said:
  "I will not take criticism from the Opposition about improvement grants…These grants totalled £900 million last year, whereas they were £90 million when the Labour party was in office."—[Official Report, 18 July 1984; Vol. 64, c. 334.] That piece of cheek came from a Government who have drastically cut the money available for improvement grants generally and the percentage of grant for householders. That is apart from cuts in the housing allocation, rate capping and all the other interferences with local democracy.
  I shall tell the Minister what is happening in Birmingham in relation to improvement grants. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) hopes to enlarge upon my remarks. Mr. Frank Reynolds, the city environmental health officer, in a letter to the National Home Improvement Council in March, said:
  "The situation in Birmingham is that our present workload on house renovation grant inquiries and applications is 28,475 and this accumulation has built up since 1 April 1982. Although some 22,000 of these grants are being actively pursued by the staff there is an enormous backlog still to be visited."
  Because of the Government's cut in the money available, Birmingham will be able to complete only about 6,000 grants in the current financial year. This is not an argument about numbers and money. It means heartbreak and disappointment for thousands of people who were encouraged to apply for grants before the last election and whose hopes were dashed when the Conservative Government were returned last autumn and the first of the cuts were made. That was deceitful and dishonest. I have no doubt that the people of Birmingham had that in mind when they returned the city to Labour in the local elections in May and the Euro-elections later.
  The Government have forced Birmingham city council to restrict grants to houses lacking basic standard amenities such as baths, wash hand basins, sinks, water closets, hot and cold water supplies and to improvements to meet the needs of disabled people. That is it—full stop. That is the reality of the Government's vaunted home improvements policy. Thousands of Brummies will receive no help with new roofs and other works that need doing. The vaunted "enveloping" scheme, of which Government Members could not make enough before the last general election, is now a dead duck.
  The facts are not a surprise to Government Members. They know the position. Public spending on housing in
  1020
  1978–79 was £5,803 million. By 1981–82 it had slumped to £3,336 million. For 1984 it is pitched at £2,264 million. Since 1979 a cut of about 61 per cent. has been made in spending on housing compared with a rise of 27 per cent. on defence spending. Such are the Government's priorities.
  The building figures tell the same dismal and depressing story. In Great Britain, local authorities started 56,378 new homes in 1979. 13y 1983 that figure had fallen to 32,591. That was not an accident. It was not because people were not waiting for homes. It was the result of a deliberate strategy by the Conservative party to cut back heavily on spending on housing in the public and the private sectors. In the public and private housebuilding sectors, starts between 1980 and 1983 were 40 per cent. down on the period between 1975 and 1978.
  Mr. John Heddle (Mid-Staffordshire): How much will Birmingham benefit from money provided through the Housing Defects Bill, the Lords amendments to which are due to be considered tomorrow? Will the hon. Gentleman suggest to the now Labour-controlled Birmingham city council that if the money that is locked up in mortgages by people who have had the good sense to buy their houses from the Birmingham city council were released and refinanced through a building society it would be available to the ratepayers and the homeless and for all the things, like home improvements, for which the hon. Gentleman pleads?
  Mr. Corbett: The hon. Gentleman has the problem round his neck. I hope that he will be courteous enough to sit there until I have finished so that I can tell him exactly what is happening. He has obviously been reading an out-of-date brief from Tory central office.
  The Government's most massive attack on public spending has been against housing. Government policy means longer waits for a home and longer waits for repairs and transfers. It condemns thousands in Birmingham and hundreds of thousands throughout the country to the misery of squalid housing and adds to the package of deprivation suffered by those who are also denied jobs.
  In 1982–83, under Tory control, just five new houses were built in Birmingham—just five. In 1983–84, just 33 new houses were built. That is for a major city in Britain. Is it because new homes are not needed? In 1979–80, 12,562 people were on the waiting list in Birmingham. About 13,000 people were on the waiting list in 1980. When the Tory administration left office in May, the housing list stood at 20,450.
  Mrs. Edwina Currie: I was the chairman of the housing committee in Birmingham at the time about which the hon. Member is being so avidly critical. Will he tell the House the number of properties that were started and developed for sheltered purposes, for the disabled and other special needs groups, the number of properties funded by the city for housing associations and other groups such as the single homeless, in which I took a particular interest? Will he tell us the amount of property sold, including derelict land, to private builders and the number of properties that they were able to erect as a result, particularly in the inner city?
  Mr. Corbett: The hon. Lady's constituents in Derbyshire must wonder why she has such a long and lingering fascination for Birmingham. I shall come later to most of the details for which she asked.

  1021
  The Minister knows what is going on in Birmingham in relation to housing and housing expenditure. The city put in a bid for £120 million of housing allocation for 1984–85. It has been allocated only £66 million. There is urgent need, especially in the inner city area, for a much larger spend to create the jobs about which the Prime Minister and her right hon. and hon. Friends are always crowing. The need is not only to provide decent homes, but to help take some of the 400,000 building workers off the dole and put them back into useful work.
  These well-housed Ministers know well that they are storing up a housing problem that will match that of the immediate post-war years. Some 1·25 million homes in England and Wales are unfit and lack basic amenities, 800,000 people live in overcrowded conditions, 2·5 million houses are seriously affected by dampness and it has been estimated that about £10,000 million is needed to remedy construction and design faults in existing council homes such as those built by the Bison wall frame system in my constituency. Some 103 blocks have been built by that system in the city of Birmingham. All that the Government can say to a city that cannot get anywhere near enough housing money to deal with its normal problems and faces a massive repair and renovation bill is, "You find the money yourselves."
  A report on the tower blocks, which was submitted to the Birmingham housing committee in February this year, stated:
  "The main problems with the wall frame system are the possibility of insufficient ties being installed in inner and outer leaves of external walls."
  The report added:
  "urgent action has been taken to provide bolts to 83 suspected panels."
  Those are the 3-ton external cladding panels. Some 1,200 other panels in those tower blocks are suspect.
  The Housing Defects Bill promises to help those who bought defective council houses by giving them a 90 per cent. repair grant, most of which will be funded by the councils, but what are the councils to do when they face equally severe problems with similar types of housing? They have been told that they must deal with these matters by using funds from their housing allocations, which are being cut in any event.
  The private sector, together with the building suppliers and other linked trades, used to be a good friend of the Tory party, but not now—not any more. I suspect that VAT on home extensions, introduced by the Chancellor of the Exchequer, put the final seal on that. However, that is by no means the end of the housing misery. A survey just published by the Birmingham standing conference on the single homeless showed that on any one night nearly 200 people could be sleeping in six night shelters in the city. In the course of one year, well over 2,000 people might pass through those shelters. It is no good the Minister saying that they should look to the private sector. The privately rented sector in Birmingham fell from 61 per cent. of housing stock in 1947 to 15·9 per cent. in 1975,and I suspect that it is much lower today.
  The number of single homeless on the city's housing list has risen dramatically. According to the survey, they now represent 55 per cent. of those on the waiting list, and half of them are aged between 18 and 24. What is being done to help them? Nothing is being done in Birmingham, because of the Government's policies. Let us look at the
  1022
  number of maisonettes, assuming that they are suitable for the single homeless—in many cases they are not. In 1979–80 just 15 were built in the city. In 1980–81 none was built, in 1981–82 four were built, in 1982–83 none was built and in 1983–84 two were built. What about two-storey flats? They are no good, because they are provided mainly under warden-supervised schemes for the elderly. There are precious few of them in any event. Some 263 were built in 1981–82, only 62 were built in 1982–83 and 213 were built in 1983–84.
  The stark fact is that nothing is being done in Birmingham for the single homeless or others in desperate housing need, because of the Government's savage cuts in the money spent on housing. In 1982–83, just five new family houses were built in the city of Birmingham. That is when the hon. Member for Derbyshire, South (Mrs. Currie) was proud to be chairman of the housing committee. In 1983–84, just 33 new family houses were built. There are 20,000 or more people on the waiting list. What hope do they have of getting decent and adequate housing under this Government? The fact is that the only place that those 20,000 people will have to live is on that waiting list.
  5.55 pm
  Mr. David Winnick: My hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) has initiated a useful debate on housing.
  There is no doubt that there is a housing crisis. It arises mainly from the large-scale cuts in public expenditure since the Government took office five years ago. In a recent Adjournment debate on housing the Under-Secretary disputed some of the figures that I quoted then. I have since rechecked them in the Library. I am repeating what I said in that Adjournment debate: in real terms, expenditure on housing in Britain will fall during the current financial year to around 39 per cent. of the 1979–80 level. In round figures, that means a reduction from £5,455 million in 1979–80 to £2,118 million in 1984–85.
  Ministers have made much play of the decline in public sector housing starts during the last years of the Labour Government. There was such a decline, and I regret it. As my hon. Friend the Member for Erdington rightly said, however, it is nowhere near the decline since this Administration have been in office. In 1978, the last full year of the Labour Government, there were over 107,000 public sector starts. In 1981, the figure was down to 37,000. It rose to 52,000 a year later, and last year it was just over 47,000. Therefore, the Minister, like the Under-Secretary, may state that there has been an improvement, but it was an improvement over the miserable 1981 figure when there were just 37,000 starts in the public sector. From 1974 to 1979, there was a reduction of just over 26 per cent. in the number of public sector housing starts. From 1979 to last year, the figure was just under 42 per cent.
  I know that the private sector interests Conservative Members more than public sector starts. It is interesting therefore, to note that in the private sector there was a 48 per cent. increase between 1974 and 1979 and only a 16 per cent. increase under this Administration.
  There is undoubtedly a desperate need for council dwellings to be built. As my hon. Friend said, a large number of people are waiting to be housed. Many have been waiting for years on end. A lot of them are living in the most inadequate accommodation. Some young married

  1023
  couples manage to live with their parents or in-laws; others take one-bedroomed rented accommodation because it is all that they are likely to get. Many of them are being cruelly exploited by private property companies. I have referred to the role of the Berger property empire during Question Time and in correspondence with the Minister.
  Recently, there was a television film about what is happening in London, where bed and breakfast accommodation is provided by hotels. What a pathetic scene it was. Families, most with children, were put up in so-called hotels because the local authorities could not—and are not likely to be able to for some time—offer them any sort of rented accommodation.
  A substantial house building programme is required. The Government's approach — there was the same response from the Under-Secretary during the Adjournment debate on 25 June—is, in effect, to say that there is no real need for new rented accommmodation in the public sector. Even if there were not massive unemployment— officially, the figure in my travel-to-work area is over 17 per cent.—and even if there were no increase in the mortgage interest rate, there would remain many people—I put the figure as high as 30 per cent. — who would stand no chance of getting a mortgage and who could find adequate accommodation only by being offered it by the local authority.
  Those are people who desperately need to be housed by a local authority. What is their alternative if they cannot get a mortgage? How can they find other forms of accommodation? Does the Minister suggest that the private rented sector could help such people? All the evidence shows that there has been no revival of the private rented sector and that there is not likely to be. It is not in a position to help the hundreds of thousands of people on waiting lists. All hon. Members know that that is a fact. The sort of people shown on television who are living in bed and breakfast accommodation, with their parents, with in-laws or in one-bedroomed flats will have adequate accommodation such as hon. Members, including the Minister, enjoy, only if a local authority offers them accommodation.
  Other people are in difficulty because of the Government's housing policies. Many couples live in multi-storey flats and are waiting to be rehoused in houses. In some cases couples with two or three children must wait a long time for that. Conservative Members are keen to tell us about the Government's policy of forcing local authorities to sell council accommodation. People who live in multi-storey blocks of flats and come to my surgeries or write to me do not want to buy accommodation on the sixth, seventh or 12th floor of a multi-storey block. The better type of council accommodation, such as houses with gardens, is being sold off. If the Government are so keen on their policy to sell council accommodation — they constantly tell us about it—why is the same statutory right not given to private tenants? Hon. Members know the answer to that only too well.
  A couple of weeks ago a constituent wrote to me because he was concerned that his parents were living on the seventh floor of an eight-storey block of flats. Apart from other matters, the son wants his parents to be rehoused in a house or at least in a three-storey block of flats. I took the matter up with the local authority, as I always do. The housing department, in its reply, told me that, due to the acute shortage of housing in the borough,
  1024
  the couple would be eligible for a two-bedroomed house only after having been 21 years in a flat. I do not blame the local authority; but I do blame the Government.
  My hon. Friend the Member for Erdington told us that his local authority had built only five or 10 dwellings in the past few years. Since 1979, my borough councilWalsall—has been unable to enter into contracts for new council dwellings. Clearly it is faced with an ever larger number of people waiting to be rehoused from multi-storey accommodation and a large number of people waiting to be housed for the first time. Year after year the borough submits applications under the housing investment programme for about £36 million, and each year the sum allocated is no more than about £10 million.
  The Minister who is to reply courteously sent me a note to tell me that he would be visiting Walsall, I replied immediately, and suggested that during his visit he should try to understand the housing plight in the borough and the local authority's problems as the borough is designated as a housing-stretched area. But I doubt whether he took up those points.
  It is not only a question of building new accommodation. There is also the problem of modernising older council properties. Local authorities cannot carry out the sort of modernisation programmes that they wish to carry out.
  I make no apologies for referring again to the Rosehill estate in Willenhall in my constituency. The properties there were built in the 1930s. Among the dwellings—-I doubt whether the Minister saw them on his visit—are 200 which have only outside toilets. Many of them have unplastered kitchens, some are missing hand basins and more than 400 of them are damp. The local authority wants to modernise those properties as quickly as possible. That is the objective that one would expect from a local authority. However, it cannot do so at the moment and it has not been able to do so for the past few years, because the allocation it receives under the annual housing investment programme is inadequate. Therefore, tenants on the Rosehill estate must wait year after year, although they pay large amounts in rent. The improvements, which are absolutely necessary, and which the House should recognise as being necessary, cannot be carried out.
  The Government have pursued a dogmatic policy on housing, as in other matters. Since they took office they have been determined that housing should bear the brunt of public expenditure cuts. That has brought many difficulties and much misery to families everywhere. As I said, many people who cannot get mortgages desperately need to be rehoused by their local authority. It is all very well for the Government to sell off council accommodation—I do not want to go into the pros and cons now of that argument—but it is interesting and distressing to note that, apart from the war years, this is the first time that there has been a substantial reduction in the rented sector.
  The elementary thing that the Government should have done if they were determined to pursue their policies was to say, "If we are going to encourage local authorities to sell off accommodation, we must ensure that the accommodation is replaced." They have done nothing of the kind. It is precisely because the best type of accommodation has been sold that local authorities are left with multi-storey blocks of flats, from which many people wish to move to houses. But, as the houses have been sold off, how can they do so?

  1025
  The Government may argue that, even if there had been no sales policy, the houses would still be occupied. However, in the last Parliament, the report of the Select Committee on the Environment, of which I was a member, pointed out that quite a number of the people who had bought those dwellings would have moved to the private sector anyway. Therefore, a number of those council houses would have been available for the type of family that I have been speaking about. There are many building workers on the dole who could be usefully employed on building and modernising the accommodation which is so desperately needed.
  Neither I nor my hon. Friend the Member for Erdington have any illusions that we can persuade the Government to change their mind. However, it is right that Labour Members should use every opportunity in the House to illustrate the hardship and suffering that are being caused to our constituents because of the Government's policies.
  6.9 pm
  Mr. John Heddle (Mid-Staffordshire): I rise with an apology, if I may, to you Mr. Speaker, my hon. Friend the Minister and the House because I fear that I may not be able to be here when my hon. Friend replies. I hope that in the event he will forgive me.
  It is necessary to put right one or two statements. The hon. Members for Birmingham, Erdington (Mr. Corbett) and for Walsall, North (Mr. Winnick) failed to acknowledged one simple fact—that the long housing waiting lists in their constituencies, mine and those of my hon. Friends did not start in 1983, 1979, 1974, 1970, 1966, 1964 or even 1959. They started years ago. They perhaps started in 1919, when rent control was first imposed as a temporary post-war expedient. They were perhaps exacerbated by the fact that between the wars it did not pay reputable builders, and landlords such as Costain and the Wimpey group to build homes to rent. It might have been exacerbated when the Government, in their wisdom, introduced the Parker Morris standards and caused houses to be built of far higher standards and at far greater costs than necessary. [HON. MEMBERS: "Rubbish."] It is not rubbish at all. Opposition Members shout, "Rubbish," but they do not understand that the capital cost must, in some way, have a reflection upon the rental income; otherwise, who pays? The taxpayer and the ratepayer have to pick up the tab. I am not necessarily suggesting that we should return to cost-rent, but there must be a relationship, as any hon. Member who has served in government or local government is aware, between capital and revenue.
  Opposition Members fail to acknowledge that our housing problems are born of political dogma. I suggest that the political dogma is mongrel political dogma. Why was it that in 1977 the party then in government produced a Green Paper, from which I shall not quote but which, as the House is aware, specifically stated that rent control was one of the reasons for the excess of people over homes to rent? Despite the findings of that Green Paper, did the party opposite in government do anything to release the noose that is rent control? Not a bit of it. It did the opposite, and it was contradictory. When, in 1979, the Government introduced the Housing Bill, they introduced two forms of tenure that could, under normal, fair and reasonable circumstances, increase the supply of rented
  1026
  accommodation for just the people whom the hon. Member for Erdington has suggested are on his housing waiting list and that in my constituency.
  Mr. Winnick: I know the hon. Gentleman's views about rent control. He is frank about them and I suppose that we should respect him for making his views clear. He is not in favour of rent control. He sees shortholds as a way of doing away with rent control and security of tenure in time. Is he aware that the Rent Act 1957, which decontrolled a great deal of rented accommodation and ensured that all new rented accommodation was not subject to any security of tenure or rent control, did not lead to an increase in rented accommodation; it led to a substantial decrease in privately rented accommodation? In 1959-60, the local authority of which I was a member found that it had to rehouse many people who were the victims of Rachmanism or semi-Rachmanism. That Act led to Rachmanism.
  Mr. Heddle: The hon. Gentleman makes the same point in every housing debate. The House is well aware of his views. I deplore Rachmanism and the activities of the few who get rich quick on the backs of the poor and unhoused, such as the Berger group of companies to which he referred. However, we should not let one egg in the housing basket spoil the many good. We may put restrictions on overcrowding, unfair rents and licence agreements but, in doing so, we should not ignore the fact that the majority of institutions, building societies and reputable builders would like the opportunity to provide homes to rent.
  I welcome the proposals contained in the Green Paper published this week about the possible way ahead for the building society movement to become more directly and actively involved as a supplier of first resort homes to rent or for sale.
  I gave way to the hon. Gentleman, who in the last Parliament was a parliamentary neighbour of mine, because I hoped that he might explain the dichotomy in which his party finds itself. It disagrees with the principle of shorthold, designed to provide private rented accommodation and thereby mobility of tenants and mobility of labour, yet it agrees with the concept of the assured tenancy provisions designed to do precisely the same for newly built properties in the same Housing Act 1980.
  The division across the floor arises because the Labour party believes that the housing problem can be solved by the wave of a municipal cheque book and Conservative Members believe that although it cannot be solved, at least in some respects it can be ameliorated by a partnership between the public and private sector, with the public sector providing homes for the disabled, and for those in real and genuine need —the disadvantaged— and the private sector providing the ladder of opportunity and independence to which most people aspire who are fortunate enough to be able to do so.
  The hon. Member for Walsall, North referred to the building societies and the current rate of mortgage interest. I must declare an interest. I am a vice-president of the Building Societies Association. A year ago, it published a most interesting report which I suggest the Labour party ignores at its peril, and which shows that, of the 40 per cent. who do not today have the privilege of owning their own home, 90 per cent. expect to own their own home

  1027
  within their lifetime. They look to the Conservatives in government to implement policies that will enable them to aspire to their lifetime's ambition.
  Why did not the hon. Member for Erdington, who has temporarily left the Chamber, mention that between 1976 — when the then Chancellor went with his begging bowl, as far as the tarmacadam of Heathrow, to the IMF —and 1979 when they lost office, deservedly, starts in public sector housing fell from 170,000 to 81,000?
  It is easy for Opposition Members to point to the figures of this Government. It is even easier if they look back and see what the leaves of history foretold then—and the reason was simple. Inflation and the economy were out of control; as the late Anthony Crosland rightly said, the party was over. There was just not enough food in the larder or money in the kitty to provide homes. That is why public sector starts in those three short miserable years fell by 50 per cent.
  I have mentioned the fact that the private rented sector, whether through the voluntary housing movement, shorthold or short tenancy, can provide the mobility and can release people from the wooden and static housing environment into which, sadly, the public sector locked them. The hon. Members failed to mention that. They failed to mention that the Government — the Labour party could have done it, of course, in its period of office —have given public sector tenants a tenants' charter. The Government have given them the same rights that the private sector tenant has had for some time. Let not the House and the country ignore that.
  The Opposition have failed to acknowledge that improvement grants, despite this temporary hiccup, have been at an all-time high and that home insulation grants are at an all-time high. They have failed to acknowledge that, by trying to bring forward development land in inner cities such as Birmingham, to which my hon. Friend the Member for Derbyshire, South (Mrs. Currie) referred, the Government have established a land register to identify that basic commodity on which all new houses must be built. It is our most precious national commodity.
  I am pleased that, in answer to a parliamentary question last week, my right hon. Friend the Secretary of State for the Environment said that at last he is taking powers under section 98 of the Local Government, Planning and Land Act to compel local authorities to release this land to enable private sector builders—the employers of skilled labour in the construction industry — to build homes under the partnership and half-and-half schemes. Local authorities and other public authorities such as the British Rail Property Board, the Ministry of Defence and regional hospital and health authorities have been sitting on this most valuable asset, but the schemes to which I have referred will enable prospective tenants on housing waiting lists at least to start on the ladder of opportunity.
  Who provided the concept of the half-and-half scheme, improvement for sale and homesteading? It was not the Labour party. Mongrel political dogma shut the door of the kennel in its face.
  Mr. Peter Pike: The hon. Gentleman has made comparisons between the public and private sectors, but one important area in which fair comparisons cannot be made is that of the interest burden borne by council tenants in their rents. Would it not be fair if council tenants were given a concession equivalent to the income tax
  1028
  concession on mortgage repayments given to those in the private sector, bearing in mind that at present the interest burden on rents is extremely high?
  Mr. Heddle: I shall not be tempted down that path, other than to say that local authorities are at a greater advantage than the private sector. The private sector must borrow its money on much shorter terms and much more stringent conditions. Local authorities obtain money from the Exchequer over 40 or 60 years at concessionary rates of interest, but the private sector enjoys no such privilege or advantage. The hon. Gentleman's point about tax relief on rents and on mortgage interest would be fair if rents were at a realistic and fair market level, just as they are in the private sector.
  Mrs. Currie: Is it not also the case that where housing benefit is claimable, the private owner purchasing his house on a mortgage can claim that benefit only against the mortgage interest — not against the repayment of mortgage itself—whereas the council tenant can claim it against the entire rent?
  Mr. Heddle: That is absolutely right. I am sure that my right hon. Friend will agree that the owner-occupier who enjoys the benefit of mortgage interest relief up to £30,000 —recently increased—is by standing on his own feet releasing the public sector from the pressure of providing him with a home.
  The hon. Member for Erdington failed to mention the number of houses owned by local authorities in Birmingham and elsewhere which have been empty not just for six or 12 months, two or four years, but in some absurd cases 10, 15 or 20 years. Those hon. Members who know of such houses that have been left idle and which have gone to waste should consider urging that they be let at concessionary rents or for rent-free periods to those on housing waiting lists who are do-it-yourself experts and who might be prepared to invest some of their time and a lot of their expertise to bring those homes up to habitable and lettable standards.
  Mr. Corbett: I take the hon. Gentleman's point about homes, particularly those owned by the county council, out of which the police have moved. Some in my patch have been vandalised. However, when the Conservative party was in control of Birmingham, under the control of the hon. Member for Derbyshire, South (Mrs. Currie), many homes around the city, once tenants had moved out, were boarded up and stood empty waiting for people who were able to buy them. Is the hon. Gentleman defending that?
  Mr. Heddle: The hon. Gentleman makes a fair point, but I am saying that Labour Members did not even bother to mention these blatant examples of bureaucratic waste. I am not for a moment suggesting that this is a party political issue. I am suggesting that, as these properties are owned by the public sector, there is no landlord—no one who each week knocks on the door to collect the rent. There is no one to care for those properties or even to care for the good will and welfare of the tenants. That is why there is a strong argument for the management of the public housing sector to be given perhaps to the voluntary housing movement which has a more caring, coin-passionate and prudent attitude to the way in which our housing stock is managed.
  I rest my case there. I asked the hon. Member for Erdington how much the city of Birmingham would

  1029
  benefit from the grants made available to Airey house owners and to the owners of the 26 other types of property which fall within the categories incorporated in the Housing Defects Bill. He failed to give the answer that I was seeking.
  The problem of housing and its waiting lists will be solved only if all parties can somehow reach an accommodation—I choose my words carefully—so that mongrel dogma goes by the board and practical reality which has regard to the aspirations of the majority of the people takes its place.
  Mr. John Fraser: The hon. Gentleman referred to people with a £30,000 mortgage standing on their own feet, but the tax relief on such a mortgage is £1,170 public subsidy in the first year. Can we reach a consensus that that subsidy is paid to everyone in need of housing?
  Mr. Heddle: The hon. Gentleman, whose views I respect very much and who has much practical experience of these matters, perhaps did not understand my answer to the hon. Member for Burnley (Mr. Pike). We can compare a subsidy in the public sector with mortgage tax relief in the private sector only if the conditions relating to both are equal. They are not. Tax relief to the home owner in the private sector through mortgage relief is not a subsidy in the same sense that a rent is subsidised — [HON. MEMBERS: "Oh?"] It is not. The housing problems that confront us all in our advice bureaux each weekend will be solved only if the political barriers are broken down and practical realities which have regard to the aims and aspirations of the majority of the British people take their place.
  6.28 pm
  Mr. George Park: Time and again, attention has been drawn to the fact that the Government are prepared to carry through their policies irrespective of the social consequences. A classic example is the restriction of expenditure on housing.
  No one can deny the tremendous need for new houses, and for the maintenance, repair and renovation of existing homes. In terms of human misery, this lack of provision is hard to measure, but there is no doubt that it is a major contributor to the break-up of marriages and families and a cause of general unrest. Lack of a decent home plus unemployment adds to the sorry picture of life under this Government for millions of people.
  A steady increase in housing provision and repair would not add substantially to imports. It would bring work to a sector of industry which has probably the highest rate of unemployment, and pay packets instead of dole would result in a greater demand for goods and services to the general well-being of the economy. The Government seem blind and deaf, and are more intent on their accountancy than on meeting this need.
  In Coventry, even before the moratorium, the existing resources, including capital receipts, were completely unable to deal with the problems. There are 3,000 pre-war council houses needing modernisation. This problem can be tackled only at the rate of 200 a year, so is a 15-year programme. Some 7,000 houses have major insulation problems and 13,500 are not centrally heated. The Minister will agree that that is the only way to deal with
  1030
  condensation in the no-fines dwellings that Coventry had to erect in great numbers after the war to get roofs over people's heads. At the present rate, this programme will take 20 years to complete.
  All the multi-storey blocks in Coventry need their windows replaced, and there is no money in the programme for that. Jobbing and planned repairs are already £1 million over budget, and those repairs are essential if the housing stock is to be regenerated. The only new house building is at the rate of 70 units a year for the elderly and disabled, despite a waiting list of over 6,000 and a transfer list of 3,000. No one on those lists is interested in when the lists started. All they know is that they are on the lists and have little prospect of getting off them.
  I am sure that the general public would be interested in the comment by the hon. Member for Mid-Staffordshire (Mr. Heddle) that councils had built houses to too high a standard. He might have put it a bit more bluntly and said that the houses were too good—it would have been more honest if he had put it that way. The claim that the Labour party does not believe in people owning their own homes is evidence of a lack of knowledge. Nearly 20 years ago, the Labour council in Coventry was building houses for sale.
  Mr. Michael Forsyth: I appreciate that Glasgow is some way from Coventry, but is the hon. Gentleman aware that the Labour party in Glasgow has refused an offer of £1 million to sell a sub-standard block, and that it will demolish it at a cost of £750,000 rather than allow a private developer to develop the block for sale to provide housing in Glasgow? What commitment does that show to home ownership or to dealing with the problems that the hon. Gentleman is discussing?
  Mr. Park: I shall not parade my knowledge of Glasgow, but I was born there, although I do not get back there very often. The last time I did so was nine months ago, and I was agreeably surprised at the amount of renovation work that the Glasgow authority is doing on some of the old tenements such as the one in which I had lived. It is doing a marvellous job of work. More power to its elbow; I am sure that it will want more money to get on with it.
  In the private sector, 17,000 dwellings in Coventry need improvement. At the present rate of progress, it will take 30 years to cover current needs. Rewiring is a dangerous problem that is well known in Coventry, but the programme for that will take five years to complete. It hardly needs to be said that, by the time all these programmes are completed at the present rate of expenditure, there will be another huge backlog.
  To add to the general frustration, interest rates will require council tenants to find an additional £800,000, which is about 65p a week for each tenant. I do not imagine that Coventry is exceptional, and the Coventry problem is repeated up and down the country. That means that there is an urgent need for a complete reappraisal of Government policy towards public expenditure on housing.
  6.34 pm
  Mr. Nigel Spearing: It was about five years ago, when the Minister for Housing and Construction was occupied in a different role, that I drew

  1031
  the attention of the Prime Minister to the plight of young families in tower blocks in my constituency. I instanced the need of the council unwillingly to sell off excellent small houses built at public expense, and I asked whether this was not discriminating against the needs of families in tower blocks. The Prime Minister, in her ignorance, replied that it was not, because people in tower blocks had an equal right to buy their flats if they wished. The right hon. Lady had misunderstood the point because she did not understand housing needs.
  The hon. Member for Mid-Staffordshire (Mr. Heddle) talked about doctrinaire principles on housing. All the evidence is that it is the Conservative party that is being doctrinaire on this matter. The Labour party believes in all types of home ownership — co-operative, housing association, municipal and private.
  The London borough of Newham has a high proportion of private building, which needs a great deal of renovation because it was built at about the turn of the century. The borough also believes in housing for sale to young married couples. Indeed, it pioneered a scheme to build houses at relatively low cost for sale to young people who, for a short period, went into the tower blocks to which I have referred. That shows not a doctrinaire approach, but a very practical approach to the need for good, sound accommodation.
  Mr. Winnick: Does it not show the flexible policy of the Labour party, that a Labour Government introduced the option mortgage scheme in the 1960s, which gave many young people the opportunity to become owner-occupiers? If the Labour party were anti-owner-occupation, why did it introduce the option mortgage scheme?
  Mr. Spearing: My hon. Friend underlines my point.
  I started by referring to tower blocks. I wish to draw the attention of the House to a serious problem now developing in Newham, which I mentioned on Second Reading of the Housing Defects Bill on 26 April—the events in and surrounding Ronan Point. This is perhaps the most famous tower block in the world because in 1968, as a result of a relatively mild gas explosion, a corner of it collapsed, and with it the whole idea of tower blocks. From then onwards, they have not been built in anything like the same numbers, and their social disadvantages have become all too apparent.
  Again, in principle, this should be a non-party issue, particularly as system building in tower blocks was officially encouraged. Ronan Point was built under the Larsen Nielsen Danish patents by Taylor Woodrow Anglian construction. It was encouraged by the National Building Agency, which spanned both Labour and Conservative Governments, and by the Minister for Housing and Local Government, as he then was.
  I hope that the Minister for Housing and Construction will yet again acknowledge that this is a non-party national issue. The Government have already acknowledged this by providing some help to those who have purchased defective buildings, which are now in private ownership.
  However, they have not provided sufficient assistance for defective buildings in public ownership. I shall concentrate on defective buildings of the Ronan Point, type. After the collapse of Ronan Point, the Minister set up a tribunal, chaired by Mr. Hugh Griffiths QC. It reported with commendable speed. Within a year, it had
  1032
  produced a report and recommendations. However, the House may be shocked to hear that the legal procedures over liability, and compensation for the burgesses and council of the London borough of Newham have not been completed, although it is 14 years or more since the collapse of that block.
  Taylor Woodrow Anglian has appealed to various courts. The most recent appeal to the High Court was completed only a couple of months ago. The matter is now before the official referee so that the amount of money to be paid can be determined. I understand that that can take up to two years.
  There must be something wrong with the legal system if it takes between 14 and 16 years for the legal consequences of the Ronan Point collapse to be sorted out. Perhaps there is something wrong somewhere. I am all in favour of the law providing plenty of opportunities for appeal, but the Taylor Woodrow Anglian consortium seems to be taking things a little far.
  Two or three months ago it was found that something was happening to the structure of Ronan Point that had not been foreseen. In particular, the floor slabs were contracting, leaving cracks between the floor and the walls. In an ordinary two-storey house, such a structural fault might be unfortunate but not all that serious. However, it is very serious in a tower block.
  Years ago, before the tall building era, we were told that a building could not be higher than the tallest fire escape. After the war, the building regulations changed but only on condition that an outbreak of fire in a tall building could be contained within a small part of it for a given period. It was on that understanding that tower blocks were built. The cracks around the floor slabs meant that Ronan Point and eight similar blocks surrounding it immediately became a fire hazard. Other structural aspects were investigated.
  A few weeks ago, tests took place in a block that had been emptied of people, but: the results have not yet been given. Just a week ago one of the most important tests, a fire test, took place, but very quickly that had to be aborted. It was found that the floor panels had bowed and that one had cracked. The results of the fire test will be made known to the inhabitants of Ronan Point and those eight surrounding blocks at a public meeting to be held on Saturday 4 August at 2 pm. At 5 pm. that day, the council's housing committee will meet to reach a decision.
  The Minister will probably already know that invitations have been sent to his right hon. Friend the Secretary of State. If the right hon. Gentleman cannot come from nearby Redbridge, I hope that others will come to hear what the technical experts have to say. After all, there are serious implications, probably for the nation as a whole, and certainly for Newham. The eight blocks surrounding Ronan Point house 700 families. If any hon. Members were in a similar position, I am sure that they, like them, would say that if the flats are a major fire hazard —as they may well be—they want up and out.
  If any of us were members of a housing committee in a London borough, Birmingham, Glasgow or anywhere else, I am sure, we would say—even the Minister too—that something should be done. Of course, the cascade effect of having to rehouse 700 families—as may be the case — is mind boggling, particularly in present circumstances. The problem is not just finding accommodation quickly for them, but the cascade effect on the other families on the waiting list, who will include

  1033
  young married couples, people living in inadequate accommodation with children, elderly people who want ground floor accommodation or accommodation better suited to their needs, the ill, the disabled and those in overcrowded conditions. If those 700 families have to be given priority, the human misery, suffering and waiting for the rest will be considerably increased. Yet they are the very people who have not been offered redress for the original Ronan Point disaster. That is ironic, and should be considered by the appropriate authority at a later stage.
  However, the Government will clearly have some responsibility. In earlier debates, they have admitted that there is a national problem. In former times, the GLC would have had a strategic role in Greater London's housing. But the GLC has been divested of that role not only in the county but in the new towns and in the area covered by its predecessor—which did great work, too —the London county council. That is a result of this Government's policy. The Government also have policies for the housing improvement programme. They have policies—or, rather, lack of them—in respect of capital for housing. Indeed, we heard about them last week from the Secretary of State for the Environment.
  In other words, just when the needs of the London borough of Newham may be dramatically increased, the Government's policies are restricting to the minimum its means to meet them. However, there is one hope. As a result of an order that has passed through the House, the London Dockland Development Corporation has appropriated land on which the borough council was going to build 6,000 homes. Thus, in certain circumstances there may be a moral obligation, not only on the Government but on the LDDC, to use land which may be available in Newham, and which may even at this very minute be the subject of compulsory purchase orders. Ironically, vesting orders were imposed on the borough some time ago, so its land area is much smaller than it would otherwise be. Therefore, despite the Government's policies, some relief may be possible.
  The Griffiths report, which was published in 1968, contains many conclusions and recommendations about the Ronan Point disaster. Conclusion No. 10, which relates to paragraph 147 of the report, states:
  "The individual components of the building provide the specified fire resistance, but the building may suffer structural damage leading to progressive collapse as a result of a fire of normal intensity"
  We know that the buildings were strengthened against the possibility of another explosion, but were they strengthened against the possibility of fire? If so, when and where were the tests carried out?
  The second recommendation to which I wish to draw attention, No. 46, relating to paragraph 216 of the report, states:
  "The Fire Regulations should be revised to take account of the effect of heat arising from a domestic fire of normal intensity on the behaviour of the structure as a whole."
  Were the fire regulations revised accordingly? If so, were tests carried out? The tests that took place last week on Ronan Point will probably reveal unexpected features which may have been present for a long time but which have been revealed only by structural changes in the block.
  I hope that at some time—I do not expect him to be able to do so tonight—the Minister will say whether all the recommendations of the Griffiths tribunal were
  1034
  implemented. If so, may we be told of the documents involved and how they were carried out? I trust that the Minister will answer the two specific questions that I have asked, if not tonight, certainly before the afternoon of Saturday 4 August.
  6.51 pm
  Mr. Jeff Rooker: It is axiomatic that, as I am speaking in this debate, I shall not be rising on a similar matter which was to have been debated later. I am sure that it is convenient for the Minister and my hon. Friends that I should speak now, because the points that I wish to raise concern the general terms of this debate on public expenditure on housing.
  Tempted though I am to respond to the points made by the hon. Member for Mid-Staffordshire (Mr. Heddle)—I agreed with some aspects of his speech—I shall confine myself to the current housing improvement situation in Birmingham. I shall not compare the performance of the present Government in relation to housing grants with that of previous Labour Administrations. The two cannot be compared in general terms because the overall figure of housing expenditure has changed dramatically and, within that overall figure, the housing improvement grant figure has changed in the opposite direction. In other words, in one there has been a substantial reduction and in the other a substantial increase.
  I wish to concentrate on the way in which the state of affairs in Birmingham has come about and to plead with the Minister to do something to help. Most of the difficulty has arisen because of a change in recent months compared with what was the position in, say, the previous two years. That is the period about which I am speaking and I shall not go down the highways and byways travelled by the hon. Member for Derbyshire, South (Mrs. Currie), who, to my astonishment—I discovered this only this evening — is still a member of Birmingham city council. I thought that she had resigned. I gather that if she does not turn up in October, she will be deemed to have resigned.
  Because of the change in Government policy on housing improvement grants since the general election, 5,000 jobs in Birmingham will be lost between next September and May 1985, 3,000 directly in the building industry — the jobs of people working on housing improvements—and 2,000 indirectly—those working in services and for sub-contractors and suppliers. Under the present arrangements, contractors cannot keep those people employed between the time when existing contracts come to an end and the point at which Birmingham can start large-scale schemes next year.
  That information was given to me by the chief officer of the council. His statistics have been confirmed by the Building Employers Confederation. Given the normal downturn in employment prospects in the building industry during the winter, those 5,000 people will be unemployed in addition to the normal rise in unemployment in building in the city, part of which I represent.
  There was a time when Conservative Ministers applauded the system known as enveloping, which was developed to its present sophisticated state by the city of Birmingham. Whatever may be said about that system, it has not been regarded as a party issue in Birmingham. This area of policy was not even adopted by what I might call my former constituency until last year. I went to a seminar organised by the local urban renewal committee — it

  1035
  was, in reality, the former urban renewal committee, which existed before the hon. Member for Derbyshire, South became chairman of the housing committee—to obtain more information about the policy. I am glad that I did so, because a large chunk of the inner city is in my present constituency.
  Although, as I say, Tory Ministers applauded the enveloping scheme, we have turned full circle to the point at which it has almost been wrecked. I gather that there is, somewhere in the Department of the Environment, a draft circular on the subject. Those with practical experience of these matters tell me that the terms of the draft circular can only be described as rubbish in the way that they will affect Birmingham. That information was given to me as recently as four weeks ago.
  I gather that the terms of the circular will represent a bureaucratic nightmare for the locality. For example, Birmingham officials tell me that it will require a double bill of quantities to be presented and that local officers will be expected to supply to the Department of the Environment, 18 months in advance, details of the bed space in houses for enveloping. The hon. Member for Derbyshire, South, like my hon. Friends, will be aware of the way in which Birmingham got to work on enveloping and secured a large share of the extra cash so that it would have sufficient money to get on with the job.
  That work cannot continue if a civil servant in Marsham street must be given details 18 months in advance of the bed space in the houses involved. Officials of Birmingham city council — I am talking not about politicians but about people operating the scheme—have asked me to put those matters to Ministers at the first opportunity, and that I am now doing.
  The 1982 Budget triggered off the changes. We recall the Chancellor of the Exchequer saying:
  "to encourage local authorities to make more general improvement grants available, their capital allocations in 1982-83 will be increased by £100 million over and above the expenditure provided for in the White Paper". £ [Official Report, 9 March 1982; Vol. 19, c. 750.]
  It was in that Budget that he announced the availability of 90 per cent. home improvement grants.
  The Minister for Housing and Construction (Mr. Ian Gow): The hon. Gentleman will be aware that on 9 March 1982 my right hon. and learned Friend said that the exceptional measures to which the hon. Gentleman has referred would apply only to 31 December 1982.
  Mr. Rooker: I had intended to deal with the 1983 Budget, which extended the 1982 policy. I did not intend to make a substantial point of that because I am more concerned with the implications of the policy, which can be seen daily, house by house, road by road, in my constituency. But more of that later.
  Birmingham grabbed the opportunity of the 90 per cent. grants and the extra money that was available. Indeed, some local authorities accused Birmingham city council of trying to scoop the pool. Only because we had schemes which could be put together quickly were we in Birmingham able to take advantage of what the Government, rightly, were encouraging at that time, and other authorities followed our example. In 1983 the Chancellor said in his Budget statement:
  "Last year I announced a major attack on disrepair by increasing the rates of repairs grants. This has proved very successful. Expenditure in 1982–83 will be twice that in 1981–82 and a further increase is expected next year. We have already announced that the higher rates are to continue until the end of 1983–84; and local authorities have been told they may spend without limit on all improvement grants next year."—[Official Report, 15 March 1983; Vol. 39, c. 146.]
  I accept that there was a deadline, but the Chancellor of the Exchequer told local authorities that they could spend without limit. Local authorities told the people, "Get your application forms; the Chancellor has told us to spend without limit." In a speech outside the House in late 1982 the former Minister for Housing and Construction said: "Spend, spend, spend." Birmingham city council used the opportunities presented by the two Budgets and Ministers' statements to adopt the envelope approach for blocks of houses——
  It being Seven o'clock, and there being private business Set down by direction of THE CHAIRMAN OF WAYS AND MEANS, under Standing Order No. 7 (time for taking private business), further Proceeding stood postponed.

  Cornwall County Council Bill [Lords]
  Order for consideration, as amended, read.
  Question proposed, That the Bill, as amended, be now considered.;[The Chairman of Ways and Means.]
  7 pm
  Mr. Andrew Bowden: I submit that the Bill should not be considered. It is a measure which seeks exceptional powers, especially in respect of dogs and their right of access to beaches. I speak with some knowledge, as I represent part of a seaside constituency. I am not unaware of the problems that dogs can create. It is sad that a minority of dog owners allow their animals to behave in an unsocial and unreasonable way, to foul the pavements, to run loose in the roads and to behave unreasonably on our beaches.
  The House is being asked to approve a Bill which will give draconian powers to Cornwall county council and the district councils which will implement it. I have no doubt that the sponsors will argue that the district councils in their areas will behave reasonably and that they do not want to apply draconian powers, but if the Bill passes through Parliament and takes its place on the statute book, future district councils will be able to take extensive and unprecedented steps to prevent dog owners from taking their dogs on to the beach, whatever the sponsors and the representatives of the present district councils may say.
  I accept that there is a strong argument for saying that areas of the beach that are not affected by the tide twice every 24 hours, except in unusual circumstances such as excessive storms and freak weather, should be treated in the same way as a pavement or a road, However, it is not accceptable to the House and millions of individuals that the section of beach between the high-water mark and the low-water mark, which is washed perfectly clean twice every 24 hours, should not be available freely and openly to dog owners to enable them to exercise their dogs. I note that an exception is to be made for the blind. Unfortunately, we live in a rather violent and unpleasant age. Many of the elderly are nervous about being on their own and regard a dog as a protector. There are many people who choose to go out walking or to go on the beach early in the morning or late at night and they feel much more secure——
  Mr. Robert Hicks: Not in Cornwall.
  Mr. Bowden: I am sure that Cornish people are not that much different from the rest of us in the United Kingdom. They are part of the United Kingdom. I cannot believe that the problems that are faced in many other parts of the United Kingdom do not appertain to some degree in Cornwall. I note that my hon. Friend the Member for Cornwall, North (Mr. Neale) is in his place. I know that there has been considerable trouble in some parts of his constituency at certain times of the year.
  Mr. David Penhaligon: That is when the English go there.
  Mr. Bowden: I suppose that that is a cry for UDI for Cornwall. The Bill comes near to asking for that. We have read in recent years of unpleasant violent incidents in parts of Cornwall, North. There has been violence on the beaches in that area. I remember a case in which a young
  1038
  man was pursued in the beach area by a gang of youths. He fell over a wall and was killed. That happened quite recently.
  Mr. Gerrard Neale: No dogs were involved.
  Mr. Bowden: My hon. Friend is a highly intelligent person and he knows what I am getting at. I am saying that the elderly, for example, will feel much more secure in having a dog with them on the beach.
  Research has shown clearly that individuals and dog owners feel physically and emotionally more secure if they have a dog with them when they are out on their own. To deny such people the right to take their dogs on to a substantial section of the beaches of Cornwall would be quite wrong. If the Bill becomes the law of the land, other authorities, especially those which are represented by a substantial number of anti-dog Members, will be faced with pressures from well-organised groups which campaign against dogs.
  You would be surprised, Mr. Deputy Speaker, at some of the unpleasant letters which I have received from individuals who are pathological in their hatred of dogs. Some say that dog owners should pay licences of £50 or £60 annually and should not be allowed to take their dogs out of their homes or gardens. There are even those who argue that all dogs should be incinerated and wiped out. That is an extremist view and I am not suggesting that the distinguished and elected members of the district councils of Cornwall or of the Cornwall county council would follow it. However, we know that there is a powerful and well-organised lobby which is campaigning actively against dogs. They welcome the proposals in the Bill.
  Mr. Robin Corbett: The hon. Gentleman has referred to some rather disturbing letters which he has received. Can he recall whether any of those letters came from Cornwall?
  Mr. Bowden: Yes, a number did. I admit that the majority of letters came from areas outside Cornwall. It was significant that some writers who live outside Cornwall told me, "We shall start a movement and a campaign within our own county council areas to have Bills presented to the House so that we can have the same powers in our areas as those that are being sought by Cornwall." I feel sure that in East Sussex and in other coastal counties a tiny handful of extremist dog haters will get together and form a forceful lobby to put pressure on the county and district councils to ask Parliament to approve legislation on similar lines in their areas. The Bill should not be proceeded with. It would establish some dangerous precedents.
  I have only just begun to develop my arguments. Let us consider the report from the Committee on Unopposed Bills. In reporting to the House, the First Deputy Chairman of Ways and Means said:
  "The Bill in some respects gives powers relating to police, sanitary and other local government matters in conflict with, deviation from, or in excess of, the provisions or powers of the general law; and the manner in which the Clauses relating to those matters have been dealt with is set forth in Appendix (A)."
  That is comforting. I am sure that we are all familiar with the details of appendix (A). However, I am somewhat disturbed by the final paragraph of the report, which reads:
  "There are no other circumstances of which, in the opinion of the Committee, the House should be informed."

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  I am loth to make remarks that could be interpreted as criticism of that distinguished Committee, but I wonder how deeply the Committee looked into the implications of the proposals in the Bill. Let us look at them in more detail.
  On page 1 of the Bill, in the first paragraph, we read that it is designed
  "to confer further powers upon the local authorities of that county; and for other purposes."
  There are large parts of the Bill which I am sure will be of great benefit to the people of Cornwall. I do not wish to be unreasonable. I do not wish to take up the time of the House unnecessarily or to obstruct the passage of some important clauses in the Bill. However, I suggest to the promoters that they might, in the time that remains to them, consider withdrawing the clause to which I so strongly object. If they were to do so I should be only too happy to give the Bill my blessing. I know that I speak for the hon. Member for Birmingham, Erdington (Mr. Corbett), too.
  Mr. Corbett: The hon. Gentleman will recall that, in a similar case, the councillors of Bournemouth council saw the sense of the arguments—which, as they said, were evenly balanced—and, in order to allow the Bill to proceed, withdrew their attempts to keep dogs off some beaches for part of the year.
  Mr. Bowden: It is true that the standards of the councillors of Bournemouth council are very high. Bournemouth has always had outstanding representatives. The town has always sent distinguished Members to this House, and I have no doubt that those hon. Members have guided and advised the council on many occasions. It may be that on this occasion the council was advised by the town's Members of Parliament and wisely took that advice.
  Mr. Peter Hardy: Should not the hon. Gentleman explain to the wise councillors of Cornwall that, since the Bill was prepared, the Government have promised to bring in new legislation on the dog licence? Apparently they are obliged to do so because of the abolition of the halfpenny, which appears to be having a considerable effect on legislation. That legislation may be hotly contested in the House, because there may be reluctance to support the degree of decentralisation to which the Government may be committed. Should not the councillors pay heed to the hon. Gentleman and withdraw their proposals on dogs until we see what the Government have in mind?
  Mr. Bowden: The hon. Gentleman's intervention is most powerful. I am sure the House agrees that the present level of the dog licence is ridiculous. The licences cost twice as much to administer as they bring in. That is crazy. However, the Government have not yet made a firm commitment. I believe that Ministers at the Department of the Environment are already feeling a little twitchy about the reactions to the Government's proposals. We are now assured that there will be a discussion document. The House loves discussion documents, and indeed I sometimes think that there should be more of them. I am sure that the Department of the Environment will take careful note of the opinions expressed on that document. I should certainly like to see dog licences swept away.
  In all seriousness, I believe that irresponsible dog owners should be heavily fined. One cannot expect the
  1040
  police—with all the pressures upon them—to spend hours filling in the forms and taking to court people who have allowed their dogs to behave in an unsocial and unreasonable way, when those owners are fined only £2 or £3. If there were a minimum fine of £30, £40 or more for a first offence, and £100 for a second offence, I believe that the problems of fouled pavements and dogs running wild and loose on the road—problems which are all too familiar in Brighton and throughout the country—would disappear overnight. The promoters of the Bill, and the House, would be wise to listen to the advice of the hon. Member for Wentworth (Mr. Hardy). I urge them to take what he has said into account.
  I note that my hon. and learned Friend the Minister of State, Home Office is listening attentively. I hope that he will be able to recommend to the House that the clause to which I take objection should be withdrawn. I know that he will want to take other factors into account. It is a pity that there is no Minister on the Treasury Bench from the Department of the Environment. However, I see that one of the Whips is present. Perhaps it will be possible for a Minister from that Department to come and listen to the debate, because it is closely related to the trend of Government policy. I see that the Whip is leaving the Chamber. No doubt he is heading for the telephone to try to arrange for a Minister to come here from the Department of the Environment. If that is the case, I apologise for disturbing the Minister's dinner. He might not be pleased with me, but I am only acting in what I believe are the interests of the House.
  The Bill is like the curate's egg. There are some splendid parts to it. Indeed, some are so good that I almost did not oppose it. I welcome clause 13, which deals with street numbers. They are important. Much frustration and inconvenience is caused by people who do not have clear numbers on their homes. Their absence makes life difficult for postmen. I am not suggesting that we should pass special legislation to make postmen's lives easier, although they do an excellent job and we should do everything possible to help them. Street numbers are also important for the emergency services. If an emergency arises, an ambulance driver could easily miss an obscure name or number and the result could be loss of life.
  I take the strongest objection to clause 19. Schedules 1 and 2 suggest that the Bill., if passed, should be known as the Cornwall County Council Act 1983 and come into effect on Easter day 1984. unless I am completely mistaken, that smacks of restrospective legislation.
  Mr. David Mudd: I do not wish to interfere in my hon. Friend's fascinating dissertation, which is one of the best introductory speeches on the qualities of the Bill that I have heard, but one of the amendments proposed by the promoters covers the fact that Easter 1984 has already passed and makes Easter 1985 the commencement date.
  Mr. Bowden: That is splendid news. However, I must restrict my comments to the Bill as it stands. The amendment to which my hon. Friend referred might not be approved. At the moment, a dog that was seen last month doing something that it should not have done on a beach, as suggested by the Bill, could be acted against. Governments of all political complexions have passed retrospective legislation. The House does not like it and, as it stands, the Bill is retrospective.
  Mr. David Harris: If my hon. Friend examines schedule 2, he will find that it rules out completely the circumstances that he has just described.
  Mr. Bowden: It warms my heart to hear my hon. Friend's interpretation of schedule 2. I look forward to the sponsors confirming it. It is unacceptable if there is any chance of circumstances such as I have outlined occurring and an innocent dog owner being penalised.
  I have already touched on my most serious point, which is the companionship and protection that a dog provides. I do not doubt the sincerity of Cornish councillors, but we must consider how the powers that the Bill provides could be interpreted and used. Once the Bill is on the statute book, the House will have no control over councillors. We all know how low are the polls at local elections. The polls in Cornwall might be as low as 20 per cent.
  Mr. Hicks: My hon. Friend should do his homework.
  Mr. Bowden: Perhaps my hon. Friend would like to give me a figure. I am open to correction and do not pretend to be an expert. I should be surprised if the poll was 40 per cent., which is still deplorably low. When my hon. Friend the Member for Cornwall, South-East (Mr. Hicks) contested his seat at the general election and was returned, yet again, with a thumping majority—may he remain in the House for many years to come—he was not elected on a poll of 40 per cent. I suspect that it was much nearer 80 per cent. We should have such polls at district council elections, because councils would then truly reflect the opinion of local people. The danger is that a small, well-organised minority, perhaps of dog haters, will run a campaign, put up candidates and influence the councils to apply the Bill in the most draconian way.
  That could have an appalling effect upon many individuals who want to walk their dogs in peace, with reasonable security and free from fear, which is what dogs can often provide in such circumstances. That could well be denied to many citizens of Cornwall and to others as well. What about those who visit Cornwall? I hope that the promoters of the Bill will take that into account. If the Bill goes onto the statute book, people who are thinking of taking their dogs to Cornwall for a holiday will suddenly realise that their dogs could be affected by the Bill. So they will say that they will go not to Cornwall but to Brighton, although it would be wrong of me to exploit that during the debate.
  Mr. Neale: My hon. Friend always advances a sincere argument. It would truly be understood were he speaking about a Bill affecting Sussex. Knowing, as I do, that he occasionally spends his holidays in Cornwall, I hope that when he next comes down he will do so incognito. I rather suspect that, having made the speech that he is now making, his welcome will be less than favourable. Bearing in mind that Cornwall has about 326 miles of coast line, with much of which I am aware he is well acquainted, how does he conceive that it will be possible, other than on a few designated beaches, to have limited access to effect the sorts of draconian controls about which he is talking? It should be borne in mind that the Bill has received considerable support from various local parties and organisations. As the Member for Cornwall, North I have not had one letter or comment against the Bill.
  Mr. Bowden: My hon. Friend knows well that one of the great difficulties that we face when discussing
  1042
  legislation is that the vast majority of people who will be affected by it are not aware of it at that time. However, when the Bill becomes an Act and people start to see how it applies or could apply to them, often, as I am sure other hon. Members will confirm, we hear their reactions and discover the comeback.
  I have had some pleasant holidays in my hon. Friend's beautiful county and I look forward to other holidays in the years ahead. My hon. Friend is much younger than I. If at some time in the future the people of Brighton, Kemptown decide to dispense with my services, or if I retire, I may consider living in Cornwall in my declining years. If I did so, I should not consider it for long, because of my dog. I fully accept what my hon. Friend says about the district councils, but what worries me is the way in which the powers could be used in the years ahead. I believe that my hon. Friend will concede that point. Certain procedures will have to be undergone, but they could be used in many ways which, in the longer term, could well be detrimental to the county of Cornwall.
  Schedule 1 is headed:
  "Section 3 of the Dogs Act 1906 as having effect in accordance with section 18 (Control of Stray Dogs) of this Act."
  Section (5) says:
  "No dog so seized shall be given or sold for the purposes of vivisection."
  An earlier part of the schedule outlines how the seizure will be carried out. It greatly concerns me that that is all that is said. I should like to hear from the promoters what steps will be taken to ensure that that cannot happen, because there are far too many cases of animals being stolen or taken and supplied to laboratories or individuals for experiments and vivisection.
  I do not want to exploit your goodwill, Mr. Deputy Speaker, so I shall not enlarge on the arguments against and the problems of vivisection. However, I think that the House will agree that far too many experiments on animals are undertaken every year in Britain and that many of them are unnecessary and cruel. I welcome the recent decision by my hon. Friend the Under-Secretary of State for the Home Department to make a substantial sum available for research for FRAME — Fund for the Replacement of Animals in Medical Experiments—so that more methods can be evolved to eliminate the need for using a high percentage of animals for experimentation on a weekly and monthly basis. How will the promoters of the Bill ensure that if it becomes law any animals taken under the terms of the Bill will not in any circumstances end up in a laboratory where they could be experimented upon and, as in so many cases, cruelly treated?
  Schedule 3, page 34, makes fascinating reading and I suspect that it was drafted by an individual or group of people with bureaucracy in mind. The schedule deals with the control of surf boards. It says:
  "No person shall use, or cause or permit any other person to use, a surf board within the district unless that surf board is registered with the district council"
  Goodness me — registering surf boards! I wonder whether that has been costed. I shall not be unfair and say that it sounds like a Utopian Socialist dream, but it sounds like a Utopian bureaucratic dream. Where will it end? We already have a Swansea for cars. Some people would like a Swansea for dogs. Will Cornwall really set up a Swansea for surf boards?
  The schedule becomes even more incredible when it stipulates that, alternatively, the surf board in question may be

