Commons Sitting of 21 March 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

    Israel
    Mr. Lathamasked the Secretary of State for Foreign and Commonwealth Affairs whether he has yet fixed a date for his proposed visit to Israel.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): It has not yet been possible to find a mutually convenient date, but I am looking forward to a visit as soon as that proves practicable.
    Mr. Latham: When my right hon. and learned Friend, who personally has greatly improved Anglo-Israeli relationships recently, visits Israel, will he assure his Israeli hosts—whether before or after their general election—that Britain is totally committed to the withdrawal of all foreign forces from the Lebanon and to the territorial integrity of all states in the region?
    Sir Geoffrey Howe: I am certainly in a position to do that.
    Mr. Allan Roberts: Does the right hon. and learned Gentleman agree that now that American policy in the Lebanon has failed the time may be appropriate for a separate European initiative on the middle east, perhaps on the lines of the original Venice declaration, to ensure secure boundaries for Israel and a homeland for the Palestinians?
    Sir Geoffrey Howe: The principles set out in the original Venice declaration remain valid, and it is important for the views of European countries and of the United Kingdom to be made clear along those lines. Nevertheless, the fact remains that it is essentially for the parties in the region to find the means of conducting the necessary negotiations between themselves.
    Mr. Lawrence: Is my right hon. and learned Friend aware that his proposed visit to Israel will be welcomed as an even-handed and friendly gesture? Will he also bear in mind that there is a widespread feeling that there have been enough initiatives on the middle east and that the Venice initiative, which dealt the death knell to the Camp David agreement, and the withdrawal of the agreement between Israel and Lebanon, have done little to inspire the Israelis with any confidence in the outcome of negotiated peace settlements?
    Sir Geoffrey Howe: I appreciate that there are many circumstances in which the various parties involved may
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    sometimes have little confidence in the prospects for peaceful negotiations, but the fact remains that means have to be found to bring together the two sides in an effort to arrive at agreements on terms that are acceptable to both.
    Mr. Janner: As a prelude to the right hon. and learned Gentleman's visit, will he discuss with First Deputy Foreign Minister Kornienko next week the thoroughly destructive role that the Soviet Union has played in the middle east? Will he try to get Mr. Kornienko to agree that the Russians will use their considerable influence in Syria to induce that country to leave Lebanon so that all other foreign troops may leave also, as they have agreed to do?
    Sir Geoffrey Howe: I do not expect to have the opportunity to meet First Deputy Foreign Minister Kornienko next week. My hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind) will be talking to him, and I have no doubt that he will take the opportunity to follow up the reference to middle eastern questions that I made in my talk with Mr. Gromyko at Stockholm in January. No doubt the role and part that can be played by Syria will be one of the questions that will arise there.
    Later—
    Sir Geoffrey Howe: Perhaps I may make it clear to the hon. and learned Member for Leicester, West (Mr. Janner) that I shall not myself be seeing Mr. Kornienko, because I have long-standing plans which will take me out of the country while he is here.

    Namibia
    Mr. Bowen Wellsasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on developments in the negotiations on Namibian independence.
    The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): We remain committed to Namibian independence on the basis of free and fair elections in accordance with Security Council resolution 435. We welcome recent developments in Southern Africa, which must improve prospects for a settlement, notably the signing of a pact between South Africa and Mozambique and the progress towards disengagement of South African troops from Southern Angola.
    Mr. Wells: I thank my hon. Friend for that reply. What role has Britain played in trying to bring about a settlement in that area, particularly with Namibia and Angola in mind? What is his reaction to the recent statement from Havana in which conditions were set for the withdrawal of Cuban troops from Angola?
    Mr. Rifkind: We have used numerous opportunities to impress upon all the parties the need to make the proposed disengagement of South African troops from Angola a success. That will undoubtedly increase the prospects for the independence of Namibia under Security Council resolution 435.
    The declaration by the Cuban and Angolan Governments is welcome in so far as it shows a willingness to begin the withdrawal of Cuban troops, albeit subject to certain conditions. Naturally, we believe that the removal of all foreign troops from Angola would be helpful in trying to solve problems of the region as a whole.
    Mr. Nellist: Is the Minister aware of the continued detention of a British subject, Mr. Alan Roberts of

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    Warwick university, by the security police of Namibia, under security regulation AG9, without charge, for more than three weeks? For how long will the Government tolerate that incarceration of a British citizen? What is the hon. Gentleman doing to convey the British people's abhorrence at the detention without charge of this British subject and to deal with the problems faced by his wife and family?
    Mr. Rifkind: The British consul travelled from Cape Town to Windhoek on 14 March specifically to see Mr. Roberts, and there have been a number of additional telephone conversations between our consular staff and Mr. Roberts. We have been in touch with the South African authorities, who have assured us that within a short period Mr. Roberts will either be released or charged with a specific offence. We have encouraged them to keep to that assurance.
    Mr. Ian Lloyd: Has my hon. Friend seen the interesting report by the all-party group that visited Namibia, particularly the conclusion that Namibia was not viable in practical terms as an independent state? Will he comment on that?
    Mr. Rifkind: I have read with great interest the report to which my hon. Friend refers. It is the case that the independence of Namibia under Security Council resolution 435 is an objective shared by most of the United Nations and one which the South African Government have said they are prepared to support. In those circumstances, we must seek independence of Namibia. It may be that there is a need for friendly countries to consider what help to give to an independent Namibian Government, but that should not in any way deter us from the objective of an independent Namibia which is agreed by all the parties.
    Mr. Johnston: Will the Minister define the expression "all-party", which is rather loosely used?
    Mr. Rifkind: The hon. Gentleman must address that question to the members of the group that has been referred to.
    Mr. Anderson: Is it the Government's assessment that South Africa is still persisting with its attempt to obtain a settlement outside the United Nations framework with Angola, the internal parties and SWAPO? Will he make it clear that for the Government the search for a peaceful settlement can come only on the basis of resolution 435?
    Mr. Rifkind: Concern has been expressed at the recent statement by the South African Foreign Minister envisaging a round table conference of a number of parties in South Africa. We have been encouraged by South Africa's assurance that that is in no way intended to circumvent Security Council resolution 435. We have emphasised that we continue to see that as the proper, and indeed the best, basis for achieving Namibian independence.

    Costa Rica
    Mr. Parryasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's relations with Costa Rica.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Ray Whitney): We enjoy very good relations with Costa Rica, whose democratic system is widely admired.
    Mr. Parry: I thank the Minister for his reply. Will he tell the House whether he supports the United States arming those counter-revolutionaries based in Costa Rica who attack targets in Nicaragua?
    Mr. Whitney: The United States has no military or paramilitary forces in Costa Rica. We support every effort to put an end to violence in that region.
    Mr. Bottomley: I welcome my hon. Friend's indication of the democratic nature of Costa Rica. Is it the Government's policy to encourage elections in Nicaragua and El Salvador in which all serious opposition parties take part?
    Mr. Whitney: Certainly we encourage the promotion of democracy in those countries, and indeed in all the region. My hon. Friend will have noticed our decision to send observers in response to the invitation to examine the conduct of the various elections in El Salvador.
    Mr. Johnstone: Given that Costa Rica has a long, and in Central America one might say unique, record of liberal democracy, will the Minister review the Government's policy towards that country with a view to giving it any assistance that it may require, and will he say what assistance the Government now provide?
    Mr. Whitney: The hon. Gentleman will understand that we have to look very carefully at the disbursement of our aid, and normally aid for that region would be considered through the agency of the European Community.
    Mr. McCrindle: Is my hon. Friend satisfied with the level of our representation in Costa Rica? Is it the Government's policy to continue to represent themselves in neighbouring Nicaragua from the Costa Rican embassy, or are there any moves afoot towards the, some would think desirable, restoration of diplomatic relations between this country and El Salvador and Nicaragua on a direct basis?
    Mr. Whitney: I am pleased to advise the House, as, indeed, we advised the House a few days ago in a written answer, that we have decided to open missions at chargé d'affaires level in El Salvador and in Nicaragua.
    Mr. Anderson: The Government will know that we have long pressed for that change, and we welcome without reservation the upgrading of our diplomatic representation in Managua,—[HON. MEMBERS: "And in El Salvador."]—and, indeed, in El Salvador, but it so happens that Nicaragua is Costa Rica's neighbour and El Salvador is not. Do the Government now accept that the Sandanista regime in Nicaragua enjoys overwhelming popular support and that attempts by the CIA to destabilise that country, such as by mining the Soviet tanker bringing supplies to Puerto Sandino, are doomed and are a real threat to peace?
    Mr. Whitney: We are unable and unwilling to take the one-sided approach reflected in the hon. Gentleman's question. When a free and fair election has been held in Nicaragua, I suggest to the House that that would be the time to make a new judgment on whether that regime commands full support in that country.

    Middle East
    Mr. Ernie Rossasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the situation in the middle east.
    Mr. Waltersasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress towards a middle east peace settlement.
    Sir Geoffrey Howe: There has been no recent progress in settling the various disputes in the region. We shall be keeping up our efforts to help bring about negotiated settlements to the Arab-Israel dispute, and the Iran-Iraq war. It is disappointing that the Lebanese reconciliation conference in Lausanne made so little progress, and it is to be hoped that Lebanon's leaders will make a further effort to reach a lasting settlement.
    Mr. Ross: Does the Foreign Secretary accept that at the core of the middle east problem is the need to resolve the problem of the Palestinians, and that there is no likelihood of that problem being resolved after the report that he issued on 8 February this year, drawn together by Assistant Attorney-General Judas Karp, outlining the repression of the Palestinian Arabs on the West Bank? If the Israeli Government are not prepared to tackle the repression of terrorism against the Palestinians in the occupied territories for which they are responsible, there is very little likelihood of the Palestinians and the Israelis sitting down together and discussing peace.
    Sir Geoffrey Howe: I am certain that the interests of the Palestinians on the West Bank have to be taken fully into account. We regard Palestinian self-determination as essential in any negotiated settlement. It has been our view for a long time—indeed, since the Venice declaration—that the PLO should be associated with any negotiations, provided that they themselves accept the Venice principles.
    Mr. Walters: Does my right hon. and learned Friend accept that King Hussein's recent remarks reflected the understandable frustration felt by Arab moderates at United States policy in the Middle East? Does he propose to be more active in trying to bring about an international conference aimed at achieving a comprehensive peace settlement, before a major explosion takes place again in the area?
    Sir Geoffrey Howe: I am interested in what my hon. Friend has to say about the reasons behind King Hussein's recent remarks. I shall not comment on what they imply about relations between his country and the United States of America, but plainly the voice of King Hussein and of Jordan has an important part to play in the search for a settlement in that area. Indeed, it has a leading part to play in bringing together the voices of the moderate Arabs, who have such a contribution to make. I am not sure that the proposal for a conference has any part to play at this stage, but we shall certainly continue to press all the parties concerned to come together to consider the future.
    Mr. Maclennan: What action has the Foreign Secretary taken to mobilise an international response to evidence of weapons being used in the Iran—Iraq war that are outlawed by the laws of war, in particular, chemical weapons?
    Sir Geoffrey Howe: We obviously view with great concern reports that chemical weapons have been used in that conflict. As the hon. Gentleman knows, a United Nations team is currently involved in assessing the evidence and I should not want to prejudge its findings. I have already made it clear that we would roundly condemn any violation of the 1925 Geneva protocol.
    Mr. Temple-Morris: Does my right hon. and learned Friend share the view of the Americans and others that the greatest present obstacle to peace in the Gulf is the attitude and policy of the Iranian Government? If so, wilt he make that clear to the House?
    Sir Geoffrey Howe: We deplore the continued conflict in the Gulf and have been urging both parties to take steps to bring it to an end as soon as possible. A whole series of attempts have been made to achieve mediation. Many people have tried to achieve that, both inside and outside the Security Council, including the United Nations Secretary-General. Every such effort should be sustained.
    Mr. Healey: Does the Foreign Secretary agree that, now that King Hussein has delivered the coup de grace to recent American policy in the near east, the main danger to world peace and Western interests lies in interference with freedom of passage for oil supplies through the Gulf as a result of the war there?
    Will the right hon. and learned Gentleman answer the following extremely urgent questions? First, does he agree that unilateral Western military action to secure freedom of supplies would be most unwise, unless it was clear that there was a serious danger to the prosperity of Western countries as a result of any interference with oil supplies? Secondly, will the Foreign Secretary ensure that no Western action is undertaken in the Gulf without securing the understanding of the Soviet Union, in whose back yard the Gulf happens to lie, and which has the same interest as the West in freedom of passage through inland waters? Finally, have any steps been taken to cover the insurance of tankers passing through the Gulf, in case commercial insurance rates rise to a level that oil companies cannot afford?
    Sir Geoffrey Howe: I cannot give a specific answer to the right hon. Gentleman's last point. As he will appreciate, the rates fluctuate according to the circumstances as they are seen at any particular time. However, I undertake to make some further inquiries about that. I agree with the right hon. Gentleman about the potential dangers of the Iran-Iraq war and the importance of ensuring that before considering any question of military or other action to clear the straits if they became blocked all diplomatic channels should be exhausted. I also agree about the importance of ensuring that, if events move in that direction, the Soviet Union is advised of the nature of any action or initiatives in prospect, because it would be serious if there were any misunderstanding in that respect.

    Oman
    Mr. Campbell-Savoursasked the Secretary of State for Foreign and Commonwealth Affairs how many civil servants in his Department have visited Oman since January 1981.
    Sir Geoffrey Howe: Our middle east department records indicate that at least 187 civil servants from the

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    Foreign and Commonwealth Office have visited Oman since January 1981. This figure includes 146 duty visits to the British eastern relay station at Masirah.
    Mr. Campbell-Savours: With regard to two particular civil servants, Mr. Michael Alexander, the overseas secretary at Downing street to the Prime Minister, and Mr. Ivor Lucas, an ambassador in the middle east, is it true that either of those two gentlemen advised the Prime Minister not to raise at the palace in Salalah the question of the contract to build a hospital in Oman whilst it was known to the Omani authorities that Mark Thatcher, the Prime Minister's son, acting as a consultant, through Monteagle Marketing, to Messrs Cementation International Ltd. was in Salalah at the same time?
    Sir Geoffrey Howe: The question would be relevant only if the Prime Minister had, in fact, raised any such question in the context that the hon. Gentleman suggests. That is not the case.

    Chile
    Mr. Fatchettasked the Secretary of State for Foreign and Commonwealth Affairs when he next plans to meet representatives of the Chilean Government.
    Mr. Whitney: My right hon. and learned Friend has at present no plans to do so.
    Mr. Fatchett: Will the Foreign Secretary consider having an early meeting with the Chilean Government to press upon them the continuing violation of human rights in Chile and also to make clear to the dictatorship that the view of the British people is that if these violations continue we should sever all links between this Government and the dictatorship in Chile?
    Mr. Whitney: We regularly make clear our concern about the observance- of human rights and the continued violation of human rights in Chile. Only last week we voted in favour of the resolution of the United Nations Human Rights Commission in Geneva. This called on the Chilean authorities to respect human rights and to extend for a further year the mandate of the United Nations special rapporteur.
    Mr. Lawrence: Is my hon. Friend aware that if Opposition Members were to swallow their paranoia and go to Chile they would themselves be able to make those representations on human rights, and probably with more effect than they have done from their armchairs in the Tea Room? Does he agree that if they went to Chile they would be able to give some assistance to the Centre-Left party, which wants very much to come quickly to democracy?
    Mr. Whitney: I am happy to agree with my hon. and learned Friend. I add that if Opposition Members were to swallow their paranoia on everything, they would suffer from considerable indigestion.
    Mr. Winnick: We on this side do not intend to go to Chile on trips that are paid for by the authorities. Can the Minister tell the House what steps will be taken to try to persuade the Chilean authorities to expel Rauff, the notorious Nazi war criminal and mass murderer, so that he may stand trial in West Germany? Is it intended simply to accept "No" from the Chilean junta, or will the British Government press the United States in particular to exert pressure on the Chilean authorities?
    Mr. Whitney: We have supported the request by the Federal Republic of Germany and the United States Government to the Chilean Government to permit the extradition and expulsion of Walter Rauff. The Chilean Government's reply rejecting that request has been received only recently, and is being studied.
    Mr. Anderson: The Minister will know that we welcome the United Nations vote as a recognition by the Government of a further deterioration in the human rights record of the Pinochet regime. Moving from the human rights record to the Chilean naval contract and others, is it true that the Chilean navy has concluded negotiations for the purchase of HMS Hermes, HMS Antrim, two type 22 frigates and 24 Sea Harriers?
    Mr. Whitney: There has been no development on those potential arms sales negotiations since the reply of my right hon. and learned Friend on 7 December. Certain negotiations are in process, but none has been concluded.

    Papal Pro-nuncio
    Mr. Greenwayasked the Secretary of State for Foreign and Commonwealth Affairs when last he met the Papal Pro-nuncio; when next he expects to do so; and if he will make a statement.
    Mr. Whitney: There has not, as yet, been an opportunity for my right hon. and learned Friend to meet the Papal Pro-nuncio, nor is any meeting currently planned. Archbishop Heim did, however, call on my right hon. and noble Friend the Minister of State on 23 February.
    Mr. Greenway: Will my hon. Friend seek an early opportunity to meet the Papal Pro-nuncio for general contact reasons and in particular to express the great concern felt by Christians of all denominations, in the House and outside, about the continuing persecution of the Roman Catholic Church in Poland by an atheist regime, as expressed most recently by forbidding schools to put crucifixes and other religious symbols on classroom walls?
    Mr. Whitney: It is open to His Excellency the Papal pro-nuncio to see either my right hon. and learned Friend, the Foreign Secretary or any other Foreign and Commonwealth Minister. We sympathise with the concern expressed by my hon. Friend and attach the greatest importance to religious freedom in Poland and elsewhere.
    Sir John Biggs-Davison: Despite the threat to religious freedom in Poland, has not Cardinal Glemp, in obedience to the Pope, required his clergy to abstain from political activity? Might not His Excellency the Pro-nuncio have a word with the hierarchy here on this matter?
    Mr. Whitney: I must resist the temptation offered by my hon. Friend to intervene in Vatican politics and diplomacy.
    Mr. Skinner: If the Foreign Secretary or any of his junior Ministers meet the Pope, will they ask him how much the Vatican Bank lost as a result of the failure and bankruptcy of the Banco Ambrosiano?
    Mr. Whitney: The question referred to the Papal Pro-nuncio, not the Pope. We are encouraged by reports that progress has been made towards a settlement of claims by creditors. The part played by a number of British banks has been welcomed.
    Sir Bernard Braine: Is my hon. Friend aware of the urgent appeals coming out of Poland for the international community to intervene on behalf of the Solidarity leaders and members of the KOR who have been imprisoned for some years, some of whom are being grossly ill-treated, and none of whom are charged with offences that would appear in the calendar of any Western country? If arrangements are being made to see the Papal Pro-nuncio could that matter be discussed with him, with a view to raising the international community's ire on this subject?
    Mr. Whitney: I take careful note of what my hon. Friend says. Our concern is for religious and other freedoms in Poland and elsewhere—for example, the freedoms that we thought we had secured under the Helsinki agreement.