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  "registered with another district council within the county, or with any other council outside the county which operates a scheme accepted by the district council as substantially similar to this scheme."
  I used to be a computer salesman. I only wish that I manufactured computers, in view of the potential market for a network of computers dealing with surf boards, from Cornwall to Northumberland.
  Presumably, if I take my surf board to Cornwall I may be approached by a district council official wishing to know whether my surf board is registered. As I should not dream of using an unregistered surf board, I should then give details of my name and address, the district council in my area, the name of the town clerk and perhaps even the full reference number of my surf board. I might even have the permit itself tucked inside my bathing costume, because Members of Parliament must be scrupulous in observing the law in every way.
  The official will then have to check the matter. Will he return to his office, feed the information into a computer and wait to see what comes out? How long will that take? Shall I have to wait on the beach, holding my surf board but unable to use it until I have been cleared? The schedule must be re-examined extremely carefully, because it is simply not practical.
  I have outlined briefly and sketchily one or two of my objections to the Bill and I look forward to hearing the answers to my points. Whatever the weaknesses of the Bill, however, I do not wish to destroy it. I repeat, therefore, that if the provisions relating to dogs and their access to beaches are withdrawn I shall be prepared to overlook my objections to other parts of the Bill and to agree that it should become law.
  7.43 pm
  Mr. Robin Corbett: It may be a risky thing to do, but I must confess that I have been going to Cornwall for my holidays since I was a boy and I have grown very fond of the place. I used to go on a bicycle. Nowadays I go by train or by car. I am familiar with places such as Gorran Haven, Mevagissey and Fowey. I say that so that there shall be no misunderstanding about my reasons for opposing the Bill.
  I do not say this as a criticism of the promoters, but I am puzzled about the introduction of the Bill. This is an extremely over-governed country and we try to do far too much governing from here. Many matters in the Bill in other circumstances would be far better left to the district councils. I do not believe that considering a succession of Bills of this kind represents the best use of parliamentary time.
  The hon. Member for Brighton, Kemptown (Mr. Bowden) was kind enough to allow me to intervene to remind him and the House that after a long exchange the promoters of the Bournemouth Borough Council Bill saw the wisdom of seeking to withdraw similar provisions relating to dogs on beaches. As my hon. Friend the Member for Rother Valley (Mr. Barron) forcefully argued, the Government have made it clear that they are considering legislating for the control of dogs in general. That being so, nothing would be lost if the provisions in this Bill were withdrawn. The Government have said, broadly, that they intend to give local authorities extensive powers to control dogs. Awaiting the Government's proposal would thus achieve greater uniformity and render the provisions of clause 19 unnecessary.
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  There is also weight in the argument advanced by the hon. Member for Kemptown that clause 19 will affect people who would otherwise wish to take their holidays in Cornwall. The documents kindly distributed to us stressed the great importance of tourism to Cornwall, and I am sure that we all acknowledge that. We are told that a spot survey in 1976 showed that at one time 114,000 visitors out of an estimated 275,000 were actually using the beaches. That is a very large number of people. Indeed, one of the attractions of Cornwall to me is that when it is raining on the north coast, the odds are that it is sunny on the south coast and vice versa, and there is no great problem in getting from one side to the other. The overwhelming majority of those holidaymakers must be "emmets" — people from outwith the county — and a substantial number of them will be bringing their dogs. As the purpose of the Bill is to keep dogs off designated beaches during the holiday season, one may infer that a large number of visitors bring their dogs on holiday as part of the family unit.
  Mr. Andrew Bowden: My hon. Friend the Member for Cornwall, North (Mr. Neale) said that he had not received any letters objecting to the contents of the Bill. Does the hon. Gentleman agree that that is because people often do not appreciate the effect of legislation until after it has become law? Is not one of the weaknesses of the way in which Parliament conducts its affairs the fact that people often become aware of the effects of legislation only after it reaches the statute book, and it is then that the outcry takes place? On the basis of what the hon. Gentleman has said, does he share my view that, if clause 19 becomes law, just such a reaction will follow?
  Mr. Corbett: The hon. Gentleman makes a fair point. It is a problem that the House faces when considering legislation, particularly legislation of this nature. Few people beyond those immediately concerned, who are generally the promoters and those with whom they work, know that these things are happening.
  If the clause remains in the Bill, it is likely that families who have booked holidays in Cornwall, having decided to take their dogs with them, will arrive at the places at which they are staying and exclaim, "Yippee, it's a nice day. Let's go down to the nearest beach," only to find that it is a designated beach on which dogs are not allowed. They will have no means of knowing that before they arrive in the county. It cannot be in the best interests of Cornwall county council or of others concerned with the development and encouragement of tourism to allow that situation to develop. In such circumstances, a family will often say, "If that is Cornwall's attitude, we will give it up as a place to take our holidays."
  Mr. Hicks: Does the hon. Gentleman agree that that is a judgment for Cornwall and the people of Cornwall to take?
  Secondly, he gave the example of a visitor taking a dog to a beach, only to find that it is a designated beach on which dogs are not allowed during summer. That is surety analogous to going to a car park on a remote part of the coast and finding it full, but that does not put one off.
  Thirdly, people who live in Cornwall also own dogs, and this restriction will apply to them just as much as to visitors. Local people who own dogs are residents and voters. It is up to them to make the judgment when they elect their district councillors.
  Mr. Corbett: I accept much of what the hon. Member for Cornwall, South-East (Mr. Hicks) says, although he cannot have it both ways. If the promoters of the Bill see fit to bring it to the House, it is the property of every hon. Member, not just of those who represent constituencies in Cornwall.
  One of our concerns about the clause was precisely because Cornwall in this sense is jumping the gun, for reasons that I understand. These reasons have been well explained by the promoters, who acknowledge that there are arguments on the other side. None the less, they wish to do something different, although the Government have said that they are considering taking action at long last. No action was taken in 1975 by the then Labour Government after the report of the working party on dogs. It was too hot an issue, and it was not pursued. I acknowledge that there is a general need for the Government to act, although there may be arguments about the details of what the Government may propose.
  As regards the point that the hon. Gentleman made about a car park, I believe that there is a difference between the two situations. Let us take the extreme example of the family who have gone to Cornwall by train and been met by the landlady, or caught the bus from Truro to wherever it may be, and the landlady has raised no objection to their taking the dog with them. That example is not on all fours with a person who turns up at a car park near a beach, finds it full and goes somewhere else. The family that I have described will find themselves in a pickle over their week's or fortnight's holiday, unless those promoting and supporting the Bill can assure us of some mechanism by which, when people write to request a fortnight's booking between 1 and 14 July, it can be guaranteed that whoever takes that booking draws to their attention the fact that certain beaches in the area are forbidden to dogs between Easter and October.
  Mr. Jeff Rooker: If the communication is by correspondence, those responsible for replying to the applicants can frank the envelope. That is a normal way of giving information that I am sure the Post Office will find acceptable.
  Mr. Corbett: I understand my hon. Friend's point. If he is saying that such franking should state, "Do not bring your dog to Cornwall"——
  Mr. Rooker: I do not say that.
  Mr. Corbett: To be fair to the promoters, they are not saying that. They are seeking to confine this restriction to some designated beaches in the holiday season. I am not sure that a form of words could be devised to convey such a thought. The suggestion seems to be that, as a matter of common sense, the person running the establishment to which the family propose to go on holiday would point out the restriction when the booking is made. The family may say, "It is mum, dad and two kids, and can we bring the dog?" The people accepting the booking will know that, if they are to give true information, they must say, "We are glad to see the family, but we have to tell you that on certain dates you will not be able to go to the two nearest beaches, although there is another beach round the corner where you can go." However, that would run the risk of the family saying that they would not go to Cornwall, or would not stay in that establishment, but would find another one near a beach on which dogs are permitted.
  Mr. Neale: Does the hon. Gentleman accept that some people who visit Cornwall now find the state of the beaches disgraceful? Does he also accept that only the minority of families have dogs and, by the nature of things, the Cornwall tourist agencies and hotels do not insisit that such tourists must bring dogs?
  Finally, does he accept that it is clear that the opportunity is afforded to designate beaches where dogs are not permitted, but that many beaches will remain for the use of families with dogs?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The interventions are long, and will tend to make long speeches even longer.
  Mr. Corbett: We are still left with the problem of how those intending to go on holiday in Cornwall will know which beaches they can visit with dogs and which they cannot. I have no statistics of how many holidaymakers visiting Cornwall take dogs with them. I readily accept the point that the hon. Gentleman makes about the problem that arises for holidaymakers who do not own dogs as a result of the activities of the irresponsible few who allow their dogs to foul the beaches.
  I disagree profoundly with the hon. Member for Kemptown about clause 13 and street numbers. If he had read on, he would have noted:
  "A district council may alter the number or numbers allocated to a building, and where they do so subsections (2) and (3) above shall apply to the altered number or numbers."
  What I suppose to be the ambition of the promoters of the Bill, for reasons that the hon. Gentleman mentioned, particularly in relation to the emergency services, could be defeated. A local authority, under clause 13, could decide to alter the numbering in a street with which everybody had been familiar for 50 years or so, thus causing some chaos and risk.
  Clause 18 states:
  "A duly authorised officer of a district council may exercise the powers in section 3 of the Dogs Act 1906".
  It provides that, where he sees a stray dog, he can seize it if it is not in the charge of a person. That is particularly important, because, from the evidence that I have seen provided by the promoters of the Bill, it appears that the major problem with which clause 18 is meant to deal arises from stray dogs. I acknowledge the specific problem of dogs on beaches. All hon. Members, wherever they live, will know that the major problem arises from unlicensed dogs roaming the streets. To that extent, their owners are irresponsible. Clause 18 would give Cornwall county council the power to deal with such stray dogs, whether or not they are on a beach. I am puzzled why the county council wants special powers to deal with stray dogs on beaches. Under clause 18, the council has powers to take stray dogs off a beach. The council is being selective in its proposed control policy. That is another reason why I do not think that the Bill should be considered.
  Local authorities have powers under section 82 of the Public Health Acts Amendment Act 1907, which provides for general byelaws affecting the seashore, and under section 235 of the Local Government Act 1972. The county council could use those powers to deal in a fairer and more general way with the problem caused by the activities of stray and unsupervised dogs—or, one might say, of stray and unsupervised owners. I hope that the House will agree that the Bill is inappropriate.
  8.1 pm
  Mr. David Mudd: I commend the Bill to the House. I have listened to the speeches by the hon. Member for Birmingham, Erdington (Mr. Corbett) and my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden) and I cannot help believing that they must have had an unhappy childhood. Before they went to bed at night they must have peered under the bed to see whether anyone was lurking there. Even now they must check the wardrobe to see whether monsters are hiding there. They have both over-reacted and magnified the simple intention of the Bill. With respect to my hon. Friend the Member for Kemptown, the nearest that we came to a reasonable contribution was in his three-minute intervention in the speech of the hon. Member for Erdington.
  We should not overlook the skill, determination and wide breadth that have gone into drawing up the Bill. We must not overlook the fact that it deals with many other important issues which are necessary for the smooth running, security, comfort and safety of people going to Cornwall on holiday or living there for other reasons.
  It is wrong to suggest that Cornish district councillors are a load of elderly, backwoods geriatrics who get together to decide what legislation they can draw up to launch upon an unsuspecting public. It is wrong to suggest that they say one week, "Let's have an anti-dog week," and the next, "Let's go anti-topless sunbathing." The Bill reflects a balanced consensus of the Cornish district councils and Cornwall county council. The legislation gets rid of anomalies and introduces new, up-to-date and relevant legislation.
  My hon. Friend the Member for Kemptown overlooked the fact that the Bill goes further than dealing with the numbering of streets. It provides employment opportunities. I am sure that neither my hon. Friend nor the hon. Member for Erdington would wish to obstruct a Bill that does that.
  Mr. Andrew Bowden: My hon. Friend is not being fair to me. I said that I do not wish to destroy the Bill. I said that the Bill contains many good clauses. I said that I appreciate the effort and time that have been devoted to it, but will hon. Members please agree to withdraw clause 19? If that happened, everybody would be happy.
  Mr. Mudd: My hon. Friend is saying that he would be happy if clause 19 were withdrawn, but there is no sign that everyone would be happy. My hon. Friend and the hon. Member for Erdington might be the only two people who would be happy.
  The Bill provides employment opportunities. It deals with the problems of smoking chimneys, the problems experienced by refuse collectors, dangerous refuse, safety for the holidaymakers using hotel swimming pools and with the dangers to which holidaymakers are exposed by the use of Malibu surfboards. I recognise that surf is not known at Brighton, so I forgive my hon. Friend for demonstrating his lack of knowledge of the danger that can be caused by the use of these instruments.
  The Bill deals with specific issues which should be considered. One such issue, which may seem trivial, involves the lapsing of the Truro Port Fish Authority regulation. That will lapse on 31 July if it is not replaced.
  The controversial clause 19 is not anti-dog legislation. If it is anti-anything, it is anti-irresponsible, selfish and
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  inconsiderate dog owners who, disregarding their responsibilities to their animals, allow them to roam over the beaches causing dirt and distress to many people.
  It is suggested that the measure is draconian and will result in a D-day in reverse. Apparently, the barricades and barbed wire will go up around all the Cornish beaches on the landward side to stop the poor little doggies getting on to the beaches to do what Billy Connolly would describe as their "jobbies". That is what it is all about.
  Clause 19 contains inbuilt safeguards. If the district council wants to take action, it must take a decision and then advertise its decision in the local newspaper in the area of the beach which is likely to be involved. It mast allow 28 days for people to make their observations. The council is then obliged to consider representations. If it still decides to go ahead, it must publish a statutory notice in the local newspaper in no fewer than two consecutive editions and the resolution will come into force 28 days later. No hasty move can be made.
  There can be no question of sealing off every Cornish beach, because many are totally wide open. Only the traditional Cornish cove with a simple path down to it can carry notices of the resolution. If the powers are granted, they will be in minority use.
  The speeches so far have overlooked an important point. Any resolution can be rescinded or amended by the district council which makes the resolution. Local residents may say that they would rather the dogs that run wild were taken away. The district council has the power to do that. It has the power to grant exemptions for guide dogs, dogs for the disabled and even dogs owned by elderly people. This is not an evil, wicked or draconian measure.
  My hon. Friend the Member for Kemptown has come up with an incredible and ingenious solution—"Let the dogs have their play between the high-water mark and the low-water mark." Dear, oh dear. I can visualise what will happen. Outside the cosy nook theatre at Newquay, the slipway at St. Ives, Penzance promenade or on Falmouth seafront rows and rows of little doggies will be sitting, legs crossed, with strained expressions on their faces waiting for the tide to go out. The senior doggy will fish out his tide table and Hunter watch and say, "Boys, the beach is open for the next 12 hours." How ludicrous, but how nice for the doggy who has everything—his own gold-plated diary, calendar and tidal predictions for the next year.
  As my hon. Friend the Member for Kemptown knows, he is talking absolute nonsense. I do not ask my hon. Friend to accept that he is talking absolute nonsense in the Cornish context, but he knows that even in Brighton on a hot summer day as the tide begins to recede, every young child wants to go to that lovely, squelchy, wet, glistening patch of uncovered beach. My hon. Friend would say, "No, let the dogs run over it first." The point has correctly been made that it may make sense to allow the dogs to use the section of the beach where the receding tide will take the jobbies away, but the incoming tide will surely sweep them back up the beach. For those reasons, I commend the Bill to the House.
  My hon. Friend the Member for Kemptown suggested that the Bill was a form of UDI for Cornwall, and in a way I agree with him. I agree because every provision in the Bill is vital, is of essential local interest and is socially necessary to the people of Cornwall, who are represented by Cornwall county council and the Cornish district councillors who have decided that this step is necessary.
  Question put, That the Bill, as amended, be now considered:
  The House divided: Ayes 94, Noes 9.

  Division No. 434]

  [8.12 pm

  AYES

  Alexander, Richard

  Kirkwood, Archy

  Ashdown, Paddy

  Knight, Gregory (Derby N)

  Baker, Nicholas (N Dorset)

  Knox, David

  Beith, A. J.

  Loyden, Edward

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

  McCurley, Mrs Anna

  Bennett, Sir Frederic (T'bay)

  McDonald, Dr Oonagh

  Benyon, William

  Madel, David

  Bevan, David Gilroy

  Mawhinney, Dr Brian

  Boscawen, Hon Robert

  Miller, Hal (B'grove)

  Boyes, Roland

  Mills, Sir Peter (West Devon)

  Brandon-Bravo, Martin

  Miscampbell, Norman

  Bruce, Malcolm

  Moate, Roger

  Budgen, Nick

  Molyneaux, Rt Hon James

  Burt, Alistair

  Montgomery, Fergus

  Butcher, John

  Mudd, David

  Campbell-Savours, Dale

  Murphy, Christopher

  Carlisle, Kenneth (Lincoln)

  Nicholls, Patrick

  Cash, William

  Norris, Steven

  Clark, Dr David (S Shields)

  Oakes, Rt Hon Gordon

  Cope, John

  Peacock, Mrs Elizabeth

  Corrie, John

  Penhaligon, David

  Cox, Thomas (Tooting)

  Pike, Peter

  Currie, Mrs Edwina

  Pollock, Alexander

  Dorrell, Stephen

  Powley, John

  Douglas-Hamilton, Lord J.

  Rooker, J. W.

  Dykes, Hugh

  Ross, Stephen (Isle of Wight)

  Emery, Sir Peter

  Shaw, Giles (Pudsey)

  Eyre, Sir Reginald

  Silvester, Fred

  Fatchett, Derek

  Smith, Sir Dudley (Warwick)

  Fookes, Miss Janet

  Soames, Hon Nicholas

  Forman, Nigel

  Spicer, Jim (W Dorset)

  Forth, Eric

  Squire, Robin

  Fraser, J. (Norwood)

  Steen, Anthony

  Freeman, Roger

  Stradling Thomas, J.

  Fry, Peter

  Taylor, John (Solihull)

  Garel-Jones, Tristan

  Taylor, Teddy (S'end E)

  Glyn, Dr Alan

  Thurnham, Peter

  Greenway, Harry

  Townsend, Cyril D. (B'heath)

  Grist, Ian

  Viggers, Peter

  Gummer, John Selwyn

  Waddington, David

  Hamilton, W. W. (Central Fife)

  Wakeham, Rt Hon John

  Hannam, John

  Wallace, James

  Hargreaves, Kenneth

  Waller, Gary

  Haselhurst, Alan

  Wardell, Gareth (Gower)

  Hawkins, Sir Paul (SW N'folk)

  Watts, John

  Howarth, Gerald (Cannock)

  Hunt, David (Wirral)

  Tellers for the Ayes:

  Jessel, Toby

  Mr. Robert Hicks and

  Jones, Gwilym (Cardiff N)

  Mr. Gerard Neale.

  Kennedy, Charles

  NOES

  Clay, Robert

  Parry, Robert

  Hardy, Peter

  Skinner, Dennis

  Jones, Robert (W Herts)

  Lofthouse, Geoffrey

  Tellers for the Noes:

  McKay, Allen (Penistone)

  Mr. Robin Corbett and

  Marek, Dr John

  Mr. Andrew Bowden

  Merchant, Piers

  Question accordingly agreed to.

Clause 1

  CITATION AND COMMENCEMENT
  Amendments made: In page 2, line 30, leave out "1983" and insert "1984"
  In page 2, line 35, at end insert——
  "(b) Insofar as section 54 (Transitional provisions, savings and repeals) of this Act relates to the Sea Fisheries (Truro) Order Confirmation Act 1936, the Truro Port Fishery Order 1936 and the Truro Port Fishery (Variation) Order 1975 it shall come into force on the passing of this Act."
  In page 2, line 36, leave out "(b)" and insert "(c)"
  In page 2, line 37, leave out 1984" and insert "1985" —[Mr. Mudd.]

Clause 11

  TEMPORARY PROHIBITION OF TRAFFIC DURING EXECUTION OF WORKS
  Amendments made: In page 7, line 29, leave out " 12(1)" and insert "14(1)"
  In page 7, line 30, leave out "1967" and insert "1984"
  In page 8, line 9, leave out "12(3) to (5) and (8) to (11)" and insert
  "14(4) to (7) and (9) and section 16"
  In page 8, line 10, leave out "1967" and insert "1984"
  In page 8, line 13, leave out "(2) of that section" and insert
  "(3) of the said section 14"—[Mr. Mudd.]

Clause 14

  POWER TO ORDER ALTERATION OF CHIMNEYS
  Amendment made: In page 11, leave out lines 1 to 6 and insert——
  "(6) In this section 'chimney of a building' has the meaning given by section 34 of the Clean Air Act 1956." — [Mr. Mud4.]

Clause 19

  DOGS ON BEACHES
  Mr. Andrew Bowden: I beg to move amendment No. 2, in page 12, line 31, leave out clause 19.
  The promoters of the Bill have circulated to hon. Members a document which deals with substantial parts of clause 19. I refer to page one of the briefing statement, which is headed:
  "Statement on behalf of the Promoters in support of the Consideration of the Bill as amended in Committee".
  Paragraph 5 states:
  "This clause would permit a district council to specify beaches in its area where dogs are not permitted during the summer months. The clause and schedule 2 to the Bill prescribe a procedure for public consultation before a beach is specified, and it is a requirement of the clause that notice of the effect of the provision shall be given by signs displayed in conspicuous positions on the approaches to any such beach."
  In paragraph 10 the promoters were open enough to say:
  "it is recognised that many dog owners act responsibly",
  but in another part the promoters refer to the "minority who create unpleasantness". What I object to about clause 19 is that, because of the minority, the majority have to suffer. In our country, that is an unreasonable approach.
  Sir Dudley Smith: Does my hon. Friend not realise that it was ever thus and that that happens in almost every sphere of life?
  Mr. Bowden: I fear that my hon. Friend may be right, but it does not mean that we should tolerate it when we do not have to. There are occasions when it works like that, but because it happens in some circumstances, it does not make it right that it happens in others.
  My hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) made great play of comments that I made to the House about dogs going on beaches. We were all highly amused by his remarks. However, we should examine a little more closely the proposals that I made. I represent a seaside constituency. I am conscious of the fact that too big a minority of dog owners are utterly irresponsible. If we imposed the right level of fines—severe fines—and the right controls on those who allow their dogs to foul pavements or the parts of the beach which the tide normally does not reach, the problem would rapidly disappear.
  Mr. George Park: Can the hon. Gentleman tell me how one fines dog owners when the dogs run wild and one does not know to whom they belong? That is a problem.
  Mr. Bowden: Exactly the same principle applies to people who let their dogs roam wild on the streets. Under the present law, the owners of dogs that are found running loose on the streets are liable to fines. That is so in Brighton and in other parts of the country. The problem is that the fine is so minuscule—the amount of money is of so little consequence—that it is no deterrent. Far too many people—again, a minority of dog owners—push their dogs out of their homes first thing in the morning and let them roam wild. The people then perhaps go off to work, and have the dog back in the house in the evening. That is nothing short of criminal. Apart from the danger to the dog, there is the danger to human life, which is much more important. Until we have a system of imposing fines of such a nature that they become a deterrent, the problem will exist.
  In many areas around our coasts—I suspect even in parts of Cornwall—one can see clearly the areas where the tide reaches twice a day and where it does not. My hon. Friend the Member for Falmouth and Camborne referred to dogs and their owners standing by with their watches to see when the tide went out so that all the little doggies could move in. My hon. Friend was amusing, but there is a serious aspect to the matter. We are talking about a limited period before the part of the beach that is washed by the tide is available, as the tide ebbs, for dogs to use. Is there anything wrong in allowing the part of the beach that is washed clean twice a day to be used freely by dogs?
  I have observed many owners in Brighton, as well as in other parts of the country, carrying a spoon and a plastic bag. I do it myself. It is easy to pick it up. That is what one should do, particularly if the tide is going out and it will be many hours before the beach is cleaned and it will be used in the meantime by families and people on holiday.
  I believe that a compromise can be reached. The clause does not contain it. The promoters were fair to make the point in their statement to which I referred, but why penalise the majority because of the irresponsible minority?
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  I shall not repeat in detail the arguments that I made in my opening speech. I am sure that the House will receive that news with great relief We should be careful about providing these powers to two district councils through the Bill. I am not in any way casting aspersions on or making derogatory comments about the ladies and gentlemen who serve on the Cornwall district council. They give up their spare time, put effort and work into the community and are to be greatly thanked for it. There are times when authorities and district councils can be influenced by small organised minorities who present themselves as a majority. We are all aware of protest campaigns which give the impression of representing a massive proportion of the country, when time and time again they represent only a small but well-organised minority.
  8.30 pm
  My final point relates to the companionship of dogs. For millions of people, especially a large number of elderly people, a pet is all that they live for. If they were denied the right — this could easily happen if these proposals were to spread widely throughout the country —to go for a walk on the beach with their pets, it would be scandalous. The lives of the elderly and the single often revolve round their pets and they often have little else to love or to be loved by. We should remove the clause, reconsider it and perhaps bring it back on another occasion.
  Mr. David Penhaligon: It is not to our advantage to delay the proceedings, but I find it extraordinary that the hon. Member for Brighton, Kemptown (Mr. Bowden) expressed those views. I do not understand why he is so worried about the clause. There are hundreds of beaches in Cornwall—not a dozen or a score, but hundreds. There may be a hundred in my constituency alone. By beach standards in Cornwall it is short of them compared with most other areas.
  The clause merely seeks to give the district council the power to exclude dogs from a few of those beaches for six months of the year. I find it incomprehensible that the hon. Gentleman should regard that as a great removal of the freedom and right of people to exercise their dogs. It is amazing that anybody should defend the right of dogs to put excreta on every beach in Cornwall, rather than on 95 per cent. of beaches, as the Bill would provide.
  I am in favour of defending minority rights. Some people are afraid of dogs, perhaps on irrational and unreasonable grounds. I remember a tragic case in which a young girl of about eight was killed by an alsatian on Perranporth beach. The Bill would give that minority a few beaches—not hundreds or scores—where they could with reasonable certainty take their families and exercise and enjoy their leisure free from dogs.
  Mr. Corbett: The hon. Gentleman has yet to explain how clause 19 would deal with that problem, as it arises mainly where dogs are unaccompanied.
  Mr. Penhaligon: The hon. Gentleman is being ridiculous, and he knows it. It is not difficult to notice a dog wandering on to a beach. If the clause were passed and one saw something with four legs on a beach, the local council would have the power to remove it. We cannot educate our dogs to read, to understand the Bill and obey the law, but if such powers existed, at least people could

  1053
  remove dogs and dogs could not be taken freely to the beaches involved. That is all that this clause, paraphernalia, talk and nonsense is about.
  My constituents will not understand what is happening. The proposal is supported by the county council, the district councils, the chambers of commerce, the parish councils and all their elected members. Yet two hon. Members, one from Brighton, where people do not know what a beach is, and one from Birmingham, who does not even claim to know what a beach is, seek to oppose this limited power being given to a community whose main industry is tourism. It is extraordinary.
  The Minister of State, Home Office (Mr. David Waddington): It might assist the House if I intervene at this stage to indicate the Government's attitude towards clause 19, which seems to be the only contentious clause in the Bill.
  Our main concern is that this provision extends the criminal law, albeit with local effect. In general, we are opposed to the creation of new offences by local Bills when it is open to the promoters to use powers available to them under the existing public general legislation.
  The hon. Member for Birmingham, Erdington (Mr. Corbett) put his finger on the problem when he said that we should look at section 82 of the Public Health Acts Amendment Act 1907. That section gives district councils extensive powers to make byelaws to regulate the seashore for the prevention of danger, obstruction or annoyance to users of the shore. We believe that this power is sufficiently wide to enable byelaws to be made to exclude dogs from beaches in approproate circumstances. Although no local authority has yet applied for the confirmation of a byelaw to exclude dogs from beaches, byelaws, have been confirmed banning dogs from parks and leisure grounds — in other words, in analogous circumstances. In considering applications for such byelaws we take into account the reasonableness of the proposed offence, bearing in mind the need for dog owners to have facilities to exercise and enjoy their animals, and the prospects for enforcing it. We also normally require evidence of adequate alternative facilities for dogs and for the area in question to be enclosed in order to exclude strays. We would apply these criteria to any application for byelaws to exclude dogs from a beach.
  When the Cornwall County Council Bill was being considered in another place, the Committee had before it a report submitted on behalf of my right hon. and learned Friend the Home Secretary drawing to its attention the byelaw-making provisions of the 1907 Act and recommending that the promoters be required to justify the creation of a new substantive offence when there were existing legislative powers available. I should, however, add that when the report was being prepared we considered making a recommendation that the clause should be disallowed. But, as I have said, no byelaws to regulate dogs have so far been made under the 1907 Act and, in the absence of any such experience, we felt that it would have been unreasonable to make such a recommendation. For the same reason, we did not pursue our argument when the Bill came before a Committee of this House.
  I should perhaps mention that since the Cornwall County Council Bill emerged from its Committee, a Committee in another place has disallowed an almost
  1054
  identical provision in the Bournemouth Borough Council Bill. The beaches of Bournemouth are different from most of those in Cornwall — there are no coves in Bournemouth—and that factor may have influenced the Committee. The Home Office has since been in correspondence with the Bournemouth borough council, and we have undertaken to give sympathetic consideration to an application to regulate dogs on beaches. If the council is able to satisfy our criteria, and subject to the consideration of any public representations, we may in due course have a scheme of byelaws which will test the suitability of that type of control.
  The Government neither commend nor strenuously oppose the clause. It will create a precedent which other coastal authorities will doubtless wish to follow. In those circumstances, I believe that the House should consider carefully whether the evidence that has been submitted on the promoters' behalf is sufficient to justify the creation of a new criminal offence, when the public general law already provides powers which would enable them to deal with the nuisance of dogs on beaches.
  Mr. Corbett: I thank the Minister for his useful contribution to our debate. It has highlighted a number of issues which are of concern to some of us. I make it clear again that in no way do I wish to encourage irresponsible dog owners not to look after their dogs properly. It will not surprise hon. Members to hear that I have had many representations from Cornwall, including one from a Mr. Langmaid, and I accept it when he says that he receives 20 to 30 complaints a week over dogs fouling beaches. Mr. Langmaid is chairman of the Looe town trust. That backs up a statement made in a brief which the promoters were kind enough to send me, which states that the problem mainly arises
  "from packs of dogs or individual dogs running loose and causing annoyance and alarm and dogs fouling beaches."
  That was the point that I put to the hon. Member for Truro (Mr. Penhaligon), who was rather rumbustious in the way that he responded to me. One of the major problems arises from the activities of stray dogs. Whether the Bill goes through or not, the second problem hinges on the way in which the various councils will police the measures provided in clause 19.
  Perhaps the hon. Gentleman can help me. We know that people are employed to clean beaches, and they may be the ones who will be given the enforcement responsibility. Is it proposed that the beaches designated under the clause are to have virtual full-time dog wardens to patrol them, although they will not necessarily have to sit on every beach for every minute of the summer? That sounds like a good job.
  Mr. Mudd: Enforcement would be carried out by local authority staff, who would be carrying out other duties on those beaches at the time. They would be supervised by lifeguards, who often occupy an elevated watch tower and are in a far better position to see what is going on.
  I should like to reply to a point made earlier by my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden) and I apologise for addressing this to the hon. Member for Birmingham, Erdington (Mr. Corbett). One of the enforcement problems has often been that the witness is a lay person on holiday who is unwilling to come forward to court with evidence. That would be obviated by having local authority personnel responsible for enforcement.
  8.45 pm
  Mr. Corbett: I am grateful to the hon. Member for that intervention. I wish to pick up a point which the Minister was kind enough to make. One of the other anxieties that I have about the clause is that it creates a precedent. I find it puzzling—I do not want to dwell on this—that there have been no applications to deal with the problem if it has been of such concern as it would appear to have been for many years. This is not a new problem. One wonders why the authorities did not pursue that solution. I do not want to berate them over that, however; I just want to underline my anxiety about the precedent that the clause will undoubtedly set — the Minister has confirmed that —against the background — this was mentioned by my hon. Friend the Member for Wentworth (Mr. Hardy) in an earlier debate—of the Government's proposals to try to effect better control of dogs.
  I have heard nothing that dissuades me from the view that the impact of the clause will be to treat the responsible dog owner — someone whose dog is licensed and properly on a lead and under control, and which does not go around frightening other people on a beach and would not be allowed to foul the beach—in the same way as it seeks to deal with the irresponsible dog owner. There is no argument in the House about the need to deal effectively with those who irresponsibly neglect their dogs, through we may argue about the best way to do it.
  I believe that the promoters have gone over the top with this proposal. The Minister was kind enough to make the point that in clause 19 we are dealing with a criminal offence. It is serious to seek to turn this matter into a criminal offence. It may be a nuisance, dangerous, disgusting and all the rest of it, and one acknowledges the hazards that it creates for those trying to enjoy a holiday, but to turn it into a criminal offence, which the Bill's promoters would have us do, is a bit of overkill. I hope that even at this stage there will be some better and later thoughts about the clause. It will be a welcome sign if those involved with promoting the Bill have taken on board some of the points that we have tried to make and say that they are prepared to withdraw clause 19.
  Sir Dudley Smith: I have considerable admiration for my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden), who is well known as a compassionate man, but I think that he is on the wrong tack tonight. I came in at the tail end of the last discussion and listened to the arguments. This seems an eminently sensible proposal.
  My hon. and learned Friend the Minister, in effect, says that other councils might catch on and do the same thing. It will be very good if they do. It seems to be an advance which will be appreciated by many people. I am not anti-dog, but I am aware that a significant number of dogs owners abuse them, to the detriment of the environment and to the health and living standards of other people. The hon. Member for Truro (Mr. Penhaligon) in his brief intervention, said that not all the beaches in Cornwall would be affected. I believe that the coastal regions would be far better places if such a prohibition were placed on them.
  My hon. Friend the Minister hedges his bets. He does not advise that we should support or vote against the clause. He draws our attention to the fact that there are byelaws which local authorities may invoke, but we are all aware that few councils do that, whatever their political complexion. They realise that dogs are a hot potato. There
  1056
  are no votes in them. A great deal of controversy arises when any effort is made to restrict them or allow them greater access to different areas.
  If large numbers of byelaws are ignored, I should have thought that a county council such as this, which is putting forward a proposal to restrict the admission of dogs to certain beaches, was to be admired and supported. I hope, from what I have heard, that other local authorities and coastal areas will follow suit.
  Mr. Peter Hardy: I believe that the hon. Member for Warwick and Leamington (Sir D. Smith) failed to understand the point that my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) was advancing. As the Minister confirmed, we are talking about a criminal offence. The difficulty, as I am sure all hon. Members will agree whether they like dogs or not, is that a substantial number of people should perhaps not have dogs or should look after them a great deal better than they do. The responsible dog owner, whose dogs do not contribute to the nation's problem, may well make a mistake when he visits Cornwall. He may, unlike the hon. Member for Brighton, Kemptown (Mr. Bowden), be a stranger and find himself unwittingly committing a criminal offence. We must be careful about that.
  I was grateful to the Minister for his contribution, and it was appropriate that he spoke early in this brief debate to express the Government's hesitation. However, the Government should understand that we are hesitant, not because of the Cornwall county council's efforts, but because of the Government's failure for almost six years to enact the proposals placed before Ministers in the late 1970s by the advisory committee.
  I know that the Government did not want to incur unpopularity by introducing any change. They wanted that change to be introduced by a private Member, but they did not back that hon. Member, having, at least on one occasion, persuaded him to insert in his Bill that which they quietly wanted to see enacted. With the abolition of the halfpenny later this year the Government must now introduce legislation because the cost of the dog licence is 37 ½p. As a result of that misfortune the Government will find themselves on the receiving end of criticism which they have tried to avoid for the last five or six years. I welcome the Government's receiving criticism, but it is unfortunate for Cornwall county council that at this stage it has moved into the line of fire.
  Clause 19 should be removed, first, because of the criminal offence that it would impose and, secondly, because we ought to wait to see what Bill is introduced during the next Session. A Bill will have to be introduced then. Such a Bill may please the Cornwall county council. even though it may not please those of us who do not wish the Government to pass all the responsibiliy on to local authorities so that British dog owners do not know whether they will be in a pro-dog or anti-dog area.
  Dr. M. S. Miller: Abolish the licence.
  Mr. Corbett: My hon. Friend should not be so dogmatic.
  Mr. Hardy: I am certainly not being dogmatic. My hon. Friend the Member for East Kilbride (Dr. Miller) suggests that we abolish the licence. There is a great deal of merit in that, but those of us who are interested in this

  1057
  matter recognise that there is a defect with regard to protection of dogs and the control of those who are unfit to handle them.
  The hon. Member for Truro (Mr. Penhaligon)—I am sorry that he is not in his place—was somewhat critical of the hon. Member for Brighton, Kemptown (Mr. Bowden) and suggested that we might be interfering with Cornwall's tourist trade. I should not wish to do so. The traffic jams that one sees on television are, after all, a quite sufficient deterrent to a holiday in the south-west.
  As a Yorkshireman, I hesitate to interfere in Cornish matters, but it seemed to me that the hon. Member for Truro was so eager to defend Cornwall's beaches against the nuisances which dogs could inflict that I wondered whether donkeys on which children can ride would be allowed on the same beaches.
  Mr. Mudd: I assure the hon. Member for Wentworth (Mr. Hardy) that he will find no asses on Cornish beaches. I am also delighted to be able to assure him that clause 47 contains a statutory defence which will apply to any prosecution brought under clause 19.
  Mr. Hardy: I am glad to hear that, because my dogs, which are virtuous animals, cannot read.
  I hope that Cornwall county council and those hon. Members who represent Cornwall with considerable distinction will reconsider the retention of clause 19, in view of the imminence of Government legislation. It would be a pity if the House were to legislate even for one part of the United Kingdom if in a few short months—and it can only be months—a national Bill with relevant clauses is to be placed before the House.
  Mr. Stephen Ross: I am sure that the hon. Gentleman, with his great experience of conservation matters, particularly with regard to the Wildlife and Countryside Act, is not risking the possibility that the Government will do something in 12 months' time. Should he not accept what is being offered now?
  Mr. Hardy: I share the hon. Gentleman's interest in conservation. However, if the Government allow a mistake to get through the House now, that mistake will be compounded in legislation next Session. The experience of the hon. Gentleman and myself with the Wildlife and Countryside Act leads me to suggest that real thought and care are necessary. I should not wish to see the pitch queered by fairly careless and not necessarily nationally applicable measures of this sort.
  The advice which the Minister hesitantly gave is relevant. I have never sought to interfere with legislation affecting another part of England, but, given the implications for other parts of England in the light of imminent legislation from the centre, I believe that the hesitation recommended by the Minister may be justified. I hope that those hon. Members responsible for the Bill in the House will consider the matter urgently.
  Mr. Rooker: My hon. Friend has offered those who promote and prepare private legislation a half apology for speaking on this subject. He should not do so. That will be used on later Bills. No hon. Member should offer an apology for speaking on or moving amendments to any Bill which affects any part of the United Kingdom. I have done so in the past and have never regretted it. Other hon.
  1058
  Members have done so. We give a hostage to fortune if we make even half apologies for intervening in the legitimacy of such debates.
  Mr. Hardy: I entirely agree with my hon. Friend. The difficulty is that he represents the west midlands. While that area has high unemployment, it has the capacity to recover from the ravages of the present recession rather more rapidly than south Yorkshire. My area is at present in appalling need, and I should not wish any hon. Member from the south-west to retaliate should there be a Bill from south Yorkshire designed to create jobs for those whom I represent. That is why I must be cautious before providing hostages to fortune.
  I have spoken for longer than I intended, but I was anxious about the cleanliness of Cornish beaches and about the presence of donkeys as well as dogs. I am concerned to ensure that we do not take a decision now which could have serious implications when the House considers the Dogs Bill, or whatever it might be called, in the next Session.
  Mr. David Harris: It might be for the convenience of the House if I try to deal with some of the points that have been raised in this debate. I thank hon. Members for taking part in a fair way. I was afraid, when the debate began earlier, that there might be some attempts to spin it out and raise unnecessary points. I am glad that that has not happened, and in particular I thank the hon. Member for Wentworth (Mr. Hardy) for the manner in which he has approached the subject. I agree that every hon. Member, whichever part of the country he represents, has an absolute right to intervene in private Members' business. I know that I speak for my fellow Cornwall Members when I say that we do not resent interventions by other hon. Members. We accept their right to intervene and applaud their interest in this subject.
  Clause 19 is unprecedented. Therefore, my hon. and learned Friend the Minister is right to say that it should be examined with some care by the House before we proceed to vote on it. I would describe the tenor of his remarks as slightly hostile neutrality. I was puzzled, because, if the Government feel that way, why did they not intervene at an earlier stage and make their views clear? If they had felt strongly about this clause, they could have opposed it. However, they did not decide to take that attitude to the Bill when it was before the other place. They asked the promoters to examine and justify clause 19 and that was done, to the apparent satisfaction of those who examined the clause. I do not think, with respect to my hon. and learned Friend, that it is good enough for the Government to suggest that, as they have sat on the problem of dog control for a long time and are now moving towards possible legislation, Cornwall county council should think again.
  9 pm
  Mr. Waddington: Let me make the Government's position clear. Although that last argument has been advanced by others, it was not advanced by us. On Report, the Government invited the Committee to look with great care at this provision, and pointed out that no such provision should remain in the Bill unless those on the Committee were satisfied that it was necessary, as there was the byelaw-making power.
  Mr. Harris: I acknowledge that that is the position that my hon. and learned Friend put earlier. Apparently, in

  1059
  previous stages of the Bill, that satisfaction was given by the promoters of the Bill to those examining it, and the case was accepted at that stage.
  Labour Members, particularly the hon. Member for Wentsworth, advanced the argument that, because the Government are approaching legislation on this matter, the promoters of the Bill should withdraw clause 19. I speak on behalf of my fellow Members from Cornwall in saying that, with respect, we should resist that invitation from the hon. Member and from others who take that point of view. We do so partly because we must recognise that Cornwall county council and the district councils have spent a considerable amount of money in promoting this Bill. They have not done this lightly but because they think that it is necessary. We do not know at this stage what legislation will be introduced by the Government on this subject. I also point out to hon. Members who are urging us to take this course that, if the Government bring forward legislation dealing with this issue, there is nothing in the Bill to prevent district councils, if they have designated beaches, from withdrawing that designation. I should expect them to do just that if there is satisfactory legislation to deal with this subject.
  Let me return to the basic case for clause 19. It was not embarked on lightly by. the county councils and all six of the district councils in Cornwall. As has been said repeatedly on both sides of the House, Cornwall depends on tourism.
  Mr. Neale: Will my hon. Friend confirm that many of the parish councils have also taken this matter up strongly in support of the district and county councils?
  Mr. Harris: I am happy to confirm what my hon. Friend says. Many parish councils have written to us as individual Members. I am sure that they wrote to my hon. Friends long before I arrived at the House a year ago, and they have written to me since then. I accept that, on the other side of the argument, there are people living in Cornwall who do not want this. That is a safeguard.
  There will be controversy when district councils implement clause 19, if it is passed. I can envisage the correspondence columns of the West Briton and Royal Cornwall Gazette, the Cornishman, the Cornish Times and the Falmouth Packet being full of letters on this issue. So again, the implementation of clause 19 will not be undertaken lightly. There will be controversy, but I have no hesitation in saying that the district councils and the county council want it and feel that it is necessary. In addition, the five hon. Members who represent Cornwall back it without exception. I therefore commend it to the committee.
  Question put, That the amendment be made:——
  The House divided: Ayes 11, Noes 64.

  Division No. 435]

  [9.07 pm

  AYES

  Clark, Dr David (S Shields)

  Marek, Dr John

  Clwyd, Mrs Ann

  Parry, Robert

  Cox, Thomas (Tooting)

  Skinner, Dennis

  Dalyell, Tam

  Hamilton, W. W. (Central Fife)

  Tellers for the Ayes:

  Hardy, Peter

  Mr. Robin Corbett and

  Lofthouse, Geoffrey

  Mr. Andrew Bowden.

  McKay, Allen (Penistone)

  1060

  NOES

  Adley, Robert

  Kennedy, Charles

  Alexander, Richard

  Knight, Gregory (Derby N)

  Atkins, Robert (South Ribble)

  Knox, David

  Baker, Nicholas (N Dorset)

  McCurley, Mrs Anna

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

  Madel, David

  Bevan, David Gilroy

  Mawhinney, Dr Brian

  Biffen, Rt Hon John

  Miller, Hal (B'grove)

  Brandon-Bravo, Martin

  Miscampbell, Norman

  Bruce, Malcolm

  Mudd, David

  Budgen, Nick

  Murphy, Christopher

  Campbell-Savours, Dale

  Norris, Steven

  Carlisle, Kenneth (Lincoln)

  Onslow, Cranley

  Cash, William

  Osborn, Sir John

  Cook, Robin F. (Livingston)

  Penhaligon, David

  Corrie, John

  Pike, Peter

  Currie, Mrs Edwina

  Pollock, Alexander

  Dorrell, Stephen

  Rooker, J. W.

  Dykes, Hugh

  Ross, Stephen (Isle of Wight)

  Forman, Nigel

  Shaw, Giles (Pudsey)

  Forrester, John

  Sheldon, Rt Hon R.

  Forth, Eric

  Silvester, Fred

  Fraser, J. (Norwood)

  Smith, Sir Dudley (Warwick)

  Freeman, Roger

  Soames, Hon Nicholas

  Glyn, Dr Alan

  Spicer, Jim (W Dorset)

  Greenway, Harry

  Squire, Robin

  Hannam, John

  Stradling Thomas, J.

  Hargreaves, Kenneth

  Taylor, John (Solihull)

  Harris, David

  Townsend, Cyril D. (B'heath)

  Haselhurst, Alan

  Wallace, James

  Hawkins, Sir Paul (SW N'folk)

  Waller, Gary

  Hunter, Andrew

  Jessel, Toby

  Tellers for the Noes:

  Jones, Gwilym (Cardiff N)

  Mr. Robert Hicks and

  Jones, Robert (W Herts)

  Mr. Gerrard Neale.

  Question accordingly negatived.

Clause 22

  TOUTING, ETC.
  Amendment made: In page 18, leave out lines 2 to 6 and insert—
  "(a) the use of the forecourt of premises for any of the purposes mentioned in subsection (2) above by the owner or occupier of the premises or by a person being a relative or bona fide employee of the said owner or occupier;"—[Mr. Mudd.]

Clause 54

  TRANSITIONAL PROVISIONS, SAVINGS AND REPEALS
  Amendments made: In page 31, line 22, leave out "as" and insert
  "(which was confirmed by the Sea Fisheries (Truro) Order Confirmation Act 1936) and"
  In page 31, line 25, leave out "that" and insert "the former"
  In page 31, line 26, leave out "said Order of and insert "Truro Port Fishery Order"
  In page 31, line 30, leave out "30" and insert "78"
  In page 31, line 31, leave out "1984" and insert "1936" —[Mr. Mudd.]

Schedule 5

  TRANSITIONAL PROVISIONS AND SAVINGS
  Amendments made: In page 36, leave out lines 36 to 39
  In page 36, line 40, leave out "6" and insert "5"
  In page 36, line 44, leave out "7" and insert "6"—[Mr. Mudd.]

Schedule 6

  REPEALS
  Amendment made: In page 37, leave out lines 30 to 32 —[Mr. Mudd.]
  Ordered,
  That Standing Order 205 (Notice of Third Reading) be suspended, and that the Bill be now read the third time.—
  [The First Deputy Chairman of Ways and Means.]
  Order for Third reading read.
  Queen's consent, on behalf of the Crown, signified.
  Bill read the Third time and passed, with amendments.

  Housing
  Question again proposed, That this House do now adjourn. —[Mr. Garel-Jones.]
  Mr. Rooker: The city council selected blocks of houses for enveloping contracts in a manner that was designed to attract maximum help from the Government, following the Chancellor of the Exchequer's Budget statements of 1982 and 1983, in repairing the external fabric of thousands of dwellings with only a modest contribution from the owner-occupiers. That was the other great assistance to my constituents and the constituents of other Birmingham Members.
  Many of the owner-occupiers involved are elderly and many others are unemployed. In many roads the majority of owner-occupiers are first and second-generation immigrants. They saw an opportunity for the first time to make a real improvement to the homes that they had bought and occupied for many years. They had found that they could not carry the entire burden of repairing and improving their homes because of the general decay. Those who could afford to spend money on their homes often found that there were only one or two others in the street in that position. These factors were holding up the regeneration of the inner city.
  The great benefit of the enveloping scheme is that it provides an incentive for all occupiers. Entire blocks are improved under single contracts, which means that half the properties in a street are not left in decay. The city council used its authority and powers and exploited to the full the opportunity that had been presented by the Chancellor. Large construction companies had not wanted to know about home improvement work for years because they regarded the work as penny-pinching and not worth their while. Under the enveloping scheme, large construction companies were obtaining contracts worth about £1 million in the Birmingham area. That sort of business is obviously attracted to the large construction companies. Small, large and extremely large companies have been involved in Birmingham's enveloping schemes.
  Birmingham received an average of 3,000 applications for home improvement grants each year until about 1982. In the past two years it has received 35,000 applications. The increase cannot be attributed to magic. It has occurred because it has been the city council's deliberate policy while under the control of both the Labour and Conservative parties to inform people of their rights under the Chancellor's Budget statements. "Spend, spend, spend," said Ministers. "There is no limit on the sum of money available." Admittedly, it was only available until a certain date. That exhortation was repeated the following year. People were encouraged to apply, and there was the jump in two years from 3,000 applications a year to 35,000. That bulk of applications could not be dealt with overnight.
  The real issue affecting several thousand of my constituents became apparent earlier this year. A year or 18 months ago, the roofs and external parts of the houses were being repaired. There were contractors all over the place, bedroom ceilings were caving in and there were lots of problems, but a great deal of good work was being done. The city council told my constituents, "You do not want contractors all over the outside of the house and the inside at the same time. Wait until the external block

  1063
  enveloping has been done before you apply for the internal improvements to the kitchen and bathroom and so on." Thousands of people were given that advice.
  The city environmental officer, Mr. Reynolds, wrote to me on 20 February this year. He said:
  "During the course of the Heathfield Zone II envelope contract, prospective applicants were advised, in good faith, that in order to avoid problems of having two contractors working on the same property at the same time it would be advisable for them to delay their application until the completion of envelope works to their property."
  That was sound advice and given in good faith, but it turned out to have been based on a false premise of what the Government's policy would be. A major problem now faces hundreds or thousands of my constituents and those of my hon. Friends who represent Birmingham. I believe that the whole inner city is represented by my hon. Friends, unless part of it falls within the constituency of the hon. Member for Birmingham, Edgbaston (Mrs. Knight). I am not sure of the effect of the boundary changes.
  These people have better garden walls and front paths than bathrooms and kitchens. If one drives, cycles or walks around the roads in the Birchfield and Handsworth part of Perry Barr, it looks great. The roofs have been redone, the guttering has been repaired, there are new window frames, the external fabric looks great and there are new gates and walls. However, some of those houses cannot be lived in. I have many elderly constituents who have had to go to live with their children since the work on the inside of the house could not be done because, with the change of policy since the general election, the owners could not get the grant. Those houses will deteriorate. There will be vandalism. This is a crisis of monumental proportions.
  The problems connected with the block improvement work are not confined to the inner city. In another part of my constituency, in the green leaf area on the city boundary, there is a pre-war council estate built in the '20s and '30s called Kingstanding. It borders the leafy suburb of Sutton Coldfield. There are 2,000 houses there with outside toilets. The council has been modifying about 100 a year. Under the schemes, that work has had to stop. Many of the houses have been sold in recent years, either to sitting tenants or as empty houses under the scheme that operated until May this year.
  One of the key points for those buying such houses, which might have been thought sub-standard because they had outside toilets, was that one could get a grant for a mini-mod to convert to an inside toilet. That was a key selling point, for octogenarians as well as for families with young children. I have constituents in their seventies, eighties and nineties who have not been able to get a grant to convert an outside toilet. The problem extends from the inner city to the boundaries of Birmingham. In some cases, it affects entire rows of houses because the improvements have been made in a block enveloping scheme.
  This year, Birmingham has £17 million available for home improvements but it is already committed to spending £22 million simply because the previous administration did not turn the tap off on the applications quickly enough because it was not told by its Government that there would be a change. Conservative Members should just imagine Councillor Neville Bosworth during the recent elections on the telephone to the Secretary of State for the Environment saying, "Patrick, do you not
  1064
  know that I am trying to run an election up here?" He said that because Ministers did not understand what would happen in Birmingham.
  That is the reality, but it is not for lack of ministerial visits to Birmingham. On 29 June, the Secretary of State said that he had made five official visits to Birmingham in the past 12 months. He then listed six. The present Secretary of State is so accident-prone it is not true. Four of those visits were specificlly to the inner-city partnership programme. Lord Bellwin had been there twice, the Minister for Housing and Construction had been three times—he might have been since—one Under-Secretary of State had been three times and another Under-Secretary of State had been there once. Ministers are therefore fully aware of what is going on. However, the prospects for 1985–86 are probably worse than for this year. A serious problem is emerging.
  Do we have to wait until two years before the next general election before the Government decide to change their policy and tell us to spend, spend, spend, as the Prime Minister did? She told local authorities that they were not spending enough on capital improvements. She had the brass face to accuse them of not spending enough. That gave authorities such as Birmingham a massive incentive to spend and then commit. People's expectations were raised. They were encouraged to apply. It was only by encouraging people to apply that Birmingham could assess the scale of the problem. It could then get the big international building companies to take an interest. They are not interested in 20 or 40 houses; these boys are interested in 100 or 500 houses on one contract. It is not possible to do that without testing the market. That is where Birmingham has failed because of its success.
  Ministers must put that right. They must show that they do not hold in cynical contempt inner-city problems and the desire of people who live in them to improve their areas. People who live in the inner city in Birmingham have attempted to improve their environment. They want to live there. Only a few are forced to live there because of house prices or other factors. Unfortunately, the people who want to improve their environment are being prevented from doing so because the Government are not making their contribution.
  The Government have shown a callous disregard for the implicit commitment to make the funds available. They have a duty to make that good. Birmingham still has about 18,000 applications that it must inquire into before deciding how they will be processed. Ministers should act like statesmen rather than as Tory politicians. I am aware that they are concerned for the fabric of society and for their fellow citizens. That is what they keep telling us. But are they concerned for the integrity of Government? That is what is involved here.
  Although Ministers might have been coming up the motorway for lunches, dinners and breakfasts with various people, they have not met my constituents and gone into their houses to see the reality. The Secretary of State has refused to meet my constituents who are involved in the Heathfield envelope scheme. He said that he would not meet them in London or in Birmingham because no useful purpose would be served by meeting them. They are the people who have the outside of their houses done but cannot get the inside done. They need to know that their case is being put effectively and to talk to Ministers. They honestly do not believe that Ministers understand what has happened in Birmingham.

  1065
  I am making a special plea for Birmingham. It is not possible for any other hon. Member to claim that his or her authority made such great strides as Birmingham did following the 1982 Budget announcement. We have created a problem because of our success in moving so fast. I ask one of the Ministers—preferably the Minister for Housing and Construction, who is to reply to the debate, because it is more likely that he will still be here when Parliament returns after the recess than the Secretary of State—to give a commitment that, before the end of the recess, he will come to my constituency as my guest. I shall even pay his train fare if need be. He need not put an impost on the Civil Service. I do not want any increase in public expenditure. He can enjoy the hospitality of my constituents, who will be more than happy to show him the problems of the inside of their dwellings.
  There are important issues at stake. It is worth just drawing the attention of the House to a couple of quotes from the book by Paul Harrison entitled "Inside the Inner City". In his concluding chapter on page 434, he says:
  "The very existence of inner cities and depressed regions as distinct georgraphical entities militates against policies to assist them. It is perfectly possible for a suburban or rural resident, a Tory minister or a higher civil servant, to live and die without ever witnessing, let alone understanding, the realities of life on the lower terraces of the social ziggurat. It then becomes easy, all in good faith, to underestimate the scale and depth of the problems, to misconceive their causes and consequences, and to support misguided measures that only serve to aggravate the situation."
  He made a further point which will not be valid because of this debate tonight, when he said:
  "it is much easier to crush the disadvantaged without an outcry than it is to reduce the privileges of the privileged."
  As long as there is breath in my body and in those of my hon. Friends, the demands of our constituents will not go unspoken in the House. As sincerely as I possibly could, I have deliberately attempted not to make this a partisan speech. It is political—by God, it is—but I have deliberately sought not to make it highly partisan because the structure and the cause of the problems are not of that nature.
  I am pleading with the Minister to come and look at the problem. I do not expect him to come to the Dispatch Box tonight and say that there is an extra £10 million or £20 million for Birmingham. I suspect that the Prime Minister is not too happy about the rates there being cut two years running and the Tories losing control. She must think that something is wrong in Birmingham. One of the things that is wrong in Birmingham is that the people feel cheated. They knew about the problem in May. I am paraphrasing the efforts of Councillor Bosworth. He made valiant efforts before the election to change the policies, but he failed. That is out of the way now. I ask the Minister in all good conscience to listen to and study what I and my hon. Friends have said and to come with us to Birmingham before Parliament returns after the recess to see the reality of the problem for himself.
  9.33 pm
  Mr. William O'Brien: This important debate affects thousands of people in Britain. I want to echo some of the remarks of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), because many of the points that have been made about Birmingham apply equally to the areas of west Yorkshire that I represent—
  1066
  the metropolitan districts of Wakefield and Leeds. I want to try to bring to the Minister's notice the effects that the Government's policies are having on housing in those areas.
  Having been involved in local government for a considerable time and held the responsible position of deputy leader of an authority with some 48,000 council dwellings — the tenth largest housing authority in the country — I know that housing matters have always loomed large in the minds of councillors in areas such as mine.
  As we have heard in this and previous housing debates, the metropolitan districts have major problems with defective housing and pleas have been made to the Government many times to allow local authorities such as mine to undertake the urgent expenditure required to keep such housing habitable. A report to the Wakefield metropolitan district housing committee in November 1983 on the subject of Airey houses stated:
  "Following discussions with the Chief Housing Officer and Committee approval, structural inspections together with temporary repairs were commenced on 10th February, 1982".
  The need to channel resources into those areas has a long history. Contrary to the Government's policy of cutting resources, investigations show that additional resources are needed to provide and maintain dwellings in the metropolitan districts.
  The report continues:
  "The method of inspection was to remove plasterboard at ground floor level to a height of 600 mm, together with 'U' Foam insulation and to make a visual inspection of each column base."
  That extensive investigation showed:
  "The number of columns found to be affected in any dwelling varied from 9 per cent. to 68 per cent. and the damage varied between fine hair cracks 50 mm long, to severe cracking and spalling 500 mm long, although the general average was approximately 150 mm."
  That report to Wakefield district council expressed concern about the deterioration in the Airey houses.
  As for Leeds city council housing committee, a report dated as recently as 14 June, concludes:
  "It is also relevant to point out that at no time since Local Government re-organisation in 1974 has the Authority faced such a daunting array of problems with it housing stock, nor has the need for capital investment in repairs and renewals ever been so high. The resources of the Department of Public Works will need to be maintained at least at the present level for the foreseeable future and may well, depending on events, need to be expanded. The potential workload by which the department lives is also more in evidence than ever before and, subject only to an adequate provision of funding by Central Government, the prospects for the immediate future appear to be secure."
  There is evidence beyond any shadow of doubt to prove that there is a need for further resources to be made available for housing purposes in the metropolitan areas, in particular, and in local government in general. The report, which was considered by the public works committee of the Leeds city council, continues:
  "The survey was intended to provide a basis for future planning, resource allocation and to provide advance knowledge of problems that will become more pressing with the passing of time. Leeds city council have a current housing stock of 94,157 properties. A high proportion of the total have features that will make them actually or potentially expensive to maintain. Because the housing stock is large and in general need of repair, the Housing Investment Programme funding is insufficient to enable adequate progress to be made towards correcting this unsatisfactory state of affairs. Items of exceptional maintenance, that is maintenance which the City Council cannot fund properly from its present resources, have therefore been tabulated below to indicate the scale of the problem."

  1067
  A list of the houses in the public and private sectors that are in need of urgent consideration is then given.
  On more than one occasion, the Minister and the Department have been made aware of the needs of Wakefield and Leeds metropolitan district councils. I should be grateful to hear what the Minister's intentions are to ensure that resources are made available to guarantee that the houses of tenants or owner-occupiers will be maintained to an acceptable standard.
  Mr. Derek Fatchett: My hon. Friend probably knows that on 29 June the Secretary of State came to Leeds to look at the housing situation, and I think that he was impressed by the scale of problems in the city. The debate may well give the Minister an opportunity to explain how the Government intend to respond to those problems. I am sure that my hon. Friend will agree that the citizens of the city of Leeds will be looking forward to a favourable response from the Minister when he winds up. The only form of favourable response, of course, will be the allocation of additional resources to deal with all the problems that my hon. Friend so adequately spotlighted in the earlier part of his speech.
  Mr. O'Brien: I appreciate my hon. Friend's intervention, which demonstrates the need of the city of Leeds for an increase in its housing investment programme. As my hon. Friend has pointed out, investigations have been carried out, and representations have been made. I hope that the Minister will make some reference to the visit, and that some assurances will be given that the programme drawn up by the Leeds city council can be carried out.
  The report continues:
  "The city council already commenced rehabilitation work on Airey properties. It is the view of the City's professional advisers that all Airey properties should be repaired within five years. At the present rate of funding, however, the programme will take 12–15 years to complete."
  If we are to retain properties for occupation by tenants in Leeds and Wakefield, I hope that the Minister will take into consideration the important points that have been made in the report.
  Wakefield and Leeds, as well as other cities, have experienced problems with multi-storey flats. Remedial work is needed, but, because of reductions in the HIP allocation, the programme for maintaining and repairing multi-storey flats has been retarded. I hope that high-rise flats will be repaired in the near future. The matter is urgent. The report says that if the present allocation is continued it could take 14½ years to complete the repair and maintenance scheme for high-rise flats in Leeds.
  Re-roofing of properties is necessary in Wakefield and Leeds. The Wakefield area contains 13 authorities which were housing authorities in their own right before reorganisation. Extra resources must be made available for re-roofing, to make houses safe and habitable and to prevent demolition — the only alternative if more resources are not made available. Some houses also need rewiring.
  Last year a publicity campaign was launched to encourage house owners to apply for improvement grants. Television advertisements encouraged people to apply to local authorities for improvement grants. The number of people applying surpassed anything that local authorities expected.
  Each week at my surgery people want to know why their application for an improvement grant has not been
  1068
  dealt with. The Minister should explain that the reason is the reduction in the money made available to local authorities for house improvements. He should explain that, because of that reduction, local authorities have to tell owner-occupiers that they must wait another year or two years. If more money is not made available, some people will have to wait 10 years before they can improve their homes.
  If the Minister will not meet the demand by people encouraged by the Government to apply for improvement grants, he must make it clear that the delay is caused by the Government's policy of reducing local authorities' allocations for house improvements.
  There is a need for a statutory examination of the provisions made for lift replacement and maintenance in high-rise blocks. Allocation for that work is made under the housing investment programme, but I ask the Minister to make examination of those aspects a priority. If necessary, because of the safety implications, funds for that purpose should be taken out of the total allocation.
  As regards Leeds, the report of the director of public works stated:
  "The provision of funding identified for exceptional repairs would need to take place over varying periods as indicated in the text but in no case should the period exceed 10–12 years."
  If the Government do not make resources available, a number of the repair and maintenance programmes envisaged by local authorities in my constituency in particular, and throughout the country in general, will have to continue for 14 or 15 years.
  The report continues:
  "Funding at the present level would also need to continue to arrest deterioration by continuing to upgrade the many priority estates of Council properties currently in need of planned corrective and preventive maintenance and to permit the construction of a significant number of new properties particularly in those sectors not being served by the private housing market."
  A number of hon. Members who were elected to Parliament for the first time last year received an open letter from the National Home Improvement Council asking them to take a special interest in the matter of home improvements. The letter stated:
  "This is an open invitation especially addressed to the new Members who have joined the House of Commons this year. You all have your own special constituency problems, whether you represent a farming community, a decaying inner city suburb, or an area in need of new industries or more jobs. But the one problem you will have in common is Housing."
  That statement is true. Every hon. Member faces the housing problem in his constituency. Because of the recent increases in mortgage interest rates, people who plan to purchase a house are increasingly looking to the rented. sector to relieve their housing problems.
  Last week, a young couple came to me with a problem. They advised me that they were to marry in March next year. Their mortgage arrangement had gone through four weeks ago. Just after signing the agreement, but before they could enter their house, their mortgage payments had increased by £5 per week. The Leeds Permanent building society has increased its mortgage interest rate to 13 per cent. That problem faces people who want to purchase a home.
  Many other problems face local authorities. Condensation problems are increasing. Resources should be made available to relieve defects and ensure that housing improvements are made. I share the plea that my collegues will make to the Minister for resources to be

  1069
  made available to local authorities to provide proper and effective housing schemes. I share the plea made by my hon. Friend the Member for Perry Barr, that we should take this problem out of the arena of the "them and us" situation, treat it with humanity, and give it the consideration that it rightly deserves.
  Mr. Max Madden rose——
  Mr. Peter Pike rose——
  Mr. Speaker: Order. Before I call the two hon. Members who wish to speak, I should tell them that the winding-up speeches will begin at 10.15 and that the Front Benches wish to divide the time between them.
  9.55 pm
  Mr. Max Madden: I am grateful to my hon. Friend the Member for Birmingham, Erdington, (Mr. Corbett) for initiating this debate. I very much regret that I could not be here to listen to his speech and to speeches made earlier by my hon. Friends.
  The debate centres on the deepening housing crisis that confronts the country. We have heard from many hon. Members representing constituencies throughout the country about the housing crisis that afflicts the inner cities of west Yorksire, Bradford — my own city — Leeds, Birmingham, Liverpool and many others. The crisis is directly due to the failure by the Government to devote public expenditure to combat the housing crisis and to a lack of political commitment and priority.
  It is extraordinary that at this time of a deep housing crisis, when millions of people are in acute housing need, particularly in inner cities, tens of thousands of construction and building workers are unemployed and we have mountains of building bricks. I hope that as a result of the debate the Government will reconsider their housing policies, which have resulted in the recent lamentable house building programmes since 1979. Under the last Labour Government, in one year as many houses were built as have been built under this Administration in three years. The scale of the housing problem has magnified since the Government first came to power in 1979.
  Since then, still more problems have been created. Year by year there has been a reduction in rate support grant, which helps local authorities to combat the housing crisis in their own areas. There has been a massive reduction in improvement grants, which enable local authorities and others to improve homes and bring them up to acceptable standards. Most recently, there was the imposition of VAT on those who are willing and keen to repair and improve their homes. Those Government policies make it much harder to combat the housing crisis.
  I should like to dwell on one specific aspect of the housing crisis—the problems that many of the poorest single people and childless couples face, especially with regard to the availability of furniture grants, which are administered by the Department of Health and Social Security. You may suspect, Mr. Speaker, that I am straying out of order. I hope that that will not be so, because I hope that the Minister will take the view that the Department of the Environment, in its role as the Ministry responsible for overall housing policy, should concern itself with the effect that the rule is having upon the housing needs of the poorest sections of our community.
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  I hope that the Department of the Environment will also exert pressure on the Department of Health and Social Security to abolish that rule, which I and many charities and agencies involved in the housing crisis believe is contributing significantly to the difficulties that we face. The rule to which I refer prevents single people and childless couples who are qualified to claim a grant from getting that grant if, in the view of the Department of Health and Social Security, suitable alternative furnished accommodation is available.
  In a recently prepared paper the Campaign for Single Homeless People referred to a case which can be duplicated up and down the country, especially in our inner cities. It said:
  "After years of homelessness and living in unsuitable, expensive bed and breakfast, she has finally been offered a council flat. She goes along to the DHSS office to ask for the furniture grant she needs to move in. Since she has been unemployed for over six months she qualifies, but the DHSS office, if it is following its instructions, will ask her to go away and get up to 15 refusals from landlords. If she manages to do this DHSS can still tell her to try any address they know about —usually the most sub-standard bed and breakfast in town, which has vacancies most of the time because anyone who can, leaves as soon as possible. No-one could blame the claimant if she has given up by now. Either she will give up the tenancy, and go back to the cycle of temporary, unsuitable housing and homelessness or she will try to live in an empty flat on bare boards. Of course the DHSS office may not bother following its instructions. Many just refuse single claimants straight off. Because the rules give DHSS officers so much discretion, decisions are often different for claimants in the same situation at the same office."
  I have a constituent who is in exactly that position. The local authority, which is anxious to rehouse her large family, has nominated her through a housing association for an empty council flat. She has accepted the tenancy and would like to furnish it. That would be extremely convenient to the local authority, which could then rehouse the rest of her family in suitable, available accommodation. However, because the DHSS is refusing that grant, she cannot furnish the flat and is in great difficulty. That story could be told by many of my right hon. and hon. Friends about constituents in a similar situation.
  That problem relates to public expenditure. Taxpayers, because of this stupid rule, are being asked to finance something which is expensive to them and wholly unnecessary in practice. The CHAR briefing cites another claimant who is caught in the trap of this rule It says:
  "a claimant in inner London could be paying up to £98 a week in a hotel, with a total entitlement of £106·85 a week and be refused a furniture grant to enable them to move into a council flat at perhaps £25 a week which would reduce their entitlement to £51·80."
  In public expenditure terms, this rule is extremely costly to the taxpayer. It is ludicrous in terms of local authority house planning, because it undermines local authority house building plans, programmes and policies. It is extremely discriminatory, because it discriminates against the poorer sections of society — the single homeless and couples without children. Therefore, I appeal to the Minister to consider the social and financial implications of the rule. Because of his overall housing responsibilities and his responsibilities for planning housing, I urge him to have discussions with the DHSS about the effect of the rule and to persuade it to do what it can to abolish the rule as quickly as possible.
  I understand that the rule is being reviewed by the DHSS. I hope that the information which must be in the

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  Minister's Department will be made available to the DHSS so that steps can be taken to remove it. All the housing agencies involved see the rule as one of the biggest obstacles that they face in trying to secure proper and satisfactory housing for those in most need.
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  I hope that as a result of tonight's debate the Minister will reflect and reverse the Government's housing policies and take one modest step by suggesting urgently to the DHSS that it should abolish this stupid rule as quickly as possible.
  10.4 pm
  Mr. Peter Pike: I wish to deal briefly with only three aspects of housing as I have an Adjournment debate at the end of today's business on the specific problems of housing in Burnley. The debate has been interesting in highlighting a number of housing problems facing local government at present as a result of the Government's financial policy.
  First, I wish to refer to sheltered housing. It is important at present, and, as time goes on, the demand for sheltered housing will increase. Most councils are far from able to meet the demand for that type of accommodation. The increasing number of people living longer means that this type of accommodation will be required by more people as each year passes. Councils should be provided with sufficient resources adequately to meet the needs of the community for sheltered housing.
  The central control system is another important development in sheltered housing. It is a welcome new feature which will cover a wider range of the population. I am not suggesting that central control systems should replace the traditional sheltered housing scheme whether it is converted sheltered housing or purpose-built. The central control system has the added feature that it gives 24-hour coverage for 365 days a year to those people who are fortunate enough to be in sheltered accommodation. It means that the warden can go out. There is cover when the warden is sick and on other occasions when cover cannot be maintained at present for 24 hours.
  That type or provision has a capital and revenue cost. It is important that the Government should assist councils to meet the capital cost and to ensure that they do not suffer penalties as a result of incurring revenue costs.
  Another important aspect of the central control system is that it can be introduced into individual homes, whether on council estates or in the private sector. Many elderly people wish to remain in their own home, not to move into sheltered accommodation. They may have lived in their own homes throughout their lives and may not want to move until they really must. The central control system will enable them to enjoy life in their own homes until it is necessary for them to move. That is another important reason why the Government should assist that facility.
  Another matter to which I wish to refer is improvement grants and the cowboy firms which do some of that work. I believe that the Government should introduce measures to give councils greater powers and resources to control work undertaken by private companies. I accept, of course, that many companies do a first-class job and cannot be criticised.
  The Minister will recall that when he came to Burnley some time ago he paid an unplanned visit to a home where the owner was complaining about a cowboy firm which had undertaken grant work. The Minister was going round in his car, and suddenly he asked to stop. He sought the first pedestrian on the street and asked what his house was like. That person took the Minister into his home and complained forcefully about the standard of work that had been done.
  As I said to the Minister at the time, that was not the worst example of shoddy work carried out regrettably by some cowboy firms at present. I know that the Government are considering that problem. It is an important point if we are to make the best use of public
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  money that is being spent on improvements. Members on both sides of the House will welcome any measures that will ensure that the public receive the best possible value for money, and that the house owner has a good job done and does not have to ask for a further grant. Some of my constituents are having to do that because of the standard of the work that has been done.
  I intervened earlier and mentioned the important subject of interest rates and the burden that they place on housing revenue accounts and the effect that they have on rents. We all know of the changes in Government policy affecting housing revenue account subsidy. That has meant that rents have been forced up rapidly, and in many areas they are now at unacceptably high levels. It is time that the Government thought seriously about changing the structure yet again to ensure that council tenants get a fair deal compared with those in the private sector.
  The balance has now moved away from the council tenant and is heavily in favour of the home owner. The Government should give serious thought to ensuring that rents are fixed at acceptable levels. Local authorities should not be forced to put rents up to levels that people cannot afford. It is also important to take account of rent levels in specific areas. Levels in my area are far lower in the private sector.
  As the Minister will know, in certain areas houses are cheaper than in London.
  The Government often fall into the trap of assuming that because council houses sell at a certain price in London, they sell at the same price in the provinces. In Burnley, the average council house — assuming full discount—will sell at between £6,500 and £7,000, given that a person has been a tenant for 20 years. That does not provide much capital. Therefore, I hope that the Government will stop basing their housing policy on London prices and will instead take more account of the situation in the rural areas.
  Sheltered housing is an important issue. I am sure that all hon. Members believe that the elderly have a right to live their last years in decent accommodation, with proper back-up facilities. It is therefore essential that the Government make the cash available so that councils are able to meet the demands placed upon them by this important requirement.
  10.12 pm
  Mr. John Fraser: It is a pity that the debate was interrupted by a dog fight, but it has shown two things —an overwhelming discontent with the levels of public expenditure and a lack of interest by Conservative Members; there has been only one contribution from Conservative Back Benches.
  I want to underline the extent to which my Labour colleagues have expressed concern about public expenditure on housing without partiality as to tenure. As much concern has been expressed about the availability of improvement and repair grants to owner-occupiers as about the level of expenditure that can be undertaken by local authorities. That simply shows the fairness and broadness with which the Labour party approaches housing policy.
  I begin by mentioning two things of which I have given the Minister notice. The first arises out of the recent agreement on the Housing and Building Control Bill. The House will recall that, as a result of defeats in another place, we agreed that where housing was particularly

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  suitable for old people, the right to buy would not be exercisable under the Housing Act 1980. The Bill has now received Royal Assent, and the sections dealing with the right to buy are due to come into force on 26 August.
  The Minister has issued guidance to local authorities on the circumstances in which dwellings will be exempt from the right to buy, but there is great discontent about the short time that has been allowed for consultation with local authorities. I am told by the Association of Metropolitan Authorities that he has allowed only eight working days to consider the criteria that he has published for making judgments as to whether an elderly person's accommodation is to be subject to the right to buy. Perhaps the speech by my hon. Friend the Member for Burnley (Mr. Pike), and the endorsement that the House gave it, showed the importance that is attached to preserving elderly persons' accommodation to be available for letting.
  I ask the Minister to allow sufficient additional time for consultation to deal with the discontent that has emerged from the discussions with the local authorities and from the notes sent to him by the National Housing and Town Planning Council. It has shown some concern about the code that he has issued and says:
  "The Council would wish to emphasise that the Code should be drafted to be of benefit to both the Secretary of State and the local authorities who will have a key role to play in the procedures … the code will need to be a much more substantial document and not take the form of a checklist for the Secretary of State … Whilst the Council understands the reasons for a tight timetable, it will clearly be impossible for consultation with interested bodies to be completed by 20 July."
  That is the deadline that was set. That is just one comment on the timetable, and I hope that the Minister will take it seriously.
  The Association of District councils does not agree with the criteria, and many reservations have been expressed by the Association of Metropolitan Authorities. The central objection to the criteria is that there are no clear words to suggest that the code that the Minister is publishing is not a cumulative set of tests. I am sure that it is not intended that the items that he has set out in the code — for instance, that the house:
  "is particularly suitable, having regard to its location, size, design, heating system"—
  is not to be a cumulative test to be taken together with factors such as whether the house is within easy reach of the shops, post offices or public transport and has easy pedestrian access and so on.
  There seems to be, from the way in which the code is drawn at the moment, an attempt to evade the defeat that the Government suffered in the House of Lords and the compromise that was arrived at in the House of Commons. I want the Minister to give an undertaking that he will, if necessary, give more time to the objections by local authorities, and that he will treat the headings that he has already published simply as illustrations of the circumstances in which the house may be considered particularly suitable for elderly persons. They must not be regarded either as a acumulative or exclusive list of criteria.
  Let me give an example. It says on the list that one of the tests of whether an elderly person's dwelling is to be exempt from the right to buy is whether it has central heating in all the rooms. The absence of central heating may have nothing to do with whether the dwelling is suitable or not. Some elderly people do not like central heating because they find that it gets on their chests or is
  1076
  not suitable. The fact that a flat does not have central heating in every room should not disqualify it from being exempt from the right to buy.
  Another consideration is whether the flat is on the ground floor, but many local authorities find it convenient and economic to build old persons' dwellings on the first and second floors. They do not have to have lifts, and elderly people are often quite content to live on the first floor. The criterion that an elderly person's dwelling should be on the ground floor only is far too narrow a definition of the sort of dwellings that should be exempt from the right to buy.
  I do not wish to go through the whole list, as there are many other things that I wish to say about housing policy. However, I ask the Minister to consider seriously the request for an extension of time and for a publication of a code that is merely illustrative and not construed in the constricted manner in which local authorities see it now.
  Perhaps I should declare an interest as a member of a firm that advises housing associations. I say this because my second particular question is over the Housing Corporation's newly published arrangements for shared ownership. I understand that it has found itself in some difficulty about the funds available for housing associations as a result of the imposition of VAT on house alterations. It is estimated that the imposition of that tax alone will reduce the money available from the Housing Corporation by about £30 million in a full year. One of the victims of that imposition will be the shared ownership schemes.
  The Government and the Housing Corporation have been able to put together a scheme with the Nationwide building society that will substitute for the present shared ownership arrangements something called an index-linked shared ownership scheme, under which public expenditure will provide 10 per cent. of the cost of the dwelling, and the building society will provide the mortgage for the other 90 per cent. Indeed, 45 per cent. of the cost of the dwelling will be covered by the conventional type of mortgage and the other 45 per cent. will involve an index-linked scheme. I have looked through costings provided by the Housing Corporation as well as costings provided by a housing association. In both cases, the cost of shared ownership will apparently be more under the index-linked shared ownership scheme than under the existing scheme.
  That is most unusual, as the shared ownership scheme is for the first time enshrined in statute, in the Housing and Building Control Bill, which comes into force on 26 August. The extraordinary thing about this Government's housing policy is that a scheme for people buying their own council houses—the shared ownership scheme—which will not even begin until 26 August, is being dumped for the housing association sector, perhaps this month.
  Will the Minister confirm that existing shared ownership schemes that are being put forward by housing associations will not be tossed arbitrarily to one side in favour of the index-linked shared ownership scheme that has recently been published by the Housing Corporation? Will he confirm that, at least for the next few months, the two schemes will be able to run side by side? If the Government decide otherwise, a good many housing development schemes being pioneered by housing associations will be stopped in their tracks until the new scheme comes into effect.

  1077
  I return to the main issue, which is the Government's scandalous neglect of responsibility for housing, despite the pressing evidence of unmet need and the fact that between 400,000 and 500,000 building workers are available to meet it, and could thus come off the unemployment register. A considerable saving could be made in social security budgets, because for every building worker found a job as a result of increased public expenditure, at least £5,000 a year would be saved.
  I shall spell out that need, to which many hon. Members have referred. England has a stock of just over 18 million dwellings. Of them, 2 million dwellings, or one house in nine, are unfit—there are about 1·1 million unfit houses — lack the basic amenities or are in need of repair costing £7,000 or more. Thus, there are 2 million homes in a severe state of disrepair. If the number of homes requiring repairs that cost more than £2,500 is added to that, 4 million of those 18 million homes in England are in need of substantial expenditure of one kind or another.
  Furthermore, those conditions are getting not better but worse. Between the two English house condition surveys of 1976 and 1981, the number of houses needing more than £7,000 spent on them increased by 22 per cent. The big increase in the number of houses needing repair no longer comes in the private rented sector but in the owner-occupied sector. Even excluding inflation, our housing is becoming not better but worse.
  In terms of human need, 1·1 million people are on housing waiting lists and of them, at least 250,000 are in the GLC area. It is an accepted fact that in a year 80,000 people are made homeless and that twice that number apply to be treated as such. More than 500,000 families are sharing accommodation, and there are over 250,000 of what are called concealed households. There is, therefore, a massive unmet need for public expenditure to relieve these poor housing conditions. It is a need which goes right across the board, a need for expenditure by local authorities, housing associations and owner-occupiers.
  The most important statistic is represented by the misery, denied opportunity and loss of employment which has been caused by the cutting of public expenditure on housing during the years while the Conservatives have been in office. Only a lunatic Treasury monetarist would divert public expenditure—and, in the case of the 18 July announcement, money actually in the kitty—from housing.
  The consequence is that money which might have been spent on housing—which has little import consequences and which helps to relieve unemployment as well as the conditions of misery in which many homeless or badly housed people find themselves — will be diverted to people to buy Japanese cars and video recorders and foreign imported goods. That is the effect of the Government's lunatic monetarist policy, which will bankrupt this country as the oil runs out.
  The public expenditure figures are appalling. It is a story of liquidation of the Government's responsibilities in housing. About 60 per cent. of all cuts in public expenditure have been visited on the housing sector, and the level of expenditure next year will be 35 per cent. in real terms of the public housing expenditure which the Conservatives inherited in 1979.
  Taking all housing spending, and using 1982–83 as the base year — following the pattern of the public
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  expenditure White Paper — public expenditure has dropped from £6·286 million in 1979–80 to £2·264 million in 1984–85. By the next financial year, public expenditure in housing in Britain will account for 3p in every £1 of public expenditure, compared with 10p per pound in the mid-1970s.
  The Prime Minister encouraged local authorities to spend more on housing. She said in November 1982:
  "We need more capital spending by local government and in the public sector generally". — [Official Report, 3 November 1982; Vol. 31, c. 21.]
  In a letter to Sir Jack Smart, the right hon. Lady said:
  "Local authorities have been enabled, and indeed encouraged, to increase their capital expenditure by using capital receipts to supplement their capital allocations."
  As a result, local authorities, in accordance with the Housing Act 1980, had large capital receipts in the financial years 1981 to 1984. They had accumulated in their coffers enough money to spend on big housing programmes. Anybody with knowledge of running a housing committee knows that one cannot sell a house today and start a new one tomorrow. These things must be planned, and sometimes it is necessary to keep the money in the bank for a time before undertaking a housing expenditure programme.
  The Government have prevented local authorities from spending their accumulated capital receipts, which they previously said formed no part of public expenditure. It is public expenditure in the sense that it is local expenditure, but it is simply taking from one source, the sale of council houses—money provided by building society mortgages — and recycling it either into the building of other council houses or, more often, in Birmingham and such places, recycling it into the private sector by way of repair and improvement grants. However, the ability of local authorities to recycle capital receipts in that way has been denied to them.
  The Government claim, despite all the failings that I have mentioned, that they have a good housing record. They have not. I shall quote from the most recent publication on house building for May 1984, which was published by the Department of the Environment on 4 July 1984. I shall deal with the public sector, as that is the only sector for which the Minister has responsibility. From March to May 1984, total starts, on a seasonally adjusted basis, were 3 per cent. down. In the public sector, starts were 23 per cent. down on the previous three months when similar comparisons were made. In case anyone says that there is a seasonal variation that has to be taken into account over the three months, the figure for public housing starts was 22 per cent. lower than a year ago.
  The Department of the Environment in Marsham street has become a sort of Treasury abattoir with the massive slaughter of the plans of local authorities and the hopes of those on housing waiting lists and of those who are badly housed. I have used the words "lunatic" and "moronic" in describing the actions of the Department, and I do not think that I am guilty of exaggerated language. It seems that there is a PA within the Department, and I do not mean a personal assistant or someone who spends too long in the bar. I am talking about a project abortionist.
  The DoE is the only Department that I know of that aborts successful projects. The Government had one jewel in their crown. Ministers often talked about increased expenditure on improvement and repair grants. It stood about £90 million under the previous Labour Government and it had increased to about £740 million last year. It is

  1079
  estimated that expenditure will increase to about £900 million in the current year. The Minister says that that is a great achievement, and I do not deny it, but it has been achieved by a reduction in other forms of public expenditure on housing. However, taken by itself, the increase in improvement grants and repair grants was a success story.
  One of the Department's officials must have said, "Minister, we have a success on our hands. Let's abort. "The Minister came to the House and announced the abortion of the grants. Authority after authority has cut off its housing and improvement grant programme, to the tremendous distress of many owners who bought their houses in the full expectation that the grant system would continue. They may not have thought that the 90 per cent. grants would continue, but they thought that local authorities would continue to grant money. Public expenditure cuts have denied that possibility. The distress which has been caused is to be found among those whom the Government profess to defend and not in the local authority and housing association sectors.
  The Government had great success with a scheme which involved in part the right to rent as well as the right to buy. It was called the-do-it-yourself shared ownership scheme. It was a highly popular scheme which was pressed by the Housing Corporation and housing associations. However, the PA in the Department appeared and said, "This scheme is a success, Minister. Let's abort." The scheme was brought to an end last year. The other shared ownership scheme involved a mixture of renting and buying, and that, too, has been aborted.
  The picture for 1985–86 is dismal. It is estimated that net public expenditure on housing, after taking into account the capital receipts of local authorities, will be about £1 billion for 1985–86. That is the estimate that appears in the public expenditure figures which were published in February.
  What the Secretary of State said on 18 July was that local authorities had overspent by £368 million in 1983–84 and were likely to overspend by about the same amount, or more, in the current year. He went on to say that the so-called overspend of £750 million to £800 million would be deducted from the housing investment programme for 1985–86.
  If next year's HIP is cut in that way, there will be a total moratorium on new housing projects, and that will be a crematorium for people's housing hopes. The effect of such a cut in the building programme for next year will be catastrophic. It is taking place when the local authorities have capital receipts of £2·5 billion or so, accumulated between 1981 and 1984 which are available to spend on public housing but have not been spent. Local authorities will be prevented from spending the very money that they were encouraged to build up from the sale of council houses. They are being constrained from using the £2·5 billion in their hands. The Government will be stealing that money and banking it for their own monetarist purposes.
  Ministers can point to one or two small successes, but the Government have achieved an almost total liquidation of net public expenditure on housing. There will be a few schemes, but under this Department of the Environment and this Minister for Housing and Construction public housing has become a token run by ciphers.
  10.37 pm
  The Minister for Housing and Construction (Mr. Ian Gow): I congratulate the hon. Member for Birmingham, Erdington (Mr. Corbett) on having won first place in the ballot. We have had a most interesting debate.
  With characteristic courtesy, the hon. Gentleman gave me notice of the two specific matters that he wished to raise. First, he asked about the consultation with local authorities regarding the provisions for the purchase of elderly persons' dwellings under the Housing and Building Control Act 1984 which, as the hon. Gentleman rightly said, comes into force on 26 August.
  The Department issued a consultation letter on 9 July. Because the provisions of the Act come into force on 26 August, we asked that replies should be received by Friday 20 July. Of course, the subject matter—the purchase by tenants of houses or flats which may be considered to be particularly suitable for the elderly—was contained in almost identical form in the Housing Act 1980. We are not springing a new subject on local authorities.
  The hon. Gentleman was right to say that the chairman of the housing committee of the Association of Metropolitan Authorities wrote to me on 11 July. In a letter of 13 July I explained to Councillor Donnelly:
  "The Department asked for comments on the draft guidance on the new provisions for elderly persons' dwellings by 20 July because the provisions come into force on 26 August. Between those two dates comments on the draft guidance need to be considered, final decisions on the text taken, the text reproduced and incorporated into the draft circular on implementation".
  At the end, I said:
  "If your comments should arrive late they will of course be taken into account if we are able to do so."
  If comments either from Councillor Donnelly or from others are received after 20 July, we shall do our utmost to take them into consideration.
  Mr. John Fraser: Will the Minister confirm that the points in his guidance notes are not cumulative but should be considered independently as indicators of whether a dwelling is suitable for exemption?
  Mr. Gow: I give the assurance in, I hope, the terms that the hon. Gentleman seeks. It will not be necessary to satisfy all the tests (a) to (i) in paragraph 6 for an exemption from the right to buy to be granted by my right hon. Friend. Each case will be judged on its merits. This is a consultation paper, and we shall revise it in the light of the comments that we receive from those whom we have consulted.
  The hon. Member for Norwood (Mr. Fraser) also asked about index-linked finance, about which the chairman of the Housing Corporation made an announcement on 4 July. The Nationwide building society has agreed to provide a total of £30 million—half in conventional mortgages and half in index-linked mortgages—to cover 90 per cent. of the cost of housing association homes that are provided for shared ownership. That means that the corporation is able to provide new homes at a cost of only £1 for every £9 that is put up by the private sector. The shared ownership programme enables people to enter home ownership at an income level of about 70 per cent. of that which is normally required. I confirm that, for the time being, the two schemes will exist side by side.
  Quite properly, because we are considering public investment in housing, this debate has concentrated on the stock of local authority housing. I expect that a growing

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  proportion of the nation's housing needs will be met from the private sector. Today we have 60 per cent. rising home ownership. I expect that trend to continue. Opposition Members have reminded the House today that they share our goal—I hope that I do not misrepresent them—of trying to achieve a nationwide property-owning democracy. If I have misrepresented any Opposition Member, I shall gladly give way.
  Mr. Winnick: I shall take up the Minister's challenge. We have already made it clear that we are in favour of owner-occupation. When in government, we would never have introduced the option mortgage scheme if we had not been in favour of it. There should be no distortion about Labour's stance on owner-occupation. Does the Minister agree that many people—certainly no less than 30 per cent.—even if there were not mass unemployment, will not be able to obtain a mortgage? What will be done about that? Will the number of council house starts continue to decline? Will the Government accept the responsibility to ensure that people who cannot get a mortgage and have no other means of being adequately housed will be able to obtain accommodation in the normal way through a local authority?
  Mr. Gow: Of course, I agree with the hon. Gentleman that many people and families do not want or cannot afford to become owner-occupiers. I merely want to achieve some bipartisanship and, subject to that qualification, I think that I have the assent of the Opposition. No representative of the Liberal or Social Democratic parties is present. I welcome the assent of the two major parties that we should strive for and welcome a nationwide propety-owning democracy. I am most happy with that assent.
  Mr. Winnick: What about my question?
  Mr. Gow: I shall come to that later. I embrace the Front and Back Benches of the Opposition in this common ground and am happy to welcome the interest in and passion for home ownership shown by the hon. Member for Birmingham, Perry Barr (Mr. Rooker). Although the hon. Member for Perry Barr, who made an eloquent speech, may not be an assiduous reader of the Financial Times, we may be sure that the hon. Member for Norwood is.
  In Monday's Financial Times we discovered a further interesting conversion, recently confirmed by the Labour party, towards the concept of home ownership. I thought that I would have the rapt attention of the Labour party, because this is a country which has sometimes served as a model and guide for Socialists throughout the world—[Interruption.] Hon. Gentlemen must not divert me.
  Mr. Mark Baker, writing from Peking, said:
  "A home of your own is now the great Chinese dream. For the first time since the early 1950s, the Government" —[Interruption.]
  The Labour party says that the conversion took place only following the visit of my right hon. Friend the Prime Minister. That was not a claim that was made initially by the Minister for Housing and Construction. On the contrary, that was a claim that came from the Labour Benches. However, I do not want to be diverted. I shall read on.
  "Tens of thousands of Chinese families have purchased their own apartments and houses during the past two years and demand is
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  far outstripping supply. After experimenting with real estate development on capitalist lines in several cities, the Government now appears to have decided to shift the emphasis of its housing programme from public rental to private freehold. The policy shift"——
  this will be of particular interest to the hon. Members for Perry Barr and for Bradford, West (Mr. Madden)—
  "was recently endorsed by the most senior Chinese leader, Deng Xiaoping. He told the party newspaper, People's Daily, that encouraging people to buy and sell their homes would make the construction industry more profitable and stimulate residential building."
  There follows an interesting piece of advice.
  "Deng even advocated increasing rents on government-owned accommodation to encourage the change—`if house rents are too low, people won't buy houses,' he observed."
  Mr. Corbett: When I was in Shenzhen, the special economic zone, a month ago, I saw accommodation for 300,000 people that had been built with public funds in five years. The Minister should not pretend that China is suddenly going to tip it all out and try to flog it.
  Mr. Gow: I was quoting, from that paper beloved of the Labour party — the Financial Times — Mr. Deng Xiaoping, a leader greatly revered by the Labour party.
  I wish to move from Peking to London. I want to examine the level of public expenditure in housing and what it is achieving. The figures for local authority capital expenditure on housing for 1983–84 were published last week. Gross capital expenditure on housing was over £3 billion. That is a considerable sum by any standards—[Interruption.] The hon. Member for Norwood suggest that £3 billion is not a substantial sum.
  Mr. John Fraser: It is not a penny higher than the level of mortgage interest relief in the private sector.
  Mr. Gow: I shall be comparing the £3 billion with various other figures. I hope that the hon. Gentleman will allow me to do that. He and some of his hon. Friends described the statement made by my right hon. Friend the Secretary of State a week ago as a moratorium. I should make it clear that local authority capital expenditure is subject to a cash limit, as was well understood when the cash limit for the current year was set. A week ago my right hon. Friend appealed to local authorities for restraint. That certainly was not a statutory moratorium, and he invoked no statutory powers. He asked for restraint by local authorities to achieve not a cut but to remain within the limits for local capital expenditure in the current year.
  Capital expenditure by local authorities on housing was just under £2 billion in 1981–82. By 1982–83 it had risen to nearly £2·5 billion. Last year it was more than £3 billion —one third higher in cash terms than in 1978–79 when the Labour Government were in power.
  The nature of housing expenditure has also changed markedly in the past few years. Much more is being spent than in the past on renovating existing stock, both public and private. In 1978–79, the last year for which the Labour Government were responsible, expenditure on improvement grants was £90 million. In the year ended 31 March 1983, total expenditure on improvement grants was £430 million. We do not yet have the final figures for the year ended 31 March 1984, but total expenditure in that year exceeded £900 million.
  The Government have been criticised because the exceptional arrangements announced by my right hon. and learned Friend the then Chancellor on 9 March 1982 were not continued beyond 31 March 1984. Although you were

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  not Speaker at that time, Mr. Speaker, I believe that you presided over the House during my right hon. and learned Friend's Budget statement on 9 March 1982. As you will doubtless recall, he said that the exceptional arrangements were to continue only until 31 December 1982. Having extended those arrangements well beyond that date, until 31 March 1984, we are now rebuked by the very party which spent only £90 million on improvement grants when it was in power.
  Mr. Willie W. Hamilton: What about council house starts?
  Mr. Gow: I am replying to specific criticisms of the Government's improvement grant policy.
  Last year £730 million was spent on new council house building, more than £1 billion on repairs and improvements to local authority stock and more than £900 on home improvement grants. For the first time, expenditure on repairs and home improvement grants exceeded that on new build, even though expenditure on new build has remained relatively constant.
  Mr. Rooker: The Minister has not uttered the word "Birmingham" since he began. I ask him to respond briefly to the points that I made, and to what has been said by my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett).
  Mr. Gow: I understand the hon. Gentleman's point. The hon. Gentleman will agree that the debate has lasted for three hours, and I made no complaint about the time left to me by the hon. Member for Norwood.
  The hon. Member for Perry Barr asked me whether I would visit his constituency. I cannot give the hon. Gentleman a specific undertaking about which month it will be, hut, before the end of this year, I will come to his constituency and visit those parts that he would like me to visit. I have already visited the constituency of the hon. Member for Burnley (Mr. Pike). I was particularly interested to do so, because the hon. Member used to be the leader of the Burnely borough council. I do not want to enter into too many commitments.
  In accordance with MR. SPEAKER'S Ruling—[Official Report, 19 July 1984; Vol. 64, c. 522]—the debate was concluded.

  Coal Industry Dispute
  10.56 pm
  Mr. Willie W. Hamilton: After that little knockabout, we come to an equally serious matter.
  Last Thursday evening, the Prime Minister had a hard job to do. After a disastrous 12 months since the 1983 election, she had to make a speech to her fearful Back Benchers that would send them on their holidays in reasonably good spirits. From the report and leaks that we have had of that meeting, it is interesting to see how she tackled the challenge. She chose to use that occasion to initiate a hymn of hatred and personal abuse against the National Union of Mineworkers' president and the leader of the Labour party. Her attempt to equate the miners with the enemy in the Falkland islands showed the depths to which she is prepared to descend, not to serve the national interest but to save her own political skin. Her vapourings inevitably were echoed by her pathetic puppets last weekend—the Secretary of State for Employment, the Chancellor of the Exchequer, of course, the poodle, the Home Secretary, and, not least, the chump, the chairman of the Tory party.
  On that occasion, the Prime Minister reportedly said that the pit strikers posed as great a threat to democracy as General Galtieri of Argentina, although in the House on Monday the Secretary of State for Energy denied that she hurled that insult at the miners. She apparently also shrieked about the danger to liberty, the attempts to circumvent democracy and the danger of tyranny.
  All those charges can be hurled back in her teeth. For instance, her determination to leave this great city of London as the only capital city in our western democracies without its own democratically elected council, and to abolish elections in London and the other metropolitan boroughs throughout the country, all of them under Labour control, and to put in their place unelected Tory placemen, shows what a double-faced twister she is.
  Equally, for the right hon. Lady to talk about the miners' threat to liberty and the dangers of tyranny as a result of their activities is brazen effrontery from one who seeks to deny basic human rights to the workers in GCHQ. That is tyranny at home, perpetrated by the Prime Minister herself. A High Court judgment against her states that her action was a denial of natural justice. It is no wonder that The Economist—a Tory magazine—on 5 July described her Government as
  "the most inept since the war."
  Those remarks are an introduction to the debate. I am anxious to get all my notes on the record in the time at my disposal.
  I shall now deal directly with the miners' strike. The Prime Minister's appointment of Mr. Ian MacGregor as the septuagenarian chairman of the National Coal Board is, and was recognised to be, an open declaration of war against the National Union of Mineworkers. With his appointment three immovable objects came together—the chairman of the NCB, the president of the NUM and the Prime Minister. That is the seedbed on which the present dispute has grown and festered. If the three could be exiled on a desert island, incommunicado, for 12 months or more, the interests of both the coal industry and the nation would be well served.
  The Prime Minister has a pathological hatred of trade unions in general, and the NUM in particular. She was

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  determined from the outset to teach the miners some severe lessons, while pretending to be above the struggle —one of the many examples of her deviousness over the years. Mr. MacGregor can see no further than a balance sheet. He has about as much warmth as the Prime Minister or an arctic iceberg.
  As for the NUM president, I remind the Prime Minister and the Government that he was democratically elected by a huge majority far greater than that obtained by the Prime Minister at either of her two general elections. The Prime Minister's appointment of Mr. MacGregor played into Mr. Scargill's hands. It made his confrontation policies that much easier to put into effect.
  The sudden decision to close the Cortonwood colliery in Yorkshire was, for sheer ineptitude and provocation, hard to beat. It was a deliberate incitement to the NUM. It gave some credibility to Mr. Scargill's charge that Mr. MacGregor, acting on the Prime Minister's instructions, was out to butcher the coal industry. It therefore gave him the excuse, which he had long sought, to engage in a full-blown national strike. That aim had been thwarted on two or three earlier occasions by the democratic will of his own members.
  Mr. Scargill therefore sought to surmount that impediment by changing the rules which forbade a national strike without a national ballot. My right hon. Friend the Leader of the Opposition has said that, unless and until there is a national ballot, the deep divisions within the NUM, among trade unions within the coalmining industry and between the NUM and other unions outside the mining industry will continue.
  Mr. Allan Rogers: Will my hon. Friend give way?
  Mr. Hamilton: I am sorry, but I shall not give way. I have much to say, and I want to say it in my own way.
  Unless and until every Opposition Member asserts the right of every miner to have a democratic say in how his national union works, divisions are bound to continue. We should not be afraid to say time and time again—it has been said this morning in the executive committee of the Labour party—that every man should have a right to vote in matters concerning him.
  Mr. Rogers: Will my hon. Friend give way?
  Mr. Hamilton: No. I want to say what I want to say. My hon. Friend had a chance to put his name down for this ballot. He might have a chance later in this debate to say what he wants.
  Without a national ballot, the NUM is divided within itself and from other trade unions inside and outside the industry. Mining villages and communities all over the country, and even families within them, are divided. The political, economic and social wounds inflicted on mining communities will take generations to heal.
  As the weeks have passed, so too attitudes on all sides have hardened. Recriminations are becoming more fierce and bitter. Mr. Scargill repeats his inflexible demands—there has been no change in them in the past 26 weeks —for a complete withdrawal of all plans for pit closures except where no coal reserves remain, the full implementation of "Plan for Coal" agreed in 1974 and no redundancies.
  Mr. Rogers: It was a conference decision.
  Mr. Hamilton: I hope that my hon. Friend will not provoke me too much, or I shall take the whole one and a half hours.
  For their part, the Government have been increasingly determined to impose their will by the deliberate and calculated starvation of miners' wives and children. Never in our history—not even in war time, not even by any previous Tory Government — have the wives and children of workers on strike been treated worse by the state than the families of murderers, rapists and other criminals. Whatever the merits or demerits of the strike, that treatment of innocent wives and children is indefensible and callous cruelty, which is so typical of the Prime Minister and her view of Government in relation to trade unions.
  Recently, I visited the NUM soup kitchens in my constituency, where I was presented with a letter by a young striking miner from Glenrothes. He showed me a letter that he had received from the DHSS in Kirkcaldy demanding answers to these questions: Had he had any payments from the social work department of the regional council? If so, how much? To whom were the payments payable? To its credit, Fife regional council—a Labour-controlled council — refused to give that kind of information to the DHSS. If the DHSS wishes to obtain that information from the miner, that is up to the miner; but the DHSS will get no help from Labour-controlled councils in that type of nefarious activity. That young man is a deeply worried, decent guy anxious about his future. That applies to the vast majority of miners up and down the country.
  Miners have the undeniable right to try to protect their jobs by whatever legitimate means lie at their disposal. In the light of the present Government's record of deliberately created mass unemployment, miners have every justification for being deeply apprehensive about their future employment prospects. So have other workers, however. While a miner has the right to protect his own job, so too have steel workers, workers in the paper mills in my constituency, railway workers, dockers and everybody else. No man has the right to threaten another man's job the better to protect his own. That is happening.
  Nor has any man the right to assume that his job will be available to his son or sons, still less his grandsons. That claim is made by some NUM leaders. It is an absurd and unrealistic defence of the hereditary principle. It was repeated in the House of Commons only on Monday by my right hon. Friend the Member for Chesterfield (Mr. Benn). In this rapidly evolving technological era — nowhere more so than in an extractive industry such as coal—such a claim is utter nonsense. Pit closures are bound to take place, and have occurred ever since there was a coal industry hundreds of years ago. It is in the nature of an extractive industry that that should be so.
  I have figures from the House of Commons Library and the Official Report that show that, in the five financial years when the Labour Government were in power—1974–75 to 1978–79—there were 32 closures and in the succeeding five years there were 46 closures. That process will go on under any Government, and nobody can pretend that it will not or that we can avoid it in any way. There is no purpose in trying to make political capital out of an inevitable geological fact.
  Mr. Allan Rogers: My hon. Friend does not know what he is talking about.
  Mr. Hamilton: I wish that my hon. Friend would shut up.
  Mr. Rogers: I wish you would.
  Mr. Hamilton: I know more about it than my hon. Friend.
  The purpose of a publicly owned industry is to humanise that process, mitigate any hardship, and reduce as far as possible any feelings of insecurity and fear of the future. Successive Governments have gone a long way towards achieving that purpose — perhaps not far enough, but "Plan for Coal", agreed in 1974 on a tripartite basis, was an attempt to implement as far as practicable those human concepts.
  What is needed now is for "Plan for Coal" to be updated and possibly renamed "The National Plan for Energy Resources up to the year 2000". That initiative must come from the Government now; certainly before the House goes into recess. That is the imaginative response that I hope will help to resolve the dispute.
  The strike has gone on for far too long to do anybody any good. Nobody should be so foolish now as to engage in silly talk about winning or losing, or teaching lessons to anybody. Eventually the long-term and short-term problems of the coal industry, and all other energy problems, will have to be resolved by the interested parties getting together in a civilised and common-sense manner, with no preconditions laid down by either side.
  I pay tribute to my right hon. Friend the Member for Salford, East (Mr. Orme) for his continuing and continuous effort to that end. That should have been the Government's response. However eloquent an Opposition Member may be, it is no substitute for a Minister taking on that role. There has been little response from the Government on these matters. The editorial in The Observer last Sunday stated:
  "Mrs. Thatcher appeared to declare war on the miners last Thursday night … she was only trying to rally her dispirited troops … in doing so she heightened the stakes wantonly."
  The Prime Minister's hysterics came when, despite the hot public rhetoric of Mr. Scargill, the chairman of the NCB is reported by The Observer as believing that the NUM negotiators are
  "genuinely trying to find a formula for a deal over pit closures."
  The Prime Minister is rightly accused of being a bad listener. She refuses to listen to any views or opinions other than those that conform to her own instincts and prejudices. She despises and rejects any ideas of conciliation and consensus. She likes total victory and unconditional surrender by her opponents, so the strike goes on and will continue to go on unless and until she bends and realises that she cannot win in the sense that she wants to win, and nor can any other section of the community. The longer the strike lasts, the greater will be the social tensions and the threats to the rule of law and to the prospects of compromise and conciliation.
  I was a young schoolboy and the son of a Durham miner at the time of the 1926 strike—not many hon. Members can claim that. At that time, the miners were starved into surrender. The bitterness and scars caused then are still felt to this day—more than 50 years on. Neither the Prime Minister nor any member of her Government can even begin to understand that.
  I have represented a mining constituency for 34 years, so I know what I am talking about. My father was a collier in Durham and taught me a lot about it, so I am entitled
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  to say my say on these matters. It is time that some of these things were said. I beg the Prime Minister to make a superhuman effort. I ask her to try, just for once, to be human and magnanimous and to act as the Prime Minister of the whole United Kingdom and not just the posher part of it. I ask Mr. Scargill to reconsider his position as calmly as his excitable personality will allow.
  The miners and their families are among the most patriotic and reasonable folk in the United Kingdom. I am reckoned to be one of them. To insult them as the "enemy within", as the Prime Minister has done, says more about her than it does about them. I beg the Minister to reply in the spirit in which I have made my speech. In the past few weeks we have seen hundreds, indeed thousands, not all of them miners, on the so-called picket lines. Many thousands more have stayed at home. It is to them that we should appeal. I believe that they are desperate for an honourable and fair settlement. They are suffering harshly.
  Let me give two examples from my constituency. In my surgery a fortnight ago a striking miner, with no bitterness in his voice, said, "Willie, I want you to try and get me a council house to rent," because, he said, "I have bought my house and now I am threatened with eviction because I have no income and cannot make the payments.' I wrote to the local authority. It will house him. He is back to square one. He feels no bitterness, but there is no future for him unless and until the strike is solved honourably and satisfactorily.
  I give one further example, of an electrician at the Seafield colliery. He and his wife are good citizens. They do noble voluntary work of various kinds in Leven. They have a daughter who is just coming out of university in Dundee as an interior designer. They wanted to give that girl a few hundred pounds to set her up in her own little business. They cried to me, "What are we going to do? We have got rid of our savings." I said, "I wish that I could tell you." There is no future for that girl either, unless and until this is solved.
  The Government have a hell of a responsibility. They should use some imagination and magnanimity to bring this foul and, I believe, unnecessary strike to an end as quickly as possible.
  11.22 pm
  Mr. Jonathan Aitken: The hon. Member for Fife, Central (Mr. Hamilton) has done the House a service by introducing, albeit at this late hour, this important subject. I also hope that I am not ruining his future political career by saying that I found many of his arguments convincing and courageously put.
  Those of us on this side of the House who represent mining constituencies are aware of the truth that he spoke when he said that many of the miners are patriotic and honourable men. I do not believe that those epithets can be so fairly applied to some of the leaders of the National Union of Mineworkers at present, but that is a point on which we differ.
  I agree with hon. Gentleman when he says that the strike has gone on for far too long. Efforts must be made to solve it. Let us in this debate try to examine one or two of the points that the hon. Gentleman put forward. I believe that he opened by attacking two wrong targets I believe that his attack on my right hon. Friend the Prime Minister was unjustified. For a start, I heard the Prime Minister's speech to the 1922 Committee which the hon.

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  Gentleman described as a "hymn of hate". Those of us who had the opportunity of listening to that speech know that that is a completely unfair and inaccurate description.
  Let there be no doubt in the House or the country that every Conservative Member supports wholeheartedly the stand that the Prime Minister is taking, because there can be no other, faced with a challenge from a union leader who says that the strike is not about pay or jobs but is about his political wish to bring down the elected Government.
  Opposition Members should be equally opposed to a union leader whose aim and ambitions are revolutionary and extra-parliamentary and not in the best interests of union members.
  The criticisms which the hon. Gentleman made of Mr. Scargill were restrained, but correct. It is a disgrace to the NUM that this massive strike, this massive injury to our nation, should have been launched on the undemocratic basis of no ballot. In insisting on a strike without a ballot, Mr. Scargill sowed the real seeds of hate and destruction in our society. I am grateful to the hon. Gentleman for spelling out his criticisms so clearly.
  The second wrong target which the hon. Member for Fife, Central attacked was Mr. Ian MacGregor, whom he accused of having made an open declaration of war on the NUM. That is not true. It is the same Mr. MacGregor who proposed a pay increase of 5·2 per cent. for the NUM, a pay increase which the right hon. Member for Salford, West (Mr. Orme) said was not in dispute, and which keeps the pay of the miners at the highest level for industrialised workers. It is Mr. MacGregor who proposed to the Government—a proposal which was accepted—to go on investing £2 million a day of the taxpayers' money in the coal industry. It was Mr. MacGregor who persuaded the Government to support the new £450 million pit at Ashfordby. It was he who introduced the extremely generous redundancy terms which make the redundancy terms offered by the former Secretary of State for Energy, the right hon. Member for Chesterfield (Mr. Benn) look mean. Above all, it is Mr. MacGregor who is trying to introduce into the debate the economics of the real world outside the introspective arguments of the NUM.
  There is a price for coal in the world. Mr. Scargill keeps on telling everyone, in another of his misrepresentations, that Britain produces the cheapest deep-mined coal in the world. This is not so. The average pithead price for deep-mined coal in the United Kingdom is £46 a tonne. The equivalent figure in the United States, a high wage country, is £23 a tonne. In Australia it is £16 a tonne. Some 52 per cent. of the coal that is mined in this country is produced at above the average world prices. We are producing far too much coal which cannot be sold at competitive prices.
  Mr. Kevin Barron: The hon. Gentleman is comparing the cost of coal production in this country with the cost in other countries. Does he not realise that the vast majority of coal in America and Australia is taken from the surface and not deep mined? We are talking about deep-mined coal, and it is misleading the House to use those figures as they are an unfair comparison, and the hon. Gentleman should be fair.
  Mr. Aitken: I am sorry to contradict the hon. Gentleman, but it is his facts that are wrong. I have here a release from the Department of Energy, which gives the
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  precise figures. They show that the pithead price for deep-mined coal in the United States is £23 a tonne, in Australia £16 a tonne, and in the United Kingdom £46 a tonne. There is no avoiding the fact that the United Kingdom industry is uncompetitive for much of its production. This is the nettle which sooner or later has to be realistically grasped in the key negotiations on the future of the coal mining industry.
  Mr. Dennis Skinner: Will the hon. Gentleman admit that there are many industries which are uneconomic from time to time, but then after a while become economic? Does he appreciate that in the coal mining industry pits can be uneconomic for one, two or three years and then suddenly run into a good seam and become extremely economic? As he knows all about running an uneconomic industry—TV-am—would not his argument apply down the line to it? It was losing money heavily and was not able to compete with the BBC, and that resulted in the biggest industrial relations fiasco that we have known on television. Would not that station have been closed if MacGregor had been anywhere near it?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I remind the House that the debate finishes at 12.26, and I wish to call as many as possible of the hon. Members who are anxious to speak. Interventions make speeches longer.
  Mr. Aitken: I shall resist the temptation to debate TV-am, except to say that if the management of the coal industry were able to cut its costs as fast and efficiently as TV-am has done, the coal industry might stand as sound a chance of survival as TV-am has done and will do.
  The challenge for the future of the coal industry is to shift more of its coal production into low-cost production. A greater percentage of our coal production could be competitive and low-cost, if only certain reforms were introduced, which is what Mr. MacGregor has been trying to do.
  I represent about a quarter of the 2,400 Kent miners. When I spoke last in the House on this subject, on 19 May, the hon. Member for Bolsover (Mr. Skinner) loudly predicted that the country's coal stocks would run out in eight weeks, so backing up Mr. Scargill's figures.
  Mr. Skinner: I said nothing of the sort.
  Mr. Aitken: The record speaks for itself.
  Mr. Skinner: The hon. Gentleman can read in Hansard what I said.
  Mr. Aitken: I have the relevant copy of the Official Report with me and I read it before coming into the debate. The hon. Gentleman roundly supported Mr. Scargill's claim that coal stocks would run out in eight weeks. They have not run out.
  I said at that time that in Kent, as everywhere, the strike was unfolding with the impending doom of a Greek tragedy. In Kent, due to the unthinking intransigence of the miners' leaders there, who are to the left of Arthur Scargill— indeed, they are probably to the left of the man in the moon—are building a funeral pyre on which they, by their stupidity, may sacrifice virtually all the jobs of their members.
  The Kent pits are something of a peninsula in the mining industry. They are losing £22 million a year, with totally uneconomic production. Coal in Kent is produced

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  at about four times the cost of Australian deep-mined coal and two and a half time the cost of American deep-mined coal. Two of the pits in Kent are geologically and economically very doubtful. One face has recently been lost for ever at Tilmanstone, there are growing doubts about Snowdown, and it is doubtful whether Betteshanger could survive on its own.
  My message to the Kent miners is that every day the strike goes on it becomes more and more possible that the entire Kent coalfield will never reopen. I appeal to them to get democracy back into their union and to try to have a ballot. I believe that the majority of Kent miners are going along with the strike in sullen acquiescence, not liking one bit the way in which their Left-wing leaders are dealing with matters.
  In the country as a whole, 60,000 miners, one third of the work force, are now back at work. That figure is probably artificially low because this is the holiday season. When that is over, even more will be at work. I believe that we shall see in this strike what happened in 1926, that gradually more and more men will return to work and that, in the course of doing so, a great deal of bitterness will be created.
  It is to be hoped that realism in relation to the economic facts will soon dawn and that intimidation will end. Silver Birch, whoever he is, is achieving great support, along with support from the wives. The sooner the voice of sanity—such as we heard tonight from the hon. Member for Fife, Central—is heard loud and clear, the sooner the men will return to work without bitterness.
  11.34 pm
  Mr. Geoffrey Lofthouse: We should, at the outset, identify the reason for the strike. It will be agreed that the position is deadlocked and that nobody seems to have an answer which will avoid somebody losing face, and it is natural and human that nobody wants to lose face. This is now a contest between the miners and the Government. The Prime Minister, on the other hand, has always denied that the Government had any involvement in it. But the House and the country know from a Daily Mirror article a few weeks ago that that is untrue. The Prime Minister and other Ministers continued to mislead the House by insisting that they were taking no part in the strike. They said that it was purely a matter for the miners and the National Coal Board.
  The Government are now involved in the strike. Whatever the Government may have done, the Prime Minister has never believed in "Plan for Coal". Unlike my hon. Friend the Member for Fife, Central (Mr. Hamilton), I believe that the Prime Minister did not declare war on the miners last Thursday night; she declared war on them in 1979. We must recollect, after the winter of strife before the 1979 election, the Prime Minister on television and in meetings round the country with her fist in the air saying, "By God, I will take on the trade union movement." She tried to do that, and with some unions she has had some success. But her big goal was the National Union of Mineworkers—the union which gave her the leadership of the Conservative party after the miners' strike of 1974 and put paid to the prime ministerial career of the right hon. Member for Old Bexley and Sidcup (Mr. Heath). She had made up her mind that she would not allow the mining industry to do that to her. She believed that she could reduce the miners' muscle by reducing their numbers.
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  So keen was the Prime Minister on pit closures that she was almost tempted in 1981 to carry out an exercise similar to this one of 1984. A large pit closure programme was intended at the time. There were denials of the existence of a list, but whether there was a specific list, there was an intention in 1981 to run down the mining industry. But the Prime Minister pulled back from doing that, because she was not ready to take on the mining industry. Stocks were insufficient, police strategy was incomplete. and no one could do the job that MacGregor is now doing. She had to appoint someone to control a major industry for 12 months because the man she wanted for the hatchet job was unavailable.
  We all knew from an item in The Observer that the Prime Minister had every intention of appointing the man who had caused all the chaos in the steel industry. She went a long way in the House to duck the question whether she intended to appoint him, but she was warned by me and others before the appointment about what might happen in the mining industry if the appointment were made. As always, she refused to listen to sincere advice. After appointing MacGregor, she stockpiled coal and prepared the police so that MacGregor could go about his work of butchering the mining industry.
  Someone must be big enough to move. I do not know whether hon. Members who do not represent mining areas appreciate the conditions in those areas and the poverty that miners are suffering. A few weeks ago, I thought that the miners would not continue their battle. In the early days, I thought that the strike would not last long. But the miners in my area are now more determined to stick this out than they have been over the past 20 weeks.
  I believe — as do our hard-working, responsible miners—that the Prime Minister has created the present situation in an attempt to cut the miners down to size. She has an obligation to intervene to bring about an honourable, reasonable and sensible settlement.
  11.42pm
  Mrs. Edwina Currie: The House has witnessed a remarkable event in the speech of the hon. Member for Fife, Central (Mr. Hamilton) and it is with a little humility that I seek to comment on it. However, the hon. Member was unwise to comment on the Prime Minister's speech to the Conservative Back Benchers on Thursday, because, like myself, he did not hear it; he was not invited and I was unable to be there. Neither of us has seen a text of the speech, because there is not one, and the hon. Gentleman might have done better to omit those comments from his speech.
  However, I hope that Labour Members noted the rest of what the hon. Gentleman said. Judging by the sick looks on their faces, I suspect that that they did note it and wish they had the courage to make such a speech. I hope that the speech gets all the notice that it deserves in the national press. The hon. Member has shown by his courage that the honour and decency of many Labour Members are not dead. I honour him for that.
  I represent many of the 3,500 miners in the south Derbyshire field. Three of the pits are in the constituency of my hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) and one is in my constituency, but most of the miners live in my area.
  At the beginning of the dispute, those miners decided to take a vote. The 90 per cent. turnout justified the confidence shown yesterday by my right hon. Friend the