    India
    Mr. Durantasked the Secretary of State for Foreign and Commonwealth Affairs if he will seek to pay an official visit to India.
    Mr. Whitney: My right hon. and learned Friend has at present no plans to do so.
    Mr. Durant: I understand the Foreign Secretary's difficulty in visiting India at present. However, is my hon. Friend aware that some of my constituents with relations in India are worried about the recent disturbances in Kashmir and the Punjab? Will the Minister express those anxieties to the high commission in London?
    Mr. Whitney: Concern over what is happening in the Punjab is felt by all of us. It is a matter concerning internal political developments in India. We sympathise with the Indian Government over the level of violence. We believe that the differences between India and Pakistan about Kashmir should be settled by the two Governments. We hope that no worsening of the difficulties will occur and, certainly, that there will be no development of violence.
    Mr. James Lamond: Has the Minister read the final document issued after the non-aligned conference in New Delhi a year ago, which said that the non-aligned countries were gravely concerned about the deployment throughout the world of foreign nuclear missiles, including cruise missiles, and about the severe impact of the arms race on developing countries, since three-quarters of global expenditure is undertaken by the developed countries? If those matters were brought up during a meeting with Mrs. Gandhi, would the Foreign Secretary be uneasy during the discussion?
    Mr. Whitney: We also are concerned about continuing and increasing expenditure on arms, but our primary concern must be for the security of the United Kingdom and our allies. We therefore look to the Soviet Union to echo the concern that we have expressed and to respond to the numerous Western overtures.
    Mr. Budgen: Does my hon. Friend agree that the question by my hon. Friend the Member for Reading, West (Mr. Durant) is a good illustration of the mistake made by the Government in allowing dual nationality under the British Nationality Act?
    Mr. Whitney: I cannot agree with my hon. Friend. The British Nationality Act made a positive contribution to race relations, but that matter is more properly one for my right hon. and learned Friend the Home Secretary.
    Dr. M. S. Miller: If the Foreign Secretary goes to India, will he make it abundantly clear to Mrs. Gandhi that the British Government have no intention of joining in any demands for self-determination for the Sikhs in the Punjab?
    Mr. Whitney: I certainly give that assurance.
    Mr. Janner: As the "Easter Eye" programme has caused consternation in India by giving publicity to the case of the Kashmiri terrorists, will the Minister take this opportunity to express the condemnation and horror of the Government, the House and the British people at the assassination of Indian diplomat Mhatre?
    Mr. Whitney: We have expressed to the Indian Government our condemnation of the extraordinary and alarming assassination and our great regret at the incident. With regard to the television programme "Eastern Eye", we understand the feelings of the Indian Government. The Indian high commission is in direct contact with the Independent Broadcasting Authority and with the television company concerned.
    Mr. Michael Brown: If my hon. Friend makes representations to the Indian high commissioner, will he draw his attention to the fact that India has curtailed exports of tea, which has distorted and increased the price of tea on the world market, especially in the United Kingdom? Will my hon. Friend find out from the high commissioner whether there is any opportunity for a further increase in the amount of tea exported from India, especially to the United Kingdom?
    Mr. Whitney: I have not made or envisaged any representations to the high commissioner on that, but I will certainly look into the matter.

    Southern Africa
    Mr. Nellistasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on recent developments in Southern Africa.
    Mr. Rifkind: I refer the hon. Member to the answer that I gave earlier to my hon. Friend the Member for Hertford and Stortford (Mr. Wells).
    Mr. Nellist: Does the Minister accept that South Africa's deals with Mozambique and its proposed deals with other countries in that region have been described as the carrot and stick approach? The Minister may approve of the carrot in referring to the area's stability, but does he approve of the stick when tens of thousands of South African troops have invaded that region and brought the stability to which he refers with the deaths of thousands of citizens of Angola, Mozambique and elsewhere?
    Mr. Rifkind: The hon. Gentleman should be aware that the historic agreement between South Africa and Mozambique has been welcomed by the Governments of both countries, by the OAU and by other front-line states as a development that they can understand and support. I hope that all hon. Members welcome the agreement, which will significantly reduce tension and increase stability and further co-operation in southern Africa.
    Mr. Nicholas Winterton: Does my hon. Friend welcome the recent speech of the President of Gabon urging SWAPO to lay down its arms and enter into the multi-party conference in Namibia with a view to helping

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    that country towards independence and helping it to meet the terms of United Nations Security Council resolution 435?
    Mr. Rifkind: We are happy to welcome all speeches that contribute to the ending or reduction of violence in southern Africa. We do not doubt that the best prospect for Namibia lies in free and fair elections, so that the people of Namibia may elect the Government of their choice.
    Mr. Deakins: Will the Minister confirm that South Africa remains a racist state in spite of recent reforms? Is the Minister aware that there is a lobby of the House this afternoon, with meetings in the Grand Committee Room, organised by the anti-apartheid movement? Will a representative of his Department be speaking at any of the meetings?
    Mr. Rifkind: There will not be a representative of the Foreign and Commonwealth Office at any of the meetings, so far as I am aware, but I have told the anti-apartheid movement that I shall be happy to receive its representatives if they wish to see me, as I receive many people with different points of view on southern Africa. The hon. Gentleman is correct. The policy of separate development remains the basis of South African policy, despite the recent constitutional reforms.

    Falkland Islands
    Mr. Dalyellasked the Secretary of State for Foreign and Commonwealth Affairs if he will now release all Public Record Office files on the Falkland Islands.
    Mr. Whitney: The hon. Member has referred to Public Record Office files on the Falkland Islands. I assume that he has in mind records from the Foreign and Commonwealth Office and its predecessor Departments which have been transferred to the Public Record Office. All of these have entered the public domain, with the exception of those embargoed for a period longer than 30 years under instruments issued by successive Lord Chancellors. I have no reason to vary those arrangements.
    Mr. Dalyell: Why do we have to wait until 1991 to see the file of 1940 and of the Marquis of Willingdon's mission to Argentina entitled, "Proposals to reunite the Falklands Islands with Argentina"? People who talk about reunification cannot be very clear about our right to the islands.
    Mr. Whitney: As successive Governments have made clear, we have no doubt at all about our right to the islands. The document to which the hon. Gentleman refers was retained under procedures of which he is extremely well aware and which have been accepted by Governments of both persuasions.

    Mutual Balanced Force Reduction Talks
    Mr. James Lamondasked the Secretary of State for Foreign and Commonwealth Affairs if he will indicate the North Atlantic Treaty Organisation's position on recent proposals in regard to the mutual balanced force reduction talks in Vienna.
    Mr. Rifkind: The Alliance recognises that the East's 1983 proposals contain some progress towards a mutually satisfactory verification regime and has suggested that the two sides should look more closely at their differences in
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    this area with the aim of bringing their positions closer together. But the West has also pointed out that the East's unwillingness to co-operate in resolving the dispute over the present size of its forces, and hence of the reductions that it must take to reach the agreed goal of parity at 900,000 ground and air forces, remains a major stumbling block to an agreement.
    Mr. Lamond: With the resumption of the talks after a three-month recess, could not the NATO side have been expected to have some proposals to put before the conference? Does the Minister agree that Britain, of all the NATO members, is the stumbling block to a more conciliatory attitude and the hope of making progress after 10 years?
    Mr. Rifkind: I entirely reject the second part of the hon. Gentleman's question. The United Kingdom, with other Western countries, is now reviewing the present state of negotiations to see what further proposals should be made. I emphasise that the main stumbling block has been the Soviet delegates' refusal to produce satisfactory figures on the present level of conventional Warsaw pact forces in Europe.

  EUROPEAN COMMUNITY

    Community Policies
    Mr. Knoxasked the Secretary of State for Foreign and Commonwealth Affairs what further proposals he intends to place before his European Community colleagues for the development of Community policies.
    Sir Geoffrey Howe: We have already put forward a number of proposals. In the absence of agreement at yesterday's European Council, no decisions could be taken.
    Mr. Knox: Would it not be better to concentrate more attention on developing the Community and less on discussing the petty cash account?
    Sir Geoffrey Howe: My hon. Friend is entitled to his own view of the significance of the amounts involved, but the need to secure fair and lasting arrangements for the budgetary balance of the Community was one of the crucial features with which yesterday's talks were concerned. I do not think that the Community is likely to have the secure future that I know that my hon. Friend would wish for it unless we can resolve that question.
    Mr. Bell: In setting aside the problems of the petty cash account, will the Foreign Secretary bear in mind that there are 14 million people unemployed in Europe today, and will he put forward constructive proposals to reduce that figure?
    Sir Geoffrey Howe: The number of unemployed in the European Community mirrors the situation prevailing in most parts of the world. The hon. Gentleman is right to emphasise that one of the most important objectives of policies for the Community must be to reduce the number of people out of work.
    Mr. Fallon: Will my right hon. and learned Friend take this opportunity to re-affirm our commitment to the goal of a truly free European market?
    Sir Geoffrey Howe: I am delighted to do that. Many measures need to be taken, some of which were discussed

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    at the European Council meeting of the past two days, to ensure the removal of regulations and obstacles that interfere with the operation of a liberal market economy in the Community.
    Mr. Robin Cook: Will the Foreign Secretary take this opportunity to congratulate the Conservative group in the European Parliament on its sensitive timing in choosing this week, of all weeks, to publish a video praising the EEC for enabling Europe to speak with one voice?
    So that we may judge the petty cash situation, will the right hon. and learned Gentleman share with the House details of the proposals that he apparently accepted yesterday to increase own resources? Had he forgotten that it was the Government's position that until there was settlement of the budget deficit and the agricultural expenditure question there could be no consideration of an increase in own resources? How did he hope to obtain concessions on the budget if he was willing to surrender in advance a 40 per cent. increase in our payment of own resources?
    Sir Geoffrey Howe: I had no such hope, because there was no question of my doing any such thing. Considerations of all the questions before the European Council were directly related to each other and it was quite plain to all those taking part in the discussions that, unless we were able to secure agreement on the conditions to which we attached importance, there could be no agreement on the question about which the hon. Member is understandably concerned.

    Community Problems
    Mr. Dykesasked the Secretary of State for Foreign and Commonwealth Affairs when next he expects to meet his French counterpart to discuss official problems affecting the European Community.
    Sir Geoffrey Howe: I met my French counterpart at the European Council in Brussels this week. I next expect to meet him for discussions on European Community matters at the Foreign Affairs Council on 9 and 10 April.
    Mr. Dykes: How would my right hon. and learned Friend react if there was increasing development in Europe of the Nine, with us being left out?
    Sir Geoffrey Howe: The European Community is the community of Ten and it is important that it should be so maintained. It is for that reason that my right hon. Friend the Prime Minister and I worked so hard throughout the past two days to try to secure agreement on all the matters that were on the agenda.
    Mr. Rogers: Is it not true that during the negotiations the Foreign Secretary and the Prime Minister agreed to an increase of own resources to 1·4 per cent. from 1 January 1986 increasing to 1·6 per cent. in 1988? Was that not conceded until the point was reached where they could not settle the petty cash problem?
    Sir Geoffrey Howe: There is no question of any agreement or any matter under discussion before the European Council being conceded or accepted except upon the basis that the other conditions were also agreed. A number of questions were considered in a variety of orders at different stages of the proceedings. We acknowledged that a case could be made for an increase along the lines indicated by the hon. Gentleman, but we made it absolutely clear that
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    it could be accepted only if our two conditions were satisfied. We made it equally clear that any such increase would require the approval of both Houses of Parliament.

    Common Agricultural Policy
    Mr. Maxtonasked the Secretary of State for Foreign and Commonwealth Affairs whether he is satisfied that the European Economic Community has agreed to reform the common agricultural policy in line with his demands.
    Sir Geoffrey Howe: Considerable progress was made in the European Council towards establishing a mechanism for the control of Community spending, and particularly agricultural spending. We shall press for inclusion of such a mechanism in the eventual agreement that must emerge from these negotiations.
    Mr. Maxton: Does not last week's agreement on dairy products make it quite clear that, with an increase of £500 million in the expenditure on the common agricultural policy and an increase in butter and milk prices, the Government are as far as ever from getting our EEC partners to agree to major reform of the CAP?
    Sir Geoffrey Howe: It is quite clear that there is still a great deal to be done to achieve the reform of the CAP that will ultimately be necessary. The hon. Member must understand, however, that the operation of the CAP is also of interest and of benefit to the United Kingdom's agriculture industry and that the reforms on which agreement had been reached last week would themselves have involved very substantial changes, to the disadvantage of our community. It must, therefore, be a question of time before all these matters can be put in place.
    Sir Anthony Meyer: My right hon. and learned Friend is a calm and sensible fellow. Will he exert his great authority in the Cabinet tomorrow to prevent the adoption of the ultimate folly, which would be for this country to break Community law by withholding our contribution?
    Sir Geoffrey Howe: There is, in fact, a later question on today's Order Paper which raises that subject.
    Mr. Foulkes: Since the aim of the Government is, if not to reform fundamentally the CAP, at least to control its expenditure, when the European Community is approaching bankruptcy because of the spiralling costs of the CAP, is it not stretching our credulity as well as the English language to describe an increased expenditure of £0·5 billion as a success?
    Sir Geoffrey Howe: It depends by what standards the House is prepared to judge those matters. Of course, any increase is, in principle, to be deplored. That was one of the reasons why we were opposing so many other matters yesterday that would have involved a further increase. That remains our policy.

    Common Market Reform
    Mr. Teddy Taylorasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the progress being made in the current negotiations on Common Market reform.
    Sir Geoffrey Howe: No Sir, but the hard decisions that the Community must take cannot be avoided. We shall continue to press for the reforms that are in the interest of the Community as a whole.
    Mr. Taylor: Is it not ridiculous to talk about a net payment of £4,700 million to the Community in 10 years as "petty cash"? Does my right hon. and learned Friend accept that he will have the support of the vast majority of the British people in pressing for a fair and permanent settlement of the budget arrangements, particularly when all our payments are allied to a daily trade deficit of £20 million in manufactured goods?
    Sir Geoffrey Howe: I entirely agree with my hon. Friend's description of the importance of the issues at stake in the budgetary negotiations. That was the very reason why my right hon. Friend and I worked as hard as we did to try to reach agreement on that matter.
    Ms. Gould: Did the proposals on the CAP meet the precondition of fundamental reform laid down by the Foreign Secretary?
    Sir Geoffrey Howe: The proposals on agricultural policy will be considered further at next week's Agriculture Council. They went a substantial way in the direction of reform, because to secure acceptance of a formidable reduction in total milk output was a very major step forward. One of the matters that concerned us yesterday was the extent to which that achievement was in danger of being eroded. Other steps—for example, in relation to cereals and other commodities—represented progress in the right direction.

    Own Resources
    Mr. Blairasked the Secretary of State for Foreign and Commonwealth Affairs what changes there have been in the Government's position on the proposal to increase the European Economic Community's own resources following the recent visits of European Government leaders to London.
    Sir Geoffrey Howe: None, Sir. There can be no increase in own resources without unanimous agreement between the member states, nor without the endorsement of Parliament. The two conditions laid down by my right hon. Friend the Prime Minister at Stuttgart last year have clearly not yet been fulfilled.
    Mr. Blair: If that is the position, and if the Government are to be taken seriously when they say that they may withhold Britain's budget contributions, how does the Foreign Secretary expect the public to understand the proposal to introduce next week a Bill that would grant an extra £100 million to the Commission?
    Sir Geoffrey Howe: That is a matter to which the Government will be giving further consideration.
    Mr. Durant: Does my right hon. and learned Friend agree that it hardly behoves the Opposition to criticise Conservative MEPs and Members of Parliament for speaking with a united voice, when one can hardly describe the Labour Party as having a united voice on Europe?
    Sir Geoffrey Howe: I agree, as always, with my hon. Friend's judgment on the Labour party.
    Mr. Nellist: Does the Foreign Secretary remember that, over the past 10 years, the net cost to Britain of our membership of the Common Market has been £1·5 million a day? Does he further recall that during the yes vote campaign in the referendum nine years ago there was a slogan entitled "Jobs for the boys"? With the possible
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    exception of the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), who is never here for these debates anyway, will the right hon. and learned Gentleman say what boys have got jobs as a result of those 10 years of payments to the Common Market?
    Sir Geoffrey Howe: I recall that the Labour party attempted to complete negotiations for securing a reduction in the cost of the Community to this country and that it got an agreement that produced not a penny piece, whereas this Government undertook similar negotiations that secured a refund for Britain of £2,500 million.
    Mr. Moate: Does my right hon. and learned Friend agree that although some of the agriculture proposals are welcome as a step in the right direction, they in no way reach his pre-condition of fundamental reform? Will he clarify his earlier answers by saying that the agriculture proposals themselves would not have justified an increase in own resources?
    Sir Geoffrey Howe: Before considering any increase in own resources, the whole range of decisions and their implications affecting a period of years ahead would have had to be considered and, indeed, it would have been necessary to secure agreement on the other two conditions about which I have already reminded the House.
    Mr. Robin Cook: May I press the Foreign Secretary further on the question raised by my hon. Friend the Member for Sedgefield (Mr. Blair)? Does he not recognise that it would be an offence to the House, after the stalemate this week, to invite it next week to consider a Bill to grant another £100 million to the EC to stave off bankruptcy? If £100 million is not an increase in own resources, what does constitute such an increase? Why does he not drop that Bill from next week's business and in its place introduce a Bill to deduct from our 1984 payments the rebate for 1983, which his failure at negotiations has now lost us?
    Sir Geoffrey Howe: I do not accept that last comment in any sense. Both those questions are receiving urgent consideration by the Government, and the Government will advise the House about them in due course.

    Portugal and Spain
    Mr. Tim Smithasked the Secretary of State for Foreign and Commonwealth Affairs when he now expects Portugal and Spain to join the European Community.
    Mr. Rifkind: Spain and Portugal want to accede to the Community on 1 January 1986. As I made clear to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on 22 February, we are working hard in the Community with a view to completing the negotiations this year so as to make this possible.
    Mr. Smith: How damaging does my hon. Friend think that failure to reach agreement at the EEC Council will be to the entry prospects of Portugal and Spain?
    Mr. Rifkind: I hope that it will not lead to any significant delay in the negotiations. The agricultural mandate has been agreed by the Community, and that is one of the main outstanding matters to be discussed with the Governments of Spain and Portugal. Naturally, the Community will not be able to give as much attention to this matter as it would have wished because of the outcome of the negotiations yesterday, but we still hope that the timetable can be adhered to.
    Mr. Park: When Spain joins the Community, will there be an end to the preferential tariffs which act against the export of vehicles to Spain from this country?
    Mr. Rifkind: We have made it clear to the Spanish Government that, in our view and that of many other Community countries, one consequence of Spain's accession should be a substantial reduction in the level of tariffs which that Government impose against imports from other countries. If the negotiations resulted in such a change, motor vehicles would benefit from it.
    Mr. Hal Miller: Are not the Spanish Government seeking a lengthy interim period during which the tariffs would effectively remain in force? Can the Minister give us any news about that matter and tell us whether our Government are pressing for that period to be as short as possible?
    Mr. Rifkind: It is likely that, as has been the case in similar negotiations with other new members, a transitional period will be agreed. We have, however, emphasised our view that that transitional period should not preclude a very sharp reduction from the outset in the level of tariffs against industrial imports.
    Mr. Rogers: The Secretary of State said earlier, in answer to my question, that the Government would not support an increase in own resources. Will the Government still support the accession of Spain and Portugal without such an increase?
    Mr. Rifkind: The British Government have made it clear on several occasions that the accession of Spain and Portugal is highly desirable, for both political and other reasons. Very few who believe in the Community do not believe that the accession of Spain and Portugal is an essential requirement for its political development.
    Mr. Latham: Will my hon. Friend confirm that, as the Prime Minister has said from the Dispatch Box, there can be no question of Spain entering the Common Market until its position over the Gibraltar border is satisfactorily regularised?
    Mr. Rifkind: I can give my hon. Friend a complete assurance in that respect. The Spanish Government are aware that it would be inconceivable for access between Spain and Gibraltar, after Spanish accession, to be different from access between Spain and other members of the European Community.
    Mr. Foulkes: How can the Minister state that he is still sure that Portugal wishes to join the Community on 1 January 1986, when the Brussels debacle will mean that Portugal—which will be one of the poorest countries in the Community—will be a net contributor to its funds?
    Mr. Rifkind: I am sure that the Portuguese Government will be able to speak for themselves with regard to their own interests. The hon. Gentleman is right. The existing budgetary arrangements produce arbitrary and artificial consequences. One of those would be that, unless special provisions are made for Portugal, Portugal would have the curious and unwanted privilege of joining the United Kingdom and West Germany as a net contributor. That effect emphasises the need for reform in the budgetary arrangements of the Community.