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  Secretary of State for Employment in the efficacy of pithead ballots. Everyone who wished to vote was able to do so.
  In that ballot, 83·5 per cent. of the miners voted to stay at work, and that is what they have done—despite the picketing and the advice and so-called mandate of the NUM executive in Sheffield, and despite the efforts made to bounce them out of the union of which they are loyal and rule-abiding members.
  Not only have the miners stuck to their decision, but the handful who voted to strike have stayed in work. We have only about 20 strikers. The men had to take another decision last week. Many attended a mass meeting on Sunday and they reaffirmed their decision to stay at work and to keep our pits open. I honour them for that. They are not scabs, although that is what they are called by the constituents of one or two Labour Members. I quote in their defence the comments of a former famous trade union leader in The Guardian of 16 April, who wrote:
  "In my lifetime a miners' strike was always solid. Once a vote was taken, the ranks closed, and were dignified with a self-discipline. Comradeship characterised the campaign. It was marvellous to behold. Pickets were not necessary at the pits. They were deployed elsewhere, outside the coalfields, seeking support from others. Today, it's different. Miner is picketing miner. Men are being assailed as scabs when, by no definition of the word, do they qualify. A scab is someone who refuses to accept the majority decision of his workmates for strike action, and continues to work while his mates are on the street. Workers denied the right to vote, or who have participated in a vote when the majority decided not to strike, cannot by going to work be described as scabs."
  Those are the words of someone with whom I would probably not agree on anything else. They were written by Jimmy Reid, who led the Upper Clyde shipbuilders' work-in in 1971. On that basis we should recognise that the scabs are those who are ignoring the majority decision and failing to go to work with their workmates.
  Life under the pickets and the threat of picketing in constituencies like mine is no joke and I would not wish it on anyone. We have heard about miners' wives, and they have been quoted already this evening. We have heard of miners' wives who support their families and husbands. I shall quote briefly from a letter written by a miner's wife in my constituency, who wrote as follows:
  "I never thought that I would feel such a desperate need to defend the NCB. I do have admiration for the police and speak for many wives who are grateful for the protection that they are trying to give our men. Please use your influence to have the actions of the bully boys (most of them under 25 years of age) more accurately reported … Words cannot explain the fear, anger and frustration so many of us feel that the men are being prevented from going to work in peace by louts who are portrayed on television as angels defending jobs and democracy."
  I have had many letters like that from miners' wives, including some from other constituencies where the wives who wish to see their men return to work feel that their Members are not as sympathetic as I am.
  It is worth remembering that many of my constituents, as they go to work and show the courage so to do, are feeling the pinch. They have not had a pay rise since November 1982 and most of them are owed large sums. I am sure that my hon. Friend the Minister will confirm that in many instances they are owed £400 or £500. Because of the overtime dispute, and because some of the local pits require continual maintenance throughout
  1094
  weekends, they are also losing bonuses. I suspect that many of them would be better off on the dole. However, they are determined to continue to go to work.
  We have had more than this, for we have had violence of the most despicable and miserable kind. We have had attempts to enforce mob rule night after night and day after day at pitheads, steel works and docks throughout the country. I shall read into the record the information given on 4 July by Mr. Anthony Leonard, the assistant chief constable of Derbyshire, who referred only to incidents in Derbyshire during June. He told us:
  "Since the beginning of last month there had been 62 instances of physical intimidation of working miners and their wives and families, 56 reported cases of their homes being attacked and damaged, 95 of damage to cars belonging to working miners, 47 of damage to lorries belonging to the National Coal Board and private hauliers while moving coal, and 33 attacks on NCB property."
  During the same period there were only 25 arrests. It was his view that that was only the tip of the iceberg. He quoted north Derbyshire NUM leaders and said that they could no longer control their own members. We have come to a pretty pass when that is the case.
  I agree with the words of north Staffordshire's coroner, Mr. John Wain, who dealt recently with the inquest on a miner who had been on strike and had then returned to work. He committed suicide while under pressure. Mr. Wain said:
  "Are the scabs not the two cowards who were in that public phone box—the two men who had the job of threatening this woman"
  —that is the wife of the working miner
  "and even then it needed two of them? Maybe certain members of the community would refer to them as 'scum'. The whole of the mining industry must, and I am sure does, dissociate itself from such actions."
  The two men phoned the man and talked to him and his wife. In one of the phone calls the caller said that he knew where their 12-year-old daughter went to school and what a lovely uniform she had. Then the caller said that by the time they had finished with the daughter she would not have any uniform at all. It is not surprising that a man under such pressure took his own life. Yet, with the sole exception of the hon. Member for Fife, Central, no Opposition Member has yet condemned such activity, which is taking place in the name of the miners and of the NUM and is happening right now in our constituencies.
  If, right from the start, the Labour party had taken a stand against violence and intimidation, I do not believe that it would have happened in the way that it has. But —right from the beginning—no attempt whatever was made by those Labour Members whose voices are listened to in mining constituencies—[Interruption.] There are 17,000 Labour voters in my constituency. Had the Labour party stood up as, at last, the hon. Member for Fife, Central has stood up, and said, "We will not condone violence—violence is no part of this dispute", I firmly believe that a great deal of it would not have happened.
  Nothing justifies the phone call that that man in Staffordshire received, or the cutting of the brake pipes on the cars of Derbyshire miners, which put their lives at risk. Nothing justifies 50 men picketing the home of a miner who wants to go to work, whatever our politics may be. It is disgraceful that the Labour party has never managed — except on one brief occasion — to condemn such activities.
  We are witnessing three things. First, there is a dramatic improvement in police efficiency. That is the

  1095
  result of the many reforms introduced by my right hon. and learned Friend the Home Secretary, and of the increased expenditure. We must pay tribute to the police and to our colleagues in the Home Office for those successes. Secondly, we are witnessing the bankruptcy of the Labour party—the disappearance of decency from honourable men, not only on the Labour Benches, but all over the country. Thirdly, we are witnessing the courage, determination and common sense of men all over the country—including my constituents—who have voted to go to work and who will go to work, and whom I am honoured to represent.
  11.53 pm
  Mr. Allan Rogers: I participate in this debate with much sadness, after hearing the speech of my hon. Friend the Member for Fife, Central (Mr. Hamilton). I am sad because I would have hoped that at this time of crisis within the coal-mining industry, we could have shown a reasonable amount of solidarity on the issues involved. It is important to remember that every speech made by hon. Gentlemen on the Government Benches has applauded everything that my hon. Friend said, with one exception. Conservative Members do not accept my hon. Friend's criticisms of the Prime Minister. That is the thought that my hon. Friend must sleep with tonight.
  I have a reasonable pedigree, but I do not intend to tout it around tonight. I represent a mining constituency which had 60 collieries not so long ago. A short while ago it had two collieries. At present there is one, and it is proposed that even that colliery should close.
  But mine is not a constituency without miners. As in the 1920s and 1930s, the miners of the Rhondda have had to become gipsies and travel to collieries all over south Wales in order to earn a living. That is what has happened to my community. Those who talk about redundancy payments, and about how generous the State and the industry will be if the jobs are given away, are asking people to give up their jobs and not to work again for the rest of their natural days.
  That might be the predisposition of people who have gone to public school and university, but it is not the predisposition of coal miners and others who have worked hard all their lives. They believe that there is some dignity in their work and do not want to spend the next 25 years living on state subsidies and the dole. They are fighting to protect their jobs and jobs for their children in areas where youth unemployment is 80 per cent. and adult unemployment is about 27 per cent.
  We should get the record straight on the chronology of the dispute. The strike was not sought by Arthur Scargill or the National Union of Mineworkers. When the miners of south Yorkshire spontaneously came out as a sign of solidarity with their colleagues at Cortonwood, who were to be thrown on to the dole, the NUM told them to take decisions in local areas. [HON. MEMBERS: "Address the Chair."] No. I would rather address the person within——
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman knows that he should address the Chair at all times.
  Mr. Skinner: He does not have to address Tories, so let us drop that.
  Mr. Deputy Speaker: Order.
  Mr. Rogers: I do not think that the rules of the House say that I must look at Conservative Members when I speak. I think it is my prerogative as an hon. Member to look around when I speak.
  Although we have heard petty and stupid recriminations tonight, the real issue is about bringing the country and the mining industry back to work. We need a sensible plan, not one that is based on prejudice because someone is trying to recall what happened in 1973–74 or on short-term expediency in view of the present price of coal on the world market.
  In 1979, it was predicted that, with depletion of North sea oil reserves and natural gas, we would be severely short of energy by 1990. It was agreed that the coal industry should be developed and that there should be effective control of our indigenous resources. That was sensible. I do not think that any hon. Member could argue against the proper conservation and development of a natural resource. However, in 1979, oil prices were hiked and there was an enormous crisis in the capitalist world. The capitalists who sit on the other side of the House, and others, could not cope with it. With the enormous shortage of demand, they decided to go out on to world market to buy as cheaply as possible. They are guilty of throwing away one of our most valuable natural resources.
  The fact that people are involved does not bother the Conservative party. Conservative Members are not worried about people. Although North sea oil and gas is extremely expensive to exploit, they would not suggest that we switch the supply off—but they are happy to close coal mines because mining is a state-owned industry. The private industries in the North sea cannot, they think, be treated like that. We should develop a plan for all our indigenous energy resources.
  Previous Governments have closed pits with millions of tonnes of coal in them. Who can plan our energy resources? The Government and the Prime Minister can, but we have a Government and a Prime Minister who are standing away from the battle. They do not want to know about the crisis. If the Government are elected to govern, let them govern and come up with some sensible alternatives to the present situation instead of standing apart from it. The country needs an answer. It needs leadership. The Prime Minister cannot just wash her hands and back away.
  I do not think that any miner wants to stay on strike. That is a stupid position to be in. On the other hand, it has been shown in Yorkshire, Wales and every other part of the country—with one awful exception—that the miners are not prepared to be bought off, to spend 20 or 30 years on the dole, and then to have their children prevented from working for their natural lives.
  12 midnight
  Mr. James Wallace: The hon. Member for Rhondda (Mr. Rogers) said that it was important to get the industry back to work. Everyone would heartily endorse that. It is clear that the longer the strike goes on the less likely there is to be victory for anyone, and the more likely is defeat, at some cost to the country, the National Coal Board, the National Union of Mineworkers and the Government.
  The difficulty is how to break the deadlock. The hon. Member for Pontefract and Castleford (Mr. Lofthouse) said that one of the problems causing the deadlock was that some participants, particularly the leaders of the respective

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  sides, are in danger of losing face. If the two major contenders were to step aside and allow some of their deputies who are used to tough negotiating to get on with it, they could build on some of the consensus which, apparently, has been present at the talks so far.
  Another way of breaking the deadlock has been consistently argued for by my hon. Friends and the Labour party. The Secretary of State for Energy should make a more positive contribution to bring the parties together around the table. "Plan for Coal" was a tripartite plan involving the coal board, the unions and the Government. It is odd that up to now the Government seem to have shirked the responsibility of being a party to the talks.
  In a dispute where there has been little credit around, credit must be given to the right hon. Member for Salford, East (Mr. Orme) who has taken some initiative. But that is an initiative that we on these Benches feel should first and foremost come from the Government.
  What could the Government do? The mining industry is afraid because the Government have no clear energy strategy for the next century. If the Government were to come forward with such a strategy, showing clearly the importance of coal in our energy needs, that would go a long way towards taking some of the heat out of the dispute. Many miners which whom I have spoken express great fears about the increasing role that the Government seem to give to nuclear power. Certainly, a decision to cancel the Sizewell project might be another factor which would contribute to taking some of the sting out of the dispute.
  We are constantly told by Ministers that the Government have been generous to individuals in the redundancy payments offered. We should like to see the same generosity being offered to the communities. It is clear that many communities in Scotland, south Wales, Kent and the north-east of England would suffer badly from pit closures, even if one takes the extreme argument that pits can be closed only on grounds of the total exhaustion of reserves.
  We should like to see measures such as those introduced in the steel industry to promote new industry in such areas. We should like to see some form of enterprise zone or trust which would attract new industries to the areas. It is all very well the Government offering large sums of money to people made redundant, but one constantly finds that money is no substitute for economic activity. Hand in hand with redundancy payments should be a commitment to retrain workers who find themselves redundant.
  Those are some initiatives which the Government could take to help break the deadlock. I hope that we shall have a more positive response from the Minister tonight than has been the case up to now.
  12.4 am
  Mr. Ted Rowlands: As I, too, wish to be brief and to give the Minister time to reply, perhaps I may take a leaf out of other Members' books and convey to the House the sense and feelings of one who represents one of the most traditional of all mining communities. The hon. Member for Derbyshire, South (Mrs. Currie) may care to note that I have the second largest majority in the House, so I feel that I can speak on behalf of the communities that I represent.
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  Despite all the ploys and manoeuvres of the chairman of the NCB and the Government, every attempt to appeal to the membership of the NUM in my area over the heads of its leadership has failed. The members have treated the MacGregor letters with the contempt that they felt that they deserved. The free phone system of ringing in about one's redundancy does not seem to have achieved much either. The tempting offers put out by the media of back pay for going back to work much earlier have also not worked.
  All else having failed, in the last week or so there has been the attempt at vilification. It is interesting to note that Conservative Members have not been prepared to defend the Prime Minister's speech. They now suggest that the entire press interpretation was inaccurate and that she never referred to the enemy within and without or drew any analogy between the Argentine invasion of the Falkland islands and the miners' strike. But that is what was reported, so unless the Prime Minister issues a statement that all the press reports were wrong, that is what the people of Merthyr Tydfil and Rhymney will believe.
  As I tried to explain to the Minister on Monday, the reaction to that kind of nonsense is strong and bitter resentment, especially in communities which sent more youngsters than Worcester or Finchley to fight the war in the Falklands for the right of the islanders to remain in their communities, just as we are now fighting to save our own communities in this dispute. Conservative Members should hear what is said about the Prime Minister in the shopping precincts of Merthyr Tydfil. People there regard her as the enemy within, threatening their future and their community. This dispute is not a matter of a few personalities. It reaches deep down into the communities that we represent. Until that strength of feeling is recognised, neither the Government nor the NCB will fully appreciate the arguments.
  Mr. Neale: Will the hon. Gentleman give way?
  Mr. Rowlands: I have always been happy to give way in any debate, but I understand that the Minister wishes to begin his winding-up speech at 12.15, so I have very little time to make these few basic points.
  First, if Conservative Members believe that resistance to premature pit closures has been concocted by a handful of revolutionaries, they are hopelessly wrong. It is deeply and determinedly felt in all our communities—in the Garreg valley, in Ogmore, in the Rhondda and in Merthyr Tydfil and Rhymney. There is no need for any gibes from the Conservatives about this. We have been through the same thing under Labour Governments. We know that pits were closed in the past on the basis of wrong assessments of the need for coal and wrong attitudes to the future of the industry. We accept that we made mistakes. That is why we want to ensure that the same mistakes are not made again. We do not want any programme of premature pit closures. Our view is based on historic experience. That is why we feel so strongly about it.
  Secondly, everyone talks as though the NUM and the miners have opposed all closures. There were pit closures between 1974 and 1979. What sparked the present strike was the unilateral decision by the NCB to close certain pits without proper procedures and then unilaterally to announce cuts in capacity. I speak for my own communities.
  Mr. David Crouch: The hon. Gentleman should speak for his party.
  Mr. Rowlands: I speak for my own communities and for my party. The miners will not drift back to work. They will not be cajoled or bribed into going back to work. Despite the highly publicised numbers of people at work, 120,000 are out on strike, and have been out on strike since day one. Every one of my miners has been in that category. The miners will not go back until there is an honourable and fair settlement.
  I want to get the message across that there is a grim determination in our communities to hold out. We have organised ourselves. The hon. Member for Derbyshire, South talked about miners' wives. Our miners' wives are organising themselves to ensure that we are not driven back to work. We are not willing to surrender to the Government or to the coal board. Any beliefs held by Conservative Members that many of our communities will drift back to work are not true. We will not go back to work. I want to tell Conservative Members the nature and character of my communities and their attitudes.
  What is needed now, as many of my hon. Friends have said, is for patient people to get to work. Let us have a moratorium on the vilification and the ploys that have been adopted by the coal board and by the Government. Let the Government examine their own role in this whole process. Let the Government start to try to do something. As my hon. Friends have said, the shadow Secretary of State for Energy has done more to try to bring the parties together than the Secretary of State for Energy or any Government Minister.
  Mr. Eldon Griffiths: Is the Labour party against a ballot?
  Mr. Rowlands: The Labour party is in favour of an honourable settlement negotiated between the National Union of Mineworkers and the NCB, with the support of the Government. It is for that that we should now be working. An honourable settlement is essential. The hour for argument is past. What we now need is an honourable settlement derived from the negotiations that we have been trying to get going, but to which the Government and the Secretary of State for Energy have steadfastly refused to make a contribution.
  I hope that when the Minister replies he will tell us that what the Government now plan to do is to assist the achievement of an honourable settlement, so that we can all go back to work. All our communities want to go back to work, but they will not go back to work on any surrender terms. They will go back only on the basis of an honourable settlement. It is on that basis that we ask the Government to assist positively.
  12. 11 am
  The Parliamentary Under-Secretary of State for Energy (Mr. Giles Shaw): The House will rightly give credit, I think, to the hon. Member for Fife, Central (Mr. Hamilton) for introducing the debate in the manner in which he did and for the courageous and clear way in which he laid out at least his conspicuous beliefs. However, one or two aspects which have clearly gone wrong in the dispute should be put right, such as his conviction that a national ballot is essential, his conviction that no man has the right to threaten another man's job the
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  better to protect his own and his conviction that closures are inevitable in this extractive industry. How right he was.
  If the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) wishes to have a moratorium, perhaps we might have a moratorium on intimidation and on massive picketing, and perhaps we might have some comment on the report by my hon. Friend the Member for Derbyshire, South (Mrs. Currie) of the miner who was led to commit suicide by the activities of certain gentlemen in the NUM.
  There is no question but that in this dispute— and here I agree with the hon. Gentleman—the point has been reached where we can no longer accept the rule of the mob or the bully, and can accept only the rule of national negotiation. We are challenged to make a rational contribution to rational negotiation. I accept the challenge. For some time the Government have provided the National Coal Board with the means to continue to operate as a viable industry, despite horrendous losses. The NCB's results for 1983–84 will be published tomorrow. No one should have the effrontery to suggest that the Government have not supported the industry with every pound available.
  Opposition Members must ask whether it is rational to offer a guarantee that every miner who wishes to remain in the industry has the right to do so. Is that a right which hon. Members would take away? Would hon. Members reduce by negotiation the £2 million a day put into the industry? For 35 hours and more the NCB and the NUM negotiated. I was grateful to the hon. Member for Merthyr Tydfil and Rhymney for saying that a solution could be found through negotiation between those bodies, because they must negotiate the settlement of the dispute. The Government have allowed the NCB to make offers of no compulsory redundancies, voluntary redundancy terms which are better than in any other British industry and a guaranteed investment programme of another £3 billion over four years, which is greater than the investment in any other coal industry in western Europe.
  What the Opposition are saying is that somebody has to give in. The hon. Member for Merthyr Tydfil and Rhymney and his hon. and Loquacious Friend the Member for Rhondda (Mr. Rogers) said that some face had to be saved. They would not dispute that there is a steady deterioration in the industry's capacity to survive. For geological reasons alone we are losing a number of coal faces and job opportunities.
  The NCB has made a series of offers to the NUM. It has offered to re-examine the board's proposals of 6 March to remove 4 million tonnes of capacity and to revise the objectives for individual areas. That is possible because at this late stage in the year, with the output losses and the dispute, there should be changes. The NCB has also offered to continue operating the five collieries —including Cortonwood about which the dispute originated —provided that there is agreement by the NUM on the guidelines for future decisions on colliery closures. It has offered to establish guidelines more clearly.
  The NCB has also offered the guarantee that men who wish to stay with the industry will be offered other jobs. It offered a scheme with no compulsory redundancies and generous voluntary redundancy terms.
  Frankly, there can be no doubt about the generous nature of the NCB's offers. There can be no doubt about the board's genuine attempt to negotiate. Why were the offers not acceptable to the NUM?

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  The hon. Member for Orkney and Shetland (Mr. Wallace) asked about setting up an enterprise company to provide jobs in mining communities. I accept that in Scotland, Wales and areas where mining communities are separate efforts should be made to provide investment, training and job opportunities. The NCB has agreed to do that. Will the Liberal spokesman take note of that?
  The NCB has complied with every requirement demanded in tonight's debate by Opposition Members. However, the NUM fails to understand that its total membership is not on strike, but is just as committed to the union's future as any individual member of the union, whether or not he is on strike. It is wrong for people to suggest that union members in Nottinghamshire who happen to be at work, having taken a ballot, are in some way second-rate members of the NUM. They have taken their loyalty from the union movement and from the fine tradition of a union which was the first, as the hon. Member for Rhondda would recognise if he cared to listen, to establish in its rule book that a ballot should be taken before strike action. Of course, the members of the NUM in Nottinghamshire are not alone. They have colleagues in Derbyshire, Warwickshire, Leicestershire, Staffordshire, Lancashire, north Wales and Cumbria. They represent a strong, loyal part of the NUM.
  As my hon. Friends will recognise, the big difference in this dispute is not the fact that it has lasted 20 weeks or the fact that, despite the jibes of the Opposition, for some reason the Government have not intervened — my goodness me, the Government have intervened. The difference arises because the union is substantially and significantly divided, because the NUM is the only one of the main unions in the coal industry on strike—the other two are not on strike—and because the NUM has been led in a way which means that it receives no significant support outside the industry. Twenty weeks on, not a single battle has been won by Mr. Scargill —not the battles for Ravenscraig, Orgreave, Llanwern or Scunthorpe. Not a single colliery which was brought in to work at the beginning of the stoppage has stopped producing coal. Not a single colliery which has elected to vote has been picketed out of existence.
  Despite intimidation, threats, pressures and vilification —not from the Government or the National Coal Board, but from other members of the NUM — more than 60,000 people have persisted in working in that industry. That is eloquent testimony of the real feelings in this dispute. I accept that there must be a rational, negotiated solution and that that solution must be acceptable to the National Coal Board and the NUM. I accept also, however, that rational solutions must, in the end, prevail over the rule of the mob, intimidation, violent picketing and vilification so that the industry once again shows, by producing coal at an economic price, that it can be the backbone of this nation's energy needs.

  Motor Industry
  12.23 am
  Mr. Hal Miller: It is a pleasure to welcome my hon. Friend the Under-Secretary of State for Trade and Industry to this debate on the motor industry, which plays a great part in the economy and makes a more positive contribution to it with a great deal less heat, violence and intimidation, than the coal industry. It is a special pleasure to welcome my hon. Friend to the debate, in view of his constituency of Coventry, South-West, in the heart of the motor industry in the west midlands, and his particular responsibility for the region in which my constituency lies.
  I am grateful also for the support of many of my hon. Friends who have proved themselves champions of the motor industry in their constituencies, and no doubt they will be making telling contributions to the debate. It is a shame that we have only one rather forlorn representative on the Opposition Front Bench with a motor industry constituency, but we welcome the hon. Member for Dagenham (Mr. Gould) to the debate.
  This industry is of prime importance to the economy and makes a positive contribution, with 500,000 employees directly employed in the assembly and components industries — I exclude those in the downstream service activities. It contributes about £12 billion to the gross domestic product and about £4 billion to the country's export performance. This year, it has recorded a significant turnround in stemming at long last the tide of imports. There has been a reduction of imports over the past two years of about 2 per cent. despite significant growth in the market for new cars in 1983 and so far in the current year.
  The industry is also in the forefront of the application of new technology, whether robots for manufacturing or computer-aided design. It is the application of new techology, in which the Minister takes such a close interest, that has enabled our domestic industry to survive by bringing down the break-even point and reducing the lead time for the introduction of new models. Those are significant developments.
  I should like to pay a tribute to the management and men who have achieved that significant transformation. They have accepted sacrifice. In the 10 years that I have had the honour to be a Member of the House, their wages have dropped from among the highest to the lowest in the manufacturing sector. They have delivered in terms of performance, improved productivity, quality and design. We have a responsibility to see that the commitment and confidence that they have shown the industry is matched by us in the House and the Government.
  However, there has been a heavy price to pay. In the previous debate, when I listened to the figures and conditions for mineworkers, with no compulsory redundancies, and heard that those who wanted to go could receive £1,000 per year of service, I thought that the car workers have had sorry treatment. They have had to make way for the improvements that I have described. It is no wonder that there is a sense of bitterness, in some parts of the country that we represent, at the terms available to the striking miners.
  A price has also had to be paid in terms of investment and by the taxpayer, in the case of British Leyland. Thankfully, 1984 bids fair to be another record year for

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  sales, but the fact remains that profitability is low, there is a poor return on capital and the danger of over-capacity overhangs the whole market, threatening to destroy the price structure.
  The real reason for the concern about the Nissan project was that it might increase the over-capacity that exists not only in Europe but throughout the world. I should like to put on record my gratitude to the Government for achieving in the negotiations with Nissan the acceptance that production, for the initial stage of manufacture would be offset against the company's import quotas, thus eliminating for that first stage any addition to the overcapacity to which I referred. I clearly understand the feelings of Nissan on the conditions that it requires to meet on local content, when one compares the local content achieved—if that is the right word—by General Motors' Vauxhall division in this country, which is lower than that proposed in the Nissan arrangements.
  I have referred to the threat of over-capacity, the low profitability and poor return on capital and the difficulty therefore of finding the heavy investment required to improve our performance further. It is significant that the Metro plant at Longbridge has now fully equalled any performance of a European assembler, and at one time was responsible for about 80 per cent. of the robots in British industry. Therefore, no one can claim that this is a sunset industry which should be wiped out to make way for the new industries of the future. In the west midlands we are considering the application of new technologies to our traditional industries to provide for the future for our constituents.
  Among the particular threats that I wish to mention this evening—no doubt my hon. Friends will wish to raise others—I shall emphasise three: the discussions going on in the EC on block exemption for selective distribution, the discussions in the EC about emission standards, and the problem once more of Spanish imports, which was recently and effectively raised by my hon. Friend the Member for Oxford, East (Mr. Norris).
  It is apposite that we should have the opportunity to debate the EC second draft proposals for block exemption, because the advisory group of experts to the Commission is meeting this week. It advises the Commission, which is responsible for competition policy and is not under any obligation to refer the matter further to the Council before reaching an effective decision. It is therefore most important—I urge this on my hon. Friend the Minister —that adequate instructions are given to our representatives on that advisory group. We shall not get a second bite at the cherry in the Council of Ministers. There is no recourse to that forum and we must make our position plain in the current negotiations.
  There is a suspicion that the bureaucracy in Brussels is not well motivated towards this country or to our British manufacturers—witness the recent action against Austin Rover on type approval permits, to which I may refer briefly later. It strikes me as odd that the Commission should have the powers it proposes to assume under the draft block exemption to require positive action by manufacturers rather than to require them or their dealers to desist from action.
  The second draft represents some minor improvements on the original draft, especially regarding the exclusion of commercial vehicles, but it weakens the position of manufacturers and dealers further by the imprecision of the language and the extension of the scope of action available
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  to the Commission. The points I wish to stress in this second draft concern the price differential and what is called the full-line availability of models.
  It is perhaps relevant here to point out the benefits that manufacturers believe that they can obtain and confer on the consumer, through the selective distribution scheme. The appointed dealer, in fact, provides the pre-delivery inspection. He is responsible for warranty repairs, undertakes to keep a supply of parts, has trained staff and usually has to provide premises of an appropriate standard that are easily accessible. There is not just a benefit to the manufacturer; it is believed that there is also a benefit to the consumer.
  The price differential proposal contained in the draft block exemption strikes directly at the manufacturer's prospect of profitability, because if the Commission finds that over a period of six months there is a price differential between different markets in the EEC of more than 12 per cent. it has the power to investigate and to withdraw the block exemption.
  There has been a great deal of talk by the Consumers Association, which has been reported widely in the press, to the effect that the Commission is acting as the consumers' friend in this matter by seeking to impose what are, in effect, price controls on a product. It is easy to demonstrate that it is equivalent to a price control because if a price control has been applied by a Government in a member state of the EC for at least 12 months, that is supposed to be the ruling price throughout all the other member states of the EC. That, coupled with full-line availability, means that a manufacturer or dealer cannot withdraw effectively from the price-controlled market. They may have to continue selling at a loss in the price-controlled market, and that price then becomes the ruling price throughout the rest of the EC.
  The price differential has not been defined. We do not know whether it is pre-tax list price, as in the first draft, or what price will be adopted for the application of this rule. Another difference from the first draft of the block exemption is that the price differential control is now applied to parts. That is serious for dealers.
  The second item that I wish to talk about is full-line availability. The second draft also extends the requirement that any model that the consumer chooses must he made available. That requirement extends not just to the manufacturer but to the dealer. He may not have the premises or the skilled mechanics to handle a particular model of the variant chosen by a consumer in all the member states. We must remember that we expect Spain and Portugal to accede to the Community before long, and Greece is currently a member. That illustrates the wide range of economies and types of vehicle and taste that may prevail.
  I believe that those are real threats to the manufacturers' profitability and represent an unwarranted interference in the operation of the market and a pretence that there is a free market in the Community applied to one product when there is is no uniformity of tax regime, excise duty, inflation rate, wage rate or type approval. There is a whole range of differences that can easily explain the substantial differences in the retail prices of cars which the Commission by administering this fiat, is seeking not only to overrule but to pretend does not exist. This is a favour-currying measure that cannot be justified on the facts.
  Mr. Bryan Gould: I was glad to hear the hon. Gentleman urging his ministerial colleagues to make sure that clear instructions were given to the United Kingdom representatives on the advisory group. He may like to know, as might his colleagues, that my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) has written today to the Secretary of State to urge him in that direction. We feel, as the hon. Gentleman does, that the draft block exemption in its present from poses a real threat of damage to the British industry.
  Mr. Miller: I am encouraged by the support that the Opposition have officially expressed. I do not think that this is a partisan matter, and, were it to be party political, I should feel debarred from taking part in the debate.
  I shall now refer to type approval and the recent action taken against Austin Rover by the Commission. This is an attempt by the Commission to fine the company for charging for the issue of a type approval certificate. We should bear in mind the fact that a genuine personal importer does not have to face the requirement of type approval certificate. It is only the parallel trader who is subject to the requirement. The manufacturer has a real cost to meet in obtaining type approval for his vehicle —for example, the number of vehicles that have to be crash-tested to destruction is a heavy expense. The irony of this situation is that Austin Rover charges less for its type approval permit than do other manufacturers. It is unclear why it should be selected for this action by the Commission.
  The press has somehow confused the issue of the type approval certificate with the block exemption and the differences in car prices. It has made a serious mistake in some of the figures that it has been presenting, because, with the discounts available in this market and the movement in the exchange rate, the differences that it reports to exist cannot be shown to be justified. Therefore, the position is constantly changing. There is no question of a deliberate attempt to put down the consumer, although it must be recognised that British manufacturing costs are still not, over the full model range, in line with those of our European competitors. If this attempt at uniformity were carried to an absurd extent, it would result in a loss of jobs and employment, and one could envisage, for example, that Ford might have no option but to close Halewood. The matter needs to be handled responsibly.
  There is then the problem of emission controls. There has been widespread concern, fostered particularly by environmental groups, about the damage caused by acid rain. I hope that the Minister will accept that not more than 30 per cent. of acid rain can be attributed to nitrous oxide, of which 25 per cent. can be attributed to vehicle emissions, which is 7·5 per cent. of the total.
  The Federal German Government have struck out on their own, in response to pressure from the Green party, and are seeking to introduce from January 1986 a requirement that cars be fitted with catalysts providing the same emission control as is currently required in the United States—the so-called 49-state formula—which would require the introduction of unleaded petrol at the same time.
  There is already agreement in the EC to move to the introduction of lead-free petrol, but we do not yet have agreement throughout the EC on the specification of that
  1106
  fuel or any assurance regarding its availability on a European basis, and my hon. Friend the Member for Tatton (Mr. Hamilton) may wish to speak about that.
  There is a great deal of disadvantage in the installation of catalysts, which are expensive to install—estimates range from £450 upwards per vehicle — there is a penalty in fuel consumption of about 10 per cent. and, more seriously from the point of view of the environmentalists, there is the factor of deterioration of the catalyst and the need to maintain and replace it at least twice during a vehicle's life. There is, therefore, a real cost and penalty involved, although the catalyst, if properly functioning and maintained, coupled with electronic fuel management systems, can achieve a reduction of 97 per cent. in nitrous oxide.
  There is already being developed the high compression lean-burn engine—of which examples at intermediate stages are the Jaguar HE engine and even the Ford Escort engine in its advanced form—which, employing modern technology, adds little to the cost, as it is part of a natural development. It will achieve 10 per cent. fuel economy, will not require any maintenance or replacement additional to the normal and will achieve a reduction of about 80 per cent. in poisonous oxides. Indeed, although the percentage reductions in emission differs over the lifetime of the vehicle, it is felt that the cumulative total will be equivalent by both methods, so there is a compelling argument for us to look to the new technology of the future rather than back to the catalyst technology of the 1960s.
  The question of imports has been given a good airing by my hon. Friend the Member for Oxford, East. Under the arrangements which are now under consideration, it is suggested that, on entry next year, Spain should sign an agreement, to take effect from 1986, but that nothing should be done in the meantime either to extend the reduced tariff quotas for imports of British vehicles into Spain or to limit the constantly increasing import of Spanish vehicles into this country. My hon. Friends have been active with an early-day motion calling for a limit to be imposed—a sort of import cap—on Spanish imports into Britain until the transitional arrangements following Spanish entry into the Community come into effect. When those transitional arrangements begin, my hon. Friends and I would expect a greater than normal reduction in the extremely high car tariffs of more than 20 per cent., and would also want an assurance that the luxury and compensatory taxes, which now gross up the import duty from 36 per cent. to about 67 or 68 per cent., and even gross up the reduced tariff quotas to an effective rate of duty of 45 per cent., will be replaced by a uniform rate of VAT applying equally to domestic production as to imports.
  The background to that is simple, as my hon. Friend the Member for Oxford, East recently explained. Spanish production of motor vehicles now exceeds that in this country, and there can be no justification for the continuation of these disparities, which were described as "grotesque" by my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin), when he was Secretary of State for Trade and Industry, as long ago as October 1982. The Prime Minister gave an assurance that something would be done to alleviate the problem.
  My hon. Friends may wish to mention many other aspects of the industry, including parts agreements, body panels and taxation; but we should remember the crucial role of the industry in the national economy and in the

  1107
  regional economy of the west midlands, and its contribution to standards of living and to personal freedom. We look to the Government to ensure that the climate and conditions are created in which the men of the industry can prove their personal worth and their service to the country.
  12.52 am
  Mr. Roger King: It was at about this time last year that I had the pleasure of opening a Consolidated Fund debate on this subject. The shopping list that we set out then of requirements to resuscitate the British motor industry are similar to the list that we have today. Nothing much has changed in the intervening period. In 1983 the British motor industry enjoyed record sales of just under 1·8 million units, and most people believed that that figure would not be reached in 1984. There are signs that it might be reached, but the latest estimates are that it will settle at about 1·7 million, which nevertheless represents a buoyant industry and a successful marketplace for new car sales.
  Last year we asked for some assistance on the 10 per cent. special car tax, for which we listened avidly on Budget day, but regrettably my right hon. Friend the Chancellor of the Exchequer was unable to grant it. However, he presented to the House a further imposition of tax on the use of personal company cars. We warned against that, because there is a definite sign that gradually, as company personal taxation is increased on cars, the tendency is for the user to buy a car and to be recompensed by the company. In most cases he buys a foreign car, whereas companies tend to buy British cars.
  In the previous debate we discussed the Spanish problem, the effect of Nissan coming to this country and the likelihood of pollution control. The Spanish problem is still with us, we have yet to see what effect Nissan will have on our market, though we have had an assurance that there should not be too much of a problem when it moves into phase 2 of its development and that many of its components will be supplied by our industry, and we have had assurances from the Ministers on pollution control. We are told that the Government prefer the lean-burn engine solution, rather than catalyst burners. We look to the Government to ensure that there will be no European legislation forcing us to adopt the catalyst solution.
  We now face other problems, including the block exemption rules and the disruptive effect of the dating of car number plates. I cannot understand the difficulty over block exemption. I know that the Commission would like all prices in the EC to be within a price band of about 12 per cent. That is a useful target—as long as I can buy a bottle of wine here at the price at which it is sold in Italy and France. The system must cover all goods. The Commission sells butter at 7p a pound and a bottle of plonk at about 7p and it ought to give us the right to buy at those prices before it starts picking out one industry for price control.
  The problem arises because there has been a price freeze in the Belgian market for some time. None of the car companies seems to make much money out of that market, but they all insist on a presence there. Therefore, we must be there with our European competitors. Cars are sold at a lower price, though it is important to look at the final price, after adding all the taxes and taking into
  1108
  account all the discounts. As recently as last week, it seemed that some BMW models could be bought for less here than in Germany.
  The Commission has no right to decree that a manufacturer be fined £208,000 for not allowing the public to buy a product at a price which the Commission would like to see. The company has a valid defence. The case is going to appeal and I do not want to prejudge the outcome, but I hope that the company will be found not guilty.
  Early-day motion No. 897 has been signed by 116 hon. Members from all parts of the House. That underlines our anxiety about Spanish imports. The problem is highlighted by the recent announcement that yet another Spanish company, Seat, is to sell cars here from the International Motor Show in October. By all accounts, it is a good product and competitive on quality, design and price.
  I do not suggest that we should ban the imports of Spanish cars. If Spain can export 120,000 cars to this country and sell them, that is all right by me—as long as we have the opportunity to sell in a fair market in Spain. If we do not have that opportunity, we should look to ways of bringing the Spaniards to account. If we could organise a boycott of Spanish holidays, I should be right behind it.
  The trend to have the latest prefix on a registration plate is distorting the industry. There used to be a fairly modest hiccup, but it is becoming a monstrous cough. Over 20 per cent. of a year's car sales are effected between 1 August and the following two or three weeks. There are about 370,000 cars waiting to go on to the roads at this moment, and they will sport the new number plate.
  Problems are caused for our sole indigenous manufacturer, Austin Rover, because, production has to be geared up for 1 August at a time when the annual summer holidays take place. Many of us do not have much say in when we take our holidays, because of restrictions on schooling and other commitments. The difficulty of being able to supply a wide range of cars in all manner of trim and colour combinations to satisfy an increasingly fickle market is proving considerable.
  There is not the same problem for continental manufacturers, and not for many of the other indigenous manufacturers in Britain—Ford and Vauxhall being two examples. They merely switch production from the UK to their continental plants to top up their stock in Britain. The top 10 in the league of sales in Britain reveals that many of those cars are not British in the true sense of the word, as they have been assembled on the mainland of Europe. A large proportion of the model range, such as the Escorts and the Sierras, comes in from Ford's factories on the continent.
  I understand that there was an inquiry when we finished the suffix system with the letter Y and introduced the prefix system 12 months ago to decide whether there should be a better arrangement. No one could offer a system to replace the present method of defining number plates. The police like cars to be dated by means of number plates, because for some reason people remember the date of a car by the suffix and this helps the police to deal with crime. I am not against the retention of the system, but there is a strong case for changing to 1 October for the introduction of the new letter. Many manufacturers change their models in September to coincide with the continental motor shows. The introduction of the new letter on 1 October would avoid much of last year's production of cars on the continent being dumped on to the UK market

  1109
  at peak selling times. Austin Rover would be able to have a clear run-up to that sales period. I urge that the date for the new letter be considered carefully.
  The privatisation of British Leyland is going ahead piecemeal. Jaguar will shortly be privatised and presumably Unipart, the spare part division, will follow in the not-too-distant future. The future of Austin Rover presents the real challenge. I pay tribute to the management and work force of the company, who have been able to create a viable company with a strong future. It has been rather like the phoenix rising from the ashes. It is not yet making the sort of money that would encourage the Government to sell the organisation, and I am not suggesting that a date for privatisation could be given within the next year, two years or three years.
  The workforce there needs all the encouragement that it can get to continue to produce the products which the company and the country need. There are, of course, occasional hiccups. There are industrial disputes. There was an unfortunate incident at Longbridge when the company was shut down for two weeks over a matter of principle, which was subsequently resolved. There are tragic production losses. However, the company is now producing cars and breaking a record for output that has stood for 12 years.
  Wages are important. Job security is important—and, as a result of the new market acceptability of the products, it will be there. But what will also be important in the immediate future is the feeling that the work force wants to play a greater part in the company and in its destiny.
  Our Government have encouraged property ownership. We have embarked upon a policy of selling council houses in order to stimulate property ownership. In previous privatisations we have tried to ensure that the work force has the right to own part of its company.
  We could privatise part of Austin Rover almost straight away—the part that we would give to the work force. In three years' time, with a full programme of privatisation, the work force will probably be given a say. In the case of British Telecom and Jaguar, for instance, the employees have the right to buy into the company. But might it not be possible to introduce such a measure now, so that the workers can invest their savings and be given some shares in the company which will acquire a market value when the whole company is floated? That would give the work force a sense of belonging to the company.
  Mr. Gould: How would the hon. Gentleman propose to prevent employees from selling their shares in the company almost immediately, as has happened in almost every such privatisation in the past couple of years?
  Mr. King: One would put a value on the company as it is now, allocate 10 or 15 per cent. of the shares to the work force, and give people a number of shares commensurate with the length of time for which they had worked for the company. The shares would be pieces of paper until the company had been floated. If people wanted to sell the shares, that would be fine; but the whole point would be that they would be working for the company and the future. That is the ingredient which would ensure the continuing profitability of Austin Rover and the growth of the British motor industry.
  1.7 am
  Mr. Steve Norris: We are grateful to my hon. Friend the Member for Bromsgrove (Mr. Miller) for introducing this debate. It is often said that Britain's most important industry receives sadly scant attention in this House, considering its impact on the economy as a whole and especially the economy of the west midlands.
  I shall concentrate on Austin Rover, in which I have a particular interest. The future profitability and operative capacity of Austin Rover is clearly vital to a large section of the west midlands and to the component industry which feeds on the basic construction and manufacture of motor cars.
  Over the past year, Austin Rover has continued a staggering performance — a performance which is ultimately based on a product-led recovery. There is the Montego, which follows on from the Maestro. There is the new 200 series Rover and future XX Rover which will replace the aging SDI model. The investment in product engineering is exemplified by the facilities at Cowley which many hon. Members will have had an opportunity to see the computer-aided design facility, CAD-CAM, which is a remarkable achievement.
  That means that Austin Rover is offering the most up-to-date facility for the design of motor vehicles in Europe. It is also building a database that will benefit all models. That will help the company to rationalise vehicle design. It is also investing in robotics and improved production efficiency. That produces many unpleasant consequences, which are only too evident at Cowley. On one side of the production line are 16 or 18 people, each operating a hand welder, doing a job which, on the other side, is done by one automated unit, two of which are controlled by one supervisor. In terms of the loss of jobs it is tragic to see that, but we live in a world in which, if we are not prepared to use such equipment, the company will not survive. Even the reduced number of jobs would also be lost.
  Five years ago about 15,000 people in Cowley produced about 4,500 cars a week. Now, 10,000 people produce the same number of cars and it might not be long before 5,000 people do the same. I hope that that target will be exceeded, but the principle is plain. The result is precisely what the Government's industrial policy tries to alleviate—people whom we must employ in other new industries are put on the labour market. For BL, however, it has meant that the company is able to fight the motor vehicle battle in the 21st century. Austin Rover is now as efficient as any manufacturer in Europe in terms of man hours per vehicle, and it matches the output target of the Japanese.
  The component cost in Austin Rover cars is still too high, however. A warning must go out to British component manufacturers which, for many years, have relied on Austin Rover always wanting to use British components. Unless component manufacturers realise that playing second best on product investment, quality and delivery is not good enough, Austin Rover will be forced to think about the sourcing of its components. That will mean job losses in the British component industry.
  I know one thing about Harold Musgrove and his team at Austin Rover — they want to buy British. The company still buys about 90 per cent. of components in Britain. However, it wants to succeed, even more than to buy British. If the cost of success to Austin Rover is being forced, by the simple laws of competition, to buy

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  components abroad, it will have to do so. Although I would not welcome that, I should have to accept it as an inevitable fact of life.
  In addition to investment in production design and improved product efficiency, a strong and well-marketed product enables a work force to be paid a rate that we all hope can be improved. My hon. Friend the Member for Bromsgrove mentioned the slide in the real level of pay in the motor industry.
  We have seen new jobs being created at Cowley and we hope that that shows that the decline in the total number of persons employed may have been arrested. If, instead of making 4,500 cars a week, the company makes 5,000 or 6,000 cars a week, that is the way to keep people employed and the company healthy.
  This evening we should be addressing ourselves to what the Government can do for Austin Rover. We cannot simply hand the company a cheque book. We had years of that philosophy and it produced little or no success. It is arguable that it drove the company to the brink of oblivion. The company has been brought back from that brink by the hard-nosed reality of having to accept that that company either made and sold or did not survive.
  We can continue to ensure, first, that Austin Rover has a healthy car market into which to sell in Britain. Every manufacturer needs a domestic base on which to build. That means that the Government should not use the motor industry as their major fiscal regulator at Budget time. We have seen that happen year after year. It may have satisfied Chancellors of whatever political complexion to use the motor vehicle industry as a fiscal regulator, but, my goodness, it wreaked havoc in the industry itself.
  The Government should think about the inequity of the special car tax to which my hon. Friend the Member for Birmingham, Northfield (Mr. King) referred. They should think about the fact that it singles out Britain's premier industry for a particular selective tax of an extra 10 per cent. in addition to VAT. Incidentally, insult is added to injury by making it practically the only product on which VAT is not allowable to the company purchasing the product which is registered for VAT.
  The Government should think about the taxation of company vehicle benefits. Engine size banding is crucial. The Government could do a great deal of good for the British motor industry at no cost to the Treasury. I point, for example, to the break in the table at 1800 cc—the only 1800 cc engine that is used in a British vehicle is actually made outside Britain. It is nonsense when we are deciding on engine capacity breaks to determine fiscal policy and to determine the buying policy of the company buyer that a mark should be chosen at which only overseas competitors gain and which puts all British engine manufacturers at a significant disadvantage.
  The Government should think about supporting the line of my hon. Friend the Member for Bromsgrove on block exemption and price control. That surely is a nonsense which both sides of the House can agree to oppose. I hope that we shall see vigorous opposition to the strange logic of the proposals in the ensuing months.
  Most of all, the Government should think about the fact that the motor industry is, as I have said, Britain's premier exporting industry. We should not under-estimate the importance of manufacturing industry when the Chancellor is planning his company investment incentives. We should take account of the effect on cash flow
  1112
  this year alone of the Chancellor's decision to reduce capital allowances, to abolish stock relief and to effect the one-off clawback in terms of corporation tax.
  Whatever other benefits those measures may have achieved, and without wishing to detract from the overall drift of the Budget statement, I must say that it would be unwise, to say the least, for any Government to ignore the growth and the potential still in manufacturing industry in Britain when considering future Budgets.
  Let us not rush privatisation. When Austin Rover is in a position to be returned to the private sector, let it be returned. But let no one forget that it was the private sector that drove it to the state in which it was necessary for the Government of the day to rescue it. Let us never delude ourselves that there is any special quality of private ownership which of itself will somehow rescue the company. The company will prosper in private hands and that is where it should be. I see no role for the state as a manufacturer of motor vehicles. Let us ensure, however, that privatisation takes place only when the company is in a position to fund its expansion and development and to ensure that it has a healthy future.
  Others have spoken at length about Spain. I had the opportunity to do so in a recent Adjournment debate. so I simply pay tribute to the welcome that my right hon. Friend the Minister for Trade gave to our representations in that debate. He made a most constructive response to the points that I raised. I believe that he recognised the strength of feeling on both sides and that he genuinely shared it. Many of us regarded import capping very much as a last resort which we hoped could be avoided if real progress could be made in convincing the Spanish Government of the necessity at least to show some willingness to negotiate on decreasing the reduced duty quota before accession rather than afterwards.
  Finally, I should not let this opportunity pass without paying special tribute to Harold Musgrove, Andrew Barr, Mark Snowden and the team at Austin Rover whom I have been privileged to come to know in the past year. I have seen them at work, and their commitment to Austin Rover is second to none. They are interested only in success—success for the company and success for their work force. Their own work rate is punishing. If ever a management team in this country deserved to succeed, it is that team. I only hope that in the ensuing year we shall take every opportunity to support that team and to ensure that in the debate on the motor industry this time next year we shall see further desirable progress towards a healthy and strong British motor industry.
  1.23 am
  Mr. Neil Hamilton: I am pleased to have the opportunity to raise in this rather specialist arena a problem of considerable importance to my constituency. My hon. Friend the Member for Bromsgrove (Mr. Miller), to whom we are most grateful for initiating the debate, in his usual perceptive manner anticipated the subject that I hoped to raise — the Government's policy towards vehicle exhaust emissions.
  There are a number of large employers in my constituency whose production brings considerable correspondence and vociferous protest to Members of Parliament. The nuclear power industry is a major employer. There is also the pharmaceutical and drug industry with animal research experiments. In addition, my constituency is one of the two or three with

  1113
  manufacturers of the lead additives that go into the petrol. If I seem to have drawn the short straw in that area, I make no apology for seeking to raise some of the problems that that industry will face.
  My hon. Friend the Member for Birmingham, Northfield (Mr. King) may be interested to know that there are also makers of catalytic converters in my constituency, so we shall no doubt be addressing ourselves to that problem in the future. Associated Octel employs about 250 men in my constituency, and about 2,500 in the nearby constituency of my hon. Friend the Member for Ellesmere Port and Neston (Mr. Woodcock). As a result of the Government's policy change on lead in petrol about a year ago, alas, the factory that produces the lead alkyl compounds in the Tatton constituency will close, and virtually all the men employed there will be made redundant. Octel is a major export earner for this country. Seventy per cent. of the lead alkyl compounds produced outside north America are produced by that company in the north-west, and 82 per cent. of its production, to a value of about £100 million per year, is exported. Thus, this is a very high added value industry.
  As a result of the proposed phasing out of lead in petrol, we shall be adding considerably to the costs not only of the private motorist but of industry also. One tonne of lead additive saves about 125,000 tonnes of petrol. In answer to a question of mine on 2 April this year, my right hon. Friend the Secretary of State for Energy confirmed that the cost of the Government's policy could involve an additional consumption of 800,000 tonnes of crude oil a year, and investment by the United Kingdom refining industry of some £500 million, assuming no further changes in technology or driving habits.
  I take issue with the Government on the basis of this change in policy which has adversely affected my constituents. I should like to spend two or three minutes explaining the reasons why I believe this policy to be miscalculated and ill-advised, and to mention some of the repercussions that might flow from the policies that the Government are pursuing in the European Community, to which my hon. Friend the Member for Bromsgrove referred.
  I am not persuaded that any link has been causally established between emissions of lead in exhaust gases and the health risk that various lobby groups have claimed for it, and have, alas, persuaded the Government to make the policy change to which I have referred. Since the Royal Commission on environmental pollution produced its ninth report, a great deal of evidence has been produced that seems to cast doubt upon the validity of its conclusions.
  Indeed, as the Government propose to reduce the lead content of petrol from 0·4 grammes per litre to 0·15 grammes per litre by the end of next year, it might be instructive to look at an example from Germany, which made exactly that change in policy earlier in the last decade. A study was made in Frankfurt in the mid-1970s that I think proved authoritatively that there is little connection between the emission of lead in exhaust gases and health risks. Frankfurt was chosen as the basis for the study because it is a highly industrial city with a dense traffic problem and few industrial sources that contribute to air-borne lead. Thus, it is a good example of an attempt to monitor the effect of exhaust gases.
  1114
  As a result of the policy change of the German Government, there was a 60 to 80 per cent. reduction in vehicle lead emissions, which is dramatic. The resultant average change in blood lead levels showed only a marginal decrease of about 10 per cent. In 40 per cent. of the men and 50 per cent. of the women, the blood lead concentration remained unchanged or actually increased.
  From consideration of that study and, indeed, other studies that were made in Germany in Duisburg and Dusseldorf, it seems that a 65 per cent. reduction in petrol has not resulted in a dramatic change in the blood lead levels of German children.
  I have a more recent example from a Government publication of the Department of the Environment—the "Digest of Environmental Protection and Water Statistics." In issue No. 6, 1983, there is an article on blood lead concentrations. Thirty-five blood lead surveys were carried out in the United Kingdom in 1981 as part of a European Community screening programme for lead. In all but three of the 35 cases it was shown that there was no causal connection between the blood lead level and lead emitted in exhaust gases. In the three cases where there was a high lead content in the blood there were good reasons for believing that they had nothing to do with exhaust gases.
  The three cases were in Ayr, where the high lead content in the blood was due to high concentrations of lead in the drinking water; the Islington Archway road where three men had been exposed to specific adventitious sources — stripping old lead paint or working in the scrap metal trade—and Gravesham where just one child was above the EC reference level and 90 per cent. of the children had blood levels of less than two-thirds of the EC reference level.
  The article stated:
  "Blood lead concentrations of adults living near major roads were not very different from the general population in the same area".
  I believe that the examples pull the carpet from underneath the reasons for the Government's policy.
  The Medical Research Council has recently compiled a report, which has not yet been published, into the neurotoxicological effects of lead emissions from motor vehicles and is believed to have found that there is no conclusive evidence to connect them with high levels of lead in the blood. Perhaps that report will be published so that we may be informed. I hope that my hon. Friend the Minister will be able to discover whether it is intended that the report will be published soon and will write to me with the answer.
  The Government have been pressing for further action in the European Community. The Commission has proposed that the introduction of lead-free petrol should be mandatory for all new cars by 1991. The Commission has had extensive discussions with the United Kingdom and other European car and oil industries. The United Kingdom Government are trying to persuade their European partners to introduce lead-free petrol for new cars from 1989. That would create tremendous problems for the British motor and oil refining industries. The Government are not taking into account the time required for industries to adjust.
  The Government should cease to press for an advance on the date that the Commission has adopted. I hope to persuade the Government through my, perhaps, solitary campaign. I hope that in their zeal to press on with what

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  I believe to be a misguided policy, the Government will not seek to move in advance of our European partners and so put the British motor industry at a disadvantage.
  The 250 workers in Northwich who will be made unemployed as a result of the change in policy will receive their statutory redundancy entitlements, and Octel will give them more in addition. We heard earlier about the benefits for which miners qualify when they are made redundant. My constituents will certainly be envious. Octet has an excellent industrial relations and export-earning record. Its workers have been treated shabbily.
  I hope that my hon. Friend will not add to the problems of the motor industry by pressing Government policy too vigorously in the European Community. I hope that my hon. Friend will urge upon Environment Ministers, who are primarily responsible for this policy area, the industrial problems that will be caused if that policy is pursued.
  1.35 am
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): I add to those of my hon. Friends my thanks to my hon. Friend the Member for Bromsgrove (Mr. Miller) for initiating this debate. I echo an observation by my hon. Friend the Member for Birmingham, Northfield (Mr. King) that this debate merits greater attention, or at least prime time on another occasion during the year. As my hon. Friend the Member for Bromsgrove has rightly pointed out, the motor industry is still a keystone in the industrial make-up of the United Kingdom, accounting for about 7 per cent. of our industrial output. My hon. Friend rightly said also that the motor industry is now a high-tech industry. It is a sunshine industry in every sense. It applies intellect to achieve higher added value. The industry uses the new technologies to make an existing product in a revolutionary manner and to add new facilities to its product ranges.
  I add my tribute to that paid by my hon. Friend the Member for Bromsgrove to the management and men in the British motor industry. I shall deal with some of the points that my hon. Friends have raised and then address the general themes raised during the debate, not least the questions on emissions, the block exemption regime and Spain.
  My hon. Friend the Member for Bromsgrove asked a specific question on the position of Austin Rover in the aftermath of the controversy on its type approval certificates. The company has announced its intention of appealing against the fine imposed in respect of the fees that the company charged for type approval certificates. I hope that, in these circumstances, the House appreciates that it would be inappropriate for me to comment on the details of that case.
  My hon. Friend the Member for Northfield joined in the discussion on Spain and on block exemptions. He, too, asked a specific question and he made an especially interesting observation about registration letters and the anniversary of the new registration plates. My Department and the Department of Transport are aware of the problems that British manufacturers face with the current change in letter each August. We need to note the impact of this year's change to ascertain whether the "A" change was exceptional or whether we now have a permanent annual "monstrous cough", to use my hon. Friend's words. Once the evidence is in, we shall assess the pros and cons of the case which my hon. Friend eloquently put forward.
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  My hon. Friend the Member for Oxford, East (Mr. Norris) homed in on the theme of the new technology applied in the motor industry. I, too, have been impressed with the CAD-CAM facility at Austin Rover. I have been most impressed by the new manufacturing techniques that have been incorporated in the Cowley plant and the equally excellent facilities at the Longbridge plant in particular.
  British component manufacturers do not have a good press. If we had a longer debate, it would be interesting to see how much common ground there was between my hon. Friend the Member for Oxford, East and myself on the record of British component manufacturers. Some of our component manufacturers have an excellent record, but all are striving to improve their record. The House may be interested to know that the Government have a purchasing policy, called the public purchasing initiative. That policy does not receive much prominence, but it is important in that it guides the Government in the £40 billion expenditure on goods and services which we deploy. We hope that a purchasing policy from BL will encourage the purchase of British products, because they are the best and because the relationships that BL has built up with its component suppliers encourage them by all means possible to produce the best and competitive products. Therefore, we hope that the John Egan and Jaguar story will be writ large, and that the excellent relationship that he has built up with his component suppliers will be mirrored elsewhere in British Leyland and the other major manufacturers in the United Kingdom.
  My hon. Friend the Member for Oxford, East asked what the Government could do for Austin Rover. I do not know whether he was paraphrasing Kennedy, but he will expect my response to be: what can Austin Rover do for the economy in the aftermath of a £1·34 billion input from the taxpayer? We must recognise that Austin Rover and British Leyland as a group have made immense strides. As a west midlands Member, I am in no doubt that the work force in British Leyland and Austin Rover has been used to far greater effect than in the sad years of the 1960s and 1970s. My hon. Friend also mentioned engine size banding. I assure him that we shall digest his comments in detail and respond to him in a letter. We shall see whether we have any common ground.
  My hon. Friend the Member for Tatton (Mr. Hamilton) gave an interesting and learned discourse on the medical and environmental aspects of lead pollution. I am sure that he is aware of the German dimension, and I cannot resist the temptation to say, "Ich habe wirklich keine Ahnung." Let Hansard make of it that what it may. I shall seek to obtain for my hon. Friend the information report and timetable that he requested.
  I should like to refer to Spain. The Government are acutely aware of the problems for United Kingdom manufacturers that result from the anomalous tariff regime between Spain and the Community. The imbalance of trade in cars is the most obvious and worrying symptom of this problem, but other industries — for example, domestic electrical appliances—are affected too. If it had been in the Government's power to do so, we would have remedied that a long time ago. The problem is, unfortunately, not that simple.
  Trade between Spain and the Community is determined by an agreement signed in 1970—before we joined the Community and at a time when Spain was much less industrialised than she is today. Under that agreement

  1117
  Spain is entitled to charge the high duties that she imposes on manufactured goods from the Community. As my hon. Friends will know, an attempt was made in 1979 to renegotiate the agreement. The United Kingdom obviously supported that, but other member states were not prepared to make the agricultural concessions that Spain demanded as the price of an improved regime for industrial goods.
  Since then, the Government have made clear to Spain our concern that that anomalous position should continue in the changed circumstances of the 1980s. Spain is now a major and highly competitive car producer. She produced more cars in 1983 than the United Kingdom and exported over half her production. Cars are produced with relatively low-cost labour in modern, well-equipped plants built by the large multinationals. It is absurd that such an industry should be protected by a duty of 36·7 per cent. on cars imported into Spain.
  We of course welcomed, albeit limited relief, the reduced duty quotas introduced by Spain last year. Austin Rover has made good use of that, increasing its sales in Spain by 70 per cent. in 1983. On the strength of that we made it clear to Spain that we thought that there were strong grounds for Spain's opening the door further by improving the quotas when they were renewed on 1 July this year. We were disappointed to see that, in the event, no improvements were made, although I note that Austin Rover has received a useful increase in its allocation—even though it is less than it might have hoped. The Government have therefore done all they can to improve the immediate access to the Spanish market, but we have not given up the fight.
  Mr. Hal Miller: Does the Minister recognise that article 11 of the trade agreement of 1970 to which he referred provides for the Community to authorise a member state to take the necessary protective measures in the event of difficulties which adversely affect the economic situation in a region, quite apart from serious disturbances occurring in a sector of the economy of one or more member states? Will he care to reflect on that and propose with the Spanish authorities a discussion of the difficulties arising, particularly in the west midlands?
  Mr. Butcher: My hon. Friend has, as ever, made a most perceptive point. I have a rough idea of the region he has in mind. We shall examine that proposal, but I shall come to our latest negotiating position shortly. I have no exception to that dimension being added to the guidance we may give our negotiators in due course.
  Some suggest that, since we cannot immediately gain access to the Spanish market, we should close the British market to Spanish cars, or at least find some way to stop the numbers growing. We are not, however, free to act in that way. As a member of the Community, we are bound by the 1970 agreement. There is little hope of persuading the Community to denounce that agreement and to impose higher duties on cars imported from Spain. In any case, without the agreement we would be still worse off, as Spain would then be able to charge even higher duties on all our exports to Spain.
  Unilateral action also has difficulties. There would be nothing to stop Spanish cars from crossing into the United Kingdom via Germany or France. Added to that, we would be breaking Community law, and the European Court
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  would rule the action invalid. Any ban on imports would then have to be lifted and any extra duty levied would have to be repaid.
  We have also looked at the possibility of anti-dumping or safeguard action under the agreement. This, too, would be for the Communiy to decide, but on examination we would not be able to mount a case which could fit the international rules for this.
  I return to the question asked by three of my hon. Friends: what, therefore, is the hope of relief? Are we stuck with the 1970 agreement for evermore? Fortunately, there is the prospect of a solution, indeed of one that will solve the problem once and for all. When Spain joins the Community, as we intend she shall, her trade with other member states must, after a transitional period, be free of all duties. That may seem to some to be a distant prospect, but it is not so. Spain is scheduled to join on 1 January 1986. The Community is pressing for transitional arrangements which will reduce all Spain's duties as quickly as possible. At the ministerial meeting yesterday, the Community told Spain, at the United Kingdom's insistence, that there must in addition be accelerated dismantling of her highest duties. Cars are by far the most important of industrial goods affected by high duties. The negotiations with Spain will continue, and this subject is only one of several still to be settled.
  Other member states have different preoccupations. We must be realistic as to what we can expect to achieve. There is, however, no question for the United Kingdom of neglecting the interests of our industry and we shall continue to fight for early and effective access to the Spanish markets for British manufacturers who are hampered by the present anomalous trade regime.
  With the observation I made in response to the intervention of my hon. Friend the Member for Bromsgrove, I hope that my hon. Friends will accept that our latest negotiating position is as tough as my hon. Friend the Miniser of State, Department of Trade and Industry said it would be when he replied to an Adjournment debate earlier this week. The Spaniards were left last night under no illusion about the seriousness with which the United Kingdom holds to its position. The Foreign Affairs Council will reconvene on 3 September to reconsider the matter.
  I have noted my hon. Friend's comments about motor vehicle emissions. We shall take them into account, as we always do, when our negotiating position is being considered. I share with my hon. Friends an antipathy towards being stuck with a policy for tackling emissions which may not be a state of the art or a method which bodes well for the future.
  My hon. Friends will be aware that my hon. Friend the Minister of State has said that he is attracted by the high compression or lean-burn approach alluded to by my hon. Friend the Member for Bromsgrove. There are disadvantages of which we are aware, with the deterioration of catalysts.
  The position over block exemptions may be slightly more fluid than my hon. Friends suspect. We are attempting a second draft. There is far more flexibility in the second attempt than there was in the first. The Commission is now saying that it will not stick root and branch to the 12 per cent. price, and will be a little more understanding in the way that it views its application

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  across the various member nations because of the various differences in our economies which do not necessarily imply an unfair pricing practice.
  BL's privatisation was mentioned and, as ever, we shall judge the merits of privatisation in the light of the general development of the BL group. Any commitment on that issue would be unwise and not in the interests of BL or any of its component or associated companies.
  I thank my hon. Friends once again for their contributions. The record has again been blessed with a number of astute and reasoned comments, which the Department of Trade and Industry will examine at length.

  Civil Aviation
  1.52 am
  Sir Reginald Eyre: The number of right hon. and hon. Members who have told me that they wish to take part in this debate on civil aviation and the Civil Aviation Authority's report has convinced me of the need to make a short speech to enable as many hon. Members as possible to take part.
  I should like to make it plain at the outset that I strongly support the privatisation of British Airways and I wish it a most successful future as an airline in the private sector. I believe that it deserves that, and I warmly congratulate Lord King and all his staff on all they have done to restore British Airways from a foundering and loss-making nationalised industry into a suitable candidate for privatisation.
  It must be acknowledged that that achievement has been brought about by Lord King and his team implementing the financial disciplines that all private airlines have had to maintain over the past 20 years to stay in business. Notwithstanding all that, I believe that it is right to summarise the nature of the interest and the real and understandable anxiety felt by the independent airlines at this stage in the march of events as the Government consider the report of the Civil Aviation Authority on airline competition policy and the interrelated matters of United Kingdom airports policy, the privatisation of British Airways and the future use and capacity of Heathrow.
  It is clear that the main thrust of Government policy is to ensure a successful privatisation of British Airways, at the most advantageous price to the benefit of public funds and on the most convenient time scale available. I understand this, and the strength of the case behind it. However, at the same time, there is a perfectly reasonable case for asking that full consideration be given, with similar priority, to ensuring more effective airline competition, better prospects for the consumer and a mole evenly spread and financially sound United Kingdom airline industry and at the same time retaining, and not changing, proper, effective support for the emerging provincial airlines such as that at Birmingham, which is genuinely in need of stability as it develops the potential of its new terminal.
  I have set out all these factors because, following the Civil Aviation Authority's report, there is great apprehension on the part of the entire private sector airline industry, both scheduled and charter, that its future prospects for any reasonable profitability and indeed its long-term survival are at stake. This apprehension about its future on the part of the private airline industry gives immense significance to this debate.
  The basic cause of that apprehension arises from the feeling in the private sector that a nationalised industry that has enjoyed a preferred and privileged position in United Kingdom civil aviation should not be transferred with that position more or less intact to a similar dominant position in the private sector. Against this background, and referring to the CAA report, my information is that most of the independent airlines accept the report's analysis of the issues and the problems posed in providing effective airline competition. However, while the analysis part of the report provides a stimulating, intellectual tour d'horizon — an old Birmingham expression — of the

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  issues upon which the Secretary of State must decide, it is the view of the majority of the independent airlines that the remainder of the report shows an incomplete range of options and practical solutions for the most pressing issues on which the Secretary of State needs to act to ensure a fairer balance between the present public and private sectors.
  To illustrate this point of view, I refer especially to the CAA recommendation that British Airways' European routes from provincial airports, especially Birmingham, should be taken over by other airlines. More than any of its other recommendations, this conclusion underlines the serious flaw in the CAA submission to the Secretary of State. It has chosen the most vulnerable and weakest links in the entire route network of BA to offer to the other airlines. I emphasise that the staff at Birmingham have made special efforts to sustain profitability here. However, in contrast, the authority has left BA's principal network from Heathrow without any competition similar to the competition that the then Secretaryof State, my noble Friend Lord Cockfield, allowed when he licensed British Midland to compete directly with the British Airways shuttle routes from Heathrow to Glasgow and Edinburgh.
  Lord King says that he welcomes competition, and we admire that robust approach. Nevertheless, the CAA report envisages the continuation of the effective ban on the operation of competing British airlines from Heathrow on international routes. The CAA report says in paragraph 18:
  "British Airways' size and its entrenched position at Heathrow give it enormous market power. The combination of its scale, new found efficiency and competitiveness give it a formidable advantage over the other British airlines whether it competes directly or indirectly with them. This market power is a major national asset where the British industry is in competition with foreign operators but cramps the development of other British airlines, some of which are also facing strong competition."
  In these circumstances, it is important that the Secretary of State should give full consideration to amendments needed to airport policy to allow existing private British airlines to operate international routes from Heathrow and thereby to bring about some element of the competition which Lord King rightly welcomes.
  It is clear from recent developments that Gatwick is more likely to become saturated sooner than Heathrow, because of its single runway operation. Following the development of quieter aircraft, the Civil Aviation Authority has recommended reconsideration of the forthcoming limit of 275,000 air transport movements at Heathrow. Evidence suggests that this could be raised above 300,000 air transport movements, thus giving the Secretary of State substantial opportunity to ensure that British Airways has the same effective competition on its international network from Heathrow as it now accepts on its domestic trunk routes.
  Many, though not all, of the CAA's proposals, if implemented, would have the effect of enhancing and not reducing the profitability of British Airways, since BA would have fewer marginal routes and a higher proportion of more profitable operations. For this reason, the independent operators have concluded that BA is prone to overstatement of the effect on it when objecting to route transfer and licensing change proposed by the CAA.
  Mr. Peter Snape: How will this competition on international routes come about with the agreement of overseas Governments, who are normally reluctant to grant licences to two foreign carriers on one route? No matter how politely the hon. Gentleman tries to put it. he is implying that Lord King, the chairman of BA, is overstating his case. Will he elaborate on that point?
  Sir Reginald Eyre: The hon. Gentleman is right in referring to the need for international agreement on the routes in question. They have been obtained in the past and the Secretary of State, if he agrees with the line that I am developing, would undoubtedly do his best to be successful in those negotiations. I am trying to show that BA is in a very strong position and to spell out reasonably the cause of the anxieties and apprehensions experienced by the much smaller, independent airlines as we look to the future under privatisation.
  Mr. Lewis Carter-Jones: I wonder whether the hon. Gentleman would clarify something for me in the short speech that he says he will make. Is he saying that the report does not recommend competition at Heathrow, or that he does not believe that there will be competition at Heathrow?
  Sir Reginald Eyre: I said that there is an effective ban on competition on international routes at Heathrow. The hon. Gentleman is right, and I still seek to make a short speech.
  When considering the privatisation of Sealink, the Secretary of State specifically excluded the tender of European Ferries, since the amalgamation of those two operations would produce a dominant market position in the cross-Channel ferry business. Paragraphs 22 and 23 on page 5 of the report refer, significantly, to that aspect:
  "British Airways' dominance of the British airline industry in terms of scale bring it firmly within the meaning of the monopoly situation as defined in the Fair Trading Act 1973. It is true that British Airways competes with foreign operators on virtually every international route that it serves and although direct competition on such routes is typically duopolistic, there is on many of them additional indirect competition from sixth freedom operators or from charter services. Nonetheless such competition remins muffled to a large extent whether by the predetermination and sharing of capacity, by commercial agreements, by controls over international air fares, or by restrictions on the types of traffic which charter competitors may carry."
  Paragraph 23 states:
  "British Airways is therefore very well placed to use international route profits to support expansion in other markets. Despite regulatory constraints, it could deploy this market power, almost at will, in any particular market where it chose to compete aggressively with other British airlines. It is this potential for exploiting its market power which frightens many respondents. British Airways argues that it would not go so far as to take predatory action against any other British airlines because to do so would be costly and because ease of entry and regulatory policy would soon result in a replacement for any carrier forced to leave a market. But there are many circumstances in which British Airways' commercial decisions, taken entirely for internal reasons relating to the achievement of long-term profitability, could be damaging to other British airlines simply because they are so much smaller."
  I am sure that the Secretary of State will give due regard to the Sealink precedent when further considering the present proposals for the privatisation of British Airways. Even if all the proposals in the CAA report were implemented, there would remain a strong imbalance and a dominant position for British Airways in the airline

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  business. Therefore, without reducing his privatisation plans in anything but a minor way, the Secretary of State has scope for balancing adjustment.
  Mr. James Hill: There is no logic in that, because if British Airways makes a success of a route for which it has a licence—I am talking of the future—is there any guarantee that the CAA would not immediately remove that route because it was profitable and unfair to smaller companies?
  Sir Reginald Eyre: I shall not presume to discuss future licensing arrangements. My speech relates to the Secretary of State's preparations for privatisation.
  Dr. Alan Glyn: My hon. Friend has given little attention to the important point made by those who work at BA. They work hard, the corporation is a success and they are extremely worried about the future. Will he say something about that?
  Sir Reginald Eyre: I appreciate that point. My hon. Friend told me that he had received a number of representations, but the facts that I have given should reassure him about the enormous strength of British Airways and its future. I seek to show the reasons for the anxiety amoung the smaller organisations in the private sector.
  Mr. Ted Leadbitter: The hon. Gentleman expresses anxiety about the smaller operators. British Airways became efficient and the slimming process under Lord King ensured the profitability of the publicly owned body. British Airways has rules and licences. Will there not be new fears for the smaller companies if BA is privatised?
  Sir Reginald Eyre: I will give the hon. Gentleman an example, but he will remember that I have paid tribute to the work of Lord King and his team in making this nationalised industry efficient and profitable.
  I must refer to one other worry of the independent sector. One of the most efficient sectors of British air transport is the package holiday charter airline business. Those carriers, including Britannia, Orion, Horizon and Intasun, have been the spearhead of bringing low air fares to the wide British public. They see their large investments put at risk as British Airways appears to dump many seats from its surplus capacity into an already competitive market. Those airlines strongly claim that BA's action, through British Airtours, is predatory and they feel that there should be a limit on British Airways in that market. It is not essential to the future success and prosperity of British Airways, with its domination of so many other routes.
  I hope that the Secretary of State will be able to give informed and sympathetic consideration to the problems and anxieties that I have described, which are felt so strongly in the private airline sector. I hope that my right hon. Friend will find a way of responding to and easing those anxieties as he proceeds with the successful privatisation of British Airways.
  Several Hon. Members rose——
  Mr. Deputy Speaker (Mr. Paul Dean): Order. It will be obvious to the House that many hon. Members wish to speak in this three-hour debate. I appeal for very short speeches.
  2.15 am
  Mr. Alfred Morris: I intervene briefly to make a number of points of particular significance to Manchester international and other regional airports. Ringway, with its 6,000 employees and the 20,000 other jobs which are totally dependent on the airport's activities, is much the biggest source of employment in my constituency. It also has a regional role of the first importance to the north-west. In the view of all informed opinion in the region it is, in fact, as important to the north-west of England today as the Manchester ship canal was earlier this century. I speak, however, not only as a Member of Parliament with a major constituency interest but as chairman of the parliamentary group which liaises with the North of England Regional Consortium to protect and promote the interests of the regional airports.
  The Civil Aviation Authority's recent report on "Airline Competition Policy" is, of course, only one of a whole series of major but unresolved issues which are now emerging for decision. The inspector's report on the Stansted/Heathrow terminal 5 public inquiries is expected to reach Ministers very soon. Similarly, the Select Committee on Transport must now be very near to finalising its report on the organisation and financing of airports. A further issue is the commitment by the Secretary of State for Transport to publish shortly a consultation document on air transport movements at Heathrow. There is also the policy review of Scottish airports, which the Secretary of State announced to the Select Committee, while decisions on the privatisation of British Airways and of the British Airports Authority are still pending.
  Given all these uncertainties, it is hardly surprising that the civil aviation industry is now in such confusion. The confusion extends even to the definition of terms. What the CAA sees as competition, British Airways and others condemn as substitution. If there is no agreement about the definition of terms, how can we possibly expect rational discussion and sensible decisions? It must be said for the CAA's report that, by default, it does at least make one constructive contribution to the confused debate now proceeding. I refer to the illogicality of seeking to determine any of the issues now under inquiry or review in isolation from all of the others. All aspects of policy in relation to airports and airlines, not least the interests of passengers and those who live and work near airports, are essential to an effective strategy for civil aviation. If we can avoid ad hoc decisions, the opportunity now exists to guarantee a secure and successsful future for the civil aviation industry well into the next century.
  The North of England Regional Consortium — NOERC—has campaigned since it was first set up in 1981 for a composite approach to the challenges facing the industry. That campaign has enjoyed a virtually unprecedented degree of cross-party support, both locally and nationally, and I must give the Minister notice tonight that our campaign will become even more vigorous over the months ahead. NOERC's main concern is to vouchsafe the rejection of the cynical proposal to develop Stansted as London's third airport. The solution we seek is the growth of regional airports. They include not only Manchester international airport but, among others, Leeds/Bradford, Birmingham, Newcastle and Liverpool.

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  Let me remind the House of my early-day motion No. 115, backed now by over 220 right hon. and hon. Members from every part of the House. That motion states:
  "That this House, deeply concerned to achieve balanced economic growth throughout the United Kingdom, and believing that the proposed massive expansion of Stansted Airport would produce unjustifiable urban growth and congestion in North West Essex and East Hertfordshire, calls upon Her Majesty's Government to opt now for a policy which, while providing for a modest increase in activity at Stansted, subject to a fixed ceiling, would place the greater emphasis on taking all possible steps to expand the use of provincial airports to meet demand in the region of its origin, the case for which has been well documented and shown to be financially viable by various groups, notably the North of England Regional Consortium."
  That is the way to create jobs where they are most needed, to encourage tourism outside London, to promote inward investment and generally to assist in the process of regenerating ailing regional economies. NOERC's way forward rejects the spending of upwards of £1 billion of public money on Stansted, and the environmental disaster of foisting a major international airport on rural Essex and Hertfordshire would be avoided. I know that the Minister is unable at present to comment on this crucially important issue for the north of England. Nevertheless, this House must demand an assurance that there will be no final decision on the inspector's report until it has been fully debated here. That is an assurance I implore the Minister to give in replying to the debate.
  The CAA's report is not only about the commercial interests of British Airways and British Caledonian. It provides an opportunity to assess how regional airports like Manchester can be actively encouraged to achieve the roles designated for them in the 1978 White Paper on airports policy and to maximise their contribution to regional growth and expansion.
  Hijacking the Manchester routes of British Airways and handing them to private airlines on a plate, as suggested by the CAA, is most certainly not the way to encourage the further development of Ringway. It would gravely damage both employment prospects in an area where unemployment is already unacceptably high and further undermine confidence among regional business men. What is proposed is to let the vulture pick at the flesh of a vital and virile public enterprise. Instead of inflicting unmerited harm on British Airways, and the regional airports it serves, the need is for Ministers and the airport authorities to agree with British Airways what additional services the airline should be operating out of airports like Manchester over the next few years.
  The Secretary of State for Transport, in a parliamentary reply to me last night, said:
  "The Government have made it clear on many occasions that they regard Manchester international airport as the gateway airport for the north of England and have encouraged the airport's development to fulfil this role."
  What that undertaking requires to give it real meaning is an end to the scandal of forcing 40 per cent. of the United Kingdom's international air travellers who come from the regions to use airports in the south-east of England.
  I hope the House will have noticed the statement by the Manchester International Airport Authority in The Times of Wednesday:
  "The CAA's report … is another example of discrimination against consumers in the North."
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  That is a very serious charge at a time when we are trying in greater Manchester alone to cope with male unemployment rates of over 50 per cent. in many localities and, in some, with rates that now exceed 60 per cent.
  The House must recognise that the CAA's report, as it affects Manchester, is a cause for deep and widespread concern. British Airways employees in particular see the report as a stab in the back, given the commitment they have demonstrated in making an undoubted success of the airline over the last few years. To reward that commitment and achievement by threatening the jobs of over 50 per cent. of the airline's employees in Manchester is outrageous.
  The Minister must not mistake the strength of feeling on this issue in Manchester today. Ringway is our principal public asset. By common consent, it is a major success story, and, before he comes to any decision on any matter affecting the airport, let the Minister genuinely consult those who achieved that success. Any Minister who seeks to undermine its growth will do so at his peril.
  2.24 am
  Mr. Julian Amery: This debate is important, as it might be our last opportunity to influence my right hon. Friend's decision on what course to follow on the Civil Aviation Authority report. I shall not attempt to follow the right hon. Member for Manchester, Wythenshawe (Mr. Morris), although he raised some important issues. I shall confine myself to the central controversy that arises from the report, which is whether the interests of the nation will be served by weakening British Airways in the interests of strengthening British Caledonian and other airlines.
  We must take as our starting point the fact that our duty is to ensure the best possible service for the passenger, without subsidy from the taxpayer. I think that that approach commends itself to all right hon. and hon. Members. On that basis, I shall try to traverse some of the arguments in the report. I believe that we can dismiss at once the argument that BA enjoys a monopoly, although it is by far the biggest airline in the country. Indeed, it is the biggest international carrier in the world. We should not be ashamed of that. British Petroleum is by far the largest British oil company, but nobody would dream of saying that its operations at home and overseas could be called a monopoly. If BOAC had been a monopoly when I was ministerially responsible for it, it would not have been in the red. It could not have been if it had been a monopoly.
  No international airline can be a monopoly because of the constant competition from other airlines. Wherever anyone wishes to go from Britain, with few exceptions, there is an abundant choice of available airlines. It is true that there are cartel or pooling arrangements between different airlines, but they will not be influenced by the transfer of routes. They call for greater competition, I agree, but what type of competition would help?
  I suggest that there are only three ways in which to increase competition. The most important is multiple designation, or allowing several airlines to operate out of Britain to foreign destinations. We already have a few. For example, BCal operates to Paris out of Gatwick and BA operates to the same destination out of Heathrow. Rights have been secured, but have not been taken up, by independent airlines for similar multiple designations to

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  Spain, Portugal and other parts of the world. Some have been taken up and others have not. That is the truest means of establishing competition.
  Another is one which my right hon. Friend the Secretary of State recently negotiated with the Dutch Government. It is the so-called "freedom of the skies", and allows foreign airlines which go, for example, from New York to Amsterdam to pick up passengers in Britain. That method should be welcomed and there can be no great objection to it. The third method is the deregulation of fares, or allowing airlines which operate from Britain to the same destination to charge the fare that they think appropriate, within the regulations that conform to safety requirements. These are the only real means of competition, but they are not easy to achieve. It takes two to tango in this game.
  I have had a good deal of experience of negotiation with Communist commissars, Byzantine bishops and oriental potentates, but never in my life have I found such tough bargaining as goes on over air traffic routes. It is far tougher than anything else that I have experienced.
  We must remember that, even if the House were to wish to give effect to the idea of a transfer of routes from British Airways to British Caledonian or some other carrier, it would not be that easy to bring about. Our agreements with other countries are often framed in a form which designates the carrier concerned. If we were to change the carrier, there is no certainty that our negotiating partner would accept it. Often the routes were negotiated in circumstances in which we had a greater advantage than we might have today.
  What is the object of the proposal to take certain routes from British Airways and give them to other airlines? It is an interesting concept, to which we should give our minds. It is. not competition, it is not really monopoly, but something which is described as "indirect competition".
  What does the CAA mean when it talks about "indirect competition"? As I understand it, it accepts that British Airways is doing a remarkably good job at the moment. But it says that it would be healthier for the airline industry if the second carrier were to be rather stronger so as to be in a better position to take up new opportunities that may arise or to take over opportunities from British Airways if it were once again to go into decline. It is, in fact, advocating what might be called an insurance policy.
  It is a curious kind of insurance policy. It is paying a high premium while neglecting elementary repairs to the roof. It is like trying to prevent any risk of one's trousers falling down by cutting strips from one's belt to make braces as well. That is a rather questionable over-insurance in today's circumstances.
  I am confirmed in that view when the CAA tries to apply its insurance policy. The result is that it cannot find many routes which could with advantage be taken from British Airways and given to British Caledonian. In fact, it falls between two stools. What it gives to British Caledonian is not enough to make it a striking success and what it takes from British Airways may be just enough to make that a much weaker proposition than it is today.
  The CAA recognises that weakness in its argument. What is alarming is that it suggests that that would be only a beginning and that later on it might arrogate to itself the right to transfer other routes. That needs a little thinking about. It will do the allocation. At the moment, it does not have the right. It has an important role to play in certification, registration, safety and so on, but is it to be
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  made a sort of holding company for the industry as a whole? Conservative Members are in favour of privatisation where possible, but it is not much privatisation if at the end of the day British Caledonian and privatised British Airways are brought under the hat of a quango in the shape of a beefed-up CAA.
  If we are determined to go on, as I hope we all are, with the privatisation programme, I doubt whether potential shareholders will be much attracted by the thought that the money they invest will be looked after not by Lord King or Sir Adam Thomson, but by the CAA.
  Mr. Snape: Who does the right hon. Gentleman think should make these decisions?
  Mr. Amery: In my day they were made by the appropriate Minister. Until now, it has been his job to negotiate routes with foreign countries. When all the airlines are privatised, they will be able to try to negotiate for themselves, but as this comes into the realm of foreign relations they will still need the support of a Minister. I believe that that is far more suitable than a new quango —a kind of IBA for the airlines.
  Mr. John Prescott: But the right hon. Gentleman voted for that in 1981.
  Mr. Amery: The hon. Gentleman raises an important point. Who is to decide whether an airline is doing well? No Minister would try to do that, particularly if the airlines were privatised. The market would decide. If the airline does well, the shares will rise. If it does badly, they will fall. If the privatised British Airways does badly, that will be the time for British Caledonian or some consortium to buy up the shares and with them some or all of the assets, which really consist of aircraft and routes. That is how I hope the system will balance out. It is certainly the way that appeals most to those of us who want market forces to operate.
  Mr. Robert McCrindle: If I understood him correctly, my right hon. Friend was suggesting that there was a case for returning these responsibilities from the CAA to the Secretary of State. In those circumstances, how could the Secretary of State continue to act effectively as a court of appeal? Or would a new quango be created for that purpose?
  Mr. Amery: I think that my hon. Friend has misunderstood me. There are two aspects to this. Registration, certification and safety are the proper domain of the CAA. Negotiations with foreign Governments about routes come into the domain of foreign affairs, and a Minister has to be responsible. The independent airlines will also have a hand in this, but their success or failure in terms of routes allocated should be decided neither by the CAA nor by the Minister but by the operation of market forces. That is to say, if the airline is doing well, it will command public confidence. If it is not doing well, its shares will be taken over by others.
  Mr. Hill: My right hon. Friend raises perhaps the most serious point in the entire document. The document states:
  "The CAA does seek enhanced powers to take action in support of the sound development of the industry … It also means that the CAA will be more robust than in the past taking route authority away from carriers who fail to perform."
  What will the investors think of that?
  Mr. Amery: My hon. Friend has weighed in gallantly with very good support for my argument. He has clarified the position better than I have done myself.
  Another issue to be borne in mind is the fact that the British Airways board has transformed the position of British Airways in the past couple of years. It has done this by drastic surgery. Nearly 40,000 people lost their jobs in the process. That was achieved without major industrial disturbance because the chairman of the board gave absolutely clear-cut assurances that the route structure would not be affected. Who was Lord King to give that assurance? He gave it because he had written assurances from the Minister of the day, now Sir John Nott. So public faith is pledged in this respect.
  It is a moral issue, but it is a practical issue too. I do not know how far we will go with our plans for privatisation, but this I can say. We will damage any possibility of further privatisation irreparably if we are found to be in breach of public faith. I hope that my right hon. Friend will talk closely to the Secretary of State for Trade and Industry. As a former airline pilot, he knows his job well, and he knows what the repercussions could be on the morale of British Airways personel if as a Government we were to be guilty of a breach of public faith.
  What is to be done? It is always unwise to ask for a report from a commission if one is not sure what it will report. I think that my right hon. Friend is in danger of having put a banana skin in front of himself. I hope that he will tread carefully. If the Government were to accept the report, I am advised that legislation would be necessary. I think that that would be an unmitigated disaster, causing great divisions on the Conservative Benches, and perhaps in other quarters. It would be a long-drawn-out proceeding, it would certainly delay privatisation, and it would disturb the morale of British Airways and, indeed, of British Caledonian, because they would not know what the outcome was going to be.
  I suppose that my right hon. Friend could sit on the report for some time, consider it and mull over it, and I dare say that the leadership of British Caledonian and British Airways would be able to contain the situation, although it cannot be good for morale or for potential purchasers.
  Mr. Anthony Steen: My hon. Friend keeps referring to British Caledonian and British Airways. He is aware that there are a great number of other independent private airlines besides British Caledonian. He has not addressed himself to those.
  Mr. Amery: I take my hon. Friend's point, but the issue with which I am trying to deal is the transfer of routes from British Airways to British Caledonian which is the most controversial aspect of what the report recommends. The report has not gone very far, certainly where international routes are concerned, in transferring them from British Airways to any of the other airlines. This point will arise later on, of course, but it is not an immediate point. Thus, when I refer to my right hon. Friend sitting on the report during the recess and not making up his mind yet, the people who will be affected are not the smaller lines but British Airways and British Caledonian at this stage.
  Personally, I think that my right hon. Friend would do well to have the report referred back. My own judgment
  1130
  is that we would do best to reinforce success. British Airways is doing extremely well, and we should leave it to market forces to judge the future. What the Government can do is to look for opportunities for dual designation or multiple designation, to try to negotiate freedom of the skies, and to try to work for the deregulation of fares. Only these will give us real competition. Only these will give real benefit to the customer—to the passenger—and that without subsidy.
  2.43 am
  Mr. Lewis Carter-Jones: When I was awakened at five minutes to one, the policeman said to me in a jocular manner that took me back to 1940, "You'll be flying in about an hour, Sir," and I suddenly realised that I was going to speak on the subject raised by the hon. Member for Birmingham, Hall Green (Sir R. Eyre). The hon. Gentleman should be congratulated on bringing the matter forward, but that is not a substitute for a statement on the CAA report by the Secretary of State which I hope we shall have before the end of the Session.
  The hon. Member for Hall Green mentioned the monopoly of British Airways as a result of which, he said, there is no competition from Heathrow. The CAA report refers to airline competition policy. What is quite clear —and on this I agree with the right hon. Member for Brighton, Pavilion (Mr. Amery) — is that the report contains not one word about competition. It is the biggest dog's dinner of all times. All that it does is to grant minor monopolies.
  Let us consider Manchester. If we pull British Airways out, who goes in? We do not know. Is that competition? I accept Lord King's view: let British Airways stay in Manchester, let others come in, and let us have competition. We would welcome that. It would be helpful not only to the north-west but to the whole of the north of England and provide a substantial infrastructure for the economic expansion that we need.
  Page 21 of the Civil Aviation Authority report shows that there is no question of who comes in or what will happen. Manchester, like Birmingham, will be left in isolation. There is no word about competition in the report.
  The right hon. Member for Pavilion was right to say that the CAA's interim report states clearly that if section 5 of the report dealing with international routes is to be implemented, legislation is necessary.
  Banana skins have been mentioned. Marsham street will soon be known as Banana grove, because the report plants a whole plantation of bananas. I have never known a Secretary of State slip on the skin of a banana that he grew. Legislation is essential.
  Let us return to basics. The routes belong to the British people. They are the British people's asset. I should like British Airways to stay as it is, publicly owned and run by Lord King. If that is a declaration of faith, so be it. The promise was that if certain things were done BA could be privatised. If that happens successfully, I hope that the money from the sale will go to the British people. If the CAA makes a dog's dinner of it, the British people will pay for it. That is why the right hon. Member for Pavilion was right to say that at the end of the day the British people will pay.
  I find certain parts of the report disturbing. They make me worry about the CAA. Paragraph 49 of the CAA final report is an example of slovenly thinking. If I were Sir

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  Adam Thomson and could have sued the CAA I would have done so. The report says that the CAA would think of granting routes to British Caledonian after it has examined its accounts. That is a shabby thing to put in print. It is very worrying because such reports are around for 12 months. One would have thought that there would be discussions about accounts before the publication of such a report. I should not be surprised if Sir Adam wanted to take action against the CAA.
  The report says that the CAA will make its recommendation in August. Since the hon. Member for Hall Green chose this subject for debate, a few hours ago we all received letters from British Caledonian and the CAA saying that they have now examined the books, and they are all right. That should have been done earlier. The CAA has turned out to be a lackey giving what it felt was required by the Secretary of State. I believe, however, that the Cabinet, and especially the Prime Minister and Chancellor of the Exchequer, will say that this series of banana skins will lose us substantial sums in the sale of British Airways. We have confusion, which is doubly confounded by a report that was supposed to clarify the position.
  The right hon. Member for Pavilion was wise to suggest that the Secretary of State could do various things with the report. I think that the right hon. Gentleman was too polite to say what the Secretary of State really should do with the report. The report will cause nothing but embarrassment to the Government and severe hardship to the British people.
  The unions have repeatedly said, "We were given certain promises. We believed that Lord King had a mandate. We believed that the Government were prepared to be honourable about this matter." That is precisely the point made by the right hon. Member for Pavilion.
  I want British Airways to remain public, but, if it is to be privatised, let that be done at the best going rate. How can Lord King present a prospectus for sale with this report hovering around? [Interruption.] I do not see how he can. The report, which was meant to clarify the issue, has clouded it and made it even more confused. I take the point that it would be better if the industry were privatised. The Secretary of State should take on his proper role, issue hoops and have a competition. What is proposed is not competition, but the hiving off of little monopolies.
  I shall finish my speech quickly because many other hon. Members want to speak. I believe that many hon. Members want to speak against the CAA report. I would not trust the CAA with my grandchildren's piggy-banks, after reading the sort of proposals in this report. It will be a cruel deceit to the management and work force of British Airways if the report is implemented. The report confuses an already confused position. How can Lord King possibly sign a prospectus for privatisation in those circumstances? He and his work force may easily be cruelly deceived. There is a better method of resolving the matter. I am certain that the Prime Minister will recognise how costly the CAA's proposals will be for the British people as a whole and the employment prospects for the north-west in particular. I suggest the abolition of the CAA—even though it does good work in relation to safety and control — and the handing over of its responsibilities to the Office of Fair Trading.
  Mr. Alfred Morris: On a point of order, Mr. Deputy Speaker. I hope that you will agree that it is an important
  1132
  point of order. Are we satisfied that everyone who has intervened in the debate so far, however briefly, has declared any interest he may have in the subject under discussion?
  Mr. Deputy Speaker: It is well known to the House that it is customary in debates for all hon. Members to declare interests, if they have any.
  2.55 am
  Mr. Nicholas Soames: I should like to begin by declaring an interest in that I am lucky to have in my constituency Gatwick airport. I therefore have several interests that I am sure Opposition Members will understand are very important to me. I have among my constituents British Caledonian and British Airways, and the headquarters of the British Airports Authority is in my constituency. In fact I am more girt about with problems than the Secretary of State.
  I pay tribute to the staff of the Civil Aviation Authority, who, regardless of whether we agree or disagree with their report, have undoubtedly assembled a remarkable array of evidence in a comparatively short time. They have done an excellent job. This document must not be viewed—it would be a great mistake to do so — merely as an argument between British Caledonian and British Airways. It is not an argument; it is an attempt to set a strategy for the future development of an industry that is nothing short of crucial to the interests of this country. In considering the matter, I must also bear in mind the great importance of Gatwick to my constituents, an enormous number of whom work at the airport.
  In assessing the report, it is important to understand that the changes proposed will not of themselves immediately encourage competition. I agree with the views that have been expressed on that. However, they will give British Caledonian and the other independents an opportunity to find a platform from which in future they may hope to compete with British Airways. The sheer size and dominance of British Airways does not stem from 39 years of superior performance in world markets. The House must recall that successive Governments, both Labour and Conservative, have, since 1945, rejected the concept of a single chosen instrument. The fact is that the largest international scheduled route network in the world arose from preferment at the expense of the independent sector. That is a fact of life. The Government must make up their mind this time. Do they want a single-airline industry or a multi-airline industry?
  The CAA report acknowledges that Britain's position at the aviation crossroads of the world, together with its store or enormous expertise and enterprise, should enable a more competitively balanced British aviation industry to be a leader in the world—not just by size but by long term success. It is only in such a competitive environment that efficiency and excellence will be stimulated.
  On many occasions I have paid warm and sincere tribute to the remarkable achievements of Lord King and his management staff in British Airways, but the noble Lord goes too far when he claims that these limited transfers would ruin British Airways' chances of a successful flotation. That cannot be substantiated and does not stand up, although I have some sympathy with the argument. I believe that in the past few days the noble Lord has done more damage to the chances of a successful privatisation than anything that was originally intended.

  1133
  I would be deeply distressed if British Airways did not operate substantially from Gatwick. Although Airtours is to remain, it would be entirely wrong for what would still be the largest British airline not to operate some scheduled routes from Gatwick. It would also be entirely wrong if in future Airtours, which is extremely effective and efficient and a major asset to Gatwick, were to be interfered with for being too competitive and too good at its job. The CAA should think again on the implication of its report.
  My right hon. Friend must try to achieve a healthy and broad industry overall—not merely British Caledonian or British Airways but the smaller independent airlines which have a vital contribution to make.
  The currency of airline and airport development is the route licence. It is only through the redistribution of this wealth that competition and the sound development of the British airline industry can be achieved. In consequence, I am bound to support the arguments and proposals put forward—and to some measure accepted by the CAA report—by British Caledonian and the British Airports Authority in so far as they are vital to the interests and development of my constituency and Gatwick airport. That includes a substantial presence of independent airlines at Gatwick.
  With a wide range of scheduled service products, Gatwick would become fulfilled with British Caledonian and British Airways in its politically designated role as an international gateway for London, and the livelihood and security of my constituents would be enhanced. Of equal importance, the objectives of airline competition combined with the sound development of the British airline industry would be met.
  3.3 am
  Mr. Tony Lloyd: I thank the hon. Member for Birmingham, Hall Green (Sir R. Eyre) for choosing this subject for debate. It comes at an apposite time. I do not wish to continue in the same vein as the hon. Member for Crawley (Mr. Soames). I shall leave the hon. Gentleman to his reveries and return to the more important matter regarding my criticisms of the Civil Aviation Authority report, and its basic irrelevance to the needs of the British airline industry.
  As my hon. Friend the Member for Eccles (Mr. Carter-Jones) said, it is clear that the CAA attempted to do nothing more than to conform to the ideology of its political masters. It presented the report that it was expected to present. It prejudged the whole issue. As early as December 1983 it talked about favouring a competitive solution. Although the report may be hign on the rhetoric of the benefits of competition, it provides remarkably little evidence of those benefits.
  We must recognise that, in the airline industry, competition per se is not the simple answer to all our problems. As the right hon. Member for Brighton, Pavilion (Mr. Amery) said, we should consider the interests of the consumers. Competition does not necessarily guarantee those interests. When we had some competition in the days of Laker, when there was massive over-capacity in the industry, we saw that it simply was not in the long-term interests of consumers precisely because of the massive capital costs necessary to run a modern airline.
  1134
  The report hardly dwells on competition; it dwells almost entirely on the need for substitution. To draw an analogy with football, it is as if Manchester United—much as I had my hopes pinned on it—achieved success in the league championships by chopping off the legs of Liverpool footballers. That is precisely what we are doing to British Airways. In order to enhance competition and the interests of other competing airlines, we must in some sense cripple British Airways and ensure that it can no longer play the role that it does.
  British Airways is large, and, being large, it is very efficient. There are economies of scale in running an airline. British Airways is a remarkably efficient airline now. Tribute should be paid to the work force and its present management.
  Both sides of the House would welcome it if the Minister would tell us when we can expect a statement from his right hon. Friend on the CAA report. On Monday of last week he told me that he had only just received a copy of the report and was placing copies in the Library. The Secretary of State said:
  "I shall be considering it urgently and will announce the Government's response to the recommendations as soon as possible."—[Official Report, 16 July 1984; Vol. 64, c. 4.]
  While we welcome the fact that the Secretary of State intends to respond "as soon as possible," that is in contrast to the fact that the report had been heavily leaked by Mr. Colegate who, in the media the previous Friday, told us virtually everything that was in the report. Therefore, the House has a right to demand that a statement should be made before the recess. I hope that the Minister will tell us tonight when the statement will be made.
  My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) mentioned Manchester. Manchester has not been uncritical of British Airways in the past, because we feel that it could have done more. The answer to the problems of Manchester and the north-west is not to withdraw British Airways. As my hon. Friend for Eccles said, the answer is to introduce other airlines to provide competition. If British Airways is to be kicked out of Manchester, that will have a dramatic effect upon the airport. It will become a third-rate airport, not the international class A gateway airport that Manchester has been promised in recent years.
  As regards intercontinental schedules services, the report says:
  "British Caledonian is the only British airline immediately capable of filling this role."
  However, in the Daily Telegraph British Caledonian is on record as saying that it has no interest in coming to Manchester. Manchester is being offered not competition, but substitution, and not the substitution of the one airline that the CAA feels might be able to do the job. Manchester will end up as a banana republic as a result of a Secretary of State who, as my hon. Friend the Member for Eccles said, makes the banana boat a matter of reality.
  If Manchester loses British Airways, it will be divorced from the Heathrow hub of the British airline industry. Manchester will no longer be seriously considered part of the national matrix of airline routes. The impact on the economy of the north-west would be devastating.
  As my right hon. Friend for Wythenshawe said, the area wants, not further decline, but something that will enhance the ability of the area to pick up and regenerate. An airport and an adequate airline service are critical. At

  1135
  other airports, such as Liverpool, where British Airways has pulled out, it is plain that there has been a deterioration of services.
  British Airways staff have invested as much as the nation in British Airways. On 19 November 1979 the then Secretary of State for Trade said:
  "I do not propose that any part of British Airways should be broken up or sold off. I propose that the airline as a whole should be quoted and it will then be for the board of directors to take decisions on how they organise their business." — [Official Report, 19 November 1979; Vol. 974, c. 47.]
  The British Airways work force believed that. If it is decided to chop up parts of British Airways, it will be cynically—
  Mr. Gerald Howarth: Does the hon. Gentleman agree that there is a distinction between British Airways and its component parts, such as the air tours, hotels, and so on, and the routes? Sir John Nott's statement should not be taken as suggesting that the subject of route transfers was closed for all time.
  Mr. Lloyd: The distinction that the hon. Gentleman draws cannot be seen in the statement that Sir John Nott made. He did not propose that "any part" of BA should be broken up or sold off. "Any part" does not allow for the exclusion of one part because it now suits Conservative Members.
  Mr. Michael Colvin: At about the same time, Sir John Nott also said:
  "There will be no arbitrary reallocation of routes."—[Official Report, 20 July 1979; Vol. 970, c. 2192.]
  Is that not the quotation that the hon. Gentleman is really seeking?
  Mr. Lloyd: I thank the hon. Gentleman for his assistance on this point. He is confirming my point that it would be a vicious betrayal of the employees of BA, both in Manchester and throughout the country, if the sacrifices that they have made through enormous job losses and so on over the years were to be rewarded by them finding themselves in the dole queue, after their jobs have been sold down the river in the interests not of the customer nor of the nation but of those who wish to make money out of national property.
  3.11 am
  Mr. Alan Haselhurst: Although our proceedings will be anxiously observed in many quarters, this should not be the definitive debate on the future of the aviation industry, especially as it is being conducted at this hour in the morning. I could not hope, in what must be a short speech, to do justice not only to the report but to the airlines and interests that are concerned by what is in the report.
  The CAA report should be welcomed as at least a contribution to the discussion. It may represent the view of the consumer interest in civil aviation, but that does not mean, just as when we read a report from the Consumer Association Which? magazine, that we have to accept the recommendations as to what might be the best buy. We want to test the different points of view being urged on us against the tenets of the CAA report.
  Perhaps we should go further in trying to make the right decisions for the future of the civil aviation industry. The Government have an almost unique opportunity to make decisions that will have a long-term effect on the shape of civil aviation. Many matters, not just those in the CAA
  1136
  report, are coming up for adjudication soon. I hope that the Government will allow themselves time to reflect on the whole picture that those, parts make up.
  The Government are committed to the privatisation of British Airways, and I do not quarrel with that. However, the Government might almost be embarrassed by the success that Lord King and his staff have had in running BA recently. The most difficult argument that the Government have to face is that Lord King has done a remarkable job, with the support of all the employees of BA. Because the improvement in BA has been carried through with the full-hearted commitment of everyone in that organisation, and promises have been made and commitments given in the organisation as to its future, it is hard to break faith with those who have contributed to the success. That is a difficult argument to overcome, and other points will have to be set against it.
  I hope that privatisation will not so dominate the debate that all other considerations are made subservient to it. We should not say, "Damn the torpedoes and full speed ahead," because what we can do to get our future policy right can be affected by our attitude towards competition and airports. The Conservative Administration cannot ignore the need for competition, provided that it is genuine. I accept that route substitution is not necessarily competition. It is difficult to define genuine competition in this business. We should be doing a gross disservice to competitive forces and interests if we made a hasty judgment on any of these matters.
  The adjustment of routes, in certain circumstances and to a certain extent, might play a part in restructuring the British civil aviation industry. For example, if more attention were paid to the contribution which regional airports could make to the development of civil aviation, we might consider in detail the CAA's proposals on the development of routes from provincial airports to continental destinations.
  I understand that the interests which represent Manchester, for example, would not necessarily accept that more airlines should come on to routes in replacement of British Airways. However, it might be argued that another airline which does not have an interest in Heathrow could offer more vigorous competition to BA, operating only out of Heathrow, in developing some continental routes. That is one argument which should be considered in due time against some other considerations that arise.
  If we are to get the picture right in civil aviation, we must also consider airport policy. We cannot take an undistorted view of the situation without sight of the Stansted and terminal 5 report. As that report is not available, neither the House nor Ministers can take a view on the subject. To make an early judgment on the CAA report might prejudice the quasi-judicial position of Ministers in relation to the report of the inquiry.
  In recommendation No. 7, the CAA says that the Government should reconsider the possibility of increasing available capacity at Heathrow and Gatwick. That goes beyond the scope of even the wide remit that Graham Eyre was given when he was asked to take the chair at the inquiries into the planning applications affecting Stansted and terminal 5.
  If it was decided, to whatever degree, to enhance BCal's position at Gatwick, to imply that BCal should be a more successful airline and that Gatwick should be a more successful airport, we should inevitabley come up

  1137
  against the possibility that the present physical limits of Gatwick would be reached; then what should we do about the second force airline that we would be purporting to create?
  If, however, British Airways' view is taken on the best way to exploit the British competitive airline effort, we must accept that BA should be enabled to utilise Heathrow to the best advantage of BA. That in turn has a distinct impact on the argument about whether there should be a fifth terminal. All these matters cannot be isolated from the arguments about the routes structure and the future of certain airlines.
  It is crucial for the air transport movement limits at Heathrow to be considered in this context, for they are an integral part of the whole issue. It would be a travesty to take decisions on certain matters in isolation from other decisions that must be taken.
  We are bound to hear about binding promises that were made in the past. From our different points of view, we all have sensitivities about some of those promises. If BA wishes to rely on a statement that was made in the past, it must recognise also that other statements were made, some of which it might not wish to have binding force.
  I understand that British Airways does not agree with the statement that there should be no fifth terminal at Heathrow. Some of us may be upset by the commitments given in respect of Stansted or Gatwick, or in respect of noise limits and aircraft movements at Heathrow. If there is to be a fresh look at British civil aviation policy, everyone must accept that all bets are off — all past commitments must be put into the pot together. It is no good saying that some commitments are more holy than others; we must consider them on the same basis.
  The employees in the industry are naturally worried. British Airways does not wish to be robbed, and the independents do not wish to be frustrated or extinguished. We should not take any of these matters lightly, but I cannot envisage a loss to anyone if we allow a decent period of reflection on the full picture, including all the elements that I have mentioned. The state of the market could have just as potent an effect upon the proceeds from the sale of British Airways as could any factor that has been discussed in the debate.
  I hope that Ministers will not allow one factor to dominate, but will consider the entire picture —although, of necessity, their reactions to the advisory reports that they have received and their subsequent decisions may have to be delayed to some extent. There need not be substantial losers in the drive to maintain a healthy civil aviation industry that can expand in the competitive world market on its merits. However, there are burdens and benefits, which must be shared among all. Ministers could find a way of doing that equitably and thus satisfy most of the interests that are being urged upon them tonight.
  3.21 am
  Mr. Ted Leadbitter: Anyone who has taken even a partial interest in the fortunes of British Airways during the past few years cannot help but come to the conclusion that it has been a marvellous success story. The chairman, executive board members and work force have co-operated and made many sacrifices, including the loss of 23,000 jobs, to provide a slimline
  1138
  organisation the like of which must prompt hon. Members to say that British Airways and our civil aviation industry have been outstanding successes.
  Now there is to be a change of ownership. I have had some frank words with Lord King recently in my capacity in the parliamentary Labour party's departmental committee on transport, and there is nothing I respond to better than a man who calls a spade a spade. I said to Lord King, "You do not care who owns this organisation as long as you manage it," to which he replied, "That is right."
  I repeat the point which I put earlier to the hon. Member for Birmingham, Hall Green (Sir R. Eyre). This issue has nothing to do with the efficiency or viability of the organisation, or with the input, loyalty and consideration of the present work force; it relates only to the change of ownership. If there was no problem about the routes when the company was publicly owned, and if Lord King continues to be chairman when the company is privatised, why are the other operators afraid?
  I am an interested layman in these matters. I use my experience, limited as it is, to make judgments. If there have been 122 submissions to the CAA, seeking to cream off some of British Airways' routes, why were those applications not made when BA was in public ownership? That is a logical question.
  I am not criticising British Caledonian or any other private operator. Hon. Members wish all operators to be successful, but we must address a question that has not yet been answered. British Airways is efficient and profitable. Why should the same company—perhaps with the same chairman and the same board, but under new ownership —raise new fears for the other operators?
  Little has been said about the BA work force. Irrespective of our political allegiances, we have regard for those who work successfully in industry. It is a problem if work forces do not respond to circumstances in the industrial world. There is abundant evidence that British Airways has had purposeful managerial direction and a response from the work force.
  We must take an interest in the pensions, conditions and pay of that work force. To achieve viability, the workers have suffered a loss under each of those three headings. There has been a pay freeze, a loss in real wages, reduced benefits in the pension scheme and the risk of agreements —insurances for the work force—being put in jeopardy.
  Mr. Steen: Will the hon. Gentleman give a thought to the future of the many independent airlines in private ownership——
  Mr. Snape: Which one pays the hon. Gentleman?
  Mr. Steen: There is no need to declare an interest when asking a question. If I am called to speak, I shall declare an interest.
  Many private airlines have been operating for decades with dedicated staff taking low pay. Will the hon. Member for Hartlepool (Mr. Leadbitter) say something about what should happen to those people?
  Mr. Leadbitter: That is not a difficult intellectual exercise. I could get a backward boy out of a class that I once taught to answer the hon. Gentleman's question. The hon. Gentleman has an interest in a particular operator and it is time that he said so in the Chamber. But he must be intellectually honest with himself. British Airways is in

  1139
  public ownership and before the talk of privatisation other operators had no interest in its routes. The interest arose only when privatisation was proposed.
  British Airways is not afraid of competition on any of its routes. I respect Conservative Members' views on private enterprise, but BA is not free to compete, because the CAA is laying down ground rules that confound private enterprise policies. If the CAA will respond, BA will be happy to compete with any operator on any of its routes.
  I do not agree with Lord King in all respects, because he is a privatisation man, but he is a man of considerable competence. We must not allow our political philosophies to interfere with realities. If BA is privatised, he will chair the company as he has chaired the public body. He will not be afraid openly to compete in accordance with market forces provided that the CAA keeps its nose out of it. We shall then see who will get the market on the criterion of efficiency.
  We have a common cause. If I am not afraid of private enterprise operations and private enterprise theologians are not afraid of privatisation, what are we arguing about? The nigger in the wood-pile is the CAA— [Interruption] That expression is part of the vernacular of my area. There is no objection to the rules of competition, but the interests of the work force, who have put so much into BA, must be considered. The CAA is in a position to offer considerable help to BA, and the sooner it does so the better.
  3.35 am
  Mr. Terry Dicks: I have to declare an interest. Heathrow is in my constituency, and British Airways plays a big part at Heathrow. Many of the staff threatened by the CAA report live in my constituency.
  I congratulate the management staff of British Airways on turning a loss-making airline into a profitable one. The number of staff has been reduced by 23,000. That change was based on an assurance, given in the House on 20 July 1979 by the then Secretary of State, that there would be no arbitrary reallocation of routes. Regardless of what any of my colleagues may say, that statement was made in good faith and accepted in good faith by British Airways and. more importantly by the staff of British Airways, and we have to stand by it. If we do not, what politicians say will have no credibility.
  I have great confidence in the Secretary of State's desire to increase the benefits to the customers that can be provided by the airlines striving in competition against each other, but I am equally confident that the steps proposed in the Civil Aviation Authority's airline competition policy review are not the answer. The authority pessimistically and wrongly dwells on the reduction of British Airways' scope and size as though there is some merit in this dismal approach, when the opportunity is clearly before the industry of very substantial growth.
  All over the world, civil airlines are beginning to forge ahead in recovery from the recent depressed years. It is open to British airlines to join in and benefit, and indeed British Airways is very substantially leading the way, as can be seen by the fact that last year BA made a profit of £214 million.
  The dreary proposal of substitution, or deliberately and compulsorily removing one airline to replace its services with another—always assuming that British Caledonian
  1140
  is financially able to cope with the responsibility, and there are doubts about that — is bureaucratic interference which would make many extra jobs for aviation civil servants but would just as certainly produce no extra choice for passengers. How can taking one plane off and replacing it with a plane flying in different colours create extra choice? Clearly, it cannot. Only a dyed-in-the-wool bureaucrat could believe that anyone could be taken in by that.
  There will be rejoicing in the boardrooms of Lufthansa and Air France if this misguided review is accepted by the Government, especially as the alternative airline, British Caledonian, is over-manned and inefficient. Germany and France will benefit and Britain will lose, because the powerful, Government-backed airlines of Germany and France, and many other countries will scoop up the business which this review, for doctrinaire reasons, carelessly offers them on a plate. The idea that services out of Gatwick to mainland Europe should be built up by reducing our links from Heathrow to European cities offers the stark spectre of a declining Heathrow and a triumphantly advancing Frankfurt airport, and all by courtesy of the Civil Aviation Authority.
  There is a way ahead, and the Secretary of State for Transport has pointed to it. It is perfectly possible, by the kind of ardent negotiations that he conducted with the Dutch, to bring about improvements beneficial to the passenger. Dual designation, by which additional independent British airlines will fly in competition on British Airway's routes, is perfectly possible. The Government's bilateral agreements which govern these matters are, as the term suggests, agreements. There is plenty of room for negotiation to put more than one British carrier into our part of the routes. That is where real competition can be brought in. Nothing else will do.
  I have one other grave doubt about the direction in which the Civil Aviation Authority is endeavouring to go. Paragraph 88 of the review sets out the authority's attitude in all its arrogant clarity. The authority proposes — no less — that it be given substantial further powers to conduct its licensing functions — by which it means taking routes away from one airline and giving them to another—
  "in the manner which it considers is best".
  That is the language of self-expanding bureaucracy.
  Mr. Soames: My hon. Friend talks about bureaucracies and over-manning. Will he consider British Airways at Manchester, where it employs a staff of nearly 1,000 to handle 35 flights a day? British Midland Airways in its entire establishment employs 1,250 people. Can my hon. Friend account for that difference?
  Mr. Dicks: I am afraid that I cannot. I can only say that BA has reduced its staff from 59,000 to 35,000 and now runs a profitable and effective airline.
  Paragraph 88 of the report could have been written by someone in the Kremlin who has no idea of consumer choice and what it entails. The proposals that would enable the authority to shift any airline's routes around "as it considers best" amount to a disreputable attempt to nationalise on the quiet the very industry in which the Government rightly intend to end state ownership. There is only one way for the passenger to be given more choice and for millions more to enjoy flying — real extra competition.