    Finance (Contingency Plans)
    Mr. Gouldasked the Secretary of State for Foreign and Commonwealth Affairs what contingency plans arc in hand if the European Economic Community runs out of money.
    Sir Geoffrey Howe: If the Community is not to run out of money, the Commission must now propose, and the Council of Ministers must agree, the necessary measures to control expenditure.
    Mr. Gould: As there is now a real possibility that the EEC will run out of money this year, is it not irresponsible of the Government to have no contingency plans of their own?
    Sir Geoffrey Howe: The greater the possibility, the greater the need for the Community to take the measures that are necessary to prevent that happening.
    Mr. Budgen: If a fundamentally reformed common agricultural policy is to be cheaper, why was it necessary for the Government to agree provisionally to increase own resources by 40 per cent?
    Sir Geoffrey Howe: I emphasise again that own resources were considered in the context of the entire Stuttgart agenda. There was no question of the Government accepting an increase in own resources for recommendation to the House had there not been agreement on all o [the other matters of that agenda, including our own important conditions.

    Questions to Ministers
    3.30 pm
    Mr. Dave Nellist: On a point of order, Mr. Speaker.
    Mr. Speaker: Is it relevant to questions?
    Mr. Nellist: Yes. Now that the Prime Minister is back in the Chamber, and following your ruling yesterday, Mr. Speaker, on the Attorney-General's statement on picketing on Friday, which, as I understand it, was a sub judice matter involving Kent miners wishing to travel within the south midlands area of the National Coal Board to visit pits outside my constituency in Coventry, can you give me guidance and, through you, Mr. Speaker, may I ask two questions? First, how is it that Members of Parliament can ask questions on the interpretation of the legal definition of picketing when the Attorney-General's answers are put in written form on a Friday morning and are therefore not open to oral supplementary questions? Secondly, now that the matter is no longer sub judice, can you confirm that the Table Office will accept written questions on the Attorney-General's statement, as I understand that it was not prepared to do that yesterday because the Kent miners were still trying to defend their jobs from MacGregor's axe?
    Mr. Speaker: I really have nothing to add to what I said yesterday. If the matter is sub judice we cannot ask questions about it in the House. I made that plain yesterday and the whole House understands it. As to the written answer by the Attorney-General, which I have now seen but had not seen yesterday, I am not responsible for answers that are given in written or oral form. If the hon. Gentleman wishes to put down questions he should try to do so. I am sure that his ingenuity will enable him to do that.

European Council
3.32 pm
The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I should like to make a statement.
I attended the European Council in Brussels on 19–20 March, accompanied by my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs. As the House will already know, the Council did not reach agreement on the reform of the Community's finances nor on any of the other matters before it.
I made it clear at the meeting in Stuttgart last year that the United Kingdom would be prepared to consider an increase in the Community's financial resources, but only on condition that there was effective control of agricultural and other spending and that there was a fair sharing of the budget burden. We made progress towards securing control of spending by, first, an annual limit on overall expenditure and, second, a strict financial guideline on agricultural expenditure.
The French Presidency also proposed a lasting system for a fair sharing of the budget burden. We would have been able to accept this system, but some other member states, despite the long discussions over the past nine months, were still unable to do so. Nor were we able to reach agreement on the level of the United Kingdom net contribution which would result from the application of the system.
The Council also had a long discussion on the agricultural problems which had been remitted from the Agriculture Council. Ireland sought exemption from the super-levy on a quantity of milk which would have been higher than its 1983 production. Its demands and those of other member states would have led to milk production well over 1 million tonnes in excess of the production level set earlier by Agriculture Ministers for the Community as a whole. Further discussion of the agricultural package will take place in the Agriculture Council next week.
We made a sustained attempt to reach a satisfactory compromise on all the matters at issue. At the end of the discussions, the proposition which the United Kingdom was invited to accept was: first, that instead of a lasting, equitable system for Community financing there should be a five-year ad hoc arrangement which would have left us receiving less than the average refund which we received in the years 1980 to 1983; second, that we should endorse the unsatisfactory and discriminatory arrangement for milk which I have already described; thirdly, that we should accept an increase in the Community's VAT resources to 1·4 per cent. in 1986 and have in prospect a possible further increase two years later to 1·6 per cent.
I made it plain that neither the Government nor the British Parliament could accept such a package. Therefore, I did not agree to any increase in the Community's resources. The 1 per cent. VAT ceiling remains.
Immediately following the European Council, the Council of Ministers for Foreign Affairs met in order to see whether the objections to the United Kingdom's 1983 refund of 750 million ecu could be removed, but France and Italy blocked those regulations. The Government are considering what action we should now take to safeguard our position.
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The Community is in a difficult situation. We shall, however, persevere in our efforts to achieve a reform of its finances and to make its internal and external policies more relevant to the needs of today's world. I want to see a more effective Community, developing its full potential. That is the Community in which I believe.
Mr. Neil Kinnock: Does not the Prime Minister's statement simply mean that in Brussels she failed to get payment of a £500 million rebate of our money by a target date which she herslf very deliberately set? Is it not the case that, nearly nine months after the Stuttgart summit, the Prime Minister is now even further away from securing agreements to end the injustice of the British budget deficit and that, in addition, she is isolated even from those who were prepared to help? If she had been going to Brussels as a supplicant, her lack of achievement might have been regrettable, but it would have been understandable. Can she explain to us and the country now how it was that, as the banker to the Community, with her client about to go bankrupt, she still failed to exert that unique power in order to achieve an agreement that would safeguard our interests and get our money?
The Prime Minister says that she wants
"a more effective Community, developing its full potential."
Will she not agree that it is nothing short of outrageous, at a time when there are 15 million unemployed in the Common Market, that the leaders of western Europe could meet for three successive summits and still not produce a single proposal for the economic expansion which our country of Britain and our continent of Europe so desperately need?
The right hon. Lady says in the statement that
"the Government are considering what action we should now take in order to safeguard our position."
Will she accept that in any consideration undertaken by the Government there can be absolutely no question whatsoever of subscribing to a Common Market whip-round in the form of Supplementary Estimates put before the House, and that any business anticipated for next week on that basis is hereby withdrawn?
Finally, will she now tell the House and the country, without any ifs, buts or delays, when she is going to introduce the necessary legislation to enable our country to withhold Common Market contributions?
The Prime Minister: First, the right hon. Gentleman says that we failed to get payment of the 750 million ecu refund. I agree that that was not forthcoming. I believe that he should direct his criticisms to France and Italy, because it was France and Italy that deliberately blocked the regulations. That agreement came about at Stuttgart in June last year. It is reprehensible that the Community has not so far honoured its obligations.
The right hon. Gentleman is right to say that we had help from a number of colleagues in the summit. As to getting a reasonable, equitable and permanent financial arrangement in the system, President Mitterrand in the chair was helpful, as were a number of colleagues. As I said in my statement, they were not all ready to have a system, and therefore proposed an ad hoc arrangement. Having been at this for some time, as have my predecessors before me, because we are all hampered by the system of own resources agreed in 1970, I believe that

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we need a permanent system. I note that that view is shared by the European Parliament. Others of our colleagues prefer the present system.
The right hon. Gentleman does not understand the difference between being a banker and being a net contributor. If he did, his other questions would not have followed.
As to the summit proposals for expansion—yes, we were concentrating this time as we did in Athens, on trying to get agreement on a package of measures that had been referred up to the European Council. It is correct that the Ten failed to agree.
Mr. George Foulkes: You failed. You are a failure.
The Prime Minister: Oh, so the hon. Gentleman wants me to agree to that package, which I rejected—how very interesting.
Mr. Foulkes indicated dissent.
The Prime Minister: He wants us to agree to the majority. He wants us to agree to 1·4 per cent. VAT. He wants us to agree to a totally inequitable milk package, which would have caused great trouble to our farmers; the essence of that milk package was that there should be no discrimination. The hon. Gentleman would have preferred me to go with the nine rather than to go on batting, as I did, for a fair agreement for Britain.
As to the Supplementary Estimate, which was due to come before the House some time in the near future, that is necessary because the Community is already above its 1 per cent. and is spending at 1·1 per cent. As to our action following the refusal to let us have our refund by 31 March, which is not a legal necessity but has been the habit and custom of the Community with past refunds, the Cabinet will be considering tomorrow morning what action it is best to take, and a statement will be made to the House tomorrow.
Mr. Francis PymSince a more determined attempt than ever before was made to reach agreement, since my right hon. Friend has lived to fight another day—she has told the House this afternoon that she will—and in view of the magnitude of the issues raised by the principle, practice and legality of withholding, does she agree that it would be wise to resist the temptation to withhold?
The Prime Minister: I think that it is wise first to discuss the matter in Cabinet tomorrow morning—[HON. MEMBERS: "That will make a change."] However, one cannot go on as if nothing had happened. These refunds should have come to Britain. They were agreed nine months ago and should have been here, and it is reprehensible of the Community that they have not arrived. It is almost intolerable that one should be expected to send a supplementary levy in the face of what has happened.
Mr. David Steel: Is it not a unique sign of the Prime Minister's failure of diplomacy that all the other nine member states seem out of step except her? Does she accept that, on the balance of budget payments point, her position would have been much stronger if the Government had not regularly refused resources from the regional and social funds of the Community because of the Government's objection to public expenditure within Britain? Does she accept that,
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as long as she continues with her obsession on purely budget matters, she ignores the wider issues being discussed in the Community by other member states, such as security and defence and the French proposals on banking and insurance, all of which would be in our longterm interests?
The Prime Minister: As to the right hon. Gentleman's observation about being out of step, I point out that, of the 10 members of the Community, two are substantial net contributors—Germany to the considerable extent of over 2,000 million ecu and Britain with our unadjusted net contribution of 2,000 million ecu. France is the only other net contributor, at some 19 million ecu, and all the others are net beneficiaries. The reason for the result yesterday is that they like being net beneficiaries and are not prepared to yield up their benefits to reduce our contributions. In my opinion, that is totally inequitable. We shall not get the Community in a stable state or able to field its full potential in the outside world until we feel that we have an equitable system for bearing the financial burdens of the Community. I would say that those who are against that are out of step.
May I make it perfectly clear, on the subject of the regional fund, that every penny spent by the Community in Britain is more than covered by expenditure by the British taxpayer or the consumer. It is when we have covered all of that that we are still a substantial net contributor across the exchanges to Brussels. The wider matters of security and defence are not within the remit of the Community.
Mr. Norman St. John-Stevas: Would the Prime Minister agree that to seek a permanent solution to the budget problem is to be both patriotic and a good European? How can there be a prosperous and ongoing Community if one of the leading members is continually rankling under a sense of injustice? In view of what my right hon. Friend says about the reservations of other member states on the system proposed by the French President, will she now initiate a constructive and vigorous bilateral series of talks through the Foreign Office, so that, by the time of the next summit, this problem can be permanently disposed of?
The Prime Minister: I agree with my right hon. Friend that we shall not get a stable or effective Community until the budgetary contributions are related to economic circumstances and ability to pay. That is what we shall strive to achieve, and I believe that that is what the Parliament believes in. It also wants a permanent system. It is not easy to achieve, because some of the other members are net beneficiaries and like it to be that way, but the objective of a stable and effective Community is worth striving to achieve, and that is what we are trying to do.
On the second question, of bilateral discussions, we have already had a number of bilateral discussions between meetings, and we shall continue to have more. The present situation is not sustainable, and I believe that we are entitled to fairness and equity—the same fairness and equity that we always accord to others.
Dr. David Owen: Could the Prime Minister agree that she said last- night that only a narrow divide separated the negotiations? Would she not agree that, in such a situation, with skill, that gap can be

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closed, but that the way to close the gap is not for Britain to take an illegal act? Does the Prime Minister recall the words that she used in September last year, that Britain sticks to its treaties, and her warning that countries that break their treaties on one occasion do so on other occasions? If that was acceptable as a lecture to the Chinese Government, surely it is something that the Prime Minister should stick by. Is she entitled to go to the Community and talk about the will of Parliament before she has tested the will of Parliament? May I make it quite clear that some of us will resist any legislation to withhold payment in this situation?
Mr. Dennis Skinner: Send back Jenkins's pension.
The Prime Minister: Yes, it is quite right. There was a comparatively narrow gap between us towards the end, and I use that as evidence of the strenuous efforts that we have made to compromise because we genuinely wanted a settlement. The gap that that offered us was, of course, not of a permanent system. That was a big gap. We need a permanent system, and that is an enormous gap. We must go back to that.
On amounts, the difference was between 1,000 million ecu ad hoc for five years, and a system giving about 1,250 millon ecu under a formula. The two are not totally comparable, but in so far as the gap was small for one contributor, it was smaller still for the other nine who rejected it, because it would have been allocated in ninths among them.
Several Hon. Members rose——
Dr. Owen: What about the treaty?
The Prime Minister; I forgot to answer the question about the treaty.
I must point out to the right hon. Gentleman that, although there is no exact precedent for the present situation where two member states have blocked refund regulations implementing payments already agreed by the European Council, there have been previous occasions when small amounts of money have been withheld. For example, in 1979, France, Denmark and the United Kingdom refused to pay full VAT contributions as they considered the 1979 budget to have been improperly adopted. In 1981, the French, German and Belgians similarly refused to pay in full in respect of the 1980 supplementary budget No. 2. So there have been occasions on which some money has been withheld before.
Mr. Robert Jackson: My right hon. Friend will recognise the disappointment, and indeed the anguish, which many of my hon. Friends will feel at this turn of events. In view of the provocative action by the French and Italian Governments in blocking the 1983 rebate payment, will my right hon. Friend recognise that she will have strong support on the Conservative Benches for a patient and cautious response? If the Government find it necessary to take steps to safeguard our position they should be most careful to minimise the inevitable reactions and repercussions.
The Prime Minister: I share my hon. Friend's disappointment. We did try to get a settlement. We did try to get a permanent system. We did try to get equitable figures attached to that system. Equally, I agree that we
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simply must take steps to safeguard Britain's financial position. It is not our fault that we are put in a position where we have to do that, but we must do it.
Mr. J. Enoch Powell: Will the Prime Minister, ignoring the loud protestations of those who have run away from their election pledges, recognise that her stance at Brussels corresponded, as it often does, with the instincts and wishes of the British people, and that she will have the full-hearted consent of Parliament and people to her insistence that Britain shall have its rightful needs?
The Prime Minister: I am grateful to the right hon. Gentleman. We are entitled to a fair and reasonable deal and to go on fighting for just that.
Sir Anthony Meyer: Is my right hon. Friend aware that she has, by her conduct of these negotiations, demonstrated her deep understanding of the wishes of the British people? Is she further aware that it is her responsibility to safeguard the interests of the British people and that the two things do not necessarily coincide?
The Prime Minister: I believe that the interests of the British people are that we should pursue a fair and reasonable budgetary system for British contributions, and indeed, for the contributions of other member states. I believe that those contributions to the European budget must take account of economic circumstances if we are to have a stable Community that is able to survive and play an effective role in the wider world.
Mr. Merlyn Rees: What advice will the Prime Minister give the Cabinet tomorrow when it meets under these most unusual circumstances as to what we should do if these European Johnnies do not give in to her demands?
The Prime Minister: The right hon. Gentleman will have to wait 30 years for the records—unless he is lucky enough to have an earlier leak.
Mr. Jonathan Aitken: Is my right hon. Friend aware that her correct and courageous stand at Brussels yesterday will be greeted on the Conservative Benches and throughout the country not merely with warm support but with positive jubilation? Is she further aware that there will be plenty more of that support if she decides with the Cabinet tomorrow to introduce the necessary withholding legislation next week?
The Prime Minister: I am grateful to my hon. Friend. We did strive very hard to reach a settlement. We were prepared to compromise where it was reasonable to do so, but I believe that the package that I have described to the House in my statement was unacceptable, and I believe that the decision we therefore took was the correct one.
Mr. Eric Deakins: Has the Prime Minister ruled out as part of any temporary or permanent financial settlement any system based on refunds, in view of what has happened to our 1983 refund?
The Prime Minister: The problem is this. We always speak of an equitable settlement in terms of net contributions. For that, we make a calculation which is based on money, sent to the Community by way of levies, and 1 per cent. of VAT, which are own resources, and the gap between what we send to them and what we get out in expenditure. That we call the net contribution. That is not a system which the Community itself accepts.

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Therefore, it talks about refunds. The fact is, therefore, that we get into a whole lot of what I can only call Community jargon, which makes it very difficult for us all. I still believe that we are right to adopt the net contribution or the net benefits as the right criterion for getting an equitable financial settlement.
Sir Anthony Kershaw: While fully accepting that it is impossible to ask Parliament or the British people to accept a solution which they regard as basically unfair, is my right hon. Friend nevertheless satisfied that, amid all the welter of figures and Community jargon, we may lose sight of the main purpose of the Community, which is to ensure peace and democracy in Europe?
The Prime Minister: It is precisely because I want to get away from the annual or bi-annual welter of figures and Community jargon that we want a lasting system. We were very near to getting a lasting system, and the Presidency was most helpful. I think that, if we continue to persevere, we shall be able to get a system, but then of course we have to put in place the figures which would ensure that our net contribution was a reasonable one.
Mr. Roy Jenkins rose——
Hon. Members: Oh!
Mr. Speaker: Order. Every right hon. and hon. Gentleman has a right to be heard.
Mr. Jenkins: Since the Prime Minister, as I understand it, has made it clear that agreement was very near late yesterday afternoon or early yesterday evening, will she make it explicit that because Anglo-French disputes——
Mr. Dave Nellist: What?
Mr. Jenkins: Anglo-French disputes!
Because Anglo-French disputes can be particularly disruptive, will the Prime Minister make it explicit that President Mitterrand played a very constructive role in trying to seek a solution? Will she, in considering whether to withhold payment, consider the dangers of following the example of Liverpool city council, and of responding to a budgetary position that she does not like by illegality?
The Prime Minister: I gladly respond to what the right hon. Gentleman said. This is not a British-French problem; it is much wider than that. The President of the European Council, President Mitterrand, was very helpful in securing the negotiation of a system, and the text put before the Council for decision was a Presidency text. France, I believe, and a number of other member states, would have accepted that system, but there are some who would not have done so. He was also helpful in trying to reach agreement on a compromise on figures, but we were just not able to close the final gap.
Mr. George Gardiner: Is the Prime Minister aware of the general anger which will be felt over the provocative action by France and Italy in blocking our 1983 refund and that, although no one wishes to see this dispute escalate, her Government would be amply justified in withholding an equivalent amount from our budgetary contribution, at least pending the next European Council meeting?
The Prime Minister: I am grateful to my hon. Friend. I think that blocking was unwise, and will sour relations—[HON. MEMBERS: "Who did it?"] France and Italy. Those refunds in fact were agreed in Stuttgart last June.
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We have had difficulty in securing the right procedure for them to come to Britain. It was almost all cleared through the Parliament, and then came the blocking in the European Council. I hope that it will soon unblock those funds. In the meantime, we must consider what action to take to safeguard our position, which must be safeguarded.
Mr. Joseph Ashton: Is not the Prime Minister breaking the law? Has not she gone on strike against the Common Market? What is the difference between her position and that of the NUM, or that of the Labour councillors who refuse to carry on with an arrangement? Has the right hon. Lady brought her rose-coloured glasses with her today to distinguish herself from Arthur Scargill?
The Prime Minister: No law has been broken. I believe that the Common Market is in default with us in not letting us have those refunds by 31 March. That is different.
Mr. Cranley Onslow: Is my right hon. Friend aware that no one in this House or outside is likely to feel much anguish unless it was thought that the Government were not doing their utmost to defend what President Mitterrand called "Britain's reasonable interest"? Is she also aware that in the attitude that she has taken she has our full support, and that she can take as much time as she likes to maintain that interest?
The Prime Minister: I am grateful to my hon. Friend for those remarks. We shall persevere, as I have already said. We need a permanent system and reasonable refunds. We have always played a very constructive part in the Community and shall continue to do so. However, we could not go any further, particularly over farming and agricultural matters, because that would not have been fair to our own farmers.
Several Hon. Members rose——
Mr. Speaker: Order. I realise that this statement is very important but there is an important Opposition Day ahead of us and a ten-minute Bill. I propose to allow questions to continue until 4.10 pm.
Mr. Gordon Wilson: The Prime Minister is right to press for a permanent solution to that long-standing problem. However, if it is true that there was a small gap to be closed and that she had the support of the French President, may not her abrasive style of negotiating have prevented it from being closed? Will the right hon. Lady therefore be careful in future and seek allies from the other countries instead of dissuading them from supporting us?
The Prime Minister: I do not accept that. Of course one fights fiercely for Britain's interests, just as the others fought fiercely for theirs. If voices were raised, they were not mine.
Sir Brandon Rhys Williams: Will my right hon. Friend accept that her position over the increase in own resources is very strong, and that she has the warm support of hon. Members on both sides of the House, and, indeed, of the country? However, would it not weaken rather than strengthen her position if we took a step with regard to our payments to the Community that many of our friends would hold to be petty and illegal?
The Prime Minister: My hon. Friend will have heard me from this Dispatch Box constantly being absolutely

1057
correct in putting forward advance payments to the Community and in refusing to countenance withholding them. I was absolutely correct in that respect until the Community went into default with us. When the Community goes into default with us, we have to consider safeguarding our position.
Mr. Kevin McNamara: Is not the truth of the matter that in her negotiations as Prime Minister the right hon. Lady has lost at every turn of the coin, and has failed in all her negotiations? For example, Scunthorpe, in my area, has no real steel industry left because of the number of jobs that she has discarded. Hull and Grimsby are also in my area, and she has sold the whole fishing industry down the river because of her interest in trying to obtain this sort of agreement. The record of her negotiations is one of failure, failure, failure, while claiming to have such a strident interest——
Mr. J. Enoch Powell: What was the hon. Gentleman's policy in the general election?
Mr. Kevin McNamara: I say to the right hon. Member for Down, South (Mr. Powell), who is barracking from my left, that I stood up for Britain and did not support the right hon. Gentleman, just as I do not support him now. We have lost job after job. How many jobs are we going to lose——
Mr. Speaker: Order. Such lengthy questions are very unfair to other hon. Members.
The Prime Minister: I shall take up three of the hon. Gentleman's points. First, we had the courage to face the problems of the steel industry which the Labour Government ran away from. Secondly, we negotiated the first common fisheries policy where others for many years had failed. Thirdly, although our entry into Europe was negotiated and then renegotiated by the hon. Gentleman's Government, my Government negotiated refunds of 1,100 million ecu a year on average for four years.
Mr. Churchill: Is my right hon. Friend aware that, in contrast with the long-winded carping of the Leader of the Opposition, her stance will command the overwhelming support of the British people? Is she further aware that, in particular, those of us who have long held, and continue to believe in, the ideal of European unity are whole-hearted in our support for her determination to ensure that the United Kingdom does not become the milch cow of Europe?
The Prime Minister: In all its dealings, the United Kingdom has been very generous to the Community, and I think that we are entitled to a fair deal in return.
Mr. Ron Leighton: How much longer is the Prime Minister willing to continue with this exercise in Euro-futility? Is it not clear that Dublin, Stuttgart, Athens and Brussels were entirely predictable fiascos? Is the right hon. Lady aware that the British people are fed up to the back teeth with such constant haggling and wrangling, and realise now that membership was a ghastly mistake? Will she tell the French President that, if the continental countries want to develop their own CAP, we wish them well? However, if we extricate ourselves from the EEC, we shall have much better relations with our neighbours.
The Prime Minister: No, Sir. I believe that it is in the best interests of this country to continue to belong to the Community. However, the Community will not be effective unless we obtain a fair and equitable agreement. It took three summits to obtain a fair, although temporary, refund. It took from Strasbourg, to Dublin, to Luxembourg—three European Councils—to obtain that. This time, we have so far done two. Perhaps it will be third time lucky.
Mr. Robert Hicks: In view of the very serious and sad situation that has been caused, and, not least, the further creation of anxieties and certainties for those most involved with European policy, such as the agriculture sector, does not my right hon. Friend agree that as the gap is relatively narrow, there is a very strong case for sending the Foreign Secretary to meet his and her European counterparts so that there can be an effective sweeping up to obtain a satisfactory solution as was achieved by one of my right hon. and learned Friend's predecessors?
The Prime Minister: The Foreign Secretary has been very active, both up to and during this European Council. He was, of course, negotiating along with me, and will continue to negotiate in Foreign Affairs Councils in future. I know that my hon. Friend also has considerable interests in agriculture, and I should point out that some most contentious agricultural issues came up at the European Council. Some countries did not wish to have cuts in their milk production, although the rest of us were all having cuts. They wished to have no cuts, and some even had increases in production. That would have led to an extra quota-over and above what the agriculture Ministers agreed—of 1 million tonnes, which would have been most unfair to our farmers.
Mr. Dick Douglas: As other nations in the Community like being net beneficiaries and wish to put no limit on that, and as we do not like being net contributors, will the Prime Minister reverse the process and put a time limit on that?
The Prime Minister: The hon. Gentleman will remember that we have had refunds for four years which have averaged 1,100 million ecu a year. That has meant that the refunds—in Community jargon—have been about two thirds of our net contribution, leaving us with only one third to pay. That was a reasonable deal, but it was only an ad hoc arrangement. The Community will not extend it. Since, if we obtain agreement, we are going into a period of increases in own resources, it is vital that we should obtain a fair distribution of the burden. It seems totally unreasonable to say that those who are net contributors and who bear an unreasonably large share of the burden should pass over bigger resources. Really, the one depends on the other.
Mr. Hugh Dykes: Will my right hon. Friend assure us that there is no danger that we may eventually have to pull out of the Community? To solve the crisis, will she take note of the suggestion that there should be an early emergency summit before June?
The Prime Minister: I do not think that there is much point in having another summit, let alone an emergency summit, until a number of private contacts have ensured that we are likely to be more successful next time. We had a number of high-level contacts before. There was a good

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deal of support on the system but not quite enough on the amount, although the gap is small. I think it is best that we try behind-the-scenes contacts before we have another summit.
Mr. Speaker: Mr. Russell Johnston.
Mr. Skinner: Another Liberal? We have had two from the SDP.
Mr. Russell Johnston: Surely the Prime Minister will agree that the whole object of this is to win the argument in negotiation——
Mr. Skinner: Every one a Common Marketeer.
Mr. Johnston:—to win the argument in negotiation and to win friends? Does she not feel that the fact that she has been described as intransigent by representatives of all other countries in the Community represents a failure in her own approach? In particular, was not her contentious treatment of Dr. Garret FitzGerald of Ireland—a poorer country than ours, faced with genuine problems on the agricultural package—
Mr. Speaker: Briefly.
Mr. Johnston:—symptomatic of that approach? Is it not the case——
Mr. Speaker: Order. I called the hon. Gentleman just before ten past four and he should now bring his question to an end.
Mr. Johnston: Is it not the case that, if one does not give and does not admit, one is not likely to get very much?
The Prime Minister: With regard to the Irish point, our own farmers are having to take a cut of 7 per cent. on last year's production. A number of other countries are taking a cut of 7 per cent.; others are taking less. The cut that Ireland was asked to take was larger. We were obviously prepared to say that Ireland should have a goodly share of the 600,000 tonnes extra quota that the Agriculture Council had put aside so that her cut was the same as that which would have to be endured in Northern Ireland, which would have been a 7 per cent. cut. What the hon. Gentleman is saying is that Ireland should have had exactly what she wanted, which was no cut at all but rather an increase in production of 260,000 tonnes. That is the inevitable consequence of what the hon. Gentleman is saying. That would have been devastating to Northern Ireland, to Scotland, to Wales and to British farmers. Also, he might be interested to know that the attack on that was led by other people in the Community.
Mr. Kinnock: In the informal bilateral exchanges in which the right hon. Lady will be engaged, will she be conveying the impression which she appeared to convey in Brussels, that this country would be willing to subscribe a 40 per cent. increase in Community VAT resources? If she anticipates such a subscription, will she come to the House before any such suggestion is made, even informally? Finally, the right hon. Lady—I am sure inadvertently—did not give me a direct answer to the last question that I raised. Can she now tell us when the Government will introduce the legislation to enable us to withhold our contributions to the Common Market?
The Prime Minister: With respect to the right hon. Gentleman, I did answer that. I said the matter would be
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considered tomorrow morning and that a statement would be made shortly. It is advisable to consider the matters and also to consider the legal consequences before one makes such a statement. We must take steps to safeguard our position.
On the other matter, we want strict financial restraints on the total European budget and in particular on the agricultural budget; those should be embodied in the budgetary procedure so that they can bite. Therefore, we made it clear that if there were strict financial constraints plus a fairer sharing of the burden, we would consider an increase in own resources. As the right hon. Gentleman will be aware, such an increase in own resources has to be ratified by each and every parliament in the Community.
Several Hon. Members rose——
Mr. Edward Heath rose——
Mr. Speaker: Order. I did say that we would bring questions to an end on this very important matter at ten past four, but I think the House would wish to hear the right hon. Member for Old Bexley and Sidcup (Mr. Heath).
Mr. Skinner: On a point of order, Mr. Speaker.
Mr. John Maxton: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I called the right hon. Gentleman.
Hon. Members: Oh.
Mr. Heath: Is my right hon. Friend aware that to have reached broad agreement on three out of the main factors in the discussion at the summit is a remarkable achievement? To have reached agreement on a system of financial discipline, for which we have rightly been pressing, although it may not be everything to which we are accustomed in the House, is a major step forward. For the Ministers of Agriculture to have reached broad agreement on a package with the exception of the Republic of Ireland, where it ought to be possible to make adjustments, in view of its political situation and its importance to us in the political sphere, and to have reached broad agreement on our own resources in the Community being increased to 1·4 per cent., is a major achievement and means that this summit was unlike any other which preceded it. When one considers the financial arrangements for this country, then I understand——
Mr. Skinner: Question.
Mr. Heath: I am asking my right hon. Friend whether she is aware of these facts—that the difference between the offer made by President Mitterrand and ourselves was reduced to 15 per cent.; 85 per cent. of what was being asked for by the Prime Minister was agreed. This is a very narrow gap.
In regard to the time limit, five years for budgets is a considerable time, although if it is possible to get acceptance for a permanent system, we would support it. [HON. MEMBERS: "Too long."] That is a remarkable achievement, for which my right hon. Friend should take credit. Is it not right in regard to the rebates that President Mitterrand has always made it clear that his agreement: was connected with the agreement on own resources? Therefore, there is a difference of view between. France and Britain.
Mr. Nicholas Winterton: This is longer than the Leader of the Opposition.
An Hon. Member: "This is the leader of the opposition."
Mr. Heath: Therefore, in these circumstances, is my right hon. Friend aware that many of us could not accept illegality in withholding funds from the Community?
Mr. Skinner: Will the right hon. Gentleman give way?
The Prime Minister: What my right hon. Friend says does not wholly accurately reflect what took place. The agreement on strict financial guidelines was a very hard-fought agreement. It was not finally put to the summit, so we are not quite certain whether the text which embodied the word "guarantee" would have been accepted, but all the way it was a very hard-fought agreement by my right hon. and learned Friend the Foreign Secretary and myself. I hoped that would have been accepted.
With regard to agriculture, with all due respect to my right hon. Friend, there were some very difficult matters upon which a reserve was put by the Agriculture Council, to be referred to the European Council. It was not only the Irish position that caused difficulty but also the Italian and Luxembourg positions. They wished, too, to have special quotas so that they would not have to reduce the amounts of milk produced. Those too were caught in a great contest and those matters are still referred to the Council. There is still no decision on the variable beef premium, which is extremely important to our own farmers.
Therefore, there were a number of things upon which a reserve was put by the Agriculture Council and upon which the European Council did not agree. Then came the Irish position, under which they did not want merely a portion of the 600,000 tonnes extra quota that had been agreed by the Agriculture Council but a complete arrangement. That was hotly contested, and indeed, refused by the Common Market summit.
With regard to own resources, there is no agreement on that unless there is agreement on other matters. The own resources provisional decision went further than most of us wished, in that the proposal was for 1·4 per cent. in 1986 and envisaged the prospect of 1·6 per cent. in 1988. That also was hotly contested, for reasons that my right hon. Friend will know. [HON. MEMBERS: "Too long."] I am answering questions that have been put to me, and my right hon. Friend is entitled to answers.
My right hon. Friend referred to what he called the gap in the British contribution. It is much wider than it seems because one cannot compare 1,000 million ecu ad hoc for five years with a sum of 1,250 million which is given under a system and which means that we put a limit on our net contributions even through increased expenditure. The gap involves both the system and the amount. Nevertheless, we went a long way to try to reach agreement. We were all prepared to compromise and I am sorry that we did not achieve an agreement which was satisfactory to Britain.
Several Hon. Members rose——
Mr. Speaker: Order. Ten-minute Bill.
Mr. Skinner: On a point of order, Mr. Speaker.
Mr. Maxton: On a point of order, Mr. Speaker.
Mr. Eddie Loyden: On a point of order, Mr. Speaker.
Mr. Speaker: I shall take points of order. Mr. Maxton.
Mr. Maxton: I wish to raise a point of order, Sir, about the number and party membership of hon. Members who were called to ask supplementary questions on the Prime Minister's statement. It is, to say the least, disturbing that six members of minority parties and four members of the alliance were called.
I have raised this matter with you before, Mr. Speaker. It is time that we had an answer. The Liberal party and the SDP act here as two parties, but everywhere else as one. It is an abuse of the House if they are treated here as two parties, when they fight the European and district elections as one party. Members of the Labour party represent the largest minority in the House and they have a right to your protection as much as members of other parties.
Mr. Skinner: On a point of order, Mr. Speaker.
Mr. Speaker: Order. Is it on the same point?
Mr. Skinner: Yes, Mr. Speaker. I realise the difficulties in which you are placed on such occasions, because within both main parties some members are still strongly pro-Market—I do not know why—and the majority of the Opposition still believe that Britain should be out of the Common Market and will fight for that. [Interruption.] Dr. Death is on behind me. In my 14 years in the House I have never witnessed such a curious tete-a-tete between the Prime Minister and an ex-leader of the Tory party. What puzzles me even more is that, while I can understand you, Mr. Speaker, having to call the leader of the Social Democrats and the leader of the Liberal party—although I might not agree with it—I take exception to another Liberal Member being called who has a direct interest since he is fighting a European seat in the Highlands. On top of that, the man who receives a big fat pension from Europe was also called on behalf of the Social Democrats. I think that it is taking things a bit too far when real strong anti-Marketeers cannot have a bite at the cherry.
Sir Anthony Kershaw): On a point of order, Mr. Speaker.
Mr. Speaker: The same point?
Sir Anthony Kershaw: The same point. Are you aware, Mr. Speaker, that the hon. Member for Bolsover (Mr. Skinner) got in as many words as anyone else, albeit from a sitting position?
Mr. Speaker: I shall deal with the last point first. I am not aware of that, since I cannot hear everything from here.
May I say to the House with the greatest sincerity that I seek to balance opinions in the House? In a matter such as this, which covers both sides of the House, it is difficult to achieve perfect balance, but I seek to call those who are for a case and those who are against. I also took into account those whom I called at Question Time on a broadly similar matter. I shall also take all this into account when I draw up my list of those who will take part in the subsequent CAP debates. Those hon. Members who were unfortunate enough not to be called at Question Time or for the statement will be given precedence later in the CAP debate.
Mr. Bernard Conlan: Further to the point of order, Mr. Speaker. The House clearly understood that you said that questions on the statement would

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terminate at ten past four. We understand why the House might want to hear the views of the right hon. Member for Old Bexley and Sidcup (Mr. Heath). Would Back Benchers get the same treatment, or is this an extension of the Privy Council rule, which takes precedence over the normal rules for Back Benchers?
Mr. Speaker: I hope that the House will agree—I think that it does—that ex-Prime Ministers—[HON. MEMBERS: "No."] Order.—that ex-Prime Ministers, from whichever side of the House, have a very special position in this place. [Interruption.] It is perfectly true.
Mr. Nellist: He was sitting down all the time.
Mr. Speaker: Order. I am making a statement. It is true that the right hon. Gentleman did not rise earlier during supplementary questions. I am sorry that he did not, but when eventually he did rise I felt that the House would wish to hear his views.

Marking of Gravity (Beer and Lager)
4.25 pm
Mr. John McWilliam: I beg to move,
That leave be given to bring in a Bill to provide for the marking of the original gravity of all beers and lagers on dispensing taps, bottles, cans and other containers.
In view of the extended and important statement that we have just heard, I shall be brief.
My first reason for introducing the Bill is that I believe that people should know what they are drinking. The report on beer of the Food Standards Committee of the Ministry of Agriculture, Fisheries and Food received representations from consumer interests which
"favoured declarations of the alcohol content of the beer or the original gravity of the wort from which it was made".
The report continues:
"A declaration of alcohol content would tell him"—
the consumer—
"about one aspect only, the alcoholic strength, whereas a declaration of original gravity would tell him more about the indefinable concept of overall strength, as measured by the amount of fermentable raw materials used and by the excise duty paid. The consumer would … be in a somewhat better position to compare products."
That is why I have chosen the orginal gravity rather than the brewed out gravity on which to base my Bill.
My second reason concerns health. It is unreasonable to expect people to take general advice about the health aspects of alcohol unless they know what they are drinking. The British Medical Journal, volume 283, states:
Epidemiological comparisons of alcoholism are bedevilled by lack of uniformity in designating quantities. Statements such as `five drinks a day' are meaningless, if, for example, quantity and type of alcohol are to be related to physical damage … One pint of beer may vary in alcohol content from 12–40g according strength".
The health problem caused by that is severe. The report states:
"An arbitrary level for the development of cirrhosis has been given as six pints of beer, a third of a bottle of spirits, or half a bottle sherry daily (60–80g alcohol), but this may be too high in some individuals."
If individuals do not know the strength of what they are drinking, they could be in serious trouble and find it difficult to judge what to do.
My third reason involves safety. Many of us travel round the country. I had that experience before I came to the House. To northern tastes, southern beer is relatively weak. Only the following morning does one discover that it is not weak. Unless the individual knows the gravity, he must wait until the following morning to discover the disastrous effects of the mistake that he made the night before. My Bill would enable individuals who made that mistake to recognise at once that what they were drinking was not so weak as they had thought.
Finally, I pay tribute to those brewers who are already voluntarily marking original gravity on cans, bottles and other containers. Their public-spirited attitude is an example to the rest of the industry. I would not wish my Bill to be so narrowly drawn as to make it impossible for brewers to comply with the Bill's general objectives—namely, that people should know what they are drinking and that the strength of the drink should be clearly stated for health and safety reasons.
Question put and agreed to.
Bill ordered to be brought in by Mr. John McWilliam, Mr. Allen Adams, Mr. Harry Cowans, Mr. Stan

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Crowther, Mr. Mark Fisher, Mr. Martin Flannery, Mr. Ian Grist, Mr. Ted Leadbitter, Mr. Robert Parry, Mr. Terry Patchett and Mr. Barry Porter.