  1141
  My right hon. Friend the Secretary of State can bring that about in international negotiations, as he has already shown. That is not the intention of the authority, which is discredited in the eyes of many people and needs a drastic overhaul. I could almost ask for an investigation into the operation of the CAA. Its review should be confined to the waste paper basket.
  As to BA's so-called monopoly, of the passengers who used British airports in 1983, 31 per cent. used BA, 32 per cent. used foreign airlines and 37 per cent. used other British carriers. That is hardly evidence of BA being a monopolist. As for the impact of the CAA's proposals on privatisation, there can be no doubt that taking away successful routes from BA will have an adverse effect on the sale of BA shares. Advice from the City and elsewhere suggests that privatisation could be delayed by years. I cannot believe that the Government would want that to happen. The CAA report should be rejected and BA should be left alone to allow its management staff to get on with running a successful airline.
  3.41 am
  Mr. Kenneth Warren: Conservative Members should remember that the objective which the Tory Government gave Lord King was to line up BA for take-off into private ownership. To achieve that, he has delivered, and has had to deliver, a company the quality of which will attract people to invest in air transport when, historically, such investment has been glamorous rather than profitable. BA and Lord King have delivered a high quality product and considerable customer satisfaction. The staff and leadership of BA—people such as Colin Marshall and Jim Harris—should be praised for the excellence of their effort while competing with the world's top airlines.
  BA has now joined the top flight of world carriers. It now ranks with Delta, Cathay Pacific and Swissair. It has achieved all the targets which the Government set. I would have hoped that my right hon. and hon. Friends would be cheering, but I fear that we are tearing ourselves in two over the CAA report. I am anxious that we should not lose sight of the objective that Lord King was set —production of a company which we can propel into denationalisation as quickly as possible. The CAA report is a device which could delay privatisation. There is no doubt that paragraph 88 enables the CAA to enlarge its powers for its own aggrandisement, not for the benefit of privatising BA or helping the Government. The CAA has proved in paragraph 88 that none of the route transfers that it recommends can occur without legislation being presented to the House. I doubt whether I should vote for such a procedure.
  I should like to justify my claim that the CAA has no right to what it asks for in paragraph 88. One has only to look at the start of paragraph 4 to see the naivety displayed which is not worthy of an agency responsible to the Secretary of State. The CAA says:
  "The Government's policy objectives for British civil aviation have evolved progressively since the … war."
  That simply is not true. There has not just been one Government. There have been loads of Governments and a lot of hiccups all the way. The report then goes on to say that
  "the operation of air transport monopolies did not provide the public with the best and most efficient air transport system".
  1142
  There is no criticism of the regulatory system in Britain which is enshrined in air transportation — noncompetitive methods of operation such as pooling of revenues with international airlines, restriction of the frequency of operation, the enhancement of bilaterials and a price-fixing system which is to the detriment of passengers and the development of trade in Britain.
  Paragraph 6 begins to go into the hypothetical world in which the CAA seems to operate. It starts by saying:
  "It is sometimes argued that a single major British airline would be stronger".
  It does not say who argues that. It does not seem to know that in the Civil Aviation Act 1971 the prime entry made by the Conservative Government, which came from the Back Benches — my hon. Friend the Member for Woking (Mr. Onslow) was instrumental in that—was that at least one other carrier will operate. That is the Act around which the CAA revolves. It set up the CAA. To move into the hypothesis which is generated in the document and the audacity with which it says that
  "The greater efficiencies and lower costs which British Airways has now achieved result in some part at least from the consistent policies of this Authority"
  is to ignore the fact that the result has been due 95 per cent. to Lord King and 5 per cent. to the CAA.
  For the CAA to preach about the problems of monopoly and to quote Gibbon does nothing but show that it is hot on classics and poor on knowledge of management. It even goes so far as to quote a past member of British Airways in a letter to the Financial Times on 20 June this year without seeming really to be aware that the man had not only left British Airways but that British Airways did not support the philosophy that he put forward.
  The CAA has singularly failed to face the fact that we do not need to generate competition in Britain in order to make our airlines effective. We have competition —world competition. To think that British Airways has a monopoly out of Heathrow is to deny the size of Lufthansa, Pan American, TWA and all the other airlines flying in and out and competing for the same passengers.
  Mr. Colvin: On the important question of monopoly, the CAA has made another fundamental error. In the document it refers to the definition of a monopoly under the Fair Trading Act 1973. It says that it thinks British Airways is a monopoly. It goes so far as to quote the Act, which says:
  "A monopoly situation is deemed to exist if one person, company or group of companies has at least a 25 per cent. share of a relevant market in the United Kingdom. Local monopoly situations exist if the 25 per cent. test is fulfilled in part of the country."
  Surely that means that British Airways, domestically, could be argued to be a monopoly, but internationally it is not because the Act does not apply internationally. What it says is absolute rubbish. Total deregulation of internal routes is a good idea, which I would support, but internationally is is a load of rubbish.
  Mr. Warren: My hon. Friend is right and I am grateful to him for making that intervention.
  In conclusion, I draw the attention of the House to the statement in paragraph 12, in which the CAA says that
  "economies of scale and in operating costs may not exist beyond a certain limited threshold."
  That rather lines up with my hon. Friend's intervention. It makes that statement immediately qualifies it and offers no proof whatever. It continues:
  "The authority thus has to consider",

  1143
  certain things. Having given no proof, it launches into a policy which I regard as entirely unacceptable. I see no reason why we should consider a document which is no more than a barrier to the privatisation of British Airways, which I hope will take place as quickly as possible, and I urge my right hon. Friend the Secretary of State to take the necessary action.
  3.50 am
  Mr. Neville Trotter: The report begins by pointing out that air transport is one of the limited number of industries in which the United Kingdom has excelled in recent years. We are talking about a success story. The difficult decisions to be made in the future must be considered against that background, but we must ensure that we get the foundations right for the future. We must not damage the assets that we have. The Government have got themselves into an almost impossible situation because they have asked those who wish to change the staus quo to express their views, and naturally everyone has done so.
  The one factor which is left out of the report but which I believe gives us some hope of solving the problem is growth. The Government must bear in mind that there will probably be constant expansion in the industry. Nevertheless, at 4 o'clock this morning we cannot possibly decide what our policy should be. I do not believe that a speedy answer is possible. There is the problem of Stansted and terminal 5. We cannot possibly decide on policy for the future until we have solved the problem of the London airports which are vital to the future of British Airways, British Caledonian and all the other excellent British companies. It has been suggested that British Airways may lose a great deal of money if it is forced to go to Stansted, but I do not believe that that will arise. I have always favoured a fifth terminal at Heathrow, whatever the arguments against it by the British Airports Authority. At any rate, until that question is decided, we cannot make meaningful decisions on this very important matter.
  Interestingly, the CAA report suggests that it is possible to increase the number of movements at both Heathrow and Gatwick. That will affect the options available. There seems little point in encouraging more activity at Gatwick if we are to come up against a runway limitation in the very near future.
  The main consideration must be how to achieve the best possible service for passengers. We should all like that to come about as a result of competition, with choice for passengers, the lowest possible prices and the best possible service. As we know, however, international aviation is far from being a free market. It is the most highly regulated market in the world. The Government are to be commended on their efforts to achieve some relaxation and on their initial success across the Channel to the Netherlands. We must hope that that will gradually spread to other European countries, but it would be overoptimistic to expect much speedy progress in that direction.
  That being so, we are really talking about the allocation of monopoly, and there is no easy answer to the problem of how to carve up the monopoly cake among the various worthy applicants.
  Mr. Colvin: It is not a monopoly.
  Mr. Trotter: My hon. Friend is right, inasmuch as there is great competition from Pan-Am, TWA, KLM and
  1144
  the other international carriers, but on the vast majority of international routes there is sufficient traffic for more than one British carrier to be licensed. We therefore have to decide which of our carriers is to operate on which route.
  Mr. Snape: If one carrier replaced another, would that not be a monopoly?
  Mr. Trotter: That is exactly my point. We are talking about a monopoly from the point of view of the United Kingdom part of the industry. There will be competition from Air France to Marseilles, but there will be only one British carrier to Marseilles. Paris would be an exception, as the hon. Gentleman knows, because there would be two British operators to Paris. In essence, though, we are talking about one British carrier. Which should it be?
  We must not lose sight of the need to privatise the industry, and I do not believe there should be undue delay in deciding what we will do. However, I believe that it is not practical to make a decision before the House goes into recess. I doubt very much whether my hon. Friend in reply will suggest that the Government will do that. A hasty decision is unlikely to be the right one. Indeed, I do not see how it could be, unless the Government were simply to say no to the entire report—in which case, why did they commission the report in the first place? If the Government were simply to say yes to the whole report, we know that legislation would have to be introduced to carry out the compulsory transfers, which inevitably would delay privatisation. Therefore, there can be no speedy solution to the problem in the next few days. I suggest that we await a debate in the House following a statement after the summer recess.
  I pay tribute to the staff of all the independent airlines. British Caledonian, for example, has always had an excellent reputation for looking after its passengers throughout the world, and it has the highest standards. One of the features of the British industry is the efficiency of the various operators.
  Hon. Members on both sides of the House have acknowledged the remarkable achievements in BA. Lord King and Colin Marshall have revolutionised that major airline to the benefit of the country. That shows through in the attitude of the staff. Most of us travel internally, rather than internationally, and on the flights to Newcastle there has undoubtedly been a dramatic change. It is now unknown for problems to arise as a result of the attitude of the staff, which was not the case a few years ago. One must pay tribute where it is due.
  I am conscious of the uncertainty as to the future that must be felt by the staff of British Airways in the light of the report. My message to the staff of BA is that they work for a great airline. It will continue to be a great airline in future; to be the national flag carrier for Britain; to have the word "British" on the side of its planes; to dominate the British aviation industry; and, with its excellent management and staff to be prosperous, as every hon. Member wishes it to be.
  I believe that any adjustments that are ultimately decided, if that has to be the case—and it probably will be—can be met by the growth of the industry. I do not believe that it would be practical to transfer from BA at the stroke of a pen any significant part of its network. If the changes introduced are spread over a number of years, they can be effected in a period of growth to avoid the adverse effects that some people have suggested.

  1145
  My solution would be to ponder the report into the autumn and to come back, if possible, with some agreed solution. I know that it is not easy to envisage Lord King and Sir Adam Thomson agreeing, but this is a challenge to Ministers to try to reach some agreed solution rather than to go through the procedure of legislation, and thus to the privatisation of BA that the Government and their supporters wish to see.
  4 am
  Mr. Nicholas Fairbairn: I declare an interest. I am a passenger. I travel frequently on British Airways, British Caledonian and British Midland. When I was first elected I had a choice of travelling first class or tourist by British Airways or by British Caledonian. Eventually, British Caledonian provided a service which caused most Scottish passengers to transfer to that airline. British Airways created the shuttle service because it had too many crews and too many aeroplanes. It had to pretend that it needed two aeroplanes and two crews. That is what the shuttle was about.
  Along came British Midland 18 months or two years ago. All of a sudden everyone travelled by British Midland, because it provided a better service——
  Mr. Soames: And better sausages.
  Mr. Fairbairn: The image of a burnt sausage is about as good as any which could be created for the Opposition spokesman, the hon. Member for West Bromwich, East (Mr. Snape), although a beefburger might be a better description.
  Competition was introduced, and one could travel in one of three ways. One could travel freight by British Airways or passenger by British Caledonian. One could also travel British Midland, with an excellent service. That caused British Airways to create a service which people wanted to use. In the last 10 years three services have competed for passengers between Scotland and England. They have survived or perished as a result of the service that they provided. Competition has caused no difficulties. There was no suggestion that British Airways had the monopoly or dominance.
  British Airways was compelled to improve, to rationalise and to reduce its work force, as it has under Lord King, because it intended to privatise. It is amazing to hear Opposition Members congratulating a nationalised airline on doing what a private airline compelled it to do —to employ half the number of people that it once employed and to provide a service of which employees could be confident and proud. That was achieved by competition.
  On the internal routes no one was frightened by British Airways. I do not see why anyone should fear British Airways when it is private. The customer should be able to choose the airline which offers the lowest price and best service. In my experience, both have been achieved by competing services. My hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle), who is the spokesman in the House for British Caledonian, will know that I have no preference for British Airways, British Caledonian or British Midland. I admire them all. I know those who run them. Each has achieved the passengers that it deserves.
  1146
  Frankly, I am against quangos and bureaucracies. A passage in this abominable and conceited report seems to demonstrate the fact that, whatever else the Minister does, he must not increase the powers of the CAA—the Civil Airports Authority, the Civil Airlines Authority, the Civil Aviation Authority, or whatever it is. I hate initials. The fact that one does not know the words for which they stand shows that they are a trap. If ever there was a warning to a democracy, it was surely the relevant words of Gibbon, which the report quotes and which could never be better used than against the CAA. The report quotes Gibbon as writing that
  "the spirit of monopolists is narrow, lazy and oppressive: their work is more costly and less productive than that of independent artists; and the new improvements so eagerly grasped by the competition of freedom, are admitted with slow and sullen reluctance in those proud corporations, above the fear of a rival, and below the confession of an error".
  If ever there was a description of the CAA's report, it is contained in those words.
  I ask the Minister not to increase the CAA's power in any way and not to allow the CAA to be the referee in deciding the good and bad airlines. Let that process be done by competition and the passenger. It is important to say to British Airways that we will not permit only it to fly out of domestic airports to European or foreign airports. That would be grossly unfair. It is utterly wrong to say, "We shall take from Caesar and give to God." Let the airlines compete.
  Mr. Soames: My hon. and learned Friend says that the passengers should decide. Is he aware that the Air Transport Users Group, which is a influential body, has come out strongly in favour of the report on the very ground that my hon. Friends raised earlier this evening?
  Mr. Fairbairn: I appreciate that point, but I am suspicious of people who organise attitudes as air transport users. I am an air transport user. I am not a group but a passenger. My decision whether I fly British Caledonian, British Midland or British Airways determines the service. That criterion should determine which airline has the routes.
  Mr. Michael Brown rose——
  Mr. Steen rose——
  Mr. Fairbairn: I am becoming so popular. I give way to my hon. Friend the Member for South Hams (Mr. Steen).
  Mr. Steen: I agree with my hon. and learned Friend's arguments, but the weakness in his case is that on the British Airways routes out of Heathrow to Europe and other international airports a cartel will prevent competition from private airlines other than British Airways when it is privatised. According to his argument, my hon. and learned Friend would say that that is wrong, and I would agree with him. That would mean that British Airways would be the only British carrier to fly to Europe and internationally from Heathrow. If my hon. and learned Friend extends his argument to Glasgow and Edinburgh, and to various other airlines, does he agree that other domestic private airlines flying only in and around Britain should be allowed to compete against British Airways out of Heathrow?
  Mr. Fairbairn: That would have been an impressive argument were it not for the fact that my hon. Friend made it before British Midland, which he represents, was able

  1147
  to break a "duopoly" of British Caledonian and British Airways flying into Edinburgh and Glasgow. What happened? British Midland came along and broke those airlines. Not only did it break them, but it almost ruined British Caledonian operating out of Edinburgh and Glasgow and made British Airways provide a service, so I am unimpressed by that argument. It can do exactly the same in the international and European scene as it did within Britain.
  Mr. Michael Brown: I support what my hon. and learned Friend has just said. Is it not a good idea to bear it in mind that the slogan of British Caledonian is "We never forget that you have a choice."? Are not the fears of British Caledonian and other operators allayed by the very advertising on which they are engaged?
  Mr. Fairbairn: I agree with my hon. friend on that matter. Many years ago I suggested to the chairman of British Caledonian that it should have an advertisement which said, "There are two ways to go from Scotland to England—you can go freight by British Airways, or passenger by British Caledonian." At the time, British Caledonian said that airlines were not supposed to be in competition but were supposed to love one another. They have got close to it recently, in their advertising. On the one airline there is the air stewardess who offers one all, and on the other she offers one nothing.
  Therefore, one has a choice, and one should have a choice. However, this is important. The Government gave an undertaking to Lord King, then Sir John King, that if he transformed—as he did—a nationalised industry from a public bureaucracy serving nobody except itself, union-dominated, overmanned, fat-bellied and unsatisfying, into a public service that could be privatised, the routes would not be arbitrarily reallocated. That undertaking is not something that can become a breach of faith, when he has achieved the objective that he was set as an honest and good Scotsman. One of the characteristics of Scotsmen, we like to think, is that we do not break our word. Lord King kept his. I trust that the Government will keep theirs.
  4.12 am
  Mr. Peter Snape: The House is grateful to the hon. Member for Birmingham, Hall Green (Sir R. Eyre) for initiating the debate. It is indicative of the concern felt on both sides of the House that there has been such a good attendance, despite the extremely late hour, and that there has been little support for the Civil Aviation Authority's extremely controversial report.
  I say hesitantly that the CAA's report is a predictable response to a directive from the Government, bearing in mind the views often expressed by the present Secretary of State. It is somewhat characteristic of him that while civil war has almost broken out in the aviation industry, and everyone in the industry has expressed definite views, the Secretary of State has not. On most occasions the right hon. Gentleman's lethargy would go unnoticed—it is part of his charm, if that is the right word. However, when British Airways, British Caledonian, the CAA, the British Airports Authority and various municipal airports are all busy filling the columns of our national newspapers with vitriolic attacks on one another, the Government's apparent indifference is not merely unhelpful but damaging to one of this country's most successful industries.
  1148
  Instead of responding to the review, the Secretary of State seems to be intent on taking the CAA's recommendations a little at a time. Yesterday, for example, a press notice was issued rejecting British Airways' appeal against the CAA's decision to give the new Riyadh route to British Caledonian. The Secretary of State has sat on that appeal since March. However, being the man that he is, the Secretary of State chooses to make the decision that was announced in yesterday's press release at a time which is likely to increase the confusion and uncertainty in the industry.
  The Secretary of State appears to be implementing the report piecemeal and pre-empting what should be a decision which is debated and decided by the House. I do not know how the Government of Saudi Arabia feel about that press release. I understand that they are not over-keen on the prospect of the second force airline from the second London airport flying to their own new airport in Riyadh.
  I suggest that the Minister owes the House an explanation as to why the timing of the announcement is so peculiar, bearing in mind the controversy which surrounds it. Will the Secretary of State refrain from implementing any more of the CAA's recommendations until at least a statement about them has been made to the House? I hope that the Minister can assure us tonight that the Government will make such a statement before the summer recess. I warn him that if that statement is to be made as other Departments, Ministers and, to be fair, other Governments have made similar statements—on the last day before the recess in a planted written question—there will be a row.
  I disagree with the hon. Member for Tynemouth (Mr. Trotter). I hope that the statement will be made in the knowledge that the aviation industry, in general, and the airport business, in particular, cannot be expected to wait during the summer for a ministerial pronouncement about, what is to it, a life or death matter for the future prosperity and success of this great industry.
  Mr. Hill: Does the hon. Gentleman agree that the City page in The Standard has already assumed that British Caledonian is not only to get these routes but that it will double its profits next year? How are the investors in the market place to make up their minds if we do not get a statement from the Government?
  Mr. Snape: My concern for investors is perhaps not as great as that of the hon. Gentleman. The City editor of The Standard, Mr. Neil Collins, is, I understand, a failed Conservative candidate. Whether or not we can place much credence on his views and opinions in The Standard is for the hon. Gentleman to judge. He outlines a difficulty which the House faces and which the Secretary of State is duty bound to recognise.
  Mr. Carter-Jones: Does my hon. Friend agree that the hon. Member for Birmingham, Hall Green (Sir R. Eyre) has done the House a favour by setting the pattern for the debate, in that this is not a substitute for a statement by the Secretary of State? The hon. Gentleman made his speech, we have all spoken, and the Minister will reply. [HON. MEMBERS: "Some of us."] I hope that other hon. Members will have a chance to speak. If a statement is made, we can ask questions about it. That is the importance of the Secretary of State first making a statement.
  Mr. Snape: I am grateful to my hon. Friend for that intervention. As he says, there are Conservative Members who still wish to speak. I hope that they will have an opportunity to do so, but I am not responsible for the constraints that are placed on these debates.
  Hon. Members on both sides of the House have been united by their general dislike for the CAA's somewhat shoddy report, and a statement from the Government is surely necessary. I do not believe that the Government are sure what their policy for the industry should be.
  We know that the Treasury does not appear to be interested in the future of civil aviation. It wants to get its hands on the money as quickly as possible, whatever the long-term cost to the counry. Its only interest appears to be to reduce the public sector borrowing requirement. If it is necessary to privatise British Airways sooner rather than later to do so, that, in its view, is eminently desirable. I can well understand that, as a former Treasury Minister, the Secretary of State for Transport would have some sympathy with that view.
  One of the reasons why the Secretary of State is in such difficulty, as the debate has shown, is that he has constantly ducked out of taking decisions. His predecessor changed the role of the CAA so that it was put in the position of taking decisions which are, in my view, and, I believe, that of the right hon. Member for Brighton, Pavilion (Mr. Amery), essentially political. Instead of acting as it was intended—as a regulatory agency—the CAA has become a body which has to make judgments about policy and increasingly about politics.
  We warned when the legislation was debated in the House that the changed role for the CAA, as envisaged by the Government, would be unworkable, and so it has turned out. Within months of the Act coming into force, the Secretary of State has reversed the CAA's decision on Cathay Pacific's Hong Kong route. More recently, the Secretary of state has had to intervene in a CAA decision on the British Midland shuttle.
  The Opposition believe that the CAA should be a regulatory body — no more, no less. It is for the Government and the Secretary of State for Transport to take decisions about aviation policy, not an unaccountable body. I always thought that the Conservative party despised and disliked quangos. Yet it is here handing over decisions that we believe should be made by the Secretary of State. Surely such decisions should not be made by quangos such as the CAA.
  The Opposition's anxiety about that state of affairs has increased over the past few days. Only yesterday, Mr. John Dent, the chairman of the CAA, made an unprecedented and personal attack on the chairman of British Airways. It is worrying when the chairman of a Government body makes such a personal attack on the chairman of a nationalised industry. Moreover—I quote from the Financial Times, a reliable source, I should think, —when Mr. Dent goes on to say that BA's reaction
  "is having the effect of delaying privatisation and minimising the price the Treasury will get,"
  one begins to wonder who is Secretary of State for Transport and who is the chairman of that quango.
  I believe that it is little short of disgraceful for such an attack to be made by the chairman of the CAA. If Mr. Dent wishes to involve himself in political argument and acrimony, he should get himself elected. He should be sitting where the Secretary of State is sitting. To make an attack such as that is appalling. I do not know what the
  1150
  right hon. Gentleman's view on these matters is, but I hope that, at the very least, Mr. Dent will be told how distasteful that attack on Lord King was.
  The Secretary of State, rather than handing over political decisions to the CAA, should be casting around —the Government are good at doing that—to find, from their point of view, a more sympathetic and worthy figure to chair the CAA. If we are to take any report by that authority seriously, all hon. Members will have to be confident that such a report is impartial. We do not wish to hear the chairman of such a body acting as an echo-chamber for some of the more predatory interests in the private sector of aviation. That is what he was doing yesterday.
  The main flaw in the CAA report is that what it is recommending is not competition. Broadly, there are three options for the industry. First, a major public sector flag carrier, with a smaller, second carrier, as the Edwards report proposed, and as the Labour party accepted then and supports now. Secondly, there can be regulated competition, with private carriers of varying sizes with designated routes. Thirdly, there can be complete deregulation and double designation on routes to ensure proper competition. After all, that is what the Conservative party regards as competition.
  The option for which the CAA has gone is regulated competition. It is not competition of the kind that the Secretary of State never tires of espousing. It is the substitution of one monopoly for another. Hon. Members on both sides of the House would be grateful for an explanation of such competition from the Under-Secretary of State.
  The problems posed for the Government in this report do not stop at British Airways or British Caledonian. The report exposes the woeful lack of a national airports policy. Apart from the ill-conceived idea of privatising the British Airports Authority, the Government do not have a clue about airports policy generally. The implications of the CAA report for the regional airports in particular are enormous. If the Government accept the recommendation to take BA routes away from developing and successful airports, such as Manchester and Birmingham, they will not only threaten the viability of those airports and the many thousands of jobs connected with them, but hang over the heads of the people who work in those airports a sword that is already causing them a great deal of concern.
  Already, since the publication of this report, I have received two letters from constituents, one of whom is employed by BA at Birmingham airport—the airport that concerns the hon. Member for Hall Green. Mr. John Biddlestone says:
  "We in British Airways welcome competition, we compete worldwide with airlines such as Pan American, Lufthansa, Swissair etc., and our extensive integrated network is our greatest marketing strength, which enables us to provide a better service to our customers. The substitution of another airline in the place of British Airways would be to the detriment of UK civil aviation."
  I did not solicit that letter. I received it only yesterday.
  I received another letter, again from somebody whom I have never met, Mr. George Court, who lives in my constituency. He refers specifically to one of the smaller private airlines, whose interests are espoused by the hon. Member for South Hams (Mr. Steen). By his interventions, that hon. Member has been determined to

  1151
  prove to British Midland Airways that, even if he could not catch your eye, Mr. Deputy Speaker, he was here earning his corn at 4.29 on a chilly morning.
  My constituent, Mr. Court, who also works for British Airways, writes:
  "If the report of the CAA was going to give the customers who use our flights a better service, we would all agree that they would benefit and gain by these changes. But as it is, they will be on the receiving end of a raw, inferior deal by the proposed substitution, e.g. British Midland Airways. Granted the flying staff are reasonable, what makes them a poor man's outfit is their lack of computerised check-in facilities which makes for longer delays, antiquated ground equipment which keeps breaking down (hence the necessity to keep borrowing ours) and their fairly old aircraft and lack of back-up facilities as a whole."
  Mr. Gerald Howarth rose——
  Mr. Snape: Is the hon. Gentleman seeking to defend some pecuniary interest, or does he have a genuine matter of concern to express?
  Mr. Howarth: I have no pecuniary interest in British Midland Airways. I tried that airline the other day. I decided to fly to my constituency, and I went from Heathrow to Birmingham international airport. Not only was the service at Heathrow excellent, the flight —admittedly, in a somewhate older aeroplane—extremely comfortable and the service good, but we arrived two minutes early at the new Birmingham airport. The remarks made by the hon. Member for West Bromwich, East (Mr. Snape) are unworthy and represent a cheap jibe against a company which, in difficult circumstances, is doing a grand job. I am not paid by that company. I resent the hon. Gentleman's remarks. I am here as an independent representative of my constituents.
  Mr. Snape: I merely quoted from a letter written to me by a constituent. If he wishes, the hon. Gentleman can see the letter to be sure that I quoted it accurately.
  The whole business of which airline flies from where and which routes are taken from BA is one reason why the staff of our nationalised airline are so infuriated by the very tenor of this debate. Let us remember that not just Lord King—like some of my hon. Friends, I pay tribute to him for his stewardship of BA as its chairman—but the combined efforts of the whole staff have brought the airline to its present successful position. It is a poor reward indeed to tell them, "At best, your future is uncertain. At worst, the reward for your efforts is the sack."
  Mr. Steen rose——
  Mr. Snape: No, I will not give way. British Midland Airways has had its say.
  Mr. Steen: On a point of order, Mr. Deputy Speaker.
  The hon. Member for West Bromwich, East (Mr. Snape) has been making snide remarks throughout the debate. Having made an imputation about my connection with British Midland Airways he now refuses to give way to permit me to give a proper answer.
  Mr. Deputy Speaker: Order. That is not a point of order for me.
  Mr. Snape: The hon. Member for South Hams should not be so sensitive. I appreciate that he is motivated by the finest of Conservative principles—money. He is paid by British Midland Airways to put that company's position in this House——
  Mr. Steen rose——
  Mr. Snape: No, I will not give way to the hon. Gentleman. I have not finished with him yet. He is paid to do that, and he does it to the best of his ability. He cannot expect the degree of respect that he might receive were he to speak in such a way that the House could feel that he believed in what he was saying.
  Important questions have been posed about the future of Gatwick and Heathrow airports. The CAA report makes it clear that the Government will have to make some difficult decisions about capacity, air traffic movements — the 275,000 movements at Heathrow have been mentioned in the debate——
  Mr. Steen: On a point of order, Mr. Deputy Speaker. The hon. Member for West Bromwich, East has said that my interest in aviation is solely related to the fact that I am retained by or involved with British Midland Airways. That is an imputation——
  Mr. Deputy Speaker: Order. That is a point of argument, not a point of order.
  Mr. Snape: We have debated the 275,000 air traffic movements at Heathrow and the runway extension at Gatwick. We have also discussed the fifth terminal at Heathrow and the development at Stansted, Those important questions need some answers before the summer recess. The Opposition's worry is that the Government are not addressing themselves seriously to the many problems. Indeed, we believe that they are already undermining the future of our airports.
  The recent announcement on cheap European Air fares was welcomed by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). Hon. Members on both sides of the House would agree that European fares have been prohibitive, but cheap fares must be consistent with a licensing system that ensures a sensible utilisation of capacity and the maintenance of the current network of services. Cheap fares must also be consistent with the protection of our aviation and airports industries. The Secretary of State announced the carrot of cheap fares; but he has not yet mentioned the stick. The implication of the open skies, or sixth freedom, agreed with the Dutch Government, is that foreign airlines, in return for cheaper fares, have almost unrestricted access to our airports. The agreement reached at The Hague will undermine our hub airports in London and the operations of our successful airlines, especially British Airways and British Caledonian. If there is any celebrating of that agreement, the details of which the Secretary of State has trumpeted far and wide, it is more likely to occur in Dutch than in British aviation.
  The Parliamentary Under-Secretary of State will say tonight that he has few comments to make on the report. The debate has illustrated the fact tht the CAA review poses more problems than it solves. It creates uncertainty and bitterness in British Airways, which can be dispelled only by a comprehensive statement by the Secretary of State before the summer recess. It is unfortunate that our procedures do not allow us to vote on this matter now, because, judging by the speeches that we have heard from hon. Members on both sides of the House—
  Mr. Prescott: The opposition is on the other side of the House.
  Mr. Snape: Yes; the Government have brought their opposition with them this evening. If we could have a

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  vote, we would, on the basis of this debate, defeat the CAA proposals. I hope that when those matters are voted upon, Conservative Members — instead of being so brave and bold at 4·38 am, when there is no possibility of a vote — will for once have the guts to take their principles into the Lobby and defeat a shoddy report that is bad for British Airways, British civil aviation and for the most successful and profitable industry that we have.
  4.38 am
  Mr. James Hill: I have followed the debate this evening, and I must declare, not an interest, but a loyalty. I served with British Overseas Airways from 1947 to 1958. I pioneered some routes to Australia and through central Africa. We have been talking about licences this evening, but all those routes had to be pioneered. They were not pioneered by any of the airlines which have been mentioned this evening. They were pioneered by Imperial Airways, British Overseas Airways and British South American Airways. Hon. Members will recall the dreadful tragedy of the loss of Star Tiger and other aircraft operating to South America. I did about 9,000 hours and perhaps I should not be taking part in the debate, because I probably have a bias towards British Airways.
  Nevertheless, it is right for us to criticise the report of the CAA. I served on the Standing Committee that brought this monster into being and it is growing like Topsy and wants even more powers. Every airline will be held to ransom by the CAA if my right hon. Friend the Secretary of State for Transport does not make the final decisions.
  The report must be scrutinised and we must have a full debate and a statement by the Secretary of State. The marketplace does not know where to go. Conservative Members want to cultivate the marketplace. We are wishing privatisation and the British Airways staff want to buy the shares, but they want security and they want to know what they are buying and what their options will be.
  The staff of British Airways have done a good job. One of the turning points in the resuscitation of the airline was when the loyal staff broke the strike of the baggage handlers at London and, in their spare time, loaded and unloaded aircraft. That might not appeal to Labour Members, but it certainly appealed to me. Those staff were determined not to let their airline be crushed.
  The staff have accepted redundancies and early retirement. Within the past few months their pension arrangements have been turned over and they have accepted that, for the sake of the corporation. There is tremendous loyalty among the staff.
  Routes that were pioneered by the corporation are being taken away. It may be said that only a few routes are affected—those to Jedda and Dubai, for example—and that not much business will be lost, but that is only the beginning. In future, every time that British Airways makes a success of a route it will not know whether it will still have the licence in the following year. If the Secretary of State lets the chairman of the CAA have his way, British Airways will be under threat all the time.
  I do not say that there is anything wrong with competition. Commercial markets have to be fought for. Airlines come and go; Air Florida has gone, Pan-Am is in difficulty and other airlines are having to come to terms with market forces.
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  If we can get through the privatisation, without involving the CAA report, British Airways will show what it is made of, we shall be proud of it and there will be no more difficulties.
  4.45 am
  The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell): The fact that so many right hon. and hon. Members have remained in the Chamber through the middle watches of the night is eloquent testimony to the intensity of interest in the future pattern of aviation. Their speeches have demonstrated the powerful feelings of many hon. Members about the report of the Civil Aviation Authority. Accordingly, I congratulate my hon. Friend the Member for Birmingham, Hall Green (Sir R. Eyre) on having initiated the debate. The House has reason to be grateful to him, and Ministers are especially appreciative of the opportunity that he has given them to listen to hon. Members' views as we formulate our responses to the authority's recommendations.
  The conclusions and recommendations which the authority reaches in its report fall into two basic categories. There are, first, those which appertain to the policies of the authority and, secondly, those which either call for action from the Government alone, or which need action by Government to expand the authority's future role. Those which fall into the second category are the more controversial proposals, as the debate has amply demonstrated.
  The authority has recommended that routes be transferred, but there are no powers at present to enforce such transfers, and those that were used after the Edwards committee's report, for example, to set up British Caledonian as a second-force airline have long since elapsed. Whether or not powers are taken to effect route transfers, the authority sees a continuing need for it to take decisions that are designed to secure the sound development of the industry.
  A number of hon. Members have spoken about access to London's airports. The authority has made two recommendations. First, it suggests that the Government reconsider the possibility of increasing available capacity at Heathrow and Gatwick. As the House will know, we have only recently reaffirmed our commitment to introducing a limit on air transport movements at Heathrow when the fourth terminal opens towards the end of next year. Accordingly, we shall shortly be issuing a consultative document setting out some of the options for implementing the ATM limit.
  My right hon. Friend the Secretary of State and I must now decide whether and to what extent the case has been made for trying to change the structural balance between Britain's airlines. It is clear that there is no unanimity either among hon. Members or among the airlines themselves about a structural balance. It has been argued that, large as it is in domestic terms, British Airways is not especially large internationally. In any event, if faces an overseas competitor on each of its international routes. Moreover, it has been suggested that bilateral constraints usually make it impossible to add a second British carrier to many overseas routes. To substitute another British airline for BA adds nothing to competition.
  Mr. Prescott: Precisely.
  Mr. Mitchell: I am responding the issues which have been raised in the debate and I propose to continue doing so. The hon. Member for West Bromwich, East (Mr. Snape) asked me about the Riyadh appeal decision. The decision to uphold the authority's award of the Riyadh route to British Caledonain does not prejudice our responses to the authority's report.
  Mr. Alfred Morris rose——
  Mr. Mitchell: It does not amount to implementation by stealth, as the hon. Member for Kingston upon Hull (Mr. Prescott) alleged in a letter to my right hon. Friend.
  Mr. Prescott: It does.
  Mr. Mitchell: It does not, and I shall explain why.
  Mr. Morris: Will the Minister give way?
  Mr. Mitchell: I cannot give way, because only three minutes remain before the debate must come to an end. Riyadh is a new route which has only recently become available with the opening of the new international airport there. Until recently only Saudia could fly it. It was open to the CAA to choose between the applicants for this new route on the basis of competing claims. As it was a new route, any decision that the authority made could not reasonably be held to prejudice its review. For the same reason, in supporting the CAA's conclusion, my right hon. Friend has not prejudiced consideration of the authority's report.
  The hon. Member for West Bromwich, East attacked my hon. Friend the Member for South Hams (Mr. Steen) for having some sort of retainer from one of the airways companies. That comes ill from an hon. Gentleman who sits on the Opposition Benches with a retainer from a trade union.
  Mr. Snape rose——
  Mr. Mitchell: The hon. Gentleman has taken up so much time that there is hardly a moment left for me.
  My hon. Friend the Member for Saffron Walden (Mr. Haselhurst) said that there was no compulsion on the Government to accept the recommendations of the CAA. That is quite right, but nevertheless the authority has produced an important document which we must consider carefully.
  Watching the debate has been like watching an aerial chess game in which the king is locked in combat with the knight and a bishop and their allies. Sometimes there were even attempts to change the colour of some of the squares. Hon. Members have asked for a decision, either tonight or before the House rises, and a statement from the Secretary of State. We will produce our decision as soon as we can. If we can do it before the House rises, we will. However, it would not be right to reach a decision in such a rush that it could not be given proper consideration. If that means that we have to make a statement after the House rises, I am sure that hon. Members will understand that we cannot wait until October, leaving all the operators in a state of uncertainty. I am sure that all those in the industry who wish to preserve the health of that industry —whatever their views—will agree with me about that.
  Hon. Members have drawn attention to the interrelationship between route structure policy and airport development. Hon. Members representing Manchester, Birmingham and a number of other regional airports have made clear their view that the Secretary of State should take account of the effect of policy changes on the pattern of airports and the prosperity of the various airports that will be affected by his decision.

  Structure Plan (North-East Hampshire)
  4.53 am
  Mr. Andrew Hunter: The debate of the past three hours has understandably generated widespread interest and considerable drama. When we turn from civil aviation to the Department of the Environment's draft circular 15/84 on land for housing, and the north-east Hampshire structure plan in particular, hon. Members could be forgiven for assuming that our deliberations have become more parochial. But the subject is important, because it raises the fundamental question of how far a local authority—in this case, Hampshire county council —should be free to determine the appropriate scale and pace of the provision of new housing and industrial development, bearing in mind local constraints—social, economic and environmental — and also regional and national planning objectives.
  Having grasped the basic facts the scenario is straightforward. Hampshire county council, together with the three affected district councils—Hart, Basingstoke and Deane, and Rushmoor — have jointly agreed a strategy of rolling forward the structure plan for a three-year period, to take it up to 1991.
  A second, more comprehensive review will begin shortly, to take the structure plan yet further forward to 1996, when important planning uncertainties have been resolved. The local authorities—the county council and the three districts—have determined an appropriate rate of new house building in the area: a rate of 1,865 houses a year for the three-year period. That figure is based on an assessment of local housing needs and a small proportion of what it is fashionable to call "in-migration" to the area.
  At the public examination of the structure plan earlier this month, that rate of house building was challenged by a consortium of 10 of the largest house builders and by the House Builders Federation. Those august bodies claim that the county council's figure of 1,865 houses per year pays inadequate regard to regional and even national housing demand. Housing demand, of course, is a different concept from housing need. If demand rather than need is used as the chief criterion, the house builders argue that the figure should be between 2,300 and 2,700, or even more, houses per year. The house builders also demand that the structure plan be rolled forward to at least 1994, not 1991 as the county council proposes. The Environment Select Committee demonstrated the unreliability of the house builders' figures, especially in volume two of its report, at paragraph 500, in page 238.
  On the surface the issue is fairly straightforward, but underneath lie some fundamental matters of principle. I shall discuss just three. There are others, but the hour is late and brevity is commendable. The first is the principle that local authorities should be free to determine the most appropriate rate of growth for their areas. The second is the need for balanced growth. The infrastructure, to use that word in its widest sense, must keep pace with the construction of houses. The third is the need to guard against the danger of over providing housing land in northeast Hampshire and other parts of the south-east of England, all for unproven claims that are advanced by builders.
  I shall deal, first, with local authority determination. By no stretch of the imagination can it be said that northeast Hampshire has failed to take its share of new
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  development. Since it was declared a regional growth area, the population has grown from 170,000 in 1961 to just under 250,000 in 1971 to nearly 300,000 now. That shows the huge increase in the population in the towns and villages of the area.
  At the heart of the matter are several questions. Is Hampshire county council able to review this past growth-area label in the light of new circumstances? Should it not be able to do so? Moreover, is the reviewing of the structure plan the most appropriate mechanism for undertaking such a revision? I believe that the answer to these questions should be yes. I am glad to discover that at least two powerful allies have already declared their hand. My hon. Friend the Parliamentary Under-Secretary of State for Energy, when Parliamentary Under-Secretary of State for the Environment, in an Adjournment debate in July 1982 said:
  "It is important for my hon. Friends to understand that the regional strategy set some years ago is not of itself the route by which all future planning should flow."
  In the same debate on the Mid-Sussex growth area, he
  said:
  "The status of the regional strategy is now that of useful historic source material which, as time goes by, will become increasingly out of date at the local level."—[Official Report, 13 July 1982; Vol. 27, c. 1012–13.]
  More recently, my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane), Parliamentary Under-Secretary of State for the Environment, answering a debate on planning and development in Berkshire, said:
  "It seems to me that the review of the Berkshire structure plan on which the county council is now engaged is the right route to resolve the objection my hon. Friends have raised to a continued fast rate of growth in the county." — [Official Report, 14 December 1983; Vol. 50, c. 1154.]
  It is comforting to find two Under-Secretaries of State accepting the argument that I seek to make. Moreover, the review of the Berkshire structure plan includes the Government's statement that areas designated as growth areas may be de-designated if a sufficiently strong case is advanced. I take further comfort from the fact that at the examination in public Hampshire county council more than amply proved the case for north-east Hampshire.
  It is Hampshire county council's clearly expressed intention to slow down the rapid rate of growth in the north-east of the county. The reasons given are the severe under-provision of facilities in many parts of the area, and also local concern that the high rate of growth has had detrimental social and environmental effects.
  I also agree with my hon. Friend the Member for Eastbourne (Mr. Gow), now the Minister for Housing and Construction. Speaking in the debate on the Mid-Sussex growth area, he said that it would be wrong for the Government to
  "impose their presumed superior wisdom over those who live, move and have their being in the constituencies … the man in Whitehall does not always know best." — [Official Report, 13 July 1982; Vol. 27, c. 1012.]
  How those words contrast with the scandalous and infamous claim of the consortium's Mr. Tom Barron, who said:
  "Anyway, what makes people who live in Berkshire think they own Berkshire?"
  So much for local authority determination — the first underlying issue that I chose to select.
  The second fundamental principle underlying the debate concerns the need for balanced growth. The infrastructure must keep pace with the construction of houses. The enormous scale of growth and development

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  in north-east Hampshire has not been matched by a corresponding emphasis on providing new health care facilities, hospital beds, clinics, shops and community facilities in general. In particular, this is creating acute problems in health care. I am told that the inpatient hospital facilities in the West Surrey and North-East Hampshire health authority were basically structured and funded for a population of 170,000 to 190,000. The population now exceeds 270,000.
  Planned extension and funding for additional care cannot be made available in the short term. It is not surprising, therefore, that the health authority has pleaded with the Department of the Environment, in a letter written by my namesake, Dr. Rosemary Hunter, — but no relation—in which she said:
  "We are seriously concerned at the possible size of future housing developments and consequent population growth."
  There are already acute problems in health care. Patients are being separated both by distance and difficulties of transport from their supporting families as they are moved to hospitals outside the district.
  Planners must be concerned with teachers as well as with schools, with nurses as well as with hospital buildings. That was an important message from the Select Committee. The problem cannot be solved when the Department of the Environment frequently works in isolation from other Departments. It certainly cannot be solved entirely by developers putting forward capital contributions towards new infrastructure provision, useful though that is. The continuing revenue implications often fall on local authorities and other agencies which are affected by substantial public sector cuts in revenue expenditure.
  I was impressed further by evidence given at the examination in public by the Thames water authority. It affirmed that work on new and unplanned projects would deprive existing projects and services of already overdue remedial maintenance of both sewerage systems and water supplies.
  The third underlying issue is to guard against the danger of over-providing housing land to satisfy unproven so-called "needs" claimed by builders. We must be careful to guard against the danger of throwing land at the housing problem, hoping that that will solve the real needs. It will not. How much land would have to be turned over to housing before housing land prices come down? If we used that simple equation, we could well witness the destruction of what is left of rural north-east Hampshire. We could sacrifice some of our most precious countryside and it still would not make even a small dent in the problem of housing land prices.
  The consortium's claim that north-east Hampshire must accommodate a claimed shortfall of housing land in the south-east would lead to precisely that kind of over-provision. Neither the consortium nor the House Builders Federation has conducted anything remotely matching the comprehensive research of the county or district councils or the standing conference.
  The claim by the builders that there is a shortfall of land for 78,000 houses in the south-east of England in approved structure plans up to 1991 is disputed by separate and more recent calculations undertaken by the Council for the Protection of Rural England. The Select Committee found that the builders' figures were, frankly, bogus and the CPRE proved at the examination in public that the claimed shortfall was a monstrous exaggeration that failed to take
  1160
  account of the substantial developments since 1981. According to reliable calculations, there is a surplus, not a shortfall, of 120,000 dwellings in south-east England.
  The massive differences in those figures show that a more reliable regional picture is needed in the form of strategic regional guidance. Structure plans are no substitute for that broader picture. One cannot add up a number of separate structure plan decisions to arrive at a regional picture. That is a recipe for the over-provision of houses about which I have warned. That is also the unequivocal message transmitted by all affected county and district councils and, most strongly, by the standing conference.
  The consortium's proposed revision of the structure plan is entirely unacceptable. It is fallacious. It is opposed by the county council, the district councils and the parish councils and to all intents and purposes by everyone who lives in the area. That opposition has also been expressed by my hon. Friends the Members for Hampshire, East (Mr. Mates) and for Aldershot (Mr. Critchley).
  I have tried to argue, above all, that local authorities should be free to determine the most appropriate rate of growth for their areas. I have tried to argue that that growth must balance infrastructure with housing. I have tried to argue that the dangers of over-provision of land for housing must be avoided. I hope that those points will be taken to heart. One would be happier about the future of north-east Hampshire, which indeed belongs to the people who live there, if those conditions were met. As I have said before and make no apology for saying again, I am not prepared to stand idly by and watch the further rape of north-east Hampshire.
  5.7 am
  The Parliamentary Under-Secretary of State for the Environment (Sir George Young): The thoughtful speech of my hon. Friend the Member for Basingstoke (Mr. Hunter) deserved a broader audience than it is every likely to get at 5 o'clock on a Thursday morning. He spoke forcefully about the fears of his constituents in north-east Hampshire over recent proposals by Consortium Developments Ltd.
  As my hon. Friend knows, the portfolio for planning matters is held by my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane), the Parliamentary Under-Secretary of State, who is at present representing the Government at the Olympic games in Los Angeles. It therefore falls to me to reply on his behalf, but I discussed this with him before he left and I know that he has taken a personal interest in the matters raised today.
  I listened carefully to the comments of my hon. Friend the Member for Basingstoke about the development of land for housing in north-east Hampshire. I accept at once that this is a controversial and emotive subject which has aroused deep feelings in his constituency, at least since the submission to the then Secretary of State of the original north-east Hampshire structure plan in July 1978.
  Perhaps I may put the matter in context by explaining the role of structure plans in bringing forward land for development. The planning system, including the processes involved in the preparation and review of structure plans, together with joint land availability studies prepared by builders and local planning authorities, are the main vehicles for ensuring an adequate supply of land for housing.

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  Structure plans include policies and proposals for the scale and general location of housing provision. In preparing structure plans, local planning authorities are required to take account of guidance issued by the Secretary of State, such as the strategic guidance which he has issued for the south-east region. The Government also provide other material which is of assistance to local planning authorities. For example, the Government statistical service publishes population projections and migration estimates for counties and makes available projections of the numbers of households.
  When plans are submitted to my right hon. Friend the Secretary of State for the Environment, they have to be accompanied by an explanatory memorandum. This provides the justification for the policies; for example, the assumptions on which provision for housing is based. It also has to state the relationship of the policies in the plan to expected development and other use of land in neighbouring areas. When the plan has been submitted, there are opportunities for neighbouring planning authorities and other interests, including house builders and members of the public, to object to the proposals.
  Once a plan is submitted to my right hon. Friend, he considers the plan and the objections made to it. Should his consideration of the plan and objections show that further information is needed, an examination in public provides an opportunity to investigate the matter and obtain further information before my right hon. Friend reaches a decision on the plan. Approval of structure plans by the Secretary of State, with modifications as appropriate, enables the Government to ensure that provision for housing in the plan is adequate and that plans achieve a reasonable balance between the needs of development and the interests of conservation.
  The "Land for Housing" circular which we issued earlier this month emphasises the key role of the planning system in meeting the demand for housing and stresses the important contribution which the joint land availability studies can make in ensuring that suitable land is made available for development. The circular's main objectives are, first, to ensure that the planning system provides an adequate and continuing supply of housing land, taking account of market demand; secondly, to stress the Government's commitment to the maintenance of well-established conservation policies, green belts and the preservation of good agricultural land; thirdly, to emphasise the importance of making full use for development of existing land in urban areas, and to ensure that plans are altered if they are based on out-of-date assumptions.
  The Government hope that the circular will change attitudes and lead over the next few years to more provision for housing in development plans, where appropriate, and that provision in plans will be more in line with market needs. We are now considering how best we can implement these policy objectives.
  Returning now to north-east Hampshire, I can understand that the issue of housing development should be controversial locally. The area extends from the Surrey border along the River Blackwater in the east to the small towns of Kingsclere and Overton in the west. It includes the whole of the districts of Hart and Rushmoor, and most of the borough of Basingstoke and Deane. The main towns are Aldershot, Basingstoke, Farnborough and Fleet. There
  1162
  are many smaller towns and villages, well known to my hon. Friend, but the major part of the area is open countryside, mainly well farmed, with large expanses of forest and heathland. Part of the north Wessex area of outstanding natural beauty lies in the area. One of its special features is the considerable amount of land used by the Ministry of Defence for training and other purposes. The area is well served by both road and rail links to the east and west and south-west. The M3 provides easy access to London and Heathrow, and the rail service links Basingstoke, Fleet and Farnborough to London. North east Hampshire is thus an attractive place for employment and for housing.
  As my hon. Friend mentioned, there is pressure for new development from those already in the area and from other parts of the south-east region, including London. There has, in fact, been considerable expansion over the past 20 years, which itself has created more pressure for development. Between 1961 and 1978, 11,500 town development houses were built at Basingstoke. More recently, housing has been provided predominantly by the private sector. The county council has stated that between 1976 and 1982 housing completions averaged 1,890 dwellings per year. In 1983, 2,100 dwellings were completed. Population growth was in the order of 15 per cent. between 1971 and 1981.
  Against that background of growth it is natural that people living in the area should be anxious that its attractions are maintained and that proper services are provided.
  The adequacy and distribution of housing provision in north-east Hampshire for the period up to 1988 was discussed at the examination in public which took place in March and April 1979. It was clear there, as the panel recorded, that the great majority of the local inhabitants agreed with the cautious approach adopted by the county council in formulating its proposals for housing growth.
  The panel nevertheless considered that the level of demand for housing would be higher than that forecast by the county council. It took the view that the provision within the plan would not be sufficient to accommodate the likely demand for housing up to 1988. It recommended that provision for a further 4,000 dwellings should be made. The Secretary of State proposed to modify the plan accordingly, but, having considered objections to that proposal, he approved the plan on 20 October 1980 with a reduced additional provision of 2,500 dwellings, the land for which is to be made available in the period 1984 to 1988. Total provision in the approved plan for the period 1976 to 1988 is in the range of 22,000 to 24,000 dwellings.
  Hampshire county council now needs to look forward to the period beyond 1988. In fact, the guidance which my right hon. Friend has given in circular 15/84 "Land for Housing" is that any alterations to structure plans should now be prepared covering the period for at least 10 years ahead. The county council has, however, submitted to my right hon. Friend a proposed alteration to the structure plan which rolls the housing provision forward for three years, to 1991. The alteration also proposes the phased construction of the Blackwater valley route, a new road to relieve congestion on existing north-south roads in the Farnborough and Aldershot area.
  The council describes this as a first stage alteration; it explains that this will be followed by a stage two which will

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  "be a comprehensive review which will examine afresh the appropriate strategy for north-east Hampshire and, in the light of that examination, will put forward appropriate policies and proposals for north-east Hampshire for the period to 1996."
  The county council has, I understand, already started work on stage two and expects to submit resulting alterations to my right hon. Friend in 1986.
  In relation to the already submitted alteration, the question of housing provision has again proved to be controversial and the matter was one of those discussed at the examination in public which took place at Farnborough between 3 July and 6 July.
  The discussion covered, amongst other things, the question of the extent to which demand for housing in the area should be met. The question of the provision of infrastructure has also, as my hon. Friend has pointed out, been subject to controversy. It has been argued, in particular, that existing health care facilities are inadequate even for the existing population, and that any further large population growth would lead to even worse health care. There was a quite lengthy discussion of this issue at the examination.
  The panel which conducted the examination is now preparing a report on its consideration of the discussions. When that report is received my right hon. Friend will have to consider in the light of it, and in the light of all relevant objections and representations received, whether to approve the alteration, with or without modification. If modifications are proposed they will be advertised and there will be an opportunity for objections to them to be made and considered. Clearly, in the absence of the panel report, I cannot say any more at the moment about the structure plan alteration.
  I know that those who feel strongly about housing development in the area have been greatly disturbed by the proposal recently announced by Consortium Developments Ltd. to build about 5,000 new houses at
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  Hook. I understand that remarks by some of those sponsoring the development have caused anxiety to my hon. Friend's constituents. At the examination in public, Consortium put forward its case for a significant increase in the housing provision in the plan area, but the panel did not allow any discussion of any site-specific proposal for development at Hook, since that would have been outside the proper scope of the examination. If Consortium wishes to pursue its proposal it will have to make a planning application, which will be for the local authority to consider in the first instance.
  My right hon. Friend might subsequently become formally involved if the matter is referred to him either as a substantial departure from the development plan or on appeal against refusal of planning permission or failure to decide the application. He must be in a position to deal impartially with any proposal that does come before him in that way. Therefore, though I have noted what my hon. Friend has said, I am sure he will understand that it would not be right for me to make any comment now on the merits of Consortium's proposal.
  These matters must be dealt with through the normal planning procedures. All that I can do is assure my hon. Friend that in coming to any decisions, both on the structure plan alteration and on any specific proposal for Hook that comes before him, my right hon. Friend will take account of all relevant representations received, having regard also to the Government's policies on the provision of housing land as set out in circular 15/84.
  I believe that my hon. Friend knows the position of the Department and especially its role in considering the structure plan. At this stage I can go no further than I have already gone. I assure my hon. Friend that what he has said in the debate will be taken into account by my right hon. Friend the Secretary of State when he comes to make a decision.

  Debendox
  5.21 am
  Mr. Greville Janner: I am happy to have the opportunity to draw the attention of the House to the general picture on product liability and to the tragedy of Debendox in particular. I ask the Government to assist those members of the public who are already struck by tragedy in no way of their making, especially those 70 British families whose children have been disabled because of the drug Debendox.
  It has long been the case that the law has been available to those who are wealthy and able to pay for it, and to those who are totally without means and who have a good case and can obtain legal aid. The help of the law is not available to the vast majority of citizens who need it. They have to struggle as best they can to obtain their remedy without the help of legal aid, and they often, therefore, receive no help.
  When dealing with the ordinary troubles of a difficult life, it is possible sometimes to stagger along and keep away from courts, but when tragedy strikes a family—for example, when there has been a defect in a product, which has caused illness or disablement — there is a desperate need for intervention by the law. The law is intended to protect people and to provide a system of justice that is open to all. The courts should not be, as a judge once described them, like the Waldorf hotel—open only to those who have the money to pay for them.
  In the days of the disaster of the drug Thalidomide, the public became convinced that it was vital to have a system which would enable people to have access to the courts when they need them; that it was vital that people should not be reduced to battles with great drug companies, in which they had to pay for representation and prove negligence—prove positively that the drug companies or other producers had been guilty of carelessness — or otherwise lose their right to compensation for tragedies. It was realised that it was beyond the powers of the courts to provide adequate compensation for such tragedies, but at least compensation could enable sufferers and their families to have the basic amenities of such life as their health left open to them.
  As a result, various Law Commissions met, and each in its turn recommended the institution of absolute liability, or "product liability", as it has come to be known. The English and Welsh Law Commissions unanimously recommended that our present system, where negligence has to be proved positively by the plaintiffs, should end, and that we should substitute in its place a system such as that which is already in operation in most of the United States, and is already assisting ordinary people in France and the Federal Republic of Germany, whereby once it is proved that a product is defective and it is shown that the manufacturers, in the proper exercise of their right to earn their living, had improperly put out a product that was defective, the sufferers would have a claim in law which would not depend upon proof of negligence.
  Those two reports were followed by the setting up of the Royal Commission on civil liability, headed by that redoubtable and most lovable of judges, Lord Pearson, to whom I wish to pay a warm and affectionate tribute, in his capacity as a judge and especially in the marvelous
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  friendship that he afforded to many people, including those younger than himself, such as me, whom he was always glad to help.
  Lord Pearson's Royal Commission on civil liability, always known as the Pearson commission, also recommended that we should introduce into this country the kindly, humane and decent system of strict liability for defective products. As the years went on and the Pearson report moved into a pigeon hole, Lord Pearson himself became more upset, worried and anxious—he expressed that frequently—because the recommendations were not being carried out, and no doubt one would have to wait for another misery such as Thalidomide before the public became enraged, and whichever Government happened to be in power were forced into action. He was deeply concerned at the inevitability of the suffering that would result from lack of action.
  In the days when there was a Labour Government—those happy and far-off days when I spoke from behind a Minister, even at strange hours of the night — the Government said with some reasonableness, "Let us wait for Europe to take action. It will because there is already" —that was way back in 1979—"a draft directive on product liability, and we must expect action shortly." They said that in those circumstances it would not be appropriate for the United Kingdom to take action itself.
  I have always believed that that was a short-sighted and wrong view, not least because of the difficulties of ensuring that Europe would act, but also because of the hideous possibility that the Labour Government might be replaced by a Conservative Government who would not take the same positive view that product liability law should be introduced, but would instead devote themselves to cushioning the industry against any sort of expenditure which might create problems for their supporters and those who finance them including some drug companies.
  However, no action was taken and the draft directive on product liability was turned into a revised draft directive. The Government have done everything in their not inconsiderable power to induce Europe to place its revised draft directive on product liability into another pigeon hole alongside its home effort, which was successful enough to drive Colin Pearson's report and the recommendations of the two Law Commissions into oblivion in this country.
  That is the background, which has extended from 1979 to 1984—five years of Government deliberate inaction on product liability—to the Debendox case, which is in many ways precisely the sort of misery which Lord Pearson and the Law Commissions were determined should be avoided by the introduction of product liability legislation.
  The Debendox case is not the same as the Thalidomide case. It is one where families both in the United States and in the United Kingdom have suffered tragedy as a result of prescriptions being issued for Debendox, which was taken by individuals. Cases were brought in the United States, some of which failed in spite of legislation of the sort that Lord Pearson wished to see introduced.
  Nevertheless, the fact is that mothers who took Debendox gave birth to children who were damaged by that morning sickness drug. In the United Kingdom the manufacturers Merrell Dow decided to pay nothing to those families, nothing to those children and nothing to provide some solace for those who suffered as a result of taking the drug.

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  In the United States the company took another view. The company's lawyer said that it had offered a settlement because of 678 actions which were before the United States' courts. The families involved will not have been particularly pleased with the sums they received, but at least there was a reasonable effort to provide some decent compensation for this morning sickness drug and for the 450 children who claimed that they were damaged before birth because of it.
  The drug was sold without prescription until 1978, but was then put on prescription. All sorts of committees have met to discuss how to prevent this drug being given to those who were expecting children and who should be protected.
  I am not an expert in this area of medical science. I leave that to my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley). I wish publicly to pay tribute to him. I have known him for many years. He was my mentor at Cambridge, where he was president of the Cambridge Union, that distinction was also achieved by the Minister who is to reply to the debate—the greatest distinction that he can hope to achieve—and which I was also happy to achieve in the footsteps of my right hon. Friend.
  In those days my right hon. Friend and I talked about ways in which life could be improved for the disabled. My right hon. Friend could hear with his ears and not, as has happened, with his eyes and with the help of that marvellous lady, his wife Pauline, to whom I wish also to pay tribute. Since those days my right hon. Friend has led a series of campaigns on behalf of disabled people, for which he has received great honour and distinction, and which he is continuing. In consultation with him, I have been seeking to bring to the attention of the House and the nation the legal aspects that arise from the Debendox case and, in particular, the legal necessity for a change in product liability law, leaving my right hon. Friend to his campaign on behalf of the Debendox families.
  I wish to commend to the Government the urgent need to apply the type of pressure that is open to Governments to induce the drug company to do what is decent, right, fair, kind and compassionate for the families in this country who are suffering, and for the children in this country who may not be able to discharge the burden of proving negligence which was laid upon them by the awful law as it stands, but who could, and should, nevertheless, receive minimum and minimal financial solace as compensation for the maximal and incredible hardship which has been imposed upon them for the totality of their lives as a result of the Debendox drug.
  I have no doubt that the settlement which has been made in the United States by the manufacturers did not emerge as a result of the deep wish of the manufacturers to pay out shareholders' money to those who had suffered. It came because, as business people, they looked at the reality of the cases which were being brought against them and, in particular, at the possibility of losing those cases because there would be product liability. There would be no need to prove negligence in court. That is to say, there would be no need to show positively that the drug had caused the injury in the cases due to lack of care on the part of the manufacturers.
  The manufacturers would not be able to wriggle off the legal hook by showing that they, for example, came up to the standards of testing made necessary by the state of the art — the current state of medical knowledge. That
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  defence was one which Colin Pearson believed should not be open to defendants who had put a defective product on to the market, where that product had caused, death, damage or physical injury. Colin Pearson believed that this would cut the ground from under the recommendations of his committee, and he was backed in that belief by the committee.
  In the United States, parents of the Debendox children are to receive compensation, even in the absence of provable scientific evidence that Debendox was the massive cause of the mighty injuries, although the Merrell Drug Company had won a verdict from a jury that freed it from responsibility. That is not the same as the Thalidomide case. The path is not as clear as it was in the days of Thalidomide, and the trail from product to tragedy is not as open and as proven. Nevertheless, it is the path of misery for a large number of British families with children who will grow up in a tough world faced with a disablement that is rare and wretched.
  I shall leave it to my right hon. Friend the Member for Stoke-on-Trent, South to explain to the House, with his accustomed eloquence, the case on behalf of those families, and I return, in conclusion of my speech, to the general principle of product liability which the Debendox case has thrown into high and tragic relief.
  Many allegations are made against Law Commissions, whether they be English or Scottish, or whether they are set up as a Royal Commission headed by a great lawyer such as Lord Pearson. One allegation that is not made is that they are radical panels, hacking away with enthusiasm at the body of the law and seeking to introduce massive changes in the light of the policies and desires of the far Left. On the contrary, they tend to be the sort of solid, reliable and quietly decent people who maintain the dignity of the law and the inevitability of change by gradual methods. They are not a hot bed of Militant Tendency, nor even of the centre Left. The idea that these bodies would get together on a radical recommendation — the English, the Welsh and the Scottish Law Commissions and the Pearson committee—in the wish to produce a vigorous change, particularly one where France, the Federal Republic of Germany and the United States have been in the lead, was to many of us almost a dream.
  However, that dream took place. This committee, made up of people of all political persuasions, came to a unanimous conclusion. It decided that it was necessary, in the interests of decency, kindness and compassion for families such as those of the Thalidomide children, that the law should be made available to all British citizens. Where a manufacturer places a product on the market, he should bear a responsibility for that product and should not be entitled to duck behind the law of negligence. Those who have suffered should not be required positively to prove negligence.
  It is a dreadful condemnation of Her Majesty 's Government that they have allowed five years to pass during which help could have been made available to sufferers. They have deliberately, with a determination that has been a disgrace in the circumstances, not only refused to introduce legislation but blocked legislation which European countries have been trying to bring forward for the benefit of those who have no access to the law, although their suffering has been the result of the law as it stands.