MARKING OF GRAVITY (BEER AND LAGER)
Mr. John McWilliam accordingly presented a Bill to provide for the marking of the original gravity of all beers and lagers on dispensing taps, bottles, cans and other containers: And the same was read the First time; and ordered to be read a Second time upon Friday 6 April and to be printed. [Bill 132.]
Opposition Day
[IITH ALLOTTED DAY] [SECOND PART]
Opposition Day

  Fuel Costs
  4.33 pm
  Mr. Stanley Orme: I beg to move,
  That this House condemns the Government for increasing gas and electricity prices merely to raise revenue for the Treasury and for ignoring the increased hardship this will create for millions of pensioners, one-parent families, low-income households, disabled people and the unemployed; and calls upon the Government to introduce both a home insulation programme and a comprehensive system of heating allowances to protect all vulnerable groups from high fuel costs and the risk of fuel disconnection.
  Mr. Speaker: I have selected the amendment in the name of the Prime Minister.
  There is a long list of right hon. and hon. Members who wish to take part in this important debate and I appeal for short contributions, in view of our late start.
  Mr. Orme: The Government amendment does not show the name of the Minister of State. I mean no disrespect to the right hon. Gentleman, but I note that the Secretary of State will not be opening the debate for the Government. We are debating an important issue and I feel sure that the House will take note of that absence.
  The Opposition believe that fuel supply is a major issue affecting millions of people. It is one of the basic commodities to which all of us have a right, together with food and housing. Bad housing, poor nutrition and lack of heating are direct causes of ill health and, in extremes, death, yet the right of people to fuel is regarded as a novel idea by many and its importance has not been recognised.
  The latest Government statistics for England and Wales show that 466 people over 65 years of age died of hypothermia in the winter months of 1982. Other statistics put that figure at 646. Whatever the real figure, increasing numbers of elderly people and very young children are clearly at risk each winter because they or their families cannot afford the necessary fuel to keep warm.
  Evidence shows that elderly people spend less on heating their homes in winter than many families spend on heating in the summer. Unfortunately, Government policies will increase that tendency. The recently introduced limits on standing charges, which were designed to prevent charges on small users becoming too high, are of more benefit to the owner of a country cottage than to an old-age pensioner, who may be encouraged to keep his or her electricity or gas consumption as low as possible. At the same time, fuel prices have risen at a rate that has made a critical difference to consumer ability to pay.
  When the gas and electricity price increases were announced last November we called them a hidden tax. It is no longer hidden. The Chancellor has promised that next year, or the year after, the money received thereby will be used to reduce the standard rate of income tax at the expense of fuel consumers who can ill afford it.
  The report of the Select Committee on Energy is a damning indictment of the Government's energy policy, and it sums up its view in paragraph 53, where it says:
  "We would summarise our conclusions on the proposed electricity price increase as follows. It is not justified on the

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  grounds either of the industry's Financial Target or the Government's economic pricing policy. The only plausible reason for it is the Government's desire to raise additional revenue for macro-economic purposes. This being the case, the Treasury should have the honesty to say so, rather than retreating behind a smokescreen of economic pricing."
  That is not a quotation from the Labour party manifesto. It is from the unanimous report of a Select Committee of the House of Commons on the proposed gas and, especially, electricity price increases. It noted the veiled criticism of the tax and levy extracted from the British Gas Corporation. In 1982–83 that levy amounted to £732 million.
  Once again the consumer is paying an indirect tax to ease the Government's expenditure commitments, yet in the same year the BGC's annual report admitted:
  "For many people 1982/83 was a tough year. The continuing recession affected customers' ability to pay their accounts … Those regions with high unemployment were particularly hard hit … A total of 162,000 cases were discussed with the welfare authorities … compared with 113,000 in 1981/82…67,000 prepayment meters were installed specifically to help those customers who were having problems in paying quarterly accounts."
  In the Budget the Chancellor removed the tax on domestic paraffin, but because of that hidden tax on gas and electricity it was a cosmetic exercise and will be of no benefit. In 1984 it is an insult to tell people who require proper heating to use paraffin lamps in the home, because they are especially dangerous for old people and children who should be provided with proper heating by gas or electricity. That is an implication of the Government's policy and I am sure that the electorate will see it as much.
  Mr. Gordon Wilson: Will the right hon. Gentleman note that, apart from the dangers to which he has referred, outpourings of moisture from paraffin lamps cause condensation and further difficulties for low-income families?
  Mr. Orme: I agree with the hon. Gentleman that condensation is a major problem with paraffin lamps. Many hon. Members must have visited constituents who use paraffin lamps. They use these lamps day in and day out and do not realise how much condensation is caused by them. Consequently, it is a negative approach for the Government to remove the tax on domestic paraffin. It is ridiculous to put that in the Budget as though the Government were giving something away.
  In recent months we have urged the Government to adopt the proposals in the report on electricity prices by accountants Coopers and Lybrand, which would cut prices and immediately freeze them for several years. That would go some way towards reducing the appallingly high number of disconnections. Every year about 120,000 households lose their electricity supply and 35,000 households lose their gas supply. More than one fifth remain without a supply for a month or more and many gas customers are never reconnected. It is estimated that 12 per cent. of disconnections affect households with a child under 1 year old, so about 10,000 babies were in homes without electricity at some time in 1983. Of the thousands of households whose supply is disconnected, 50 per cent. have no earned income, so their chance of paying off the debt is extremely slight. The code of practice agreed between the fuel boards and the Government has not limited disconnections to non-hardship cases. Nine out of 10 have a hardship problem as defined by the code.
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  The Select Committee report takes the Government to task on the electricity price increase. We know that the Secretary of State opposed the increase and that there was an argument in the Cabinet, but the Chancellor won the argument at the expense of millions of people who need help, not hindrance, in this regard.
  Mr. Rob Hayward: The right hon. Gentleman cites the Select Committee report. If it is such a great justification for the Opposition's case, why is no Opposition Member of the Select Committee present?
  Mr. Orme: Before the hon. Member for Kingswood (Mr. Hayward) arrived, I commented on the absence of the Secretary of State. If we are to have that kind of argument, we should start at the top. A number of my hon. Friends will come in later.
  Concrete proposals relating to the code of practice could sensibly be adopted to limit the number of disconnections. First, the code must be overhauled so that there is no doubt about its intentions. Some parts of it need amplification and clarification and phrases such as, "a reasonable period" need to be more explicit. Secondly, it should be a statutory code so as to equalise regional disparities which are all too clear when one compares the situation in London with that in areas such as the northwest. Thirdly, the code should incorporate an independent appeal mechanism so that consumers can appeal against proposed disconnections or undue charges.
  In addition, a comprehensive energy advice system must be developed to ensure that households are not unnecessarily disconnected and to secure their maximum entitlement to heating allowances. My hon. Friend the Member for Oldham, West (Mr. Meacher) will have more to say about.
  Fuel poverty is caused by bad housing, expensive and inefficient heating systems and poor insulation, as well as by fuel prices themselves, and inadequate pensions and benefits.
  Mr. Peter Rost: Has the right hon. Gentleman studied the Right to Fuel campaign's interesting publication. "The Cost of Warmth", which highlights the fact that fuel poverty is due not so much to a 2 per cent. increase in electricity prices after a two-year freeze as to the fact that the needs of the poorest members of the community are not being met? As the variation in needs is much greater among the poorest, because of the homes in which they live and the type of heating that they have, the assistance available does not go to those most in need.
  Mr. Orme: I believe that the cause is a combination of both factors, but I shall refer to the proposals in that excellent pamphlet later.
  In November 1983 the supplementary benefit fuel allowance covered just 19 units of electricity or three therms of gas per day. The weekly heating addition, which is paid at two rates, is sufficient to run a two-bar electric fire for either two hours or six and a half hours per day. People forced to remain at home because of unemployment, retirement or the need to care for the elderly spend far more of their income on fuel than the average family, but they purchase only 50 per cent. of the amount of fuel consumed by the wealthier members of society. Benefit levels rise according to the general price index, so beneficiaries are not compensated for the faster increase in fuel prices.

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  The most lasting benefits will accrue from a vastly increased programme of energy conservation. We urgently need a policy for warmth, beginning with a massive conservation programme, led by insulation for council housing, the expansion of grants for private sector housing and incentives to industry to save energy. As yet the Government have not made a direct link between energy conservation and fuel poverty, although it is profoundly obvious that the efficient use of fuel will, in the long term, lead to lower fuel bills. It has been proved that 60 per cent. of fuel can be saved through energy conservation, and slightly more in newly built properties. Yet energy conservation has always been a low priority, especially in the present Government's energy policy.
  In 1979 it was reported that 37 per cent. of households on supplementary benefit depended on electric heating and were least likely to benefit from insulation grants. In 1983, 23 per cent. of homes with accessible lofts had no insulation at all and 80 per cent. had less than that laid down in current building standards. Meanwhile—I have checked this figure many times—in 1981 only £15,000 was paid out for draught-proofing materials to 4 million supplementary benefit claimants.
  Mr. Dennis Skinner: There is plenty of insulation in here—and at Buckingham palace, no doubt.
  Mr. Orme: As my hon. Friend the Member for Bolsover (Mr. Skinner) will appreciate, those who most need insulation cannot afford it.
  Many local authority and housing association properties are in very bad repair due to dampness, condensation and mould resulting from a lack of energy conservation in both rehabilitated and newly built properties. I represent an inner city area. The multi-storey blocks of flats pushed on us by planners in the 1960s and the 1970s are insufficiently insulated, difficult to heat and costly to live in. The people who designed them, of course, do not live in them.
  Grants to individual households for home insulation are currently about £27 million, with special priority for lower income pensioners and disabled people, but the provisions apply only to those with no loft insulation at all, so those who followed previous Government advice cannot top up to today's higher standards.
  Mr. Max Madden: Does my right hon. Friend agree that to combat fuel poverty effectively the often conflicting policies of the Department of the Environment, the Department of Energy and the Department of Health and Social Security, not to mention the Welsh Office and various other Departments, must be co-ordinated to produce a coherent, comprehensive and truly national effort? Does he also agree that reducing the amounts available for home improvement and introducing a new tax on home improvement is no way in which to help combat fuel poverty?
  Mr. Orme: The co-ordination of the Departments concerned is, in my view, a matter of urgency and I shall have something to say about that shortly.
  Dealing with conservation, last year's Select Committee on Energy stated:
  "We were dismayed to find that, seven years after the first major oil price increases, the Department of Energy has no clear
  1070
  idea of whether investing around £1,300 million in a single nuclear power plant is as cost-effective as spending a similar sum to promote energy conservation."
  That goes right to the heart of what my hon. Friends and I are saying.
  Mr. Paddy Ashdown: Is the right hon. Gentleman aware that the Astronomer Royal has recently produced figures to show that if a similar amount of money as would be spent on a nuclear power station were to be spent on insulation, up to one third more energy would be saved than a nuclear power station would generate?
  Mr. Orme: The hon. Gentleman is underlining the point that I have made, and I appreciate it.
  The Select Committee went on to recommend a shift from investment in supply to investment in conservation. We welcomed the establishment of the energy efficiency office. Unfortunately, the publicity distributed by the office has had no back-up. Grants for insulation and local authority initiatives have been undermined by the Government's public expenditure cuts. During the office's pilot programme in Wales, the Welsh Office quite independently told local authorities that the annual sum for grants had been spent and that no more could be sanctioned.
  Local authorities must, therefore, play a leading role in this with their own housing, in grants to the private sector and by identifying those who would most benefit from the insulation of their homes. To do so they need the wholehearted support of the Government, and increased finance. At the moment there is no established indicator of fuel poverty. Support has been based on income maintenance alone.
  Coming to the point raised by the hon. Member for Erewash (Mr. Rost), the national Right to Fuel campaign has drawn up a seven-point index, a cost of warmth index, which, if applied to individual households, could determine the amount of fuel needed, its cost and the improvements in insulation and heating efficiency required. This work is a valuable contribution to discussions of possible solutions of fuel poverty.
  We call on the Government, therefore, to sponsor a pilot scheme on the basis of the cost of warmth index so that we can more clearly assess the needs of both the community and individual households. Included in such sponsorship should be the Department of Health and Social Services, the Department of the Environment, the Welsh Office and, of course, the Department of Energy. The efforts of all these Departments should be pooled, as my hon. Friend the Member for Bradford, West (Mr. Madden) suggested.
  Furthermore, there are countless jobs to be created from the manufacture and installation of insulation in all its forms. Thousands of people could be given a new trade. If nothing else, surely the reduction of unemployment is a compelling incentive for the Government to act. It has been estimated that 150,000 jobs could be created in work that would be invaluable at the present time.
  At the moment we waste a great deal of our energy resources. That is why the use of combined heat and power systems in the context of district heating schemes should be considered as an essential part of conservation policy. We are still waiting for the Government to pronounce on the lead city scheme. I urge the Secretary of State to bring

  1071
  the proposals to the House without further delay. Perhaps the Minister of State will have something to say about this today.
  Rather than taxing everyone with fuel price increases, we need the positive investment of resources in energy efficiency measures for low-income households. Will the Secretary of State ensure, therefore, that his officials complete and publish their review of new policies of energy conservation which we understand they are carrying out at the present time?
  Many of the issues raised in this debate form part of the People's Right to Fuel Bill, a private Member's Bill introduced by my hon. Friend the Member for Falkirk, West (Mr. Canavan), which deals with disconnections, extending the fuel direct scheme, the installation of prepayment meters, the improvement and extension of fuel allowances and a freeze on fuel prices. We cannot realistically expect the Government to support such a Bill, which will come up for a Second Reading in a few weeks' time, but their lack of support will only indicate what is already obvious, namely, that, as with all other policies, the primary intention of the Government is to improve the lot of those who are wealthy at the expense of those who are poorer.
  The Budget is a classic indication of that. If one is white, middle-class and working, one is doing very well under the Government, but other people are not doing half as well and are, in fact, being penalised. We are talking in this debate about the very people who have been overlooked by the Government. The Budget reinforced this view. Time and again the policies of the Government make the well-off better off. As we saw in The Sunday Times of 18 March, an unemployed family can have lost to the extent of £13·44 a week, while the company director is nearly £160 better off.
  Mr. Skinner: Does my right hon. Friend know that there is a better example than that? Is he aware that, as a result of the changes in the Budget relating to taxation, capital transfer tax, capital gains tax and the rest of it, the Duke of Westminster and his family will benefit to the tune of £300 million? What could my right hon. Friend do with that £300 million if he were sitting on the Government Front Bench? He could distribute it to those poor and needy who will otherwise die of hypothermia. He could do a lot with that kind of money. This is a stark example of what the Tory Government are up to—looking after their friends.
  Mr. Orme: My hon. Friend has made a good point. Such a sum would be a very good start to the kitty that we need.
  We have introduced this debate today because we think that the time is opportune. Although we are at the end of the winter, fuel bills are still coming in. We have 4 million people unemployed. They are experiencing difficulties and problems. We consider that an overall approach is needed, and that is the reason for our motion. I am sure that my right hon. and hon. Friends will support it. What is more, we must carry the argument not only in the House, but outside, and convince the prople that there is a real alternative.
  4.57 pm
  The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  "welcomes that increases in the prices of the nationalised energy industries are now below the rate of inflation and that the Government has maintained and improved the real value of social security benefits, particularly for the neediest members of the community.".
  May I say straight away that we feel every bit as much the concern that has been expressed by the right hon. Member for Salford, East (Mr. Orme) about the problems of the less-well-off members of the community in relation to fuel costs and other such causes of hardship. However, I would have more respect for the motion that he has proposed if it had been more accurate in its terms. This is why I ask the House to reject it. It calls for the introduction of a home insulation programme. We already have a home insulation programme. In 1978–79 it had an expenditure of £9·36 million; in the financial year 1982–83 the expenditure had risen to £32·7 million. Thus, we begin with an inaccuracy in the motion.
  At the heart of the motion is a call for a system of heating allowances. I hope that the right hon. Gentleman and his hon. Friends will bear in mind that, for example, in the last year for which he was responsible for these matters at the Department of Health and Social Security expenditure on heating allowances amounted to £124 million. This year, expenditure on heating allowances under a Conservative Government amounts to £380 million—three times as much as when the right hon. Gentleman had responsibility for these matters.
  Mr. David Winnick rose——
  Mr. Buchanan-Smith: I have only just started, and this is a short debate.
  Therefore, the motion should be rejected, if only on those grounds.
  The Government are doing a great deal, and will continue to do so, to help those with particular difficulties with the costs of energy. The supplementary benefits system is designed to meet the costs of the person receiving benefit, and that includes heating and other costs. Those rates are increased annually in line with the retail price index.
  As I have said, under the social security system, this Government are spending far more on heating allowances than did the previous Government. In fact, in real terms the level of that assistance is now higher than it has ever been. The rates were increased last November by 8 per cent.—well beyond the actual increase in heating and energy costs.
  In the period from November 1978, the rates of assistance have gone up by 140 per cent., whereas fuel prices have risen by 100 per cent. In other words, the help provided by the Government is 40 per cent. more than the amount by which fuel prices have risen.
  Mr. Winnick: Why does the right hon. Gentleman ignore the fact that many people must claim benefit because of mass unemployment and what has happened in the last four or five years? One problem, which is causing great anxiety to those affected, is that some people are not eligible for supplementary benefit, perhaps because they have savings of just over £3,000 or their income or small

  1073
  private pension prevent them from doing so. They receive not a penny of assistance with their fuel bills. Does the right hon. Gentleman consider that to be right and just?
  Mr. Buchanan-Smith: I shall shortly come to fuel prices and the best way of giving help. I am merely pointing out, contrary to what the motion says, that over the past five years this Government have operated the system effectively and have increased the amount of assistance. In addition, we have increased the rates of help available beyond the amount by which energy prices have risen.
  Quite fairly, the right hon. Member for Salford, East mentioned the problems facing old age pensioners. If they are on supplementary benefit, as well as receiving the old age pension they automatically receive heating allowance and the heating addition. I have met representatives of that group on a number of occasions in recent months. The amount now being spent on that group is more than £200 million a year. Here again, the Government are spending a considerable amount of money.
  Heating additions are automatically given to members of households over the age of 70 who are on supplementary benefit or who have dependants over the age of 70. As a result, 2·5 million households in the United Kingdom now benefit, compared with only 1·5 million in 1978.
  As well as help under the social security system, specific help is also given under other schemes. I have already mentioned the home insulation scheme and the amount that is spent on that. Under that scheme, help is specifically directed. For old age pensioners and the disabled, 90 per cent. of the cost of basic insulation is paid under that scheme. Special one-off payments are also available to assist supplementary benefit recipients.
  The home insulation scheme has advanced enormously in terms of the resources devoted to it, and there will be provision for assistance for basic insulation to be topped up.
  It comes ill from the right hon. Gentleman to decry what the Government have done on conservation. No Government have done more. The scheme that my right hon. Friend launched at the end of last year includes a publicity campaign throughout the length and breadth of the United Kingdom. It is being conducted at 40 different centres and is being led by my right hon. Friend and Ministers in my Department. That campaign gives to energy conservation an importance that no Government have given previously. The right hon. Gentleman should at least give us credit for that. He may still want to give more, but the assistance that we are now providing is more than that given by any previous Government.
  Mr. Orme: I appreciate that the Secretary of State and Ministers are going around the country speaking to industrialists, having breakfast meetings and so on, but that campaign is not backed up by statutory powers. It is only exhortation. However, where does the domestic consumer figure in that campaign?
  Mr. Buchanan-Smith: We are dealing equally as well with the domestic scheme. Neighbourhood energy action is another area in which the Government and my Department are directly helping voluntary organisations. But the energy conservation scheme is not related solely
  1074
  to industrial conservation. If the right hon. Gentleman doubts that—perhaps that is why the motion is worded in the way that it is—I shall be happy to send him details of the campaign, including the work that is being done through local authorities and other local voluntary organisations. In that and in many other ways, we are doing a great deal.
  Mr. Alexander Eadie rose——
  Mr. Buchanan-Smith: I shall give way for the last time, because I promised to be brief.
  Mr. Eadie: The right hon. Gentleman is trying to impress on the House how much the Government have done for energy conservation, but it is more a policy of exhortation than money. Does not the right hon. Gentleman recall that prior to 1974 the Conservative Government had never even heard of conservation? The Labour Government in 1974 introduced the concept of conservation, and the right hon. Gentleman is merely saying that this Government are trying to build on it.
  Mr. Buchanan-Smith: I am relating my remarks to the motion before us. What matters is what we are doing now and what we plan to do in the future. The hon. Gentleman is normally fair about these things, and I am sure he will accept that the money is not merely being spent on publicity. A major part of it is spent on actual energy conservation schemes, and directly helps people with insulation and so on. These are facts, and as the hon. Gentleman knows as well as I do,
  "Facts are chiels that winna ding."
  Those are the facts. They may make the hon. Member for Midlothian (Mr. Eadie) uncomfortable, but the fact that we are achieving more than his party has done is no reason for deriding what is being done to help.
  Successive Governments have realised—indeed, the right hon. Gentleman referred to this point in passing—that where help to the needy is concerned, the important thing is to direct that help to the areas where it is needed. The right hon. Gentleman referred to standing charges. I cannot help being aware from Question Time, from my correspondence and from delegations I meet that many people feel very strongly about standing charges, changes in tariffs and so on. However, the matter is one that must be examined very closely. Many of the suggestions that have been made for the abolition of standing charges or for changes in the tariffs would mean that the available help would have to be spread very much more widely. At the end of the day, someone has to pay. If a charge is abolished for one group of consumers, others will have to pay.
  Many people who are disabled, sick or elderly, or who are caring for a large or a young family, are not wealthy and have very high energy costs. It is better to help those in need directly through the social security system, through the various heating additions. That is the most effective way of providing help.
  I was interested to read a report published by the Labour Government in 1976. It was entitled "Energy Tariffs and the Poor". The foreword was in part a summary of the report. I quote:
  "After considering the group's report, the Government have concluded that none of these possibilities"—
  changes in standing charges or tariffs—
  "offers a satisfactory way of helping poor consumers with their fuel bills."

  1075
  That foreword is signed by the right hon. Member for Chesterfield (Mr. Benn). That was the conclusion of the Labour party when it was in power. It ill behoves Labour Members now to call for the very measures that they rejected when in government, when they considered those possibilities and realised that they were not a sensible way of giving help.
  The specific question of fuel disconnections has been raised. It is a question that gives me cause for concern. There is a code of practice, and it is worth remembering one or two of the guidelines in that code. No old age pensioner can be disconnected between October and March. That seems to have been forgotten in some of the reports that we have read. The code of practice was revised as recently as July 1982 after the independent report from the Policy Studies Institute. The working of the code of practice in relation to disconnections is at present being monitored by the gas and electricity consumer councils. Both those councils will shortly report to the Government on the results of their monitoring.
  We must think hard before we consider the introduction of the statutory code which some people have called for. One of the advantages of the present system is flexibility. I speak as a constituency Member. Like other hon. Members, I have to deal with disconnection cases. Very rarely are two disconnection cases alike; there are always different circumstances and a different background. I therefore believe there are advantages in flexibility. The Government have an open mind and will consider what the consumer councils may recommend in a constructive and positive spirit.
  The right hon. Gentleman referred to the report of the Select Committee. The Government will reply to that report in the proper way, but I must ask the right hon. Gentleman to put the report into perspective. It is a valuable report and a great deal of work went into it, but what we are talking about is an increase of less than 2 per cent. in electricity prices. The Select Committee had no criticism to make of gas prices but the right hon. Gentleman took care to ignore that fact.
  Mr. Wilson: Will the right hon. Gentleman give way?
  Mr. Buchanan-Smith: No. Time is short and there have already been several interventions.
  The right hon. Gentleman also forgot that the actual price increase, which has still to be endorsed by the electricity boards, was not imposed by the Government. The Electricity Council, after consultation with the Government, decided to recommend the increase to the electricity boards. There was no question of the increase being forced by the Government on the electricity industry. There have been times when energy prices have risen rapidly. When that happens we are right to be concerned about the problems created. However, let us consider the present situation, and our main energy costs. The increase in coal——
  Mr. Skinner: There is plenty of coal about.
  Mr. Buchanan-Smith: As usual, there is a Pavlovian reaction from the hon. Member for Bolsover (Mr. Skinner). In November last year coal prices increased by 3·8 per cent. That increase was below the rate of inflation, as previous increases had been. Gas prices were increased by 4·3 per cent. in January this year. That was the first increase for 15 months and was well below the rate of
  1076
  inflation. With electricity prices, an increase of slightly less than 2 per cent. is proposed, to take place in April. That is the first increase for two years and, again, it is below the rate of inflation. If we compare prices for the final quarter of 1982 with those with the final quarter of 1983 in real terms—in terms of what money will buy—we find that coal prices are constant, that domestic electricity prices have fallen by 5 per cent. and that domestic gas prices have fallen by 2 per cent.
  The right hon. Member for Salford, East was a member of a Government who raised electricity prices by 2 per cent. every six weeks during their period of office. For him to complain about the record of the present Government, under whom electricity prices are to be increased by 2 per cent. after two years, shows what nonsense the motion is and how right the House will be to reject it. I urge my right hon. and hon. Friends to vote for the amendment.
  5.18 pm
  Mr. Allen Adams: There were three things wrong with the Minister's speech: he read it, he read it badly, and it was not worth reading.
  I read in The Times this morning that it was 21 March. It might get a few things right. The date reminds me that 428 years ago Archbishop Cranmer was burnt at the stake at Oxford. On the way to the stake the previous October, Archbishop Latimer said:
  "Be of good comfort Master Ridley and play the man. We shall this day light such a candle by God's grace in England, as shall never be put out."
  Five hundred years later the Government have put that fire out, or at least had a damn good attempt at putting out the fires in many homes in the country.
  Three weeks ago I introduced a Bill on the method of paying fuel bills and asked that a commission be set up to examine the methods by which domestic consumers must pay their monthly or quarterly fuel bills. Remarkably the Government let that Bill have a First Reading. I assume from that that at the eleventh hour of the eleventh day of the eleventh month they will overwhelmingly support its Second Reading. Perhaps it would be fair to say that when the Bill received its first Reading the Government were too busy with Cheltenham to bother with it.
  The essential fact behind my Bill is that it is clearly ridiculous in the northern hemisphere to imagine that life can be sustained without heat. We have all noticed that from time to time it gets a little chilly. Yet many citizens, especially those who need heat most—the old, the sick, the disabled and the unemployed—because they are in their homes day in, day out, are least able to afford it. That is the kernel of the problem.
  We all know from constituency experience that such people sit in cold, darkened rooms, although they have given a lifetime's work. They sit with their coats on, the curtains drawn and, at best, huddled over a single bar of an electric fire. Is that the manifestation of a land fit for heroes, when people have given their all for 40 or 50 years? In winter, many such people die. We do not need to trot out statistics to prove that. We all know that the death rate in January and February is double that of June and July. At the bottom of our hearts we all know why. It is because the over-70s cannot afford to pay for gas or electricity. Moreover, they sit shivering with fear as, every two or three months, a little bill comes through the letter box saying that they must pay £50, £60 or £70. The old

  1077
  grandmother stoops down, picks up the bill, takes it out of the envelope, and often the shock is too much for her. That problem is increasing.
  As with many other problems, we merely tamper. We turn on the television and see a district council representative talking about putting carpets in old people's lofts, another talking about putting foam into walls and someone else talking about insulation in roofs. They are not striking at the core of the problem. There are two issues: how do we generate fuel, and how do we pay for the generation?
  Tom Johnston, who was Secretary of State for Scotland in the Attlee Government, had the hydro-dams built in the highlands of Scotland. The great slogan of the time was "Power in the glens." I suspect that that slogan translated in his mind to "Power to the people." He had those dams built because they could generate power infinitely. There is no limit to the amount of electricity that can be generated from nuclear power either. We are probably the best endowed country in the world for fuel. We have finite fuels in gas, oil and coal and infinite fuel from hydroelectricity generation and nuclear energy. If we do not use nuclear or hydro-power, where does it go? It is the same as asking: if one does not use one's voice, where does it go? It has no limit. We should be able to generate enough electricity to enable everyone to walk around with neon lights on their heads. There is no limit to the amount of power that we can produce, so why are we not producing it? The immediate answer is that the Government are using electricity generation as a method of raising tax rather than as a service for the people. It is as simple as that.
  Many ordinary people are fed up with the crocodile tears that are wept in the House year after year. We constantly say how sorry we feel for the poor and the unemployed and how sorry we are about the old dear who dies behind her door in February. We are all desperately sorry until July, when we forget about the issue until we become sorry again in November and December. I suggest that we put up, pay up or shut up.
  The electricity generating service should be regarded as an extension of the National Health Service. Without fuel and heat, people die. When people did not have medicine in the 1920s and 1930s, they died. The introduction of a national insurance stamp to pay for health care has increased longevity remarkably, reduced infant mortality and made our people's health incredibly better in a short time. We should regard electricity in the same light. If we believe in helping the poor, the needy, the old, the infirm and the sick, we should provide the heat that is needed in our northern climate. If we are to do that, we must take from each according to his means and give to each according to his needs.
  The solution is to introduce a system of payment similar to that which we all agree is good in the NHS. We should pay according to our means so that everyone is ipso facto entitled to the heat that is generated as a national asset. I suspect that the Government will not welcome that proposal with open arms because electricity is regarded no longer as a national service but as a method of raising tax. If we mean what we say about helping the poor and the old, we should all agree to pay according to our ability to pay.
  5.27 pm
  Mr. T. H. H. Skeet: I do not intend to pursue the arguments advanced by the hon. Member for Paisley, North (Mr. Adams) but I shall refer to what my right hon. Friend the Minister of State said. In 1982–83 the Exchequer paid £1,417 million for heating bills of one fifth of all households that depend on benefits, whereas Government expenditure on insulating the homes of such low-income families amounted to only about £18 million. I pay tribute to the Government's work on insulation, and I accept that expenditure cannot be raised to astronomic heights, but if we are to get value for money it is probably a good idea to spend more on insulation and less on meeting heating costs.
  I should like to raise a point with my hon. Friend the Minister for Social Security as he is present. A person on the social service ladder who gets supplementary benefit gets a lot of consideration, but a person who happens to be more than 80 years old and has more than £3,000 is told to run down those savings to come under the umbrella. In other words, at 85, with only £3,050, a person gets nothing by way of heating assistance. If my hon. Friend can devise any scheme that will do something for many of the old constituents who have talked to me about such problems, I shall be glad to learn about it.
  I am primarily concerned, however, not merely with people on low incomes, but with consumers generally. It may be useful to refer to the Electricity Act 1947. Section 1(6)(b) of that Act says that electricity boards shall
  "secure, so far as practicable, the … cheapening of supplies of electricity".
  Section 36(1) says that it is the duty of the central authority to
  "secure that the combined revenues of the Central Authority and all the Area Boards taken together are not less than sufficient to meet their combined outgoings properly chargeable to revenue account taking one year with another."
  It is extraordinary that in the charter Act of the electricity industry there is no compulsion on these bodies to produce a profit. If this were a private enterprise, it would probably distribute a lot of this by way of dividend, in this case to the nation at large. The electricity supply industry has been given a financial target of 1·4 per cent., which is obtainable on its existing profits. External financing limits have been given minus figures for 1983–84 of £418 million and for the ensuing year of £740 million.
  I believe that there is no need to raise prices for electricity this year. This would help consumers in general and the poor in particular. In fact, in paragraph 36 of its report the Select Committee says that there is a
  "reasonable prospect of achieving the EFL without a tariff increase".
  My right hon. Friend says that the 2 per cent. increase in domestic prices from 1 April has not been imposed on the industry but has been won by consent. I should have thought that it was a sword of Damocles hanging over the head of the industry.
  What is even more interesting is that we have three types of legislative control. One is quite apparent—it is by Act of Parliament; the second is obvious to most—an Order in Council; and third is a decree by White Paper. What legislative framework is behind the setting of financial targets, EFLs and performance objectives—none and I am fortified by the fact that the Department of Energy

  1079
  "took the view that the real price of electricity should be allowed to fall."
  That is in paragraph 27. If that is the case, why is the Secretary of State increasing it on this occasion? My right hon. Friend the Secretary of State, in a speech reported in one of the papers to the Select Committee, EP3, said:
  "Present and expected capacity in the industry is more than adequate to meet forecast demand over the next few years at least. The cost to the industry of meeting marginal increases in demand is thus likely to be lower than was expected."
  That is on the basis of capacity, but it can also be seen on the basis that the price of coal is not expected to shift markedly in the near future.
  We have been told in the course of this debate that electricity prices went up by 391·7 per cent. between 1974 and 1983. However, speaking in real terms it is only 50 per cent.
  What troubles me—and this is a point which is apparent on reading some of the statements in the Select Committee report—is that the debt of the ESI of £4,337 million will be repaid by 1988–89. It will then be a debt-free industry. Is the industry then to be expected to build up large cash surpluses? If so, what is to happen to them? Will not the result be that there will be a levy on the electricity industry comparable to that on the gas industry? Is it not one of the great faults of nationalised corporations that the public—the people supposed to benefit, the consumers—are never allowed to receive the benefit of a commercial windfall? It must go to the state for other purposes quite alien to energy purposes.
  It is perhaps ironic that while the Government are arguing in the European Council against the energy tax proposals of the EC, they should be falling victim to their own proposals here in putting up the price of electricity. I do not blame the Government so much as the civil servants and the Treasury who have wrought these changes. They say that they want to maintain prices at economic levels to reflect the continuing cost of supply, including an adequate return on the capital employed.
  Let us see what the Electricity Council says, because that is the body established for the industry and its members are the people who speak on these matters. The chairman of the council said, according to paragraph 35 of the Select Committee's report, that the proposed increase of 2 per cent. was not necessary on economic grounds in order to meet the ESI's financial target. And in paragraph 41 it is stated that the industry believes that current prices are
  "equivalent to a broadly mid-point view on Long-Run Marginal costs under a surplus capacity situation."
  Then we come to the report of the consultants, Coopers and Lybrand, on electricity bulk supply tariff which was prepared at the instigation of the Department of Energy. Paragraph 6.33 says:
  "In the present circumstances of the CEGB, with substantial and persistent excess capacity, it is perhaps not surprising that economic reasoning should lead to the conclusion that since the nation has paid for the capacity already it is appropriate to set tariffs which encourage its use."
  In other words, we should drop prices to increase consumption.
  I shall not support the Opposition motion tonight. I am arguing for the whole body of consumers, who are fed up with the nationalised corporations putting up prices. The sword of Damocles hangs over this particular industry and, whereas the price could come down, it has gone up, even if only by 2 per cent. The argument may be that the rate of return on investment is something like 2 per cent., but
  1080
  I can give the figures for the rest of manufacturing industry, which are also low at this time. In manufacturing industry, the rate of return in 1982 was only 3·3 per cent., and it would be expected that in utilities it would be a low figure anyhow.
  Mr. Bernard Conlan: I cannot follow the logic of this argument. Everybody knows that the CEGB was forced to put up its prices against its will because of Government policies.
  Mr. Skeet: If the hon. Gentleman is wise enough to have read the Select Committee report, as I hope he has, he will see that the Committee is suggesting that it is because of the persuasiveness of the Treasury that the Government, or the Ministers, had no alternative. I refer him to paragraph 49, which says:
  "Despite the strenuous denials of the Treasury witnesses, we cannot avoid the conclusion that the only plausible motivation for the large increase in the ESI's negative EFL for 1984–85 … was the Government's wish, on grounds of macro-economic policy, to raise additional revenue in order to reduce the Public Sector Borrowing Requirement."
  Who talks about the public sector borrowing requirement? It is not the Department of Energy, but the Treasury. The Department of Energy probably has never heard of it. It is the Treasury that has laid it down and has determined this. The significance of what I am saying must be quite apparent. It has been determined by a Government Department, the Treasury, the continuity boys who were there when the Labour Government were in office and we were in opposition. It does not make any difference which party is in office, the Treasury maintains its position.
  I have quoted the report of the consultants, Coopers and Lybrand, which was commissioned by the Department of Energy. It gave its view that a reduction was called for. The Select Committee report does the same. I have racked my brains to try to find out whether there is an energy reason for increasing the cost of electricity, and I can find none.
  I can see why the Government are concerned about public expenditure and want to have some impact on the nationalised industries' claims on the PSBR. It may irritate many that in Europe there is VAT on electricity and gas and that the United Kingdom has none. In Belgium there is 6 per cent. VAT, in Luxembourg 5 per cent., in Italy 6 per cent. and in the Netherlands 18 per cent. It may be that because we do not have this the Treasury considers that there should be some compensation through the 2 per cent. increase from 1 April. It may be that the energy tax that was adumbrated from Europe is another way of securing it locally.
  I know that this is a short debate, so I shall not take too long or comment on too many different things. However, I pay tribute to the Select Committee for getting together the facts. There is no justification for an increase in electricity prices. I have made no comment on gas price increases, because they are justified. If we are to have an increase in the price of electricity in a good year, I dread to think what will happen in a bad year. Can one ever envisage in future years circumstances in which the prices of electricity could fall?
  It is argued that as inflation is 5 per cent and this increase is below the rate of inflation, we should not complain. I do not hear any company chairmen arguing the point that because the rate of inflation is 5 per cent. prices must go up by that amount. The market consideration should apply. If one fiddles about with the EFLs, target