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  In the teeth of the recommendations of two Law Commissions and the Pearson commission, and in the face of suffering, the Government have blocked European legislation in such a way that the revised draft directive on product liability has been left, if not dying, moribund, the only hope for sufferers being that in due course the British electorate will get rid of the present Government so that action on their behalf may be taken by this country by no longer blocking product liability legislation.
  The Government stand charged on an indictment of determined opposition to decent change. The Law Commissions, irrespective of political belief, unanimously recommended change. Lord Pearson campaigned for change until his dying moments. That campaign has brought us here in the middle of the night so that we might again prod the Government into compassionate action. The laws on strict liability must not remain in their present state. That fact has been brought into high relief by the Debendox case.
  I commend the continual efforts on behalf of the disabled of my right hon. Friend the Member for Stoke-on-Trent, South with the loyal and determined assistance of Pauline, without whom that effort would not be possible. I urge the Government at least to express their determination to take action. I urge them to stop blocking action in Europe and to give some hope to families who are suffering that the law will be changed so that the courts will be open to all and manufacturers which market products which cause death, destruction or misery will be held accountable.
  I beg the manufacturers of Debendox to do for the sufferers in this country that which they have done in the United States under the impetus of product liability law there, and make a payment to those sufferers and thereby redeem the company's dreadful image in the eyes of the British public.
  5.49 am
  Mr. Jack Ashley: I congratulate my hon. and learned Friend the Member for Leicester, West (Mr. Janner) on initiating this debate. He has rendered a valuable service to the House by talking about a subject that is vital to many British people who have suffered damage. He is a great expert in this area, and the House will appreciate his expertise.
  The Debendox saga has been drawn out for more than four years, and the families are still waiting for justice. I have been campaigning with them during those years, and I pay tribute to their persistence and dedication. For a change, it was pleasant to hear an hon. Member support this campaign rather than vilify it, as Conservative Members and Ministers tend to do. Vilification appears to be the standard line of the DHSS when faced with a campaign on behalf of drug-damaged people.
  The former Secretary of State for Social Services—the right hon. Member for Wanstead and Woodford (Mr. Jenkin)—is known to make ingratiating speeches to the drug industry, but to snarl and snipe at its critics. The former Parliamentary Under-Secretary of State for Social Services—the hon. Member for Ealing, Acton (Sir G. Young)—when I asked him about Debendox, accused those critical of the drug industry of being anti-science, anti-progress and anti-medicine.
  The Minister for Health (Mr. Kenneth Clarke): Quite right.
  Mr. Ashley: The Minister says, "Quite right", which shows how ignorant he is of the subject. I should have thought that the former Secretary of State and the present Minister for Health would recognise that the £92 million paid by the manufacturer is cause for a slight change of mind away from the blind dogmatism that they have shown all too often.
  I am sorry that I had to criticise the Minister for Health for saying, "Quite right", because the only glimmer of hope comes from him. Those previous Ministers showed a regrettable and deplorable lack of understanding, but the present Minister has shown the proper way. He said that we must protect the successes of the drug industry, but added that we must ensure that we do not pay excessive prices for drugs through the National Health Service. Good for him. That was a sagacious comment, and I commend that sort of approach rather than the silly, blind dogmatism of his colleagues.
  The Minister for Health and the Government have a specific resonsibility to ensure that British children who claim compensation for the damage caused by Debendox are treated similarly to those in the United States of Amercia. No self-respecting Government can stand aside and support this unfair discrimination against British children. I know all about the excuses made by Merrell Dow—that the drug is fine and that it paid out only because of the excessive cost of defending itself in the United States—but they cut no ice. The truth is that the company made the placatory offer just one week before a consolidated court case was due to be heard. It was a crucial case on the main issues. Had the company won, the battle would probably have been over, with the families' resistance crushed. Had it lost, all 700 plaintiffs would have almost certainly received massive payments. Merrell decided that it could not risk that. It chose to spend £92 million to stop legal processes rather than $1 million to fight the case. One can presume only that it knew that its case was weak.
  One group of claimants is being paid in the United States while a similar group of claimants is being spurned in Britain. That is unacceptable discrimination, and I contend that the Minister has a clear obligation to act. I suggest that he supports a voluntary boycott of Merrell pharmaceutical products by the NHS. I know that he wants to respect the clinical judgment of doctors, so the best way of proceeding is for him to advise all doctors to prescribe drugs from companies other than Merrell, where possible. Evidence from the British National Formulary suggests that alternatives are available for nearly all useful Merrell drugs.
  I hope that the Minister will not jump to the erroneous conclusion that I am making a blanket attack on the drugs industry. His previous colleagues have fallen into that trap. I am not making such an attack. I readily agree that many parts of the industry have a magnificient record. I also concede that the Minister must respect, though not necessarily defer to, the Committee on Safety of Medicines. No doubt the right hon. and learned Gentleman will reiterate that the CSM has examined Debendox eight of nine times and found no incriminating evidence against it. I hope to open his eyes about Merrell and Debendox.
  Debendox is not Merrell's only controversial product. It had the United States rights for Thalidomide and

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  harassed the Food and Drugs Administration to market it. The company gave free samples of Thalidomide to American GPs and, incredibly, continued to do so after Thalidomide was withdrawn in West Germany. Luckily, an FDA pharmacologist, Dr. Frances Kelsey, resisted.
  The Minister should not be shy about fighting Merrell or assume that it is a stranger to damages. Merrell paid $200 million in damages for MER 29, the wonder drug which lowered cholesterol. Unfortunately, it caused cataracts as well. Criminal charges were brought against Merrell for
  "lack of accuracy in information given to the FDA".
  The charges were not contested, the maximum fine of $80,000 was imposed, and three executives of the company were put on probation.
  How careful was Merrell with Debendox, a drug for pregnant women? Tests on pregnant animals were carried out by the company only after they were required, following the Thalidomide disaster. The company then gave an inaccurate report of results to the FDA.
  In the United States, inquiries to drug companies do not have to be reported to the FDA, whereas adverse reactions do. The charge against Merrell is that it took calculated steps to ensure that every report was termed an inquiry. Therefore, it was able to say that it had no knowledge of reports of abnomalities.
  As for the view of the CSM that there is no scientifically acceptable evidence that the drug is dangerous, the committee may speak the truth, but it misses the point. Drug safety is about the safety of people, and the balance of doubt should lie with people's interests, not with the company's. Drug safety has to be considered in relative terms; absolutes are inappropriate.
  The most striking feature about Debendox is that there is no scientifically acceptable evidence that it is safe, even though more than 3 million prescriptions have been issued in Britain. A Parliamentary reply to me in 1980 revealed that no tests had been carried out on a sufficiently large scale to identify risks of one in 1,000, one in 500 or even one in 100. Therefore, how can it be said that on balance the drug is safe?
  Since the controversy first exploded in the United States, there have been further studies. The FDA has pursued the issue and, unlike the British CSM, it has held public discussions with experts. Like the CSM, it has found no proven causal evidence of damage, but is did not stonewall. The "residual uncertainty" of the experts led the FDA to issue a strong warning that the drug should be used only for "significant" nausea and vomiting that is not responsive to non-prescription measures. That implied a clear "keep away" notice to many of the 25 per cent. of United States pregnant women who would have normally taken Debendox.
  Those who, like the Minister, are anxious to defend the drug industry damage their case by defending companies like Merrell Dow. The Minister's Department is at fault because a few weeks ago the Parliamentay Under-Secretary of State for Health and Social Security, in answer to a planted question about Debendox, claimed that the company had decided to cease production for commercial reasons arising from ill-informed criticism of the product, and litigation, particularly in the United States.
  In its press handout for the gullible, Merrell Dow used almost the same words. The Minister was uncritically parroting the glib excuse of the company. That was a
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  regrettable lapse by a Minister for whom I have great respect. The truth is that the company ceased production because in August 1983 the Food and Drug Administration planned to press the company to give patients important information, to the effect that two studies had shown an increased risk of stomach defects after using Debendox. The company anticipated the request and withdrew the drug, and 30 years of marketing the drug came to an abrupt end.
  The controversy did not end with the withdrawal of the drug, and the legal battle will not end with the £92 million offer that the company is making. Merrell Dow is trying to get away with the absolute minimum and it does not seem to mind who it hurts in the process. It calculates that British families will not win in British courts because we do not have product liability. It knows how difficult it is to prove negligence, which the parents of British children have to do in our courts, as my hon. and learned Friend the Member for Leicester, East has so eloquently explained.
  What Merrell Dow should do, and what I would dearly love the Minister to do, is to heed the splendid example of ICI — a drugs firm with a fine record. After the Eraldin affair, ICI argued that it had no legal liability for those who had been damaged by the drug. Yet the company set up a comprehensive compensation scheme, giving equality of treatment to all. I hope that, in particular, the Minister will note that ICI paid those outside the United Kingdom who had been damaged by the drug. ICI showed a proper regard for its customers. By contrast, Merrell's refusal to pay British children, when it is paying children in the United States, is an absolute disgrace to the pharmaceutical industry. I hope that the Minister will give us his view on that situation this morning.
  The only good thing to emerge so far from this unhappy state of affairs is that it will advance the day when product liability is the law of this country. As my hon. and learned Friend the Member for Leicester, West has made clear, the present arrangements are hopelessly inadequate and we need the new deal which only product liability can provide.
  I believe that the drugs industry and the Minister will be acting foolishly if they oppose product liability — although I have more confidence in the Minister than in the drugs industry. Without product liability, we shall continue to have drug scandal after drug scandal as the black sheep of the industry pursue their nefarious ways.
  The arguments that product liability will be costly and hold up research do not bear examination, as a glance at the United States will show. Product liability there has not damaged the drugs industry at all. That argument is quite bogus.
  In the report in the Financial Times on Merrell's offer of £92 million to children in the United States, the comment was that it would not affect the earnings of the parent company, Merrell Dow Chemicals, as the payment was covered by insurance and reserves. As for the finances of drugs companies operating over here, with our crazy system of rewarding them, who knows who pays compensation? It may well be the Department of Health and Social Security. The Minister may be able to enlighten us on that point.
  Drug damage may be an unfortunate accompaniment of progressive medicine. It is a risk which it is neither easy nor sensible for individuals to insure against. It is a risk

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  that the drug companies should cover. Without product liability, we have an arbitrary system—a crazy battle for compensation. The vast majority of drug-damaged victims receive nothing from this casino approach. Only a handful of cases benefit. The resultant injustice defaces our society. It is time for the House of Commons to initiate a change to a fairer and more just system of compensation. A move towards product liability would be more than a useful start.
  6.8 am
  The Minister for Health (Mr. Kenneth Clarke): I congratulate the hon. and learned Member for Leicester, West (Mr. Janner) on raising this subject at such an uncivilised hour. He will not be surprised, and neither am I, that his right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) has also taken part in the debate. Both the hon. and learned Gentleman and the right hon. Gentleman are known to be extremely compassionate men, ready to take up the causes of individuals whom they see as suffering from injustice—particularly the disabled and the handicapped. They tend to have the support of many hon. Members in their campaigns, and of the public, and I hope that the Ministers who reply to them are equally compassionate and do their best to respond sympathetically.
  The right hon. Member for Stoke-on-Trent, South made attacks—they were not virulent ones but sideways swipes—on at least three of my right hon. and hon. Friends who have answered on these matters from the Dispatch Box. All three of my colleagues to whom he referred are equally compassionate and would not hesitate to use the power of the Government to help disabled or handicapped people who suffer injustice as quickly as any other hon. Member.
  The Government defend the success of the pharmaceutical industry. It has produced many enormously beneficial drugs. By scientific advance, it has considerably reduced illness and suffering. The British pharmaceutical industry is in the forefront of development and is an extremely valuable source of employment and earnings. We are right, however, to have an extremely severe and strict regulatory system which governs the safety of drugs. We use it when it is obviously right that the Government should ensure the prompt withdrawal of drugs that cause damage. It is also right that British law should produce compensation for people who have suffered damage and are entitled to compensation.
  There is no difference in motive between us. Nobody fails to recognise the suffering that the parents of deformed children have endured. Having said that, however, I must say that the campaign against Debendox is wholly misconceived. The arguments of the hon. and learned Member for Leicester, West and the right hon. Member for Stoke-on-Trent, South are subject to two fundamental defects.
  Mr. Ashley: Can I make it clear that I am not suggesting that the right hon. and hon. Members to whom I referred are not compassionate? I made specific charges against them and gave them notice that I would criticise them. I did not allege that they are not compassionate, for I think they are, but that they were badly mistaken in what they said about people attacking the drug industry.
  Mr. Clarke: I am grateful to the right hon. Gentleman. He is following his usual practice of not introducing a note of personal animosity into the division of opinion between him and Ministers.
  All Ministers, including me, have concluded that the campaign is wholly misconceived and subject to two fundamental flaws. First, there is no scientific evidence to suggest that Debendox caused the deformities in children which are complained of. There is no causal link, if I might use the jargon, between the drug and the injuries for which compensation is sought. Secondly, no system of law will provide compensation for an injured person if he or she cannot demonstrate that the injury was caused by the product against which he or she makes complaint.
  For that reason, the Pearson commission, although important, is almost irrelevant to the Debendox case. Even if we had strict product liability, I fail to see how any compensation would be won in the courts if those who brought the actions could not demonstrate that their injuries were caused by the product. No question of negligence would ever arise unless the causal link were established.
  We all know that Debendox is used to treat severe morning sickness. It was first licensed in the United Kingdom in 1972 and still is licensed. However, Merrell Dow will not renew the licence next month when it expires at the end of its normal five-year term. The company has told us that it will withdraw the drug for purely commercial reasons. In particular it has decided that it is not justified in marketing the product because of the cost it was incurring in defending the product against a large number of legal suits brought against it in the United States. It has also found that the campaign launched against the drug has resulted in sales falling to such a level that it is not worthwhile to market it any further. The company has never at any stage conceded that the drug is unsafe or has caused injuries to the expectant mother.
  I do not rely on the company. I was prepared to be as critical, and even sceptical at times, about the claims of giant companies in this area as the right hon. Member for Stoke-on-Trent, South, but I am persuaded by all the evidence that comes to me from the scientific community. As a result of the campaign, the drug has been closely investigated by the scientific community and the media for at least six years. The claim has been made that the administration of the drug to the mother during pregnancy has caused abnormalities in some children.
  In Britain, Ministers look for their advice primarily to the Committee on Safety of Medicines. We endeavour, and I think that we succeed, in attracting to the membership of the CSM the most distinguished medical advisers that we can persuade to give this public service. At the moment we have 19 people, drawn from a wide range of professional disciplines. They do their best to give an objective and fearless appraisal of the safety of drugs that are referred to them.
  Such is the concern about any allegation that a drug causes deformities that the committee has repeatedly looked at the drug Debendox. The committee, at the Government's request, investigated the drug in June 1978, February 1979, March 1980, December 1980, February 1982, April 1982, May 1982 and February 1983. On no fewer than eight separate occasions has the CSM examined the evidence relating to the safety of Debendox. It looked at the data drawn from animal and human studies. It

  1175
  considered a swatch of reports which suggested that there were aspects of the drug that bore examination. On each occasion the committee has reached the same conclusion.
  That conclusion is that there is no acceptable scientific evidence that Debendox causes abnormalities in children. That remains the position and the right hon. Gentleman knows it. The committee has come to that conclusion for no other reason than that that is its expert appraisal of the scientific evidence placed before it.
  That is not only the view of the CSM. It is not unknown for campaigners, even the right hon. Gentleman, to make attacks on the CSM when it will not come to the conclusions that they think it ought to on particular products. In fact, the evidence has been scrutinised by other regulatory authorities in other countries. It has been scrutinised by every major drug regulatory authority in the developed world where the product is marketed, including the United States, Germany and Australia. They have all come to the same conclusions as the CSM. It is not possible to find a reputable drug regulatory agency which has decided that Debendox is unsafe or that it causes abnormalities in children.
  That baffles a layman. It baffles me. One finds cases of children being born with deformities and mothers who are absolutely convinced that it is the result of taking the drug for their morning sickness. The fact is that it is one of the tragic risks of life that some children—a small minority—are born with deformities. Sometimes there is a cause—rubella or a virus infection; occasionally a drug, as was tragically the case with Thalidomide. In a minority of cases, however, no one knows the cause of the handicap and it is pointless to blame a particular drug unless one can establish on a sound scientific basis that there is a link between the product and the handicap experienced.
  Mr. Ashley: I am amazed at the Minister's claim that there is no evidence of damage caused by the drug. First, he ignores the warnings expressed by the FDA. Secondly, some American experts have said that Debendox is a low-grade teratogen. Thirdly, I challenge him to tell the House whether it is true that no tests have been carried out to show whether Debendox damages one in 100, one in 500 or one in 1,000. Unless such surveys are carried out, it cannot be claimed that a drug taken by 3 million women here and 33 million throughout the world has not caused damage. Only when that has been done can the Minister make such a statement.
  Mr. Clarke: With the greatest respect, it is no use the right hon. Gentleman saying that he is amazed by what I say unless he can demonstrate some inaccuracy in it. After the most exhaustive examination of all the evidence, all the major regulatory drug authorities in the western world have failed to find any causal link between this drug and deformities in children. No regulating authority has ever withdrawn the licence, because it is the opinion of the experts in every country that on the scientific evidence available to them there is nothing to show that the drug is unsafe.
  In his final point, the right hon. Gentleman was reduced to using an argument that sounds plausible but has no scientific merit. He says that it has never been possible to prove absolutely the safety of the product, but that is true of countless beneficial drugs. He is merely saying eloquently and with heavy emphasis that it has been
  1176
  impossible to prove the negative. Neither he nor anyone else can prove that the drug is unsafe, so he argues that it cannot be exhaustively shown that it is absolutely safe. That argument is ingenious. but it is nothing like enough to support the case that he has made, the strictures that he has made or, I fear, the claim for compensation.
  I quite understand the concern of people who have children damaged from birth and who have persuaded themselves that the damage is somehow related to the drug, but unless and until some scientific connection is established, it is not possible to take the steps that the right hon. Gentleman wishes.
  The Department must base itself on scientific appraisal of these matters. We cannot be towed off into populism, emotion and political campaigning on a subject as fundamental as drug safety and the health of the population. We must be guided by the best scientific advice we have, which is that, so far as anyone can see, the drug is safe.
  The result of the campaign has been somewhat extraordinary in that a product regarded by all the regulatory authorities as one that ought to be licensed has been driven from the market. On 23 January 1982, the British Medical Journal published an article entitled
  "Crying wolf on drug safety"
  which described campaigns of this kind in the following terms:
  "In contrast, associations may prove false alarms which cast an unwarranted blight on a useful drug. One such was the report associating skeletal malformations with Debendox, which has not been confirmed by later large-scale studies but played a part in the loss of public and medical confidence in the use of the drug by pregnant women."
  Many doctors think that the right hon. Gentleman and those who campaigned with him have driven a useful drug off the market. It is certainly the case that, of its kind, Debendox was the best tested drug that we had for morning sickness. Morning sickness of a mild kind is something that many expectant mothers experience, but acute nausea and severe morning sickness can be very serious. Acute nausea can damage the foetus in extreme cases. Because Debendox, the best tested drug that we had on the market, has now been withdrawn from the market, one can only assume that what the doctors are doing is prescribing another antihistamine which is less well tested and which expectant mothers are now taking when they suffer from severe nausea.
  I do not think that it is altogether in the interests of the public that we come to such conclusions unless and until there is some acceptable scientific basis for moving to that position. The fact is that the drug is unmarketable because of the campaigning against it, and the clinical freedom in this country has therefore been restrained to the extent that other less well tested products have to be used for the problem of morning sickness.
  I have put my case, about which the right hon. Gentleman is still annoyed, but he knew that I was going to put it, and I think that in his heart of hearts he knows perfectly well that one cannot mount a successful campaign for compensation for an injury from a drug unless one can begin by proving that the injury was caused by the drug against which one is campaigning.
  Given the conclusions to which I am driven, I regard his suggestion that we should now go on to boycott every other product made by Merrell and the Dow Chemical Company as ridiculous and irresponsible. It would lead to driving other worthwhile drugs off the market simply

  1177
  because he has convinced himself, in the teeth of the scientific evidence, that there was some connection there if only somebody somewhere would accept his belief in it in the absence of any scientific evidence.
  The hon. and learned Member for Leicester, West, with his usual ingenuity, has linked the problem of Debendox, regarding which he has some sympathy with his right hon. Friend's case, with the Pearson commission on civil liability. As he conceded quite fairly, the link in fact is not a terribly good one. As I have said, if we did have strict product liability in the country, I cannot see how anybody would establish any case for compensation unless he could prove a causal connection between the drug and the injury.
  As the hon. and learned Gentleman also conceded, cases were lost in America when they were brought. Two cases were fought in America, which has a stricter regime of product reliability, and the company successfully defended them. Nevertheless, Merrell has decided to offer payments from a £92 million fund to the parents who have begun, or might in future begin, legal action against the company on the grounds that Debendox caused birth defects in their children. About 700 of such legal campaigns have been filed in the United States so far. Before one looks to that, as one must, and wonders whether this is some concession of liability, and whether it shows that, under a stricter system of law, damages might have been obtained, one has to look at the background and the reasons that have been given for that payment.
  Merrell has never admitted that its drug causes injuries, and has successfully defended itself against that allegation in the American courts. It was facing a huge number of claims being brought against it, and I am informed that the position in America was that the company was highly unlikely to recover any of the legal costs that it incurred in successfully defending action after action. The company says that it faced the possibility of years of campaigning cases being brought against it, and that it could have incurred legal costs of up to £700 million in the United States.
  The company had already spent £3 million on defending the first two cases and it decided to pay what would be regarded in English law as a nuisance payment, although it involves substantial sums. The company has paid £92 million to parents to save further legal costs. It has insisted that a condition of the payment is that litigants sign a statement to the effect that Debendox was not responsible for the alleged congenital defects.
  It is not for me to put the case for Merrell. It is not for me to go into American legal cases, but no one has demonstrated that the American legal system is superior to ours in this respect, or that the payments made by Merrell prove that compensation should be paid in the absence of a scientifically provable link between a product and the injury complained of.
  Mr. Janner: Does the Minister agree that, in the absence of strict liability law in the United States, which is what I am talking about here, the manufacturers of the Debendox drug in the United States would not have made a payment of £92 million to the suffering families?
  Mr. Clarke: I disagree. I do not act as advocate for Merrell, but I have studied the reasons given by it for paying out. The company had to pay the costs of actions
  1178
  which it successfully defended, because it could not recover costs from the plaintiffs. It faced the prospect of 700 or more successful defences of its product, which could have created a huge bill despite liability not being proven. The company made a financial decision that it was cheaper to pay out £92 million to settle the actions than to pay £700 million to defend them successfully. The calculation that it is cheaper to pay even with a good defence applies whether or not strict liability applies.
  The Royal Commission report on "Civil Liability and Compensation for Personal Injury" is known as the Pearson report. It deals in detail with issues relating to legal liability and compensation in cases where products, including drugs, are alleged to cause injury. We have not filed away the report as a whole. It made over 20 recommendations on various aspects of the law. We have acted on one or two of the less important recommendations.
  The most important recommendation is that a producer should be strictly liable for personal injury caused by defective products. That would remove the necessity in English law to establish negligence or breach of contract by the producer before compensation can be awarded.
  I have never been convinced of the Pearson case. The principal problem is that the insurance costs for some products, particularly drugs, could be considerable. Pearson says happily that the costs of insurance would be passed on to the customer. The right hon. Member for Stoke-on-Trent, South rightly spends much of his time pressing us to keep drug costs to the minimum. We cannot ignore the fact that the price of some products would be raised dramatically by insuring them against liability when there is the risk of a disaster of Thalidomide proportions. The costs and risks of changing must be considered carefully. We must reflect on the possible effect that change would have on technical innovation and research.
  However, this Government, like the previous Government, have not rejected Pearson outright. We are waiting for progress on a draft European Community directive. We have decided that it would not be right to make an amendment to United Kingdom law on the issue whilst a draft EC directive on product liability is being discussed in Brussels.
  Mr. Janner: The Government are blocking it.
  Mr. Clarke: I understand that in Brussels there are disagreements on a wide range of issues involving EC directives. One of the principal concerns of many, which I share, is to allow to product liability a state-of-the-art defence. I do not believe that Pearson is relevant to the Debendox case. In so far as the report is relevant, I must confess that I have never agreed with its recommendations. Protracted negotiations go on in Europe, and the Government believe that there are advantages in establishing a common system of liability throughout the Community.
  We cannot take a final view of the proposals until certain details have been clarified. We are especially concerned to ensure a proper balance between the interests of the producer and the consumer—for example, by providing producers with a state-of-the-art defence.
  Mr. Janner: I fully accept that there is a protracted negotiation in Europe. The protraction is caused mainly by the Government, who are deliberately dragging out the negotiation to avoid any conclusion being reached. I note

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  with great interest that the Minister has now declared himself against the product liability recommendations of the Pearson commission. I am deeply worried about that aspect, because I had always counted the right hon. and learned Gentleman as one of the more progressive members of his Government, and I hope that his view on this matter is not shared.
  Will the right hon. and learned Gentleman elucidate some matters for the House? First, is his view that of the Government? Are the Government against this recommendation? Secondly, are the Government blocking European action? If so, will the right hon. and learned Gentleman please come clean and tell the House and the country about that matter? Thirdly——
  Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. and learned Member has gone far enough. Interventions should be brief. The hon. and learned Member cannot address the House twice in this debate.
  Mr. Clarke: The hon. and learned Member for Leicester, West was accusing the Government of blocking this directive in Brussels. He knows perfectly well that the Government think that there should be a state-of-the-art defence for producers. I believe that there should be a state-of-the-art defence. I do not think that, because one disagrees with the hon. and learned Gentleman on this occasion, one is necessarily not progressive. Pearson was misconceived in going for absolute product liability. The part of the report dealing with that aspect is not convincingly argued.
  The Government believe that there should be a general law of product liability throughout the EC. Obviously, there should be some improvements and we should continue to negotiate constructively on progress towards a common product liability within the EEC.
  Pearson has no direct relevance to the Debendox case. The drug was accepted by the scientific and medical community as safe and of considerable value to many women suffering morning sickness during pregnancy. It is no longer commercially worth while for the company to market the drug, and its licence is about to be withdrawn. There is, however, no prospect of compensation being given to everyone unless and until any mother of a deformed child shows that that deformity was caused by the drug about which the complaint is made.
  If scientifically acceptable evidence should ever emerge to demonstrate a link between this drug and the birth of deformed children, everyone's view would obviously change dramatically. I hope that, if there were any change in the scientific evidence, we would all be able to ensure that women and children who have suffered are treated seriously. We cannot simply ignore the weight of evidence against this claim. I am afraid that unless and until there is some scientific basis for the claim, this is one of those campaigns that are well-intentioned and arouse understandable emotion but are devoid of any solid basis in fact or in law.

  Food and Wine Exports (Soviet Union)
  6.39 am
  Mr. Teddy Taylor: I am glad to have the opportunity to raise the subject of the export of subsidised food and wine to the Soviet Union and its allies. I appreciate the courtesy of my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food being present to answer the debate, despite the outrageously late hour, because I know of the immense burden of work that she has to do. I also have the unexpected privilege of the attendance of the hon. Member for Livingston (Mr. Cook), who leads for the Opposition on these matters and probably knows more than I do about the subject.
  I wish to draw attention to the dramatic increase in the sale of highly subsidised food and wine to the Soviet Union and its allies. If we look at the figures, we get an idea of the scale of the problem. In 1979, when the Government came to power, a great deal of concern was expressed about the dramatic increase in the sales of cheap food by the Common Market to the Soviet Union and its allies. In 1979 we sold 3 million tonnes of cheap food and wine to the Soviet Union and its allies. By 1982, the figure had risen to 6 million tonnes, and this year it looks like being well over 8 million tonnes. The fact is that in the first nine months of 1983 we sent 164,000 tonnes of highly subsidised food to the Comecon bloc every week. Since the Government came to power, exports of cheap food to the Soviet Union alone have increased fivefold. That was not a consequence of the Government coming to power, as it was a Common Market decision. We exported 1 million tonnes in 1979 and 3·5 million tonnes in 1982, and the latest signs are that the figure for 1983 is at least 5 million tonnes.
  Even more worrying are the crazy prices at which we are selling and dumping food. I went to one of the local supermarkets in Southend last week to look at prices. After a great deal of trouble, the Ministry has provided me with the prices at which we supply such food to the Soviet Union. In shops in Southend, beef was about £3·20 per pound. We sell it to the Russians at 40p a pound. We pay 25p a pound for sugar, but the Russians get it at 7p a pound. We pay about £1·30 a pound for butter, but the Russians get it at 53 p a pound, and it seems that that price is going down sharply following the Commission's decision only yesterday. We pay 25p a pound for flour; the Russians get it at 5p a pound. We pay about £2·50 for a litre of reasonable wine; we give the Russians wine at an astonishing 7p per litre. At one time I thought that it was a devious plot to undermine the Soviet economy by spreading alcoholism, but Russian citizens do not get the wine at those prices.
  Those prices are available through the normal export rebates provided by the Common Market Commission, but there are also special deals under which the Cornmission agrees to provide food to Russia at even cheaper rates to alleviate the special problems of surplus. It is worrying that that is not a unanimous decision. The Commission makes its decision and passes it on to the management committee, in which we have only one voice and in which majority voting applies. Although, as the Prime Minister has made abundantly clear, we oppose those special deals

  1181
  to give the Russians food at knock-down prices, there is nothing whatsoever that we as a country can do about it unless we get other Common Market nations to support us.
  What is the effect of the sales? First, there is a dramatic boost to the Comecon economies and to the Soviet treasury. The Soviets get the food at these cheap prices, but Russian housewives do not get it at the same prices. A major mark-up is imposed by the Soviet authorities, and they keep the difference. Frankly, I do not mind—I am sure that you, Mr. Deputy Speaker, and the hon. Member for Livingston do not mind — paying taxes at a reasonable level to defend ourselves against possible Soviet aggression. However, I object strongly to paying even higher taxes to subsidise the growth of the Soviet war machine and the invasion of Afghanistan. In effect, that is what we are doing through these massive sales of cheap food to Russia.
  What is the cost to the Common Market and to us of exporting cheap food? I have tried and the Government have tried to get the information, but the Commmon Market adopts a policy of not recording where each particular subsidy goes. Indeed, there is considerable doubt about whether the food actually goes to the alleged destination. However, we know that the Common Market spends one third of every penny on the dumping and destruction of surplus foodstuffs. We also know that in 1982–83 about one fifth of all the dumping of cheap food was in the Soviet Union; and that the Common market expended £4,750 million on the dumping and destruction of food.
  It is reasonable to assume, in the absence of detailed figures, which the Government unfortunately cannot provide, despite all their attempts, that the Common market is therefore giving a straight subsidy of almost £1,000 million a year to the Soviet and other Eastern bloc economies. That is an immense amount of money. It means that £2·5 million is being spent every day of the week, including Saturdays and Sundays, to subsidise the export of cheap food and wine to the Soviet Union. It means that we are spending £100,000 every hour of each day to subsidise cheap food to Russia. You, Mr. Speaker, will be staggered to learn—I know how conscientiously you sit through our debates — and Ministers with responsibility for housing, who have great problems getting enough cash to carry out necessary work, will be especially interested to know, that since this sitting started, we have spent more than £1 million subsidising cheap food and wine to the Soviet Union. That is madness.
  I find it extremely difficult to explain to my constituents why we must impose exceedingly strict guidelines, and sometimes cuts, on necessary public expenditure, such as local authorities, schools, hospitals and roads, while at the same time we spend more than £2·5 million every day providing subsidies to enable the Russians, the east Germans, the Bulgarians and the Czechoslovaks to buy food at infinitely cheaper prices than we can.
  Apart from the damage that does to us and the benefit it affords to the Russians, the Minister will be as anxious as I am about the effect of such dumping practices on the economies of the Third world. We must face the fact that these costly dumping exercises inevitably cause poverty, distress, hardship and hunger throughout the Third world by denying it a reasonable return for its agricultural produce.
  1182
  I know that considerable quantities of food are given free to some parts of the Third world. Much of it goes to Ethiopia, although, sadly, not to the people, but to the army, which is invading another country. No one has sought to deny that by constantly dumping cheap food on the world market and in eastern Europe we are depressing world prices. Sadly, the inevitable result is that the Third world is having a dreadful time. Many of Third world countries can neither pay their debts nor maintain reasonable living standards. All their economies start by producing food and then industrial goods. The EEC should be thoroughly ashamed of the fact that its policy of dumping surpluses is causing hardship, poverty and distress to the Third world.
  We should think about the consequences of the policy for some of our friends. I was interested to read in this morning's paper—by which I mean Thursday —the statement made by some New Zealand officials about the Common Market Commission's astonishing decision to sell an extra 150,000 tonnes of surplus butter to the Soviet Union and the middle east. New Zealanders, understandably, are outraged by that. The inevitable result will be to depress world prices even further, and to make it even more difficult for New Zealand to sell what it wishes. I appreciate that the Government have fought hard for New Zealand in the Common Market Council, but some of our farmers are saying, "The New Zealanders have now had 10 years to find other markets. Why should we have our surpluses added to by the small amount of butter that comes from New Zealand?"
  Unfortunately, New Zealand cannot go to other markets. When it goes to other markets—effectively, the middle east and the Soviet Union — it finds that Common Market salesmen have been there before it offering butter at knock-down prices.
  The cheap sales are also damaging to our economy. Unfortunately, although we are providing cheap food to the Soviet Union, the inevitable consequence is that we have to charge high prices at home. If we have a high-price economy — unfortunately, with the new common agricultural-type policies for the steel industry at present being drawn up by the Common Market—the danger is that our economy will be undernimed because high prices for food inevitably mean higher wages and industrial costs.
  This desperately serious situation is becoming worse and worse. Surpluses are growing alarmingly. The dumping of food in the Soviet Union and the Eastern bloc is not just increasing alarmingly but becoming more costly as more dumping depresses prices even further.
  I doubt whether the Government or the Minister would argue with what I am saying, because the Government and the Prime Minister have deplored these cheap sales. They have said, "We vote against them in the Management Committee whenever the opportunity arises." Can we do anything about the dumping? It was sincerely thought by the Foreign and Commonwealth Office that if it could achieve strict guidelines on expenditure within the Common Market, it might somehow reduce the surpluses and the amount of dumping.
  After the Fontainebleau summit, at which the Prime Minister undoubtedly tried hard to achieve a fair settlement, some people thought that something might happen. Unfortunately, yesterday we saw what happened. We have a strict expenditure guideline for this year, because we have the 1 per cent. VAT. But what is

  1183
  happening about the control of expenditure? What is happening about the export of cheap food to Russia? Despite the fact that there is no money available, and no money voted, the Common Market Commission has agreed to dump another 150,000 tonnes of cheap butter at an especially low price.
  The Commission has described that as a trial of strength with the Council of Ministers, but, as my hon. Friend the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs said in the House yesterday, it is a decision which goes not to the Council of Ministers, which we can stop by a veto, but to the Management Committee, in which we have only one voice.
  I do not doubt the determination of my right hon. Friend the Prime Minister or of my hon. Friend the Parliamentary Secretary to argue against these special cheap sales, but what worries me is whether there is anything that we can do with the Common Market machine as it now is. My understanding is that my hon. Friend the Under-Secretary of State said yesterday that we have only one voice in the Management Committee.
  The second suggestion put forward to try to solve the problem of cheap food being dumped in the Soviet Union, is that the long process of quotas and possible reductions in the real value of prices might bring down surplus food production. I wish that that were true. I wish that I could look with some confidence to that solution.
  However, the only tiny adjustment made in the Common Market food programme—in dairy produce—is still going to leave us with a substantial surplus. Sadly, the signs are that, while we shall honestly adhere to the quota arrangements, other Common Market nations will not. That is probably why, in a recent debate, my right hon. Friend the Minister made it abundantly clear that if other countries were not going to impose the levies and abide by the quotas, we would have to tear them up. The same thing happened with steel. We all agreed to cut back on our capacity. We have cut back on manpower by over a half since 1979, but some of the other countries have made only promises. In fact, one country has actually increased its capacity.
  I know that the Government are working hard, but they are up against many things, such as the other nations and the Management Committee, which, sadly, are not prepared to do anything about the export of cheap food to Russia. There is also the enlargement problem, which will inevitably make the surpluses worse, because the agricultural potential of the new members, particularly Spain, is vast. It will be difficult to control them. We are also up against our agriculture industry. This is not just farmers fighting for a privileged position. If we cut production throughout the European Community, that is bound to involve our farmers, who do not produce a surplus of food, although there is a surplus of dairy products. Our farmers will have their throats cut because of surpluses on the continent.
  This will be a difficult road for the Government to ride. They will find it easier to go to our farmers and tell them that all Europe has to cut back, and that, where there are surpluses, production will be reduced. However, there is not the slightest possibility of that happening.
  How will we solve this problem of the ever-increasing sales of cheap food to Russia? The Government will encounter enormous problems. I do not know how this particular problem can be overcome. I do not know how we shall overcome the problem of the Management
  1184
  Committee votes, or how we shall cope with agricultural protection in an enlarged Community. I do not see how the Government can persuade our farmers to reduce their production dramatically because of the surpluses in Europe.
  Is the situation hopeless? I do not think so. In the short term, we could make a small contribution to controlling these outrageous dumping practices by not agreeing to increase the resources of the EEC. Although the Commission will probably spend money that it does not have, in the longer term, if we deprive it of the extra 0·4 per cent. of VAT, that could have some curbing effect on the amount that it spends on export rebates for dumping goods, particularly in the Soviet Union and Bulgaria.
  In the long term, we should set our sights on at least making it clear that the kind of Common Market that we would like is one with no resources at all, in which every member state would look after its own social policy, regional policy and agricultural policy. Hon. Members must be aware that what is tearing the Common Market apart and preventing us from getting on with bringing down trade barriers and increasing co-operation is the problem of resources— arguing over the money, how much there is, who gets it and where it goes. Sadly, that will take up more and more Common Market time.
  What a much better Common Market and co-operative exercise it would be if we did not have any resources and left spending decisions to the member states. This is not pie in the sky, because we see it happening in the EFTA countries. They are working together extremely well, simply to get rid of trade barriers and to increase political co-operation. EFTA works with 70 civil servants, while the Common Market has over 12,000 working on export rebates for the Soviet union and other items. EFTA countries' growth is better, and their unemployment is much lower than ours. We must consider a long-term solution of that sort if we are to deal with the problem of the enormous growth in exports of cheap food and wine to the Soviet Union.
  There are three somewhat minor points on which I should like advice from the Minister. As I have not been able to give her notice of my intention to raise them. I shall understand if she is not able to respond tonight, in which case I hope that she will write to me on them in due course.
  First, is there any way in which the United Kingdom can stop the Commission overspending, or spending more than has been agreed by the Council of Ministers, on the sale of cheap food to Russia? It seems that we cannot. However, can we in anyway restrain the Common Market from indulging in these cheap sales?
  Secondly, at what price did the Commission agree yesterday to export butter to the Soviet Union? The average is 53p per pound, which is consistent with the normal rebate, compared with our £1·30 per pound. The Commission makes special deals at specially low prices. That happened yesterday, when it agreed to sell Russia an extra 150,000 tonnes. I appreciate that it is difficult co obtain figures relating to confidential commercial sales, but for special deals which go before the Management Committee, it is usually possible to get an idea of the price.
  Thirdly, is my hon. Friend satisfied that we are operating the export rebates in such a way as to ensure that we get a fair deal from the Commission? We are aware of the Intervention Board for Agricultural Production having paid £4 million in subsidy to a Dutch firm for the export

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  of butter to Cuba. As is well known the Customs and Excise made it clear to the intervention board that the butter was going not to Cuba but to the Soviet Union. I gather that NATO's interception service passed on information to the Customs and Excise and the Foreign and Commonwealth Office, if not to the intervention board and the Ministry of Agriculture to the effect that the ship with butter for Cuba was going to Russia.
  The intervention board should have been alerted by the fact that Cuba did not import any butter the year before the Russian invasion of Afghanistan, whereas after the invasion, when a ban was placed on export rebates to Russia for butter only, there was an apparent dramatic increase in the consumption of butter by Cuba.
  We have paid over money and given the Dutch firm back its guarantee. Normally, we would get the subsidies back from the Common Market. Will we get the money back? I have a sinking feeling that we will not and that the £4 million will have to come out of the British taxpayers' pocket instead of out of the Common Market. We always seem to play fair.
  I appeal to the Minister to ensure that payments made to Mr. Daniel Telliez of Boulogne will be paid by the French Government, not by Britain. Hon. Members may recall this recent case of abuse of Common Market funds. Mr. Telliez was a school teacher in Boulogne. On a salary of only £100 a week, he managed to own 19 cars, five blocks of flats and three holiday homes. Although he had only 18 pupils in his school, he filled in a form, which he sent to the French equivalent of our intervention board, asking for a Common Market subsidy for school milk for no fewer than 22,000 children. As I say, he had only 18 pupils in his school, and the population of his village was 500. He did this consistently for two and a half years, and received £750,000 in Common Market subsidy for milk for his non-existent school children. That could, and probably would, have gone on indefinitely had it not been for the clever French income tax authorities, which could not understand how a teacher with a salary of £100 a week could own 19 motor cars, and so on. He was eventually caught, and appeared before a French court.
  If we ourselves are to pay the £4 million that we inadvertently and, in my view, wrongly paid to the Dutch firm to enable it to export cheap butter to Russia, via Cuba — although it never went to Cuba — I hope that the Government will ensure that the French Government are responsible for the £750,000 that they paid for Mr. Telliez's 22,000 non-existent schoolchildren.
  That is only the tip of the iceberg. The Minister will be aware of the scandalous way in which Common Market funds go through the Italian Government, almost directly to the Mafia, for the destruction of non-existent tomatoes. The details are well recorded, even by the Court of Auditors of the Commission. It is happening throughout the Common Market, and it is one of the greatest rackets ever. I am worried that, although Britain appears to go by the rules, there is no incentive to other member states to economise or to cut spending, because it is the EEC's money, not theirs. Does my hon. Friend believe that the intervention board can get the £4 million from the Common Market, or must we pay it ourselves?
  The problem is extremely disturbing. For those who are opposed to the Common Market, the issue of cheap food sales to Russia has been used as a rallying point. Everyone
  1186
  becomes annoyed about it, and it is much talked about. Rightly, it has been the nit-picking problem that we put at public meetings and elsewhere. But the problem is out of control. It is not a small problem. It is an enormous boost to the Soviet Union and to the economies of eastern Europe. The problem is growing constantly and dramatically, and we are at least entitled to discuss the best ways of stopping it. When we spend more than £2 million a day simply to subsidise the export of cheap food and wine to the Soviet Union — in effect when we send enough wine to provide every Russian household with three litres of wine at 7p a litre to toast the invasion of Afghanistan—we should ask ourselves, "What can be done?"
  I fully appreciate that Britain cannot do this alone. We can do it only within the Common Market. I hope that the raising of this matter will make a small contribution to urging the Government, even more than at present, to work as hard as possible in the EEC to find a solution to an international scandal that is desperately unfair to our nation, our taxpayers and our consumers.
  7.7 am
  Mr. Robin F. Cook: The hon. Member for Southend, East (Mr. Taylor) is to be congratulated on having raised this extremely topical debate. However, I cannot resist telling the hon. Gentleman that we are somewhat adrift of the estimate that he gave me yesterday afternoon of when we would reach the debate, which he suggested would be at 11.30 pm. With such errors in his calculation, he will never make it to the Government Whip's Office.
  The debate has focused attention on a rather bizarre consequence of the CAP. It confers a benefit on the Soviet Union, but that benefit is not passed on direct to consumers in the Soviet Union but is pocketed by the state, because it sells to its consumers the goods on which we provide a subsidy at a handsome profit to the Politburo. That is an eccentricity which we can observe on the surface of the CAP, but in debating it we should not lose sight of the fact that the roots of this eccentricity lie buried in the structure of the CAP, and especially two consequences of it.
  The first is the surreal surpluses to which the policy gives rise. Two specific surpluses are relevant to our debate. The first is the butter surplus. I noted that when the Commission announced the latest tranche of sales to the Soviet Union it produced a new estimate of the growth of the butter surplus, which continues remorselessly to rise. It now estimates that, on present trends, by the end of the decade we shall have 1·8 million tonnes of butter in intervention stores. That is a staggering total.
  The fact that the total is growing puts in perspective the claims made in the spring that the agricultural settlement had finally brought the Common Market agriculture policy under control and would regulate the growth of the surpluses. Indeed, I noticed that the official who announced the sale of butter to the Soviet Union earlier this week said:
  "These latest measures do not amount to much unless the member states do more to cut dairy production."
  It is clear that the Commission is not persuaded that the spring measures have done much to control dairy production. Indeed, we are increasingly aware that many states across the Channel are doing little to enforce even the cuts agreed in the spring measures.

  1187
  The position on the wine surplus is, if anything, even worse. About one third of all the wine produced in the Common Market is being bought into intervention. I notice that the Minister of Agriculture recently produced an estimate of the growth of the proportion being taken into intervention. He estimates that, on present trends, we shall soon be taking into intervention not one third of all the wine produced in the Common Market but about half the table wine produced in the Common Market.
  The system has clearly gone awry if we end up with not merely a proportion of excess production being bought into intervention, but half the total annual production being bought into intervention because no one in the Common Market wants to buy it. There is substantial evidence that some really rotten wine is being produced by manufacturers who would not dream of creating that rotten wine to sell on the open market. They are producing it because they know that they are guaranteed a purchaser, in the shape of the Commission, who will buy wine which no one, even with a palate of lead, would dream of buying on the open market.
  The second source of the problem with which we have to grapple in the debate is the high cost of Common Market production. The surpluses are locked into storage because of the high price that was paid for them in the first place. If Common Market prices were not so high in relative terms, wine, butter and other products would be sold on the world market. They cannot be sold on that market because the price paid for them is so much higher than the world price.
  According to Commission estimates released this week, we in the Common Market are still paying twice as much for butter as the average world market price. I suspect that I may have some sympathy from hon. Members present when I say that that fact gives the lie to many of the promises offered to the nation in 1975, when we were repeatedly assured that the price of food in the Common Market would fall into line with the price in the world market as world shortages forced up the price outside the Common Market. That has not happened. If anything, the gap has increased rather than diminished in the decade since then.
  Both those points form the root of the problem to which the hon. Member for Southend, East has pointed. Nevertheless, there are three other points relating to the issue that he has raised with such eloquence and perspicacity to which I shall address my mind and to which I should like a response from the Parliamentary Secretary.
  The first is the curious parallel decision by the Commission—at the same time as it decided to extend largesse to the Soviet Union; to the Government and not the people of the Soviet Union—to postpone a decision to release stocks of the butter, at a subsidised price, to European consumers such as pensioners.
  I understand that when the Commission considered the matter it had before it a proposal that as well as selling the butter to the Soviet Union it should make available a Christmas bonus, as it were, to Common Market pensioners, who are easily identifiable, who are numerous and who could make a significant hole in the butter mountain. Indeed, they would welcome the opportunity to obtain butter at the price at which it is being made available to the Politburo and the Kremlin.
  I find the decisions to postpone any commitment to such a sale offensive when the Commission is acting with such haste and impatience to carry through the sale to the
  1188
  Soviet Union. If the only way of diminishing the mountain of butter is to offload it on to the Soviet Union's allies, we are entitled to expect the Commission, for political if not economic reasons, to accept the case for making the butter available on equally advantageous terms to those within the Common Market who are in need.
  There is a curious obverse side to the benefit that we are conferring on the Soviet Union, in that the benefit is paralleled by disadvantage to our allies. The hon. Member for Southend, East referred to the effect that sales of butter will have on the Third world. On the whole, Third-world countries tend not to be major dairy producers, especially not producers of butter. The major dairy producers are the countries within the Western world, especially Australia, New Zealand and North America. They are the countries that will suffer when the butter is dumped on the world market at below world market prices.
  As I understand from the Commission's statement this week, it proposes to sell the butter at the GATT price, which is currently significantly below the operative world market price. The Common Market will therefore be undercutting sales by America, New Zealand and Australia. In other words, at the very same time when we are conferring a benefit on a country which the Government affect to regard as a threat, we are damaging the economics of countries which are clearly our allies. We could not achieve an outcome more perverse in its economic consequences for the distribution of world power. If the sale of butter is to take place, it should surely be at the world market price at which our competitors are prepared to make butter available. If the sale were to take place at the world market price, it would still involve a substantial subsidy.
  I move on to my third and most perplexing argument. Apparently it will cost more to make the sale to the Russians than the proceeds of the sale will realise. I note that the Foreign Office's package of measures designed to bring Common Market expenditure under control includes the proposition that we should save 150 million ECU by postponing any subsidised sale of butter on the world market to the Soviets or anyone else. As we all know, the Commission has overcome that proposition by the simple device of ignoring the Council of Ministers. That must cast genuine doubt on the promises that we have heard in recent months about the growing financial discipline that is being placed on the Common Market. If we ever achieve agreement within the Common Market on financial disciplin at the level of the Council of Ministers, we shall discover even more management committees which axe not bound by that discipline.
  Why does it cost us money to sell the butter? Selling butter must surely always be cheaper than not doing so, even if we are selling it to the Soviet Union. I presume that it will cost 150 million ECU this year to make the sale to the Soviet Union, because in making the sale the Commission is obliged to write off a loss on its assets, but in the real world the loss was sustained at the moment when the Commission found itself stuck with stocks of butter and wine which no one wanted to buy. The idea that these stocks represent an asset at face value is one that is possible only in the fantasy world in which the Commission operates. I ask the Minister to explain to the House how it can be cheaper to store butter at a cost of about £1 million a day than to sell it to anyone, be it the Soviet Union of wherever. If the Minister can

  1189
  satisfactorily explain that conundrum to me now, I shall be adequately rewarded for having sat here through the watches of the night.
  7.20 am
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): I know that my hon. Friend the Member for Southend, East (Mr. Taylor) feels very strongly about this matter. He has made similar speeches many times. However, I must correct him on one point. When he compared prices in the United Kingdom with those in the Soviet Union, he was comparing a retail United Kingdom price—£2·50 a litre for wine—with wholesale prices for wine exported to the Soviet Union. I am sure that my hon. Friend will accept that that is so.
  The need for subsidised food exports to the USSR and its allies is of course one manifestation of the wider problem facing the common agricultural policy—that of surplus production for which there is no economic outlet.
  To summarise the main thrust of the Government's approach to this problem, it is to tackle the disease rather than the symptoms. Our aim is to bring supply and demand into better balance primarily by acting on the level of prices but also, where appropriate, by using other mechanisms. This year, as the House will know, a major step was taken in the right direction when average support prices were reduced for the first time — although a British Minister had previously been defeated in a vote on the issue — and special measures were introduced to limit milk production.
  These were not easy decisions for the Agriculture Council to take. Certainly they were not popular with producers in the United Kingdom or in other member states. Nevertheless, it is to be welcomed that the Council of Ministers has shown that it is capable—albeit, some might think, somewhat belatedly—of acting to contain CAP costs as successive United Kingdom Ministers of Agriculture have argued. This is, however, only a first step. We have made it clear that further action will be needed over the coming years, notably to contain costs in the cereals and wine sectors where there is chronic overproduction.
  In the short term, we have to recognise that surpluses exist and that something has to be done with them. There are of course schemes to encourage consumption within the Community and a certain volume is exported as food aid, but these methods alone could not provide sufficient outlets. It is a fact of life that in most cases the cheapest way of disposing of surpluses is by export, even taking into account the need to pay export refunds, which are sometimes substantial. The refunds are in general pitched at levels which enable Community produce to be sold on the world market at the going price — the price of competing supplies. I must emphasise that these refunds do not directly benefit the importing country which would, if Community produce were not available, be able to buy equivalent produce from elsewhere at much the same price.
  That is an important point. The fact that the Soviet Union and her allies are major purchasers of foodstuffs from the Community as well as from other major food exporters reflects the failure of the Soviet agricutural system. The collective system is quite simply less effective
  1190
  than ours, which relies on individual enterprise. If Community prices were not competitive, the Soviet Union would still be able to buy equivalent supplies at similar prices elsewhere. Peculiar though it seems, the Soviet Union is not therefore the main beneficiary from its imports of food from the Community. The Community is the main beneficiary because, without the exports, the cost of the common agriculture policy would increase. The British taxpayer would suffer if, in current circumstances when substantial surpluses needed to be disposed of, we refused to export to the Soviet Union.
  Mr. Teddy Taylor: Does my hon. Friend agree that if we did not dump so much food on the world market, world prices would not be so low and therefore the export rebates would not be quite so large? Is it not the dumping by the Common Market that artificially depresses world prices?
  Mrs. Fenner: I started by saying that the disease was the surplus. It is not a case of dumping but of having a surplus. The Community's earnest intention to deal with surpluses is demonstrated by the measures that we have taken this year in regard to the dairy industry. I understand that my hon. Friend might think that we have taken these measures belatedly. British taxpayers would suffer if we refused to export to the Soviet Union, bearing in mind our substantial surpluses.
  In 1980, the Community decided to support the United States' partial embargo on food sales to the Soviet Union following the invasion of Afghanistan by ensuring that Community produce did not replace United States supplies. The United States renewed its sales to the Soviet Union in 1981 and the fact is that, unpalatable though it may be, in current conditions any attempt by the Community alone to ban exports to the Soviet Union would increase the cost of the CAP without hitting the importing countries.
  We have, however, always made it clear that we would strongly oppose any arrangements which conferred a positive benefit on the Soviet Union by offering it preferential terms which are not available to other buyers. That has been our consistent stance. I have seen the reports, to which my hon. Friend referred, that the Commission is contemplating exporting later this year large amounts of butter to the Soviet Union and certain middle eastern countries.
  It is not clear whether the arrangements envisaged are specially favourable or are at the usual price. My information is that the proposals relate to stocks of old butter. All the signs are that the Commission intends to respect the minimum price set by GATT. In September, and after consultation with member states, the Commission will make proposals to improve schemes for social butter and Christmas butter. The Management Committee will discuss the matter later today. We therefore do not have all the information. We have consistently opposed arrangements that confer a positive benefit and, as yet, there is no sign that the arrangements that are to be discussed later today provide a special benefit.
  In the Community's present budgetary circumstances, there is no money to pay for extra exports, so—subject to examining the precise details—I expect us to oppose such suggestions in any event. We would also oppose

  1191
  them, as I have already said, if, on detailed examination, it proved that the envisaged export prices were to be below market rates.
  Mr. Robin Cook: If we sell the butter, albeit at a cut price, to the Soviet Union, that ought to produce in the current financial year a new source of revenue. Therefore, why is it that, in order to make the sale, the Commission apparently requires a supplementary budget of a considerable amount to pay the subsidies? What peculiar convention results in a sale at a net cost to the Community?
  Mrs. Fenner: That is the result of paying export restitution. It costs us more to continue to store the butter than it does to pay export restitution. We shall consistently oppose any especial subsidy above and beyond the normal.
  Mr. Cook: I am genuinely puzzled. If it costs more to store the butter than to pay the export restitution, why does the Commission require a supplementary budget to go ahead with sales which presumably will reduce the storage costs?
  Mrs. Fenner: Presumably because the old butter has been stored over a long period—at least six months. In order to give an accurate answer to the hon. Gentleman's important point, I shall write to him.
  My hon. Friend the Member for Southend, East knows that in our present budgetary circumstances we shall be opposing the expenditure of the extra money. We shall certainly oppose, as we have consistently, any especial subsidy.
  The Government's position is therefore both logical and prudent. The most important need for the longer term is to contain the cost of the CAP, in particular by reducing and eliminating surpluses. Where surpluses exist, in general we support the most cost-effective method of disposal. Often that is by export and necessitates the payment of export refunds. For some such exports, the Soviet bloc is one of the markets available. To refuse to export to that market would not harm the Soviets. It would in reality harm our own taxpayers by increasing the cost of the CAP. The Government remain opposed to any special arrangements which involve exports to the Soviet bloc on specially favourable terms. That policy is correct.
  Hon. Members will be aware that, on the proposals made yesterday, the Commission has the power to determine the size of export refunds and the countries of destination to which they relate, subject only to first
  1192
  seeking the opinion of the Management Committee for the commodity concerned, on which member states are represented. That Management Committee meets later today.
  My hon. Friend referred to a special sale and asked me for clear reassurances about the operating of the export plan. He made a special reference to an export which went to Cuba. This is a rather technical matter, but the facts are fairly simple. In February 1983, export refunds of about £4 million were paid by the intervention board to two British firms on consignments of butter destined for Cuba. The board took equivalent securities from the exporters, to be released on the arrival of the butter in Cuba. Suspicions arose that the butter might have been diverted to Russia, and the Commission launched an investigation. The board accordingly held on to the guarantees. In March 1984, the exporters threatened legal action for the release of the securities. The board's legal advice was that on the evidence of the investigation so far such action would succeed. The board therefore saw no alternative but to release the securities.
  I assure my hon. Friend that that action has not prejudiced the investigation, which is still going on. If the investigation produces the necessary evidence, action can be taken to recover the export refunds, but the board was not entitled to go on withholding the guarantees provided by the exporters solely on the suspicion that the butter was not delivered to Cuba.
  The board and the Customs and Excise have cooperated to the full in the Commission's investigations, but these were on a Community basis covering similar exports from other member states and it has so far been difficult to bring them to a successful conclusion. The Commission has made no approach to the board about the release of the securities. According to press reports, the Commission has said that the cost will fall on member states if they have not acted on sound legal grounds. Our action has been legally sound, so we believe that the risk to the British taxpayer is covered.
  I hope that I have dealt with the points made by my hon. Friend the Member for Southend, East and by the hon. Member for Livingston (Mr. Cook). I congratulate my hon. Friend on raising a matter in which he has always shown the greatest interest. I know that he has also always been most concerned about our membership of the Community and anxious to ensure that the CAP helps to eliminate surpluses and is run as economically and efficiently as possible.

  Infrastructure Programmes
  7.36 am
  Mr. David Steel: I am grateful for the opportunity at this early hour in the morning to introduce a debate on public expenditure on our infrastructure. I shall be brief, as I hope to catch the eye of the occupant of the Chair in Tuesday's debate on the economy. I shall therefore not deploy the wider economic arguments, but concentrate on the positive and detailed proposals that we believe the Government should be considering against the background of the very poor current and projected rates of growth in the economy and the continuing intolerable levels of unemployment.
  The debate is stimulated by two reports—that of the Select Committee on the Treasury and Civil Service and the recent CBI report, "The Fabric of the Nation." Commenting on the Budget, the Select Committee said:
  "A number of the specific measures taken in the Budget are imaginative and welcome. Nevertheless more attention should be given to the case for increasing public investment in particular sectors, and we are concerned at the implications for unemployment of a growth rate which is expected to decline from present levels."
  When the Select Committee makes such a request, there should be a positive response from the Government.
  We in the Liberal and Social Democratic parties made this a major part of our election campaign. We differ fundamentally from the Government in believing that the country's resources, especially the resources and revenue from North sea oil, ought to be used to invest forward in our future rather than to pay for an ever-lengthening dole queue.
  I am glad to say that that general thesis has received some support from the CBI. My hon. Friend the Member for Colne Valley (Mr. Wainwright) and I had the opportunity to meet the CBI shortly before publication of its report. Although we may not agree on the exact amount of public investment that we want, the CBI agrees with our general proposition because public infrastructure investment is easily the most cost-effective means of job creation. It is about 10 times as cost effective as tax cuts. Infrastructure investment has a very low import content. If we pay British workers to build and repair British houses with British raw materials, that is bound to be more effective than giving people more money in their pockets to buy Japanese videos through tax cuts. However, public investment has declined by one third since the present Government came to office in 1979.
  In its report, "The Fabric of the Nation", the CBI argues that an efficient infrastructure is the foundation of an efficient economy, and that sensible investment in the right infrastructure will achieve three things. First, it will help to sustain the current economic recovery by reducing business costs, improving competitiveness and creating a framework within which jobs can be generated and unemployment reduced.
  Second, the CBI says that it would eliminate some of the bottlenecks that hamper economic growth and help to avoid similar constraints arising in future. It is referring particularly to improvements in transport and communications.
  Third, the CBI argues that it will promote regional development and improve the environment. In addition, it makes the point that I have just made—that, if such investment has a low import content, it should be
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  undertaken now while there is substantial spare capacity in the economy and we still have a substantial income from offshore oil and gas production.
  What surprises me about the CBI report—a surprise that I none-the-less welcome—is that it goes on to say that the responsibility for improvements in the basic infrastructure lies predominantly with the public sector. The CBI—that great bastion of private enterprise in this country — recognises that that is true. It says that is because many of the returns on such investment accrue to society as a whole rather than to the person providing the finance, and that such returns are not easily quantified in monetary terms.
  I hope that the Government, committed as they are to the private sector of the economy, will pay attention to that powerful argument, coming as it does from the CBI, and recognise that public investment is required. I shall leave my hon. Friends to raise particular matters with the Minister. In summary, the major candidates for such expenditure are clearly regional policy: the development of derelict land, environmental upgrading and improving the quality of life.
  The British Road Federation has recently published a report. Even if one does not go as far as it goes into the amount of money that it would like to spend on roads, clearly another major candidate for expenditure is roads.
  Members of the Liberal party are more concerned perhaps about requests from the British Railways Board for further investment in our railways system.
  At present, in many of our major cities and towns, the sewerage system requires upgrading. The system is a legacy that we inherited from the Victorians, and it has served us well. This is never particularly popular with the voters, because it is expenditure that is not visible. Nevertheless, we now know that failure to invest in the sewerage system will lead to severe trouble in future.
  Of course, at present, very topically, Members in different parts of the country are acutely aware that we have not invested sufficiently in a national water grid. Much of the suffering that parts of the country are undergoing at present through drought is quite unnecessary. We have plenty of water in other parts of the country, but we are unable to transfer it because of the lack of investment in water supplies.
  If I may make a constituency point, bridges are another candidate for investment. More than half our nation's bridges were built before 1922. About six years ago, one of the road bridges in my constituency was washed away by a high flood of the River Ettrick at Selkirk. That led the local authority to conduct a survey of all the bridges in the Borders region. Since my constituency includes a large part of the river Tweed and all its tributaries, we have a large number of bridges. The cost of repair and replacement is enormous. Much work is waiting to be done, not only in my constituency but in the whole country.
  Investment in housing is also important. The housing condition survey conducted in 1981 reported that over 1 million dwellings were unfit, nearly 1 million were without amenities, more than 1 million were in need of extensive repairs, and over 4 million were regarded as unsatisfactory. There has been a sharp slowdown in amenity provision, no progress on unfit dwellings and an acceleration of disrepair. We argued that fully in the House last night. The lack of capital expenditure, repair and the rescue of old housing stock is a scandal.

  1195
  Plenty of work has to be done. It is better to use our oil revenues on such work than to finance an ever-lengthening dole queue. The British people are eager and willing to do the work. Such capital investment is well within the Government's grasp without unsettling the economy. All that is required is for the Government to look up from their narrow, monetarist vision and to see the needs of Britain, its people and its economy.
  7.46 am
  Mr. John Golding: I welcome the opportunity to speak in the debate, because it is about one of Labour's themes during the election campaign. We said that the Government had failed because they were more willing to fund unemployment than to finance investment. I congratulate the Leader of the Liberal party on raising this important subject. I do not see the alliance working this morning. — [Interruption.] Perhaps members of the Labour party are not present to support the Liberal party, but I had expected at least one member of the SDP to bother to turn up.
  The unemployment statistics become worse, and a growing problem is that of unemployment among young people. This year youngsters will find it even more difficult to find work. The 18 to 24-year-olds have become vulnerable. Unemployment hits between one-quarter and one-third of that generation. It is a scandal that such a high percentage of young adults should be without work. The Government have made provision for 16-year-olds, but they are making no provision for the 18 to 24-year-olds who desperately need work and status as they begin adult life. We travel on inadequate roads and visit inadequate housing, while so many young and energetic people are without work. It is such a waste.
  Not only are the young causing anxiety. Long-term unemployment is a growing problem. This country has neglected that subject for far too long. It is commonplace to be unemployed for a year or more. When I was at the Department of Employment I was worried about the fact that even before 1979 the hard core of unemloyment was emerging. That hard core has grown increassingly and the Government's response has been, not to increase provision for the long-term unemployed but to reduce it proportionally. We are now getting to the stage at which we talk of hundreds of thousands of people being unemployed, not just for one or two years, but for three years. It is unacceptable for people to be unemployed for three or more years. There is no doubt that unemployment of such a duration is destructive to the personality and the family.
  It does not make sense to have a society in which young adults are without work in such numbers and for such considerable periods. It has been pointed out that at the same time there is inadequate provision for housing and roads. The sewerage system, especially in the north-west, is in a terrible state. The railways need modernisation and electrification. As the Leader of the Liberal party pointed out, we need a national water grid.
  There is a need also—this is a subject in which I have a great interest—to emulate France and develop a telecommunications and cable system for the future. Road and rail provision are important, but, in a computer and data information age, telecommunications and cable facilities will be vital. Unfortunately, the Government's actions with telecommunications, especially cable, will
  1196
  deprive Britain of the telecommunications system that it should have to survive as a great industrial nation. It is for the Government to respond to what the CBI has said.
  The housing problem is grave. As the Leader of the Liberal party pointed out, 4 million houses are unsatisfactory. Every Member of Parliament knows the tragedy that lies behind inadequate housing. I believe that many of us regard housing as the most important subject to consider on Friday and Saturday mornings. It is difficult to get across to the Government the idea of the individual and family misery that is created because those people are unable to obtain reasonable accommodation. It is a case not just of putting up with physical discomfort—many working people have been used to that discomfort all their working lives—but of enduring the psychological strain which destroys marriages and turns lives into a misery because individuals are unable to obtain the houses to which they are entitled.
  Sometimes people live an houses which are totally unsatisfactory because of the physical conditions, such as damp, because they have to climb stairs when they have emphysema or pneumoconiosis, and cannot manage, or because they have cardiac complaints and live upstairs, when they want groundfloor accommodation. People not only suffer because their houses are physically unsatisfactory, but have the problem of not being able to get a transfer from one house to another because of the shortage of housing stock.
  What is criminal about the Government is that they are making all those problems worse. They seem to have no knowledge of the stress and discomfort under which many people live. If the Government understand that, yet deliberately ignore it, they are as heartless as people say they are.
  We need the houses. There is no doubt about that. I represent a constituency where there is a good housing chairman, housing committee and housing office. Other constituencies have many more problems. Hon. Members who represent Liverpool constituencies or some of the London constituencies face far greater problems. It has never made sense to me that, on the one hand, there are the unemployed and on the other hand there is totally inadequate housing provision. It does not make sense that there are hundreds of thousands of unemployed workers from the construction industry, yet there is terrible dereliction in housing. One cannot justify it in any way. The Government should revise their housing policy.
  The Government have dragged their feet, not only in housing. The CBI is right. Our road system is inadequate. Anybody stuck behind trucks, for example on the M1 and M6 last Friday, will have seen examples of waste, not only of one's own time, but of energy and manpower in the transport of goods. Conservatives have often said in my lifetime that if working people worked harder the problems of this country would be solved. They have emphasised productivity. I have always believed that there is great room for improvement in efficiency in production and distribution and that we can increase competitiveness, not by more sweat, but by more thought.
  One area in which that is true is distribution. It does not make sense for big trucks to be in long queues to use one lane of a motorway for literally hours on end. It does not make sense that our distrubution system is so poor on the roads. The Government should improve the road system so that industrial efficiency can improve. If the Government doubt that the roads need improvement,

  1197
  Ministers with London constituencies should take to the motorways more often on Mondays and Fridays. [HON. MEMBERS: "And the railways."] I agree. My friends in the National Union of Railwaymen and in the Associated Society of Locomotive Engineers and Firemen have pleaded for a modernisation of the railway system and for investment in electrification.
  The need for more Government investment in the Channel tunnel must be stressed. The House has heard about bridges over rivers. We should consider the building of a Channel tunnel with more urgency. It does not make sense for the Government to say that we can have a tunnel only if private entrepreneurs fund a substantial part of its cost. They are delaying great opportunities.
  Our physical communications are inadequate. On top of that, there is a need to take a more rational view of the development of the cable system. In the coming era of information technology it will be vital to have an integrated telecommunications system which can deal with telephony and broadcasting, and with the exchange of data information. The Government's present piecemeal plans will not provide that.
  The Government decided to introduce cable earlier than was desirable in order to create jobs. Those plans will not materialise as things stand. The Government should regard telecommunications and cable as exceedingly important. They should get all the technical decisions right and should ensure that funding is available, whether or not private entrepreneurs think that cable television and advertising will be profitable. That is almost irrelevant in the context of our need to develop an integrated telecommunications system.
  I congratulate the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) on introducing this subject. On behalf of the Labour party, I wish to say how important it is and how badly the Government have been behaving in this area.
  8.3 am
  Mr. Richard Wainwright: The telling examples given to the House by my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) and the hon. Member for Newcastle-under-Lyme (Mr. Golding) underline the fact that for the past seven years the country has failed to keep up even the bare maintenance of our public assets. The nation has been, and is today, eating into its capital. Recently the Institute for Fiscal Studies demonstrated this and did a heroic job on the past few years' meagre figures provided by our makeshift public accountancy system. Its conclusions are unreserved and unqualified. The Government have been poor stewards, and the public assets overall are in a worse condition now than when they first took office.
  Public capital expenditure has been declining in real terms ever since 1976, except for a few months in the autumn of 1982 when the Prime Minister was forced to intervene to get a hasty, but brief, temporary upturn in local government capital spending that winter.
  There are serious consequences of such a long period of decline in capital spending, and I shall spend a few moments discussing some of them. We are not dealing with a sudden phenomenon or downturn. We are dealing with a long period of decline. One result is that the stock of up-to-date technologically modern plans for capital
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  expenditure processed through our town planning system, and the rest, is now meagre because it has been thinned out so much in recent years.
  There is a risk that if, by some magic, capital resources were to be released a great many of the projects which would be immediately available would be out of date. We would, as it were, be fighting the last war but one. There is no doubt, as I am sure most hon. Members have found when they have approached public boards, that planning staffs have been depleted. Which ambitious young people trained to assess capital projects and to make detailed plans would go with any great sense of adventure into the project departments which are so manifestly in decline?
  The effect on civil engineering, of course, has been devastating. For the most part it is still flat on its back and seriously deprived of the contracts necessary to keep teams of skilled people together. The Government do not seem to understand that it is not just a matter of keeping individual experts in employment. It is a matter of having teams of people who are accustomed to work together on skilled projects with a great deal of expertise. Alas, many such teams have been broken up by this long period of capital starvation. The private sector is rather more affected than the public sector, because it is the private sector which almost entirely carries out the public sector's plans. The private sector of our big capital works industries, with one or two exceptions, has been in a long cycle of unrelieved decline.
  I liken the Government's attitude to that of extraordinary parents who deliberately keep their children anaemic and underfed because they know they could not control them if they were robust and properly developed. The Government are scared of expansion.
  When one visits public authorities, it has been my experience in Yorkshire that a number of them say, "Of course you are right, and the House of Lords and the House of Commons were right in their reports on these various public services but, frankly, our expert staffs are now so depleted that we could not cope if the Government suddenly had a change of mind." It is high time to start relaying those foundations and equipping our public sector properly.
  The set of examples which I should like to give the House come from my constituency. I do not apologise for that, because the Colne valley is located between and surrounded by three of the largest groups of urban populations in the country; indeed, in Europe. To that extent, the Colne valley provides a fair example of what is happening.
  The most topical item in this dismal catalogue is water supply. It so happened that the Colne valley became one of the cradles of the early industrial revolution because of its vast natural water supply from the high Pennines for the early canals which brought up the coal, and for processing wool. Those natural resources are as generous and bountiful as ever, but more neglected than they have been for 150 years.
  My constituents living on the high Pennine ridge and suffering the awful level of rainfall that that involves are at the moment forbidden by an order sanctioned by the Department of the Environment to rescue their allotment crops, cricket pitches or public parks from withering in the heat, yet for years, from the reservoirs that surround places such as Marsden, at least one quarter of the water leaving the reservoirs has leaked out through our decaying distribution system before it could reach anyone's taps.

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  In evidence to the House of Lords Select Committee on the water industry in 1982 the then chairman of the National Water Council, Sir Robert Marshall, said:
  "Parts of West Yorkshire are in a very bad state in terms of their distribution systems."
  Nothing like enough has been started since to begin to remedy that position. A major new water link from Bradford to Dewsbury which would enable the valleys to keep more of the water for their own purposes remains just a paper plan. It has been authorised and appears in the projects for the future, but there is no sign of it starting. However, the House of Lords Select Committee on the water industry recommended at least an extra £100 million capital expenditure for that industry.
  The same is true of sewerage. A once beautiful stream that meanders through choice countryside in my constituency, between the two industrial villages of Meltham and Honley, known as the Mag brook, has for weeks resembled a sewer. I inspected it first on the European election polling day because there did not seem to be enough public interest in voting, so I went off on a voyage of exploration.
  Mr. Jeremy Corbyn (Islinton, North): I hope that the hon. Gentleman had had a hepatitis injection.
  Mr. Wainwright: I shall reveal my medical history at some other time. It includes a mild attack of hepatitis.
  I inspected this brook again only last week, when it not only looked like a sewer but in the heat smelt like one. This used to be a most attractive part of the scenery. All this work will have to be done eventually and never so cheaply as now, when there are so many people wanting work and when so many private sector firms, in the very part of the economy which the Prime Minister claims to cherish so much, are desperate for work.
  In an industrial district such as the Colne valley, which has some of the largest mills in the world, there are many derelict buildings. Sometimes these occupy the only flat building land around in the Pennines. The Common Market, bless its heart, has made an offer, which means about £18 million for west Yorkshire, for clearing, or possibly refurbishing, these mills. It is a scheme for areas of textile decline. It has a reasonable condition—that the British Government should match these grants pound for pound. Already, almost a year of the five-year term of this offer has elapsed and the Government have not yet responded with the necessary extra grants for local government. In their crazy way they are threatening to penalise local authorities, which are good stewards of public assets and want to take up this offer to keep these assets in proper nick.
  There is also the problem of heat conservation and energy saving. Many of these old industrial buildings, and some of those built during the first world war, look all right —some of them are monuments of industrial premises—but they are gigantic losers of heat. They were built when the coal coming up by canal from the south Yorkshire coalfields was dirt cheap, and the shop floor was scarcely heated in those days. Now they need demolishing and replacing with energy saving buildings, with other modern features.
  Much has already been said about roads, but in respect of exports I must support the CBI's plea that what it calls the absurdly poor level of linkage with the EEC ports should be put right by constructing proper roads to those ports. The CBI also says that by the time the M25 orbital
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  road round London is completed, which should be in 1936, large parts of it will be out of date when the Minister advances to cut the tape, because the width will be inadequate for the traffic that will be generated by then. The M62 motorway through the Pennines and part of my constituency has now been listed by the Government as a subject for expert survey because of the overcrowding by freight vehicles on the steep slopes.
  The full list of problems is a great deal longer than that. All this evidence points to the urgent need for larger management teams and more project planners getting new schemes off the drawing board as soon as possible. This would help in the retraining of some of those 400,000 unemployed construction workers who have been without work for more than a year.
  One assumes that the demands on the infrastructure will increase substantially up to the end of the century. Do the Government believe their propaganda about an economic recovery? They show no sign of preparing for the extra demands on the infrastructure which such a recovery would bring. We have been talking about the kind of work which would create more jobs for our people and might begin to get us into the same league as the United States, which has generated 5 million new jobs since January 1983.
  The Government can no longer pretend that all our competitor countries are behaving in the same half-cock fashion and are deliberately keeping numbers of their people unemployed. It is miserable to watch this country being administered into decline, but that is happening today.
  8.16 am
  Mr. A. J. Beith: My right hon. Friend the Leader of the Liberal party, the hon. Member for Newcastle-under-Lyme (Mr. Golding) and my hon. Friend the Member for Colne Valley (Mr. Wainwright) detailed some ways in which public investment could contribute materially to employment and provision for our future.
  I shall concentrate, in following that theme, on local government, because in the last week we have had the Secretary of State for the Environment's statement about restraints on capital spending by local authorities. When the right hon. Gentleman made that announcement, he argued that the national cash limits on local authority expenditure had been exceeded by about 13 per cent.
  In drawing attention to that, the right hon. Gentleman was acting in marked contrast to his predecessor, now the Secretary of State for Defence, who, only 18 months ago, was urging local authorities to remedy an underspend on capital projects that had occurred in 1981–82 and in 1982–83. The then Secretary of State for the Environment was not alone in arguing that case, because the Prime Minister leapt to his support. Speaking in the debate on the Loyal Address in November 1982, the right hon. Lady said:
  "We need more capital spending by local government and in the public sector generally".— [Official Report, 3 November 1982; Vol. 31, c. 21.]
  Great emphasis was laid by Ministers on the need for capital spending and to switch the emphasis from current to capital expenditure.
  Only months later, however, we have the Secretary of State for the Environment castigating local authorities for excessive capital expenditure. Responsible officials who

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  have served in local government all their lives—I am not talking of politicians — believe that central Government have gone mad because, month by month, the instructions of the Government are put into reverse. The tap of local government expenditure cannot be turned on and off in that way. To be sensibly and effectively carried out, capital expenditure needs a team of people building up a project, ensuring that it is properly costed and designed and fitted into a programme.
  During my years as a Member of this House I have never met such despair as I now see among professional local government officers over the way in which their capital programmes have been handled in recent years. They are by no means strangers to stop-go; they have witnessed that under various Administrations over the years. Now, however, it has reached extraordinary depths. Stop-stop is a tempting way to describe it, but it is not quite that, for we need look back only about a year to the dramatic assertions by the Government that local government capital spending should be increased. They were criticised at that time for not engaging in adequate capital spending.
  The recent announcement by the Secretary of State must be set against the background of local authorities having built up capital receipts which they could properly use on capital expenditure. On the Government's instructions, they have been selling off houses and bits of land with the express purpose of increasing their capital receipts. But they are now told that they cannot use that money to reinvest. In business, capital receipts are used for new investment. It is the only sensible use to make of that money.
  At the time of the Budget, when commenting on the Chancellor's proposals, I expressed the fear that we would end up like a family at the time of the depression, selling the piano to keep the debt collector at bay and to pay off current expenditure. That is what the Government are telling local authorities to do—not to use the capital receipts which they have acquired to reinvest and to replace investment which the Government may believe is no longer necessary or appropriate. They are being told that they cannot spend those receipts on investment. That money should be used to reinvest. It is the only sensible purpose for it.
  Let us consider in more detail the implications of the Secretary of State's announcement. From the beginning of this business of getting in capital receipts, councils were committed to spending on capital projects their capital allocation, plus only a proportion of their accumulated capital receipts. The proportion was originally 50 per cent.; last year it was reduced to 40 per cent.; now it has been further limited to 40 per cent. of the new capital receipts arising in the current year. Those local authorities that have carefully put aside capital receipts and said, "We shall use this money for sensible new investment", are being told that they cannot use that money for capital purposes. All that they can use is a proportion of their receipts for the current year.
  Northumberland county council is especially affected. It has engaged in proper, good housekeeping. It has done what the Government told it to do. It has gained capital receipts by selling land and property that are surplus to its requirements, on the assumption that it could use that money to invest in what it now considers to be necessary.
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  I understand the philosophy that the Government are pressing upon them: that local authorities' capital investment in the past is not appropriate to the needs of the present. Therefore, it may be right that public investment is switched to some extent.
  However, that is not what local authorities are being told to do. They are now told that the capital receipts that they have gained from selling property that they no longer needed cannot be invested in new needs.
  In my constituency, that has had the direct and immediate effect of leaving Northumberland unable to go ahead with projects for sports halls and facilities in schools. One example is Duchess high school, in Alnwick in my constituency, which has no adequate indoor sports facilities. Alnwick is a market town which does not have the leisure centres and sports complexes which its citizens regard somewhat enviously in some big urban communities. That it should have indoor sports facilities in its only high school seems only reasonable. Northumberland made provision for that through capital receipts, but now it discovers that it cannot use those capital receipts—the money which it husbanded — for that purpose. Other projects are also being affected.
  Similar schemes for Ashington technical college and Ashington high school are also being affected. Northumberland had put aside the money for those projects, but the Secretary of State's announcement last week means that the money cannot be used for that purpose. Where is the sense or logic of not switching the capital investment, if it can be switched, into new investment? That is a very striking example of the mistaken nature of the Government's policy.
  The squeeze on investment also damages other areas. To take another heart-rending example, my constituency contains a village called Low Hauxley—an old fishing village right by the beach and in an idyllic position. The village is threatened by coast erosion. The Secretary of State for the Environment recently announced, following a public inquiry, that he will not require the necessary coast protection works to be carried out to protect that village. He has told the inhabitants of the village that in 15 years' time it is likely that such works will be essential, but he will not allow them to be carried out. In effect, he is saying that that village's citizens can risk their houses being washed away by the sea or move somewhere else. He is condemning that village to die with that assertion. If the coast protection work is carried out, it will provide employment for contractors and the labour force that is available in Northumberland and the north-east of England. It would protect their homes and the way of life of a happy village, over which a terrible shadow has been cast.
  My right hon. and hon. Friends mentioned the lack of investment in water. That is an interesting topic for me to consider, because it does not apply in my part of the country. The Northumbrian water authority has undertaken one of the nation's largest capital projects on water. I turn on my garden hose with enthusiasm, knowing that half my water rates are being used to pay interest charges on a reservoir that has enough water to supply the constituencies of all my hon. Friends who are worried about what is happening in their parts of the country and far more than is needed in my part of the country. However, because we do not have a national water grid, we cannot get the water to other parts of the country. Where is the logic in creating that vast resource without

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  having the means of taking it to other parts of the country? Where is the justice in the people in Northumberland having to pay the interest charges on that enormous facility when they do not require all the water that it makes available?
  My colleagues have mentioned railways. Ministers must know how great is the need for investment in the railways and how much benefit we would get if the east coast main line between Newcastle and Edinburgh were electrified. Those are not money-wasting schemes. They represent investments in our future, to make the country more efficient and to provide jobs for our people. That is what the Government should be doing.
  8.26 am
  Mr. David Alton: I am glad to follow my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith). When his illustrious predecessor, Sir William Beveridge, was the hon. Member for Berwick-upon-Tweed in 1945, he spoke about how unemployment should be tackled. He referred to the need to speak of outlay rather than spending, because outlay suggested a sense of design rather than simply spending money for the sake of it.
  Forty years later, we have more than 3 million people in the dole queue. Another person has become unemployed every minute of every day since the Govenment were elected in 1979. That is a tremendous waste of resources. It is not an efficient way of lubricating the economy to have so many people on the dole when so much work needs to be done.
  The only growth industry in this country since 1979 has been acronyms—YOP, TOPS, MSC and the rest. There has been a growth of schemes, rather than a growth of work related to the problems facing our people.
  I have pleasure in joining my right hon. and hon. Friends in this debate, and we welcome the support of the hon. Member for Newcastle-under-Lyme (Mr. Golding). The hon. Gentleman talked about the destruction of personality that unemployment can bring. Personalities are also destroyed when people live in abject conditions, and it is outrageous that in this day and age 500,000 people still live in homes without inside sanitation, running hot water or bathrooms.
  Last week, I met representatives of the National House Improvement Council, who told me that only 12 per cent. of the homes in designated housing action areas have so far been improved. Of course, the number of homes being improved is declining because of the lack of momentum in the improvement programme, thanks to the cuts initiated by the Government.
  The council is also worried that the 1986 house conditions survey may not take place, in an effort to disguise the reality of what is happening. As my hon. Friend the Member for Colne Valley (Mr. Wainwright) said, we have a staggering 400,000 building workers on the dole, yet there is so much work to be done. On Merseyside, for every Yosser Hughes, every boy from the blackstuff, who says, "Gissa job", I can show you his wife who says "Gissa house."
  It is to a specific building project that I wish to bring to the attention of the House this morning. It involves work that desperately needs to be done on Merseyside and is related to the needs of the area. It would be spending with a sense of design rather than simply for the sake of spending. I bring the attention of the Minister to the need
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  for a Merseyside barrage. It is a scheme supported by the Merseyside county council and the Mersyside Docks and Harbour Company. It has the backing of the local university. Research has been undertaken by the Merseyside barrage group of Marintech North West, which was formerly the North Western Universities Consortium for Marine Technolgy. The group comprises four separate research units in the north-west and it has shown that the scheme is both feasible and practical. I pay tribute especially to the work of Peter Woods, the planning officer of the Merseyside county council, in drawing up some of the proposals for the barrage. It is a scheme which the Liberal party on Merseyside has been urging for over a decade. It pressed for it in conjunction with the need for a freeport on Merseyside and I pay some tribute to the Government for having responded to Merseyside's request for a free port. I hope that Mersesyside will now get the second part of the equation
  Two tidal schemes connected with barrages are currently in operation elsewhere in the world. One was established in 1966 near St. Malo on the La Ronce estuary. The second was stablished in 1968 at Murmansk in the Soviet Union. Detailed studies have been undertaken for a Canadian site in the bay of Funday and £2 million has already been spent in Britain on studies for a barrage in the Severn estuary.
  In my view, the Mersey estuary is a much more suitable location for a pilot project for a barrage, as it has a large tidal range and would provide an extensive storage area. The studies, including the £30,000 study of the county council, show that, even though there would be a need for a full feasibility report, the project is practical and could bring many advantages to the people of Merseyside.
  The barrage would consist of a large sea wall or dam across the estuary. It would have located within it turbine generators, sluices and a lock, or locks, for shipping. It would probably have a working life of 120 years. Three possible sites have been considered. The first is between New Brighton and Langton docks. The second is between Seacombe and Trafalgar dock and the third is between Rock Ferry and the former Herculaneum dock.
  The scheme would offer several advantages. It would generate about a third of Merseyside's electricity requirements. It would provide new deep sea water facilities in the mouth of the Mersey, which would be linked with the freeport. It would create a third river crossing and many much-needed jobs in the construction industry.
  There are other arguments in favour of a barrage. It would create a sheltered impounded basin, which would in turn create extra opportunities for navigation, amenity and recreation. The impounding effect would change the estuary from being fully tidal to one where tides continued to be present but where the low tide part of the regime would be missing. The water would rise to present high-tide levels but would not fall appreciably below the present mean water level. That would reduce the mean spring tide or range inside the barrage from the current 8·4 m to 4 m. That could have important implications for shipping. My noble Friend Lord Evans of Claughton, members of the Liverpool city council group and I have discussed these matters with the Merseyside Docks and Harbour Company, which is an enthusiastic support of the barrage scheme.
  An energy-generating Mersey barrage would have an important environmental and regional impact in the

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  complex that is Merseyside. It is further suggested in the feasibility studies that decisions on a barrage would best be considered as part of an integrated Merseyside regional development programme. If this is done, power from a Merseyside barrage could be available in 1993 and full power one year later. That is considerably earlier than the earliest time when power could be generated by a Severn barrage, but is dependent on a rapid accumulation of momentum, strong project management and speedy decision making in the next three years. There is a strong case for promoting a Mersey barrage as a relatively low-cost pilot tidal energy project. It is the most attractive alternative in the United Kingdom to a Severn barrage on a basis of unit cost of energy produced. It would cost less than one tenth as much as a Severn barrage and would provide valuable barrage construction and operating experience.
  A barrage would create an impounded basin in the inner and upper estuaries. The high-water stage would be prolonged and minimum water level would drop only to approximately the present mean water level. The principal environmental benefits would be water-based recreation and the avoidance of flooding from high tides and surges. The area of water available for recreation in the centre of a large conurbation would be unique in the United Kingdom, and the barrage could become a major tourist attraction. Over 300,000 people a year visit the barrage scheme at La Ronce.
  As a barrage would significantly change the estuarine characteristics in terms of pollution load, flora and fauna, sediment transport, and siltation, there would have to be extensive studies of those points before work was begun.
  Perhaps the greatest impact of the barrage project would be in job creation. During the first four years or so there would be massive construction activity. During that period, some 3,500 jobs would be created, with a short-time peak of up to 5,000. Longer-term employment effects are unlikely to be great unless substantial new activities are developed around the impounded basin, as I hope they would be.
  There are at present 130,496 people on the dole on Merseyside—88,619 in Liverpool—many of whom had worked in the construction and related industries. This scheme would provide work for many of them. It is a crazy waste to keep those people in the dole queue at a cost of some £650 million a year in unemployment benefit alone — and that figure does not include the tax that they would pay if they were in employment. Ironically, £650 million is a rough estimate of the cost of the barrage project.
  This scheme would improve the infrastructure, create work, harness a God-given renewable source of energy and provide a symbol of faith in the future for a part of Britain where commitment, faith and hope have been in desperately short supply. I commend it to the House.
  8.37 am
  Mr. Paddy Ashdown: I, too, should like to mention some matters of importance to my constituency. However, my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) and my hon. Friend the Member for Colne Valley (Mr. Wainwright) made some broader points. It is the theory behind the Government's view which many of us find
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  perplexing — the idea that the money spent on the infrastructure is expenditure, not investment. We believe that we must begin to invest in Britain's infrastructure, not just to improve it, but to keep it in one piece. Do the Government intend to allow Britain to continue to disintegrate into a pile of muddle and decay? In the end, someone will have to pick up the bill for the neglect.
  The Government frequently claim that previous Governments have been irresponsible in leaving large bills and debts behind them, but the Minister is doing no less. He is leaving a large bill which, in the end, someone will have to pay. The Government have adopted a madcap, "Alice through the Looking Glass" system of economics, in which whatever is private is all right, but anything which calls for public expenditure must be wrong.
  I recently received a letter from the Minister on the subject of the direct labour organisation in my constituency. He said that the council must accept the tenders put in by private industry, irrespective of the cost. It could cost significantly more to have certain jobs done privately than to have them done through the DLO.
  Only last night we were presented with another example of madcap logic — the sale of British Shipbuilders. British Shipbuilders deals with our trade infrastructure, rather than our internal infrastructure, in the sense that it provides our merchant ships. We heard some dotty logic yesterday from the Secretary of State for Industry, who complained that it was wrong for the British taxpayer to be creating, in the warship division of British Shipbuilders, profits which would then be used to support the manufacture of merchant shipping in Britain. The sum of that logic is that the profits of British Shipbuilders should not be ploughed back into our capacity to produce merchant ships, but should be put in people's pockets.
  When that logic comes home to roost in our constituencies, it creates havoc and misery. In my constituency, evidence produced by the British Road Federation, which is backed up by the evidence of the county surveyor, shows that the road network on which my rural community depends is falling into decay. The county surveyor has told me that he cannot deploy sufficient money to maintain it. Who will pick up the tab? Is it the Government's long-term intention simply to allow those roads to decay? Someone must pick up the tab in the end.
  The hon. Member for Newcastle-under-Lyme (Mr. Golding) mentioned the housing problem. He was right when he said that eight out of 10 people who come to our surgeries want to discuss housing problems. The sum of human misery that is created by the housing problem is not significantly less than that created by unemployment. In my constituency a single person has no hope of a house, and married people, even if they have a child, have no prospect of getting a house in the foreseeable future. Elderly people frequently live alone in five-bedroom houses because there is no accommodation for elderly people. That is a waste of resources and a cause of misery. Meanwhile, the maintenance of houses is neglected. Window frames are rotting and there are problems with wall tiles. All of those jobs must be done in the end. The Government are leaving the bill to their successors. I hope that they arrive soon. Indeed, the Government are leaving no less a bill than that which they complain of being left by the Labour Government.
  The Government are considering the external financing limit of the Wessex water authority. It has said that it needs an irreducible minimum of £32 million this year and the

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  Government have said that it is likely to get about £16 million or, perhaps, with a bit of arm twisting, £18 million. The result of that will be an immediate increase in water rates in my constituency of 25 per cent. in the first year and of 7 or 8 per cent. in following years. Moreover, as my hon. Friend the Member for Colne Valley said, 25 per cent. of our water is allowed to run away into the ground. That will continue, as will the decay in water pipes.
  The sewerage developments which Yeovil needs cannot go ahead. The housing that we need cannot be built because the sewerage system cannot cope with it. In Lyde road in Yeovil there are two 375 mm drainage pipes going into a 300 mm main. The result is flooding in local council and private houses. In Cambone road, sewage is backing up through wash basins. In the villages of Barwick and Stoford raw sewage is being pumped out because a pumping station has failed right next to a primary school in a village which, only a few years ago, suffered a minor epidemic of polio. Will the Government leave the tab for that to their successors?
  The Prime Minister is fond of telling us that she follows the simple economics of the housewife. We need to remind her that when she is in charge of the administration of Britain she is not a house owner but a tenant—but what a tenant. She has allowed the garden to run to rack and ruin. She has flogged off the doors to pay the week's bills. She has allowed the roof to decay so that it now leaks. That would never be allowed on any council estate. Indeed, the neighbours would be complaining and so would the people who live around. It is long past the time when the Government should be evicted for precisely the same reasons.
  What the Government are doing not only defies logic but is deeply irresponsible, yet they claim to be a responsible Government. The decay which they have allowed to happen in the infrastructure of Britain not only causes personal misery but leaves a bill which in the end somebody else will have to pick up. It is that irresponsibility, as well as the lack of logic, that I and my colleagues condemn.
  8.45 am
  The Parliamentary Under-Secretary of State for the Environment (Sir George Young): The House is indebted to the Leader of the Liberal party, the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), for choosing this important debate on the nation's infrastructure. We have had a Consolidated Fund debate within a Consolidated Fund debate. The matters that have been raised cover just about every Government Department, as well as going right to the heart of fundamental economic strategy. It is not often that a junior Minister in a spending Department is let loose on major issues of macro-economic strategy.
  Two broad themes have run through the debate on the infrastructure. One is that, compared with a few years ago, we are now spending far less on the infrastructure than used to be the case. Related to that we are now urged to increase, fairly substantially, expenditure on the infrastructure, both as a means of creating the conditions for economic recovery and—an argument deployed by the right hon. Gentleman — as a means to economic recovery.
  The second theme in any debate on the infrastructure is the need to spend more to maintain, repair and improve
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  the infrastructure that we already have. I have a lot of sympathy with the second half of the argument, but slightly less with the first.
  It is important to understand why we are not now spending as much as we used to spend on the nation's infrastructure. There were some good reasons for massive new construction in the 1950s and 1960s. At that time there was a substantial population increase, going up from about 50 million in 1951 to 52·7 million in 1961. and up to 55·5 million in 1971. Since then there has been an increase of only 200,000, to 55·8 million.
  Just after the second world war we had to catch up on repairing all the war damage and rebuild the nation's housing stock, which rose from 11·8 million in 1950 to 13·8 million in 1960, to 16 million in 1970 and to 18 million now. The whole emphasis on housing was on repairing, maintaining and improving what we have rather than engaging in a massive new build programme. That was the theme of the first debate that we had.
  It is important to inject a dimension on housing. I think that nearly everyone in the Chamber agrees that owner-occupation, rather than tenancy, is the preferred tenure. Over the past 10 or 20 years housing has to a large extent been taken out of the public sector and put into the private sector. Hardly anyone would disagree that that is a sensible way to proceed. But that has to be taken into account when one looks at public sector investment in infrastructure. If one tries to interpret what has happened to investment in infrastructure one has to recognise that there has been a displacement of public sector by private sector investment in housing.
  The third reason for massive spending on the infrastructure in the 1950s and 1960s was to cope with the major shift to road transport. The number of vehicles increased from 2·5 million just after the second world war to almost 20 million in 1982. To cope with that there was a major motorway programme. By April 1983 there were 1,400 miles of motorway. I do not think that any member of the Liberal or Social Democratic parties would suggest that a programme of that scale should be continued indefinitely.
  The first point to make is that we do now have the basic infrastructure of housing, roads, water and sewerage to provide for a population in which growth has now stabilised. The major expansion of the nationalised industries—for example, gas and electricity—has caught up with the demand and in some cases they have surplus capacity.
  The new towns have been rounded off as the population increase was less than expected, and there are some perfectly respectable arguments for saying that public infrastructure investment need not be as high as it was in the 1950s and 1960s.
  Mr. David Harris: How can my hon. Friend say that we have the basic infrastructure, when he knows that in my area, as in many others, we have an antiquated sewerage system pouring sewage on to beaches, there is no decent road to the west country—only the A30—and there is now a drought so people will be short of water?
  Sir George Young: I do not know whether my hon. Friend was in the Chamber when I began my speech. I said that there was a respectable argument that we should spend more on what we have. I agree with him on that and hope to explain what we are doing in that respect.

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  First, however, there are good arguments for not spending quite so much public money as we used to spend. It has been argued that a fairly large increase in capital expenditure would have beneficial effects on the economy, but a fiscal boost based on expenditure on the infrastructure will not necessarily produce lasting economic gains. Certainly, the case is unproven. We were also not told how it would be financed, whether through higher inflation or higher interest rates, and what would be the knock-on effect on the private sector. In the hour and a half of debate we heard no suggestions as to how the increases would be financed.
  Mr. Wainwright: Wait until Tuesday.
  Sir George Young: The hon. Gentleman asks me to wait until Tuesday. I noted that the speech made by his right hon. Friend the Leader of the Liberal party was a trailer for a major attack on the Government on Tuesday.
  It was also implied that increased spending on the infrastructure would lead to improved economic performance. Again, there is no guarantee that that would take place. One could argue that a great deal of public expenditure in the past has been unproductive or counterproductive and a burden on the economy and has failed to add to the productive potential of the economy. Each scheme must be considered on its merits to see whether it can be justified in cost-benefit terms rather than to make the case on broad macro-economic grounds.
  If the increase in capital expenditure were financed by reductions in current expenditure—again, this was not clear from the debate—there would be an adverse effect on employment because a high proportion of current expenditure is on direct employment. Therefore, I have some doubts about the macro-economic argument that we should invest in the infrastructure to create new jobs and economic growth. That was tried in the mid-1970s and came to a grinding halt in 1976 with the intervention of the IMF.
  I have much sympathy, however, with the argument that we should do more to repair, maintain, improve and consolidate the infrastructure. I hope that my hon. Friend the Member for St. Ives (Mr. Harris) will accept that. The Government are fully committed to that course, and we have a continuing programme to that end. That is well illustrated by what we are doing in housing.
  The hon. Member for Liverpool, Mossley Hill (Mr. Alton) criticised our record on housing, but when the Lib-Lab pact ended in 1979 only £90 million was being spent on improvement grants. In the year just ended we spent £907 million. That dramatic increase illustrates our theme of switching resources to repair, improvement and maintenance, as is sensible when we have a crude housing surplus of about 750,000.
  Mr. Corbyn: At current levels of Government investment in housing, how long will it take to house all the homeless and all the people on housing waiting lists who wish to live in council housing?
  Sir George Young: We could make a substantial start in London if the 20,000 houses in the public sector that have been empty for more than a year were put to good use. If authorities such as the hon. Gentleman's council, would sell property that they have to people on the waiting
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  list or to sitting council tenants and thus obtain the advantage of re-lets, considerable progress could be made in tackling the problems of the homeless.
  Last year we spent £1 billion on repair and improvement of local authority housing stock. Again, there is no case for massive investment in local authority new builds. We have a substantial number of difficult to let properties and properties that are vacant. We have to switch the whole emphasis to repair and improvement. This may not show up in the figures that have been deployed as investment if it is part of an increased programme of repair and maintenance.
  Mr. Alton: Without being churlish about it, at the end of the 1970s we saw a reduction in the massive demolition programmes that had plagued the country over the previous 30 years. Sometimes property had to be demolished for good reasons, but many good properties were pulled down, and a switch was made to improvements, which I welcome. Surely the Minister is not denying that, as a result of the reduction in the promised funding for improvement areas, only 12 per cent. of the houses in declared housing action areas have had any work doen to them and, as the National House Improvements Council has said, the country is becoming a patchwork quilt—derelict decay, on the one hand, and limited sporadic improvements, on the other.
  Sir George Young: I should like to see the details of the 12 per cent. If one looks at housing action areas that have only just been declared, the percentage is very low. In housing action areas that have existed for four or five years—and this is the case in my own constituency—the percentage is substantially higher—70 or 80 per cent.—where the property has been brought up to the right condition.
  I want to consider that question in a little more detail. I was asked about the statement last week on the measures to keep local authority capital expenditure within the national cash limits. The hon. Member for Berwick-upon-Tweed (Mr. Beith) implied that there was some inconsistency between what was said last week and what the previous Secretary of State and the Prime Minister said in 1982. In fact, the two statements are wholly consistent. In the first case, there was evidence that the local authorities were underspending. The resources that we had allocated to the local authorities for capital investment were not being spent, so we urged them to spend up to the cash limit. Last week, when it was clear that they had overspent by £350 million last year, and were heading for a substantial overspend this year, we invited them to spend down to the cash limit. I cannot see that there is any inconsistency in the Government's approach, given that we operate by a system of cash limits for various Government Departments. It is worth saying that we have not tried to claw back the £350 million overspend last year by taking action this year, which is the conventional means of tackling overspends.
  I was asked about the Merseyside barrage. I understand that my right hon. Friend the Secretary of State will be going to the tall ships' race next Thursday, and he will have an opportunity to discuss with other people the implications of this project, which I suspect is fairly expensive and will have to be looked at with some caution. Reference was made to some engineers and other people who were in favour of the project. I am sure that

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  somewhere on Merseyside there are equally qualified people who are dead against it. The hon. Member for Mossley Hill shakes his head. I am sure that there will be an argument that can be deployed against it on various grounds.
  Mr. Alton: I am glad to know that the Conservative European candidate in the recent elections supported the Liberal party's campaign for the barrage. Indeed, there was all-party support for it. All the riparian authorities, the county council and the docks and harbour board supported it.
  Sir George Young: I wonder whether the Leader of the Liberal party would regard himself as committed by everything that all his candidates said in every speech.
  Mr. Steel: Certainly not.
  Sir George Young: While I note, of course, that this project was endorsed by the Conservative candidate in the European elections, the Government would not necessarily regard themselves as committed by such a statement.
  The switch from new investment in housing to repair and maintenance that I outlined is being matched by similar trends in other sectors. In the private sector, housing repair and maintenance work rose by almost 7 per cent. to almost £4·3 billion last year. As to public sector assets, expenditure on repair and maintenance, putting housing on one side, rose to £2·7 billion last year in real terms.
  We have heard quite a lot about water and leaks. My Department published a technical report on leakage control in 1980. All water authorities use this in deciding how far it is economical to deal with leaks. My brief says that leaks are greatest at times of high pressure, which is at night when demand is low. Leakages can be dramatically cut by the simple expedient of reducing pressure.
  We have heard much about roads maintenance. The Government have achieved improved output for the money spent. Expenditure on structural renewal and the maintenance of the trunk roads system rose from £86 million in 1978–79—the last year of the Lib-Lab pact—to £207 million in 1982–83——
  It being Nine o'clock, the motion for the Adjournment of the House lapsed, without Question put.

  Housing (Burnley)
  Motion made and Question proposed, That this House do now adjourn.—[Mr. Major.]
  9 am
  Mr. Peter Pike: Public sector housing has already been discussed today. The earlier debate, in which I spoke for a few minutes, showed clearly how worried my hon. Friends are about housing. I want to draw to the Government's attention the housing crisis in Burnley, but the problems are repeated in many areas. The solution is to be found in the Government taking note, and taking action.
  The Parliamentary Under-Secretary has visited Burnley in the last few years and has had an opportunity to examine its housing problems. More recently—on 19 April—the Minister for Housing and Construction visited Burnley. He was able to see for himself at ground level the problems in the public and private housing sectors. The visits were much appreciated by the borough council and myself.
  Councillors and officers enjoy a good relationship with the Department's Manchester office. That is illustrated in a letter to me dated 20 July from the chief executive of the Burnley borough council, which refers to the useful and good relationship with the Department's regional controller.
  I want to concentrate on two major problems. They are not the only problems in Burnley, but time does not permit me to deal with them all. I do not dispute that the Budget of 9 March 1982 provided for an original finishing date of 31 December 1982 for renovation grants at the higher percentage rate. The time was extended and that was welcome, but ultimately it came to an end last autumn, as announced in a statement to the House. The higher rate of grant was an attraction to many people in Burnley, who found it much easier then to meet their share of the cost.
  Another problem is caused by VAT being charged on some renovation work. That means that even more cash has to be found by the owner.
  However, they are not the biggest problems. The greatest difficulty is caused by the financial limitations on this year's housing investment programme allocation. Last year's allocation, which was open-ended, was a massive incentive to councils such as Burnley to go all out to encourage people to improve their homes. Up to November last year, Burnley was receiving an average of 260 applications a month, which was encouraging to the council. I am sure that the Under-Secretary will be encouraged by that response by people living in older homes in Burnley. Almost half the borough's housing stocks are older terraced houses built before 1919, with the accompanying problems of disrepair, lack of standard amenities and poor environment. They are, however, in the main solidly built stone houses, as the Under-Secretary of State will have seen for himself when he visisted Burnley. They are worthy of the extension of life that improvement will ensure.
  Burnley has a higher proportion of housing lacking standard amenities than any other district in Lancashire —about one in 10—and that cannot be acceptable. A recent report has identified to the council 27 areas within the borough worthy of treatment as general improvement areas or housing action areas, but that treatment cannot proceed, because of the lack of finance. This year's housing investment programme allocation is £5,350,000.

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  By April 1984 grants already approved totalled £3,200,000, and those awaiting approval totalled a further £15,400,000.
  To meet last year's statement, the council stopped all further applications for discretionary grant as from November. An amount of £150,000 per month is being released to those on the waiting list. A points system has been introduced, taking into account the length of time on the waiting list, disability, hardship and other items, to determine the fairest possible system of distributing the limited resources available.
  The council—both councillors and officials—have been bombarded with submissions from people who have been on the waiting list for a considerable time and from those who can no longer apply for a full improvement grant, but only for a mandatory intermediate grant.
  One important point involves the problems that face the Stoneyholme action area, which, for more than half its life, has not been able to receive improvement grants: first because of the moratorium in 1981, and now because of the more recent cuts in the HIP allocation. After the moratorium, there was the boom period for grants in 1982. At first, the council did not have sufficient trained staff to deal with the flood of applications. The problem was dealth with as speedily as possible. As of 19 July 1984, the outstanding grant applications were as follows: improvement grants, 1,599; repair grants, 1,388; intermediate grants, 387 — making a total of 3,374. Within the intermediate grant figure is included a number of people who changed their application for an improvement grant to a mandatory intermediate grant on the basis of their belief that they stand a better chance of getting a grant earlier and dealing with some of their more urgent problems.
  Many of the people on the waiting list will have to wait years. The council's HIP allocation, which is at present being considered — on Monday of this week it was before the housing committee — for 1985–86 is £10,400,000, which includes £6 million for grants. The figure of £6 million is realistic, and the council feels that it reflects the capacity of the local construction industry to deal with the problem, assuming that the council is granted the total requested. It is not a reasonable figure in relation to the total requirements.
  Week after week, I hear in my advice bureau and read in my post complaint after complaint about people facing major problems who are unable to take action because they cannot obtain the necessary grants. I have seen many tragic cases where houses are in urgent need of improvement. It will be some years before some of the people can deal with their problems.
  The council is, of course, trying to give prior approval for urgent work to be done in appropriate cases where it is essential for work to be done without delay — for example, roofing. The problem is that that action does not really help the owner-occupier, because once the work has been done he still does not know when he will receive the grant. I have been trying to get building societies and banks to examine the possibility of lending people money in the hope that they will be able to wait until the grant is ultimately approved and received. I am sure the House appreciates that no builder will undertake work on the basis of the owner-occupier possibly obtaining grant
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  approval and the builder therefore possibly getting paid in two or three years' time. We must deal with the problem, and we need some assistance in doing so.
  Before referring to the other major area with which I wish to deal, I should like to mention council house rents. In 1980–81 the Government's subsidy to the housing revenue account was £1·6 million—now it is nil. The change in financing has forced rents up to an unacceptable level for a town such as Burnley. Between 1979–82 rent levels rose by the massive figure of 150 per cent. I must accept my share of responsibility, because part of that rise was during my period of office as leader of Burnley borough council. There is no doubt that we have forced rents up to a level that will not encourage tenants to remain in their houses or to move into council properties.
  While rent levels rose by 150 per cent., over a similar period house prices rose by only 10 per cent. In a town with low-priced houses for sale, rent levels now bear an unfavourable comparison. Burnley has always had a high percentage of home ownership, of which we are very proud. We are not opposed to that in principle—indeed, we wish as many people as possible to own their own homes — but there will always be a requirement for public housing to rent. At the moment people cannot afford the rent levels that they are asked to pay, as they are too high.
  Time forces me on to the second main problem area, which is the improvement of the council's own pre-war housing stock. The council has about 1,200 pre-war houses, which are now in urgent need of modernisation. The problem is two-fold. First, there is insufficient capital allocation, and secondly, there are the revenue consequences of such improvement. The crazy situation is that improvement of the council's own housing stock has major revenue implications, while improvements in the private sector have only minimal revenue implications.
  In the period when funds were available for limited grants, it was surprising that if we sold a house on a council estate and it could get an improvement grant there were minimum revenue implications for Burnley borough council, the ratepayers and rentpayers, but if the council improved the house itself the revenue implications were very high. The council is therefore forced to consider the implications of speeding up the improvement of its own housing stock, such as the consequence on rents or rates, or a combination of the two.
  As a result, the council can improve only 100 houses a year, which means that at the present rate it will be nearly the turn of the century before the programme can be completed. We shall then need to tackle the immediate post-war houses. That is totally wrong, in 1984. We have houses built before the war, with bathrooms outside. They were built like that because we had a large number of miners, and in the days before pithead baths the idea was that miners could take a bath before they went into the house and so not take the coal dust into their homes. We have kitchens with Belfast sinks and houses lacking all the modern facilities that should be provided. Money must be made available to deal with that problem now.
  I should like to refer to two estates in Burnley—Plane Tree and Bleak House. They are really one estate, and are in the ward which I represented on Burnley borough council from 1976 to March this year, so I know the problems of the estate extremely well. It was the last estate to be built just before the war. There are about 342 homes on it, a few bungalows and a few flats. They were

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  all well built, semi-detached houses. However, the estate is rapidly deteriorating, and that has accelerated in the past three years. The problem needs to be tackled now. At present many of those houses are empty because people will not pay the high rents for the facilities that are provided. Some 18 months ago I asked council officers to look at the estate as a matter of priority and at all possible options for dealing with the problem. Demolition is not acceptable, because the homes are basically too good. Improvement for sale by the council was ruled out by the capital spending implications and the risk of financial loss. Homesteading would only add to the grant problems. The selling price would be low, and there would be little capital receipt for the council.
  Improvement for sale through another agency was considered, but the Bradford and Northern Housing Association doubted whether it wished to take it on. The council could have changed its priorities, but I have already referred to the urgent need for grants in the boroughs. We could not transfer resources from there. We could not change the priority for dealing with other estates, because that would only have created problems on the other pre-war estates. It would not have solved the problem, but would merely have shifted it from one estate to another. We certainly could not throw sheltered housing out of our programme.
  We considered sale to a developer, and three companies were approached—Barratts, Leechs and Wimpeys. One hundred and twelve houses are being considered as a pilot scheme for a company to develop, improve and sell. That has serious implications. I shall not jump over the moon if the council pursues that course. Nevertheless, it is a possible course and must be considered extremely carefully.
  Whatever decision is ultimately taken, it will be a difficult one. On 20 July the council wrote to the Department to ask whether the Secretary of State would issue a special consent to permit the involvement of the Bradford and Northern Housing Association in solving the problem at the Bleak House estate through a scheme involving sales, lettings and, possibly, shared ownership with Wimpeys or one of the other firms. The council understands that that consent is unlikely to be forthcoming.
  The problem is urgent and needs to be solved now. If urgent action is not taken and we do not improve these homes in the private and public sectors, the problem will cost the country far more money, because its solution will involve demolition and rebuilding.
  9.17 am
  The Parliamentary Under-Secretary of State for the Environment (Sir George Young): This is the second time in less than 12 hours that I have had the privilege of listening to the hon.Member for Burnley (Mr. Pike) talk about housing.
  The hon. Gentleman has explained what he sees as the most pressing problems in his constituency. As a former leader of Burnley borough council and a member of the housing committee, he speaks with close personal knowledge of those matters, and no one can doubt the genuine anxiety that he expressed about the problems which his constituents and the local authority face.
  I commend the pragmatic and broad-minded way in which the local authority looked at a range of solutions to
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  its housing problems. I only wish that other Labour-controlled local authorities would demonstrate that pragmatism and broad-mindedness when tackling their problems. One must engage all available resources, including those from the private sector, if one is to make a concerted attack on the problems of bad housing.
  As the hon. Gentleman said, it was at his invitation that my hon. Friend the Minister for Housing and Construction visited Burnley in April, and I know that my hon. Friend found the visit illuminating, not least what he saw at the Bleak House-Plane Tree estate, a matter to which I shall return later. My hon. Friend asked me to say how much he appreciated the chance to see the position at first hand. I recall my visit to Burnley when Dan Jones was the Member and the hon. Gentleman was the leader of the council.
  The north-east Lancashire towns share some particular housing characteristics: a traditionally high rate of home ownership, which the hon. Gentleman mentioned —Burnley was one of the cradles of the building society movement; rows of terraced houses, often stone-built, marching up the hillside from the bottoms of the valleys, and often now in need of major expenditure; and comparatively little recent private sector investment, mainly because of the keen competition from the market for terraced houses.
  I was surprised when I was told the prices of houses in Burnley as compared with those in my constituency in London. By London standards they are remarkably cheap, which inhibits builders from building new house for sale. The Government recognise that that limits the ability of Burnley council to generate capital receipts. Its stocks of council houses are small to start with. We have tried to reflect that in our approach to its housing strategy. I am grateful for the hon. Gentleman's kind words about the regional controller for my Department and the good relations that exist between the council and the Department.
  The starting point must be the overall level of resources available for housing nationally. The Government have made it a cornerstone of policy to ensure that public expenditure does not consume too great a proportion of the nation's wealth and public sector housing has had to make its contribution to that strategy.
  In the longer term, the lower rate of inflation which our policies have brought about will lead to a more stable housing environment, and one in whip investment decisions can be made against a more secure background. Housing has made its contribution to past reductions in public expenditure. Even so, the HIP total for 1984–85 was increased by over £50 million from last year to this.
  I shall look more closely at the position in Burnley. The borough received an allocation for 1984–85 of £5·350 million, which represented an increase in cash terms of 21·2 per cent. over the 1983–84 allocation. That was a substantial increase—one of the largest increases in the north-west region and one which went well beyond that suggested by the generalised needs index. The allocation recognised the specific spending needs of the borough council, not least the need for extra sheltered accommodation which the hon. Member mentioned. I am sure that he is right to say that that must remain one of the local authority's top priorities. Given the resources available to the region, Burnley is receiving a fair share of the region's resources.

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  We have also tried to help by enabling local authorities to plan their housing expenditure for more than one year ahead and to use limited resources sensibly.
  For the past two years we have given assurances about the future levels of allocation. When the 1984–85 allocations were issued last November, assurances were given that for 1985–86 and 1986–87 authorities could expect to receive allocations of at least 80 per cent. and 70 per cent. of the current year's allocation provided that they could justify the need for that level of expenditure. That position was not changed by last week's announcement about local authority capital expenditure. Burnley therefore will benefit from having a relatively high starting point on which at least the next two year's allocations are expected to be based.
  I shall deal with some of the specific points made by the hon. Gentleman. The Government's view that new-build accommodation should be directed towards special needs is well known and Burnley, in common with many other authorities, has a major need for more sheltered accommodation. My hon. Friend the Minister for Housing and Construction saw the site of such a scheme at Woodbine gardens and I was pleased to learn that that scheme is now well under way, and that there are plans for other similar schemes.
  The renovation of privately owned dwellings is particularly relevant to Burnley, as some 80 per cent. of its dwellings are privately owned. The hon. Gentleman argues that the higher rates of grants applicable during the past two years and the inducement of additional allocations available under the indicative figure system, should be continued.
  As I think he recognises, in introducing these incentives in the 1982 Budget, we made it clear that they were temporary measures to help the building industry. During the past two years, Burnley has been able to spend a considerable amount on improvements to private sector stock—£2·5 million in 1982–83 and over £5·5 million in 1983–84.
  We have enabled the authority to benefit from an additional allocation of £1·7 million in 1983–84 by giving the guarantee of supplementary allocations. We continue to give top priority to home improvement and hope that, within the resources available to them, local authorities
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  will also give a high priority to the improvement and repair of private sector housing. The hon. Member mentioned the problem of repairs to the local authority's own stock. He outlined the problems that that would pose for the local authority's finances in general.
  One factor which affects entitlement to housing subsidy is the incidence of new loan charges, including those incurred in respect of council house modernisations. Whether this calculation results in a positive subsidy entitlement depends, of course, on the additional annual amount of housing income which the authority is expected to raise locally. Authorities may choose not to raise housing income by rent increases of the specified amount, but in that case we could not justify making taxpayers' money, in the form of subsidy, available instead. The arrangements for subsidy cannot be changed for that reason.
  In the present climate of expenditure constraints in the public sector, it is even more important that authorities should look for private investment to help to solve public sector housing problems wherever possible. The Bleak House estate mentioned by the hon. Gentleman is a good example of an area in which private sector involvement might benefit the authority. My hon. Friend the Minister for Housing and Construction visited this estate and was deeply concerned by what he saw. There is a clear need for urgent action to bring it back into effective housing use. As the hon. Gentleman said, Burnley is considering various options for the estate, including the possible sale of part of the estate to a developer for improvement and resale for owner occupation. My hon. Friend and I are following progress in these deliberations with interest, and discussions are taking place between officials of Burnley council and my Department.
  The Government remain committed to tackling housing problems in Burnley and are determined that all available resources should be utilised to do so—and not only those of the public sector. In this context, the remarks of the hon. Gentleman this morning are indeed helpful to our fuller understanding of the situation. I can assure him that in the HIP allocation discussions that are taking place all the points that he has raised today will be considered most carefully.
  Question put and agreed to.
  Adjourned accordingly at twenty-five minutes past Nine o'clock am on Thursday 26 July 1984.