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  performances and so on, one can so organise the figures that ultimately the price must rise still further. In other words, my argument is for the consumer. The 1957 and the 1947 Acts lay this down specifically. They do not tell the electricity supply industry that it must build up accumulated profits that cannot be distributed to anybody except the Government.
  5.41 pm
  Mr. Gordon Wilson: What the hon. Member for Bedfordshire, North (Mr. Skeet) said is even more remarkable in relation to Scotland. At least in England and Wales people know what the price increase will be. A figure of 2 per cent. has been quoted. However, in Scotland, where there is an over-capacity of 80 per cent., the rumours are that the announcement from the electricity boards will be of an increase of 4 or 5 per cent., which would be lunacy if it were to take place.
  It is no coincidence that the three Bills on this subject that have been introduced under the ten minutes rule, by the hon. Members for Falkirk, West (Mr. Canavan) and for Paisley, North (Mr. Adams) and by myself, come from Scottish Members. In Scotland, we have to put up with climatic differences that cause considerable problems for those who are ill, the unemployed and the elderly. Those are the categories of folk who are in difficulty and who have been dying because of lack of heat.
  I am glad that the hon. Member for Oldham, West (Mr. Meacher) is in his place, because I have a copy of a statement printed in The Observer on 16 December 1979. He reported that, as a Minister at the DHSS in 1976, he had wanted to answer a question about the numbers of hypothermia deaths, but his Department overruled him, giving the reason that, if he were to reply as he had wanted, showing up to 35,000 deaths a year caused by lack of heating, according to an independent survey, that would affect large numbers of old people and be used to bring pressure on the Government to improve heating provision for old people.
  I can see why the release of that information would run counter to the Treasury, which has just been attacked by the hon. Member for Bedfordshire, North. There would be two savings from coverinig up on hypothermia. First, there would be no need to give an adequate allowance for heating provision; and, secondly, if people died prematurely, the national insurance fund would be helped because pension payouts would be reduced. Over recent years many more deaths—although fewer than the true figure—have been registered as being due to hypothermia.
  Surveys have shown that in the winter months in the United Kingdom the number of elderly people who die goes up by 20 per cent. The number of babies under one year old who die in winter months has increased by 40 per cent. We must remember that we are talking not just of elderly people who are kept in their houses, but of low-income families. These families with young children have great difficulty in resolving whether their money should be spent on food, clothing or heating. This is true of many parts of the United Kingdom, but it is especially true in the north, which suffers from climatic severity.
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  Fuel poverty exists and it is accentuated by several factors. First, it is accentuated by low incomes, and with the increase in unemployment and the increased numbers of elderly there is now more of a problem.
  Secondly, as has been said, fuel prices are, relatively speaking, far higher now than they were 10 years ago. We all know why. There has been not just general inflation, but fuel inflation. However, the statutory monopolies are not allowed to make better use of their capacity by reducing prices. Any private firm faced with over-capacity would try to dispose of the product by advertising and price-cutting, and it would be encouraged by the knowledge that the more it sells, the more efficient the enterprise and the more overheads decline in terms of overall finance.
  The third factor is the type of housing that we have. We have had 20 years of building houses that are a disgrace to housing standards. We have multi-blocks. Indeed, those spread out are apparently worse than the high rise blocks. We have houses that do not even have sound insulation, never mind insulation to keep in heat. In my constituency, I have an area of high unemployment—the Whitefield housing estate. One part of it, the Skarne housing development, was built on a prefabricated basis to a Swedish design. The first thing that happened to it was that the specified triple glazing was taken out. There are now holes in the fitments of the windows where the draughts can come in and the heat can escape. The insulation of the walls was progressively reduced to fit Government financing. These are mistakes of the past, but people still live in and have to heat those houses. Lack of insulation affects much of our housing stock.
  The 20 per cent. increase in the deaths of elderly persons and the 40 per cent. increase in the deaths of babies does not happen in Scandinavia, partly because there are higher heating allowances, but partly because the housing quality is better and therefore less heat is lost through the walls. We provide statutory heating provision for those who work here. If the temperature in this place—although I do not think we are affected by the Factories Acts—or in an office block or factory were to go down, there would be a legitimate walk-out because people were having to work in low temperatures.
  However, there is no such protection for those who have to stay in their homes because of illness or unemployment. The figures speak for themselves. The poorest 20 per cent. of the population pay 11 per cent. of their income on fuel and the richest 20 per cent. pay 6 per cent. The rich will have better heating provisions in their houses and larger houses to heat. However, compared with their income, the overall impact is less.
  We have had a bad winter in some parts of the country. In fact, I wrote to the Government about it. When the DHSS found it unnecessary, according to its criteria, to set off the trigger points for the exceptional heating allowances, many people in Scotland were amazed. People were trapped in their houses for weeks. It was not the coldest winter in terms of temperatures, but in terms of snow it was a remarkably bad winter, and people were trapped in their houses. Crieff, for instance, had 2 ft of snow for about three to four weeks, and it was difficult for elderly people to get out of their houses.
  The Minister for Social Security should do something about these exceptional allowances, because at present they constitute a fraud. One sees from the figures that, in the very cold winter of 1981–82, there was an increase of

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  32 per cent. in the number of degree days, but there was only 1 per cent. increase in the amount that was paid by the Government in allowances. Indeed, recent figures show that in the north of Scotland about 2,903 degree days were sustained, compared with south-west England with 1,906 degree days. I have been quoting figures of 30 per cent., but according to the latest information that I have, I have been under-estimating that. According to one calculation, the figure should be 48 per cent.
  As time is short, I shall not speak at length, particularly as, on 25 January, when I launched my Social Security (Cold Climate Allowance) Amendment Bill, I had an opportunity to describe fuel poverty in some detail. I have the opportunity to meet the Minister next week, together with the sponsors of the Bill, to discuss the need to revise the fuel allowances to take account of severity of climate. I shall put the arguments to him on that occasion. However, according to the figures that I have about the amount of fuel that is consumed, Scotland, in both cash and percentage terms, is very much above the rest of the United Kingdom. Yorkshire and the north-east of England come close behind, so I do not make a peculiarly Scottish point here. I know from discussions with hon. Members of all persuasions from Northern Ireland that, although they might not qualify in the same category as the north of Scotland, their heating costs are so ferociously high in the Province that there is a considerable degree of fuel poverty.
  We must deal with the problem in a number of ways. First, we must improve the housing stock. That point has been made by a number of hon. Members, so I shall not expand on it. It is common sense that, by improving the amount of insulation, we can reduce the amount of fuel that people have to burn to get an adequate degree of warmth.
  Mr. Rost: I have followed closely what the hon. Gentleman said. He referred to Scandinavia and said that the higher insulation standards there are the main reason why fuel poverty does not exist there. No doubt he is also aware that the other reason is that in Scandinavia people do not waste hot water from power stations but pump it into buildings to heat them, whereas we throw away two thirds of the fuel used in producing our electricity.
  Mr. Wilson: The hon. Gentleman is pushing at an open door there. His problem is to persuade his own Government, or any Government, to take account of his arguments. We both agree that insulation is necessary.
  Secondly, if electricity and gas prices can be restrained or reduced, poorer consumers will automatically benefit.
  We should accept, therefore, that cash aid is necessary now. It is the quickest way to alleviate the problem and to curtail the misery that many of us encounter when we see people living in cold and chilly houses—conditions that we would not tolerate for ourselves or our families.
  Hypothermia does exist. We cannot sweep it under the carpet. People die because of lack of heat, and illness is caused by lack of heat. The best way to solve the problem is to have a new and comprehensive system of fuel allowances that will match the nature of the problem. Compassion demands that. I hope to continue the argument on Wednesday next when I meet the Minister.
  Mr. Deputy Speaker (Mr. Paul Dean): Order. The winding-up speeches are expected to begin at 6.30. There are still seven hon. Members who hope to speak from the Back Benches. I therefore appeal for brief speeches.
  5.56 pm
  Mr. Tony Speller: We all know where the energy deprivation battleground is, but I suspect, as is usual in energy matters, that we are using wrong weapons and outmoded tactics.
  I was more interested than entertained when one hon. Gentleman said how much had been spent in 1979 compared with what was being spent in 1984. The truth is that we spend our time in the House arguing which side should spend more or did spend less. That has no effect on the people of whom the hon. Member for Dundee, East (Mr. Wilson) spoke, although he made that unfortunate remark about kicking open doors, which only lets the draught in. When we speak about our constituents being cold, it is quite immaterial on which side of the House we sit.
  I always seem to get the rough edge of time having to limit my speeches to the final five minutes, but I shall do what I can. The first matter I wish to stress is that we should use existing energy sensibly and efficiently. We are not short of energy. We generate vast amounts of it, but we do not distribute it to those who need it—not even those who need it and are prepared to pay for it. The wastage is vast. If one lived in the sunnier clime of California, for example, the privately-owned local utility companies would do an energy audit on one's property. They would point out how, for a very low price, one could keep heat in a house. Many of our buildings allow the heat to leave as quickly as it is produced, but there one is told it is most important to conserve the heat within the building. Once that happens, each person can be given, for less money, a great deal more comfort. I suspect that hypothermia is not known in that part of the world, not because of the climate, but because they have a sensible approach to making each house energy efficient.
  I know that we have an energy efficiency campaign going on, and I am delighted about it, although I should have been happier with one Government office controlling it instead of three offices in competition. I suspect that, as in so many cases, the cost of administering the schemes is rather more than the benefit they produce.
  I do not believe for a moment that a discussion in the House about fuel poverty need divide us on party lines. Mention has been made of the Select Committee, and three or four hon. Members now present are members of that Committee. We appear able to debate fiercely, and yet to bring in logical unanimous comments. Energy is not a party political matter when it reaches the stage of personal fuel poverty—or, if it is, it should not be.
  Mention has been made of the cost of fuel. The hon. Member for Bolsover (Mr. Skinner), who made a couple of quick interventions, wishes us to use more coal. I wish that we used less coal, much less oil and much less gas, because they are all finite resources. We should start to look more sensibly at renewable energy that comes back again and again—the wind that never ceases to blow, I think I am happy to say, in my constituency of Devon, North, and the tide that rises and falls 30 ft. at Ilfracombe. I am talking about the things that nature provides. They

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  contaminate neither the atmosphere with sulphur fumes nor, at a later stage, our grandchildren's land with some form of waste.
  If we were sensible, we would give tax advantages—not grants—to people who build energy-efficient houses. Too many grants are given and things built simply because they have been made grant-worthy. We should give a tax advantage to the builder and architect who produce an energy-efficient house. We could give advantages in the form of tax concessions—again, not in grant—to people who install energy-efficiency measures which do not use the normal fossil fuels on which we all depend or, if they do, use them wisely and moderately. Let us do things which conserve for our grandchildren those resources with which we seem to be so profligate today.
  I find it sad that, according to a parliamentary reply yesterday, the DHSS has doubled its fuel bills in the past five years. I doubt whether one patient is one jot warmer for that vast increase in cost. We do not build to the conservation of energy standards that we should, and until we do that we are wasting our time here as we have wasted
  6 pm
  Mr. Tom Pendry: I disagree slightly with the hon. Member for Dundee, East (Mr. Wilson). Happily, we are coming to the end of a relatively mild winter. Unfortunately, it has not been so comfortable a winter for some as it has been for hon. Members in this warm House. The shocking fact of life in Britain today which cannot be disputed is, as has been said, that thousands of elderly people and babies die every year because their homes are too cold. We know that that is mostly the result of energy prices that are held artificially high by the Government or the Treasury. I do not know the difference between Treasury and Government policy—the policies are the same.
  We all know the absurdity of raising gas and electricity prices when both industries have made fantastic profits in the past year. That is the kind of insane policy that one has come to expect from the Government. They have sought to raise prices at a time when over 2·25 million people are given fuel subsidies. It is patently obvious that the poor and elderly are once more the Government's targets. One thing that is certain is that those who suffer will not be those in the income brackets which the Chancellor helped so generously in his Budget last week. I shrewdly suspect that not too many of them will figure among the 120,000 disconnections undertaken by the gas and electricity boards in a year. Nor will many of their number be among those who die as a result of cold homes. Instead, the Budget measures on building alterations and double glazing have made it much more difficult for those in real need to gain the warmth that they seek.
  In December it was estimated by the national Right to Fuel campaign, which has done so much work in this field and should be complimented by hon. Members who speak in the debate, that before the spring is out there could be as many as 44,000 deaths among those over 50 years of age and over 500 deaths of babies under a year old. As I have already said, it was a relatively mild winter and we do not know whether those estimates have been realised. None the less, the fact remains that at the end of the day many will have died as a result of those hardships. All hon.
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  Members have surgeries and can well imagine the particular hardships of disconnection. In my area in the north-west they run into thousands. Many know how difficult it is, even when the debt is paid, to be reconnected. Maladministration often causes great hardship.
  That brings me to the bureaucratic nightmare that has followed the housing benefit scheme. The picture across the country has been a dismal one of huge backlogs, long delays and unnecessary suffering for those least able to cope with it. The scheme has been so disastrous that even the Government have recognised that they must have a thorough review.
  In my constituency, the Tameside welfare rights organisation has furnished me with some disturbing facts, especially about pensioners and the chronically sick who are not taking up their entitlements to heating costs, largely through ignorance. Welfare rights organisations in Britain are doing a great job. It is clear that people well below the poverty line are not heating their homes properly if they are not claiming extra help for heating. Indeed, a recent survey commissioned by the Electricity Consumers Council found that, on average, elderly people spend less on heating their homes in winter than most families do in the summer. My right hon. Friend the Member for Salford, East (Mr. Orme) made that clear.
  The Government's continued indifference to the appalling consequences of fuel poverty is a scandal. We noted with interest the launching of the £100,000 advertising campaign by the Minister for Social Security to encourage people who were illegally underpaid supplementary benefit to claim the money that they are owed. I am glad that he responded to the Child Poverty Action Group's pressure on that matter, although he may think that he acted on his own initiative.
  Is it not about time that we had a similar campaign to encourage people to take up their entitlement to supplementary benefit, upon which heating allowances depend? Too high a percentage are not even within that scheme. The Minister is talking to known claimants in that campaign. We are talking about those many thousands of people who are not identifiable. It is clear that the DHSS can identify only its own claimants. We need to target those who are not getting heating allowances since they are not claiming supplementary benefit. We desperately need such a campaign, although so far the Minister has increasingly preferred to spend his money on the social security inspectors chasing people suspected of fraud. Much more important is the need for that money to increase the staffing levels in local authority and DHSS offices to deal with the problems of fuel poverty.
  The problems do not seem to go away over the years. I spoke in a debate in the House on a subject close to this in 1971. I referred then to many disgraceful incidents of pensioners in my constituency who had to stay in bed until midday because they could not afford to turn on the heating. The then Minister, the right hon. Member for Leeds, North-East (Sir K. Joseph), did not believe what I was saying and asked me to furnish him with the facts. More importantly, the Daily Express, equally disbelieving what I was saying, sent a representative to spend two or three days in my constituency. In a major article it concluded that, if anything, I had underestimated the problem.

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  This morning I received a number of letters on the subject, as I suppose has every hon. Member. One was a letter from a lady who said:
  "At the moment it is 2 pm. I am sat in the house with all the curtains shut to try and keep warm as I can only afford to heat the house in the evenings. This is heart-breaking after a lifetime's work and thrift. Perhaps Mrs. Thatcher would like to share our life-style for one month. She would be very welcome if it would do any good but being so cold-blooded she would not feel the cold. I am normally an optimist but I find I am getting very pessimistic about the future. Perhaps the bomb would be a blessing."
  She concluded ironically by saying:
  "I write on the blotting paper because I am not a wasteful person."
  That letter spells out much of what the debate is all about. One could go on, but I shall not. I shall adhere to your stricture, Mr. Deputy Speaker. I hope that the Minister will reply positively. If he does, he can only conclude at the end of the day that he must march into our Lobby.
  6.8 pm
  Mr. Ian Lloyd: I am sorry that the hon. Member for Stalybridge and Hyde (Mr. Pendry) should have referred in such disparaging terms to my right hon. Friend the Prime Minister who came to the Dispatch Box this afternoon after a tremendous battle in Brussels to save the real resources of Britain for a variety of other policies, one of which must surely be the resources that are spent on energy.
  The Select Committee on Energy is grateful to the House for an opportunity to debate the second of our reports to be published in a comparatively short space of time. The debate is turning largely into one on the consequences of hypothermia and how policies should be adapted to avoid it. That is a legitimate objective and one which enjoys the sympathy of every hon. Member. However, energy policy is a much larger issue altogether when compared with that narrow, if important, segment of social policy. The difficulty is whether our energy policy should be as strongly influenced by that as some hon. Members have suggested this afternoon.
  I shall give one example of how dangerous that can be. Northern Ireland has been quoted. I believe I am right in saying that there the average figure of energy expenditure per household per week is more than £12 compared with the national average of £8·35. I believe that one of the reasons, into which we need not go now, is the fact that a very large segment of the community in Northern Ireland refuses to pay any energy bills at all. That means that the rest of the community, naturally and inevitably, has to pay a higher energy bill. That could be a national problem.
  Mr. Roy Beggs: Electricity in Northern Ireland is expensive because it is produced from imported oil. We depend 90 per cent. on oil for electricity generation. We need a new strategy from the Government. Indeed, electricity charges are pegged to the level of the highest rates charged on the mainland.
  Mr. Lloyd: I am obliged to the hon. Gentleman. I do not think that that necessarily disqualifies my argument. I am aware that other special energy considerations apply in Northern Ireland.
  The hon. Member for Dundee, East (Mr. Wilson) suggested that a substantial segment of the housing stock in the United Kingdom should be improved. No one would
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  quarrel with that generalised argument. One could pick out houses in almost any community which are examples of poor insulation and design when considered by energy criteria. In the interesting pamphlet produced by the national Right to Fuel campaign, it is stated that 5 million dwellings—28 per cent. of the total—need essential repairs to make them wind and weather proof, generally at a cost in excess of £2,500 each. One does not need a computer or a calculator to work out that the national cost of that possibly desirable suggested policy is £12·5 billion more than the whole of the yield of the North sea for one year. That gives some perspective on what right hon. and hon. Gentlemen are arguing in terms of the improvement of our housing stock. These ideals should be considered carefully, but we cannot escape the consequences of such policies.
  It is important to distinguish between what the Select Committee on Energy said and what it did not say. I refer to page xii of the report, "The purpose of the enquiry", where, in eight subsections, the precise questions to which it endeavoured to find answers are stated. While I would be the first to admit that we criticised the Government on their electricity price increase, we did not substantially criticise the Government on their gas price increase, and at no time did we take into consideration—this is carefully stated in a report—the rate of return on capital in the two industries, except in so far as the financial criteria, which were applied at an early stage in the calculations, implied a rate of return, but we did not examine that.
  Opposition Members say that these industries made "great profits". I always find that term as wide as it is long. It is seldom related to the return on assets. As regards these two industries, if we had enlarged our inquiry to consider that aspect—which for various reasons we did not—we night well have had further to qualify our conclusions.
  It is helpful, and sometimes informative, to distinguish fuel poverty from poverty in general. I suppose that an absolute can be defined in the sense in which the national Right to Fuel campaign has endeavoured to define an absolute. I suggest that we may go down many puzzling roads in this respect. I was in Nepal recently. I am sure that the definition of fuel poverty in Nepal would appal the House. Nepal was running out of timber, which was the sole source of fuel in many areas. I am sure that a large proportion of the Nepalese population experienced a degree of discomfort in winter which, by comparison with the worst standard in the United Kingdom, would seem almost a paradise. Let us be careful about defining these matters so rigorously lest we set standards that others might envy.
  When one refers to fuel poverty, one might refer equally to food poverty, clothing poverty, transport poverty and housing poverty. In the family expenditure survey of 1982 some figures stand out starkly. I suggest that the prime causes of fuel poverty—if, indeed, it exists—are as follows. The basic fuel cost is the most significant element. Secondly, the high cost of building power stations in the United Kingdom makes a substantial contribution. There is the high cost of mining coal, which the House debated recently, and the high cost of oil and gas, for all sorts of reasons that hon. Members understand, not least of which is the high taxation imposed by producers and consumer Governments, regardless of the energy or social consequences of that taxation. That criticism can be applied to producer and consumer

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  Governments on a broad front. Heavy taxation plays a not inconsiderable part in fuel poverty, or the proportion of all incomes taken by the consumption of fuel in a normal household.
  Another aspect is revealed by the family expenditure survey. The right hon. Member for Salford, East (Mr. Orme), opening the debate, said that those who need insulation cannot afford it. I wish to draw the attention of the House to certain figures. The level of fuel expenditure can be exaggerated. It has never exceeded 6·3 per cent. of the average household over a long period in this country, as shown in a graph in the family expenditure survey. It does not exceed 14 per cent. of one-adult households where the householder is dependent on state pension—the narrowest segment to which I know the Opposition attach so much importance. It does not exceed 11 per cent. in households occupied by single women over 60. It accounts for 5·2 per cent. of all households' disposable income. We are therefore considering one twentieth of the average household expenditure in the country.
  Fuel expenditure appears to be not elastic to income. If I may explain that somewhat ambiguous term to the House, it means that as incomes increase—and this is different from prices falling—one would expect, if all these arguments apply to the extent that Opposition Members have argued, the first priority would be an increase in expenditure on fuel, but that is not so. If one considers the figures from incomes under £40 at one end of the range to incomes of £400 at the other end of the range, the increase in fuel expenditure is from £5 to £20, but the increase in food is from £11 to £54, alcohol £2 to £17, tobacco £1·50 to £4·50, clothing £2·50 to £38, durable goods £2·20 to £34, transport £3·40 to £61, and services £3·90 to £76. Nobody would attempt to deny that, for certain important segments of the population, significant social problems are attached to the price of fuel. However, this is not a general problem for the vast majority of citizens, and that is a credit to the energy policies of successive Governments who have handled a difficult problem in a difficult area under constant criticism.
  This suggests the directions in which policies should be driven. I put them in this order. The first is conservation and insulation, where it can be made capital efficient, and the criterion is all-important. Secondly, there should be energy price redistribution up to the point at which it is an acceptable social policy which we can afford. It should also be taken in conjunction with any other social redistribution policies that we may wish to pursue. Thirdly, there should be income redistribution by taxation. However, fuel policy must also take into consideration all the other matters that need to be taken into account when such changes are made.
  Hon. Members talk of the people's right to fuel, but where there is a right, there is an obligation. In this Chamber we hear a lot about rights and very little about obligations, or meeting those rights. As Kennedy once said, they always require real resources.
  "Enough is a function of what else is important."
  We forget that time and time again. Whose obligation is it? Is it that of the state, the energy industries, or the fuel industries? Obviously, the obligation is shared by all three. However, for the country as a whole, prices must
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  cover costs. The bigger the exemptions, the higher the prices in the unsubsidised sector. That conclusion is wholly inescapable.
  Several Hon. Members rose——
  Mr. Speaker: Order. There are 10 minutes left before the concluding speeches begin. Perhaps I could ask the two hon. Members who wish to take part in the debate to speak for five minutes each.
  6.22 pm
  Mr. Paddy Ashdown: I shall try my best to accede to your request, Mr. Speaker. Although I do not wish to waste the time of the House, I should not wish to lose this opportunity of paying tribute to the man who single handedly established—and it took great effort and personal commitment to do so—that hypothermia is a major problem in Britain. I refer to my predecessor as Liberal candidate for my constituency, Dr. Geoffrey Taylor, who, I believe, sadly died last year. His commitment to that cause brought it to the forefront of the public's imagination.
  Our support for the motion depends on both of the clauses within it. Despite what the Minister said, we believe that the Government have used fuel prices as a mechanism for raising revenue by stealth, and have sought to do so in a manner that does not come within the tax balance. I wish that the Minister had been in his seat to hear the speech of the hon. Member for Bedfordshire, North (Mr. Skeet), who completely demolished his idea that it was not the Government's fault, that the Government were not twisting the arm of the electricity board and that the board was making its own decisions freely. That is a fig leaf behind which the Minister cannot hide his nakedness, either inside or outside the House.
  Everyone recognises that the increased electricity prices that have placed such a burden of misery and deprivation on those least capable of bearing it are a mechanism by which the Government seek to raise revenue. Nothing that the Government have recently done has more clearly demonstrated their total lack of compassion and the fact that they are out of touch with the reality of those increases for the poor and deprived, about whom they seem to know so little.
  Nevertheless, we must also blame ourselves. All Governments have taken a wrong view of energy policy. The Ronan Point disaster led us to withdraw gas from flats and to put in, instead, electricity. The installation of underfloor central heating has meant that there has not been a sufficiently flexible heating policy to allow for shutting off heaters in particular rooms, and so on. The lack of drive on insulation is particularly important.
  As the hon. Member for Havant (Mr. Lloyd) said, it is important that the debate should range a little more widely than hitherto. We believe that the new burden of fuel costs cannot be carried within existing supplementary benefit provisions. In addition, the additional heating allowances are woefully inadequate for the task. The problem is much greater than that. As the hon. Member for Erewash (Mr. Rost) said—although he is not now in his place—we must look at it on a much broader scale.
  The Government seem to be missing a great opportunity. We must provide short-term urgent and immediate assistance to enable people to bear their heating costs and, twinned with that, there must be a major

  1091
  programme of insulation. The Minister was right to say that the Government have put more revenue and resources in than the Labour Government did, but they are still hopelessly inadequate to the task. The hon. Member for Bedfordshire, North exposed the Minister's figure by saying that it was about one third of the total cost paid in short-term heating bills. As has been rightly pointed out, that cost is paid now and gone tomorrow.
  Instead of making a major investment in insulation, solving the long-term problems, and making investments that will assist industry, help employment and provide a long-term resource for the people of Britain that will allow them to have adequate heating, the Government's fuel policy has exposed the compassionless heart of the Tory party as well as its lack of touch with the reality of life for the poor, old and disadvantaged. That is where the Government are most indictable. Their policy has caused a great tide of misery for those least able to cope. The Government have missed a great opportunity to help our economy, drive down unemployment and invest in the future of Britain in a way that would provide great returns and banish for ever from houses in Britain the misery and danger of cold.
  6.27 pm
  Mr. Sean Hughes: It has been said that it is a minority who are suffering the most. However, it is precisely because they are a minority, and a minority who seem to get the wrong end of the stick every time, that I wish to raise a few points.
  The clear, unchallengeable fact is that those at the bottom of the earnings scale pay more proportionately for fuel, light and power than those who are better off. I shall use some figures, the first of which was mentioned, I believe, by the hon. Member for Dundee, East (Mr. Wilson). Households on about one third of average weekly income spend 11 per cent. of their income on fuel, light and power. Households on between 50 and 60 per cent. of average weekly income spend between 7·5 and 9·5 per cent. Those households on the average weekly income spend between 4·7 and 5·5 per cent. on fuel, light and power, while those on twice the average weekly income spend between 2·9 and 3·5 per cent. on those items.
  What makes matters worse is that the cost of fuel has risen faster than other prices or incomes, thus exacerbating the original inequality. If the retail price index stood at 100 in January 1974, it stood at 342·6 in January 1984. However, the figure for fuel and light was 469·3 and for electricity alone 492·1. Thus, the worst off are even worse off. Of course the Government can respond, as they did in the debate on low pay, that average earnings have increased and that it is only sensible that fuel prices should rise realistically in relation to that rise in income, but, as my school headmaster used to say, the point about an average is that 50 per cent. are above it and 50 per cent. are below it.
  Since the Conservative party took office, a family of four on average earnings has seen a 6 per cent. improvement in income, while a similar family on five times average earnings has enjoyed an improvement of 22 per cent. and those on 10 times average earnings have enjoyed an improvement of 54 per cent. Therefore, to accommodate the above average pay increase for the well off, there has to be, by definition, a below average pay increase for the badly off. So at every turn those at the bottom are further disadvantaged. They have to spend
  1092
  more of their income on fuel, the price of that fuel is rising faster in comparison with other goods, and they get fewer income increments to meet it. It is a new law of diminishing returns—those with least will receive less than the average percentage wage increase, while paying out the largest percentage in price increases.
  Of course, that mathematical formula of deprivation applies even further. As has been mentioned, it is the worst off in our society—the old, the sick, the unemployed and the single parents—who spend most of their time at home. They often live in homes that are damp, badly insulated, if at all, or draughty. They live in precisely the conditions that demand more money being spent on fuel—money which they do not have.
  In an article in The Guardian on 1 February Robert Davies wrote:
  "Fuel poverty is endemic to Britain. Good King Wenceslas would be struck by the irony of a society whose Parliament finds time to legislate for multi-channel cable television to reach several million homes, yet which cannot supply adequate heat for 3 million of the poorest people."
  It is a political decision to increase these prices and it would take only a little political courage to introduce the sort of measures proposed in the Opposition motion.
  6.29 pm
  Mr. Michael Meacher: There could scarcely be a starker illustration of the disinterest of the Government in fuel poverty than the Chancellor's Budget a week ago. By abolishing the investment income surcharge, he gave a tax handout of £360 million to the tiny number of very rich people with share capital in excess of £100,000 and at the same time he halved the stamp duty on share transactions. That is giving a gain of something like £1,300 per person per year in this elite category while at the same time the 9·5 million pensioners who are struggling to keep warm were almost totally forgotten. For them it was not so much the fish and chip Budget as the kerosene Budget. That was a measure of such footling triviality as to be more an insult than a concession to the elderly.
  Fuel poverty is one of the most tragic disfigurements of our society, as my my hon. Friends the Members for Paisley, North (Mr. Adams), for Stalybridge and Hyde (Mr. Pendry) and for Knowsley, South (Mr. Hughes) pointed out so eloquently and forcefully. Like poverty itself, which is increasing sharply in Thatcherite Britain, the problem is getting steadily worse because all the component causes of fuel poverty—low incomes, deteriorating housing conditions and the high relative cost of fuel—are all intensifying under Thatcherite policies. As hon. Members have said, fuel is the third most important component of the budget of the poor, after food and housing. When there are 9 million people living on the official poverty line and the Chancellor is so supremely indifferent to this group, as he showed in his Budget, it is scarcely surprising that this has become a major political issue.
  I ask the Minister to pay attention, because in his opening remarks he showed a blithe indifference to what it is like to live in fuel poverty. At the root of the problem is the fundamental and incontrovertible fact that income support arrangements for households living in poverty—on the Government's own figures that means one in six of the population of Britain today—are patently inadequate. I do not know whether the Minister realises it,

  1093
  but in the current supplementary benefit single household rate the amount set aside for fuel is £6·05 per week. I ask the Minister a simple question: does he believe that he could live on that total fuel expenditure for a week? I do not think I could; I wonder whether he could. If he has any doubts about it, he should consult his hon. Friend the Member for Derbyshire, West (Mr. Parris) because he tried to live for a week on that level of income and he was unable to keep warm.
  Fuel makes up a larger proportion of the budget of the poor than of others, as my hon. Friend the Member for Knowsley, South has pointed out. Although it is true that benefit rates go up in line with the general price index, this means that poor families are not being compensated fully for the faster rise in fuel prices. That is the significance of fuel poverty as opposed to other forms of poverty. In the last five years under this Government gas prices have risen by no less than 116 per cent. and electricity prices by 66 per cent.
  There is no way that the army of fuel debtors, which numbers 1·5 million, can be fobbed off by allegations of lack of thrift or lack of prudence. Only one adequate explanation stares one in the face—that there is now an under-class whose incomes are so low that they cannot, with existing heating aids, afford adequate fuel at today's prices. There is no other explanation for the size of that figure. That is the incontrovertible fact at the heart of the debate.
  It is no use the Minister going through, as he did, all the clever paraphernalia about strengthening the code of practice, tilting the tariffs, reducing standing charges, easing debt repayments or making the disconnection procedures less arduous; all those are peripheral to the central point—that, under Thatcherite policies, low incomes have been reduced so much and fuel prices have been raised so much that fuel poverty is a major political issue.
  No amount of tinkering with the system of benefits can offer a remedy. As my hon. Friends have pointed out far more eloquently than I could, the result is clear. My hon. Friend the Member for Stalybridge and Hyde said that there are thousands of elderly people who, because they are physically vulnerable through age and disability, will die from cold-related conditions because they cannot afford on their low incomes to heat their leaking homes.
  Mr. Alistair Burt: Will the hon. Gentleman acknowledge, as none of his colleagues has done, the role of the high price of coal in the cost of electricity? Will he also acknowledge that, if the CEGB could import coal at prices some 25 per cent. lower than it has to pay for coal in this country, electricity prices could be lowered by 10 to 15 per cent.? Every time an uneconomic pit is kept open, the cost of grandmother's electricity goes up.
  Mr. Meacher: I am sorry I gave way, if that is the best the hon. Member can do. Perhaps he should realise that coal is subsidised significantly in all our competitor countries but that does not happen here. That is what makes the difference to the figures that he quoted.
  The Minister repeated today that the Government have spent more on supplementary benefit additional requirements for fuel. The point he did not make is obvious: the number on supplementary benefit because of mass
  1094
  unemployment has risen rapidly under the Government; in fact, it has risen by 70 per cent. since the Government came into office.
  The Government made a great song and dance about the home insulation programme that they inaugurated two or three years ago. In principle this is an excellent idea, and we fully support it, but the results have been pathetic. As the hon. Member for Bedfordshire, North (Mr. Skeet) pointed out so forcefully, expenditure last year was £18 million, which is only a drop in the bucket compared with what is needed.
  I am glad that the Minister for Social Security will be replying to the debate because he has to answer directly for the disaster area of housing benefit. That has had a seriously damaging knock-on effect on heating. The poor take-up of housing benefit supplement, which has not improved according to the latest figures, has meant that many claimants no longer get the additional payments for fuel to which they should be entitled. Perhaps the hon. Gentleman will address himself to that point. The whole area of fuel poverty is a mess, with a steadily rising toll of hardship and cold-related deaths.
  Fuel pricing has been based on principles of strict long-run costs, which is perfectly reasonable. Conservation policy has also led to high fuel prices, yet the response of the DHSS has been so piecemeal and disjointed that it has failed completely to stop a fast increase in fuel poverty.
  In the face of that desultory and tragic fragmentation of Government policy towards those afflicted by fuel poverty, two fundamental reforms are needed. The first requirement is a genuine home insulation policy. I mean a genuine policy, not the one in name only that exists at present. Such a policy would save fuel, create jobs, improve the housing stock and reduce the risk of debt, disconnection and discomfort among many poor families. One can think of few reforms which for so little money would achieve all those excellent objectives.
  We need a comprehensive, direct insulation programme on the lines of the North sea gas conversion project. If that could be done, an insulation programme could also be successful. Not only would that be good social policy; it would make sound financial sense.
  The specialist groups have been mentioned in the debate. I pay tribute to the work of the national Right to Fuel campaign and the National Association of Citizens Advice Bureaux, which are united in the view that financial aid for heating costs is too fragmented. I hope that the Secretary of State for Social Services, who has joined us, will accept that.
  We need a national rebate scheme for fuel, on the lines of the rent rebate scheme. It should be flexible enough to take account not only of income levels, but of the size of family, the numbers of elderly people and young children in the family, house size, the condition of the house and conservation.
  The Minister will be tempted to ask how much that will cost. Government is about determining priorities. This Government showed their priorities a week ago when they gave away £520 million to the richest 1 or 2 per cent. of the population by abolishing the surcharge on unearned income and by halving the stamp duty on Stock Exchange transactions. The same Government over the last five years have given tax handouts amounting to about £2,700 million to the same tiny group of rich people. We totally reject such values. We assert that the growing and ugly problem of fuel poverty could and should be overcome.
  Mr. Wilson: Will the hon. Gentleman give way?
  Mr. Meacher: I shall not give way. I am concluding.
  Mr. Wilson: Will the hon. Gentleman give way?
  Mr. Meacher: I suggest that the hon. Gentleman addresses his question to the Minister, because I am not giving way now.
  Mr. Wilson: On a point of order, Mr. Speaker.
  Mr. Speaker: Does the hon. Gentleman want to raise a point of order?
  Mr. Wilson: I asked a specific question, and it has not been answered.
  Mr. Speaker: That is not a point of order.
  Mr. Meacher: We assert that the growing and ugly problem of fuel poverty can and must be overcome, given a Government with the will, at a fraction of the cost of the tax largesse that has been wilfully showered on a tiny number of idle and unproductive rich over the last five years. Because we are committed to the poor and not to the rich and because we assert that this Government with their priorities will never have the will to overcome the problem of fuel poverty, we seek the support of the House for our motion.
  6.43 pm
  The Minister for Social Security (Dr. Rhodes Boyson): We have had a good debate. The right hon. Member for Salford, East (Mr. Orme) said that we were discussing an important issue, and he is right. It involves energy and its costs and what one can do to ensure that the least affluent in our society have sufficient money in their pockets to buy the necessary fuel.
  The hon. Member for Stalybridge and Hyde (Mr. Pendry) said that he hoped that I would reply positively. I shall take him up on that and reply positively. The motion
  "condemns the Government for increasing gas and electricity prices … ignoring the increased hardship this will create for millions of pensioners, one-parent families, low-income households, disabled people and the unemployed".
  The motion is tabled as if the Government have done nothing but bury the faces of the poor in the frost by hugely increasing the price of energy and doing nothing to help people pay for it. I have to reply positively to that in terms of what the Government have done and what the country knows we have done. I must speak the truth. I am always guided at times like this by people who lead me morally.
  There are two sides to the argument, as there are two sides to the Chamber. There is a right and wrong, and obviously I am on the right side. In a mixed economy, one must have a form of pricing which serves both the producer and the consumer. That is the way that money should operate. If one does not have that, one operates a totally Communist system, directed from on high.
  We live in a compassionate society. I do not bow to the Opposition when it comes to compassion. We share compassion.
  Mr. Winnick: It does not show.
  Dr. Boyson: The hon. Gentleman displays an arrogance like the Pharisees of old. I certainly do not bow to him. Compassion exists on both sides of the Chamber. What can we do with the money available to ensure that people's basic needs are met? That is what the debate is about.
  Mr. Winnick: Will the hon. Gentleman give way?
  Dr. Boyson: No. The hon. Member for Walsall, North (Mr. Winnick) has done nothing but make seated interventions. I have no intention of giving way to him, but I shall give way to the hon. Member for Antrim, East (Mr. Beggs).
  Mr. Beggs: I do not want to appeal to compassion, but does the Minister agree that British citizens in Northern Ireland should be entitled to fuel at the same respective cost as citizens on the mainland? Does he further agree that it is time that we had the interconnector between Northern Ireland and Scotland?
  Dr. Boyson: I take that on board. I am not an expert on fuel prices in Northern Ireland, but I shall study them tomorrow. Citizens throughout the United Kingdom have the same basic requirements in fuel, food and other essentials.
  What have the Government done to deserve such condemnation?
  Mrs. Margaret Beckett: The Government have done so little.
  Dr. Boyson: That is right. Coal prices were increased last November by 3·8 per cent. after one year. Gas prices were increased this January, after 15 months, by 4·3 per cent. Electricity prices are to be increased by 2 per cent. in April, after no increase in two years. Under the last Labour Government, prices were increasing by 2 per cent. every six weeks. [Interruption.] For anyone to intemipt at that stage shows guts, if not much intelligence.
  In the last two years there has been no increase in standing charges. The February 1984 edition of "Energy Trends" shows that over the period between the fourth quarter of 1982 and the fourth quarter of 1983 coal prices were constant in real terms, domestic electricity prices fell by 5 per cent. in real terms and domestic gas prices fell by 2·6 per cent. in real terms.
  Mr. Winnick: Will the Minister give way?
  Dr. Boyson: No,. the Minister will not give way. Since 1968, gas prices have risen at a lower rate than average earnings or retirement pensions.
  The second part of the Opposition's motion calls upon the Government to introduce measurs, as though we had done nothing. Let us consider the supplementary benefit heating additions introduced by the Labour Government and the increased cost of fuel and light, compared with the Government's record. We shall then see the competition of compassion and appreciate what the Government are doing about the problem.
  When the Labour Government were in office from. July 1974 to November 1978, supplementary benefit heating additions increased by 112 per cent. At the same time the heat and light components in the retail price index increased by 107 per cent., giving a tiny increase of roughly 5 per cent. in the value of heating additions provided by the Labour Government, when compared to prices. Between November 1978 and November 1983 the average supplementary benefit heating additions increased by 140 per cent., while the retail price index components for fuel and light increased by 100 per cent. In other words, there has been a 40 per cent. increase under a Conservative Government in real terms, compared with a 5 per cent. increase for a similar period under the Labour Government.

  1097
  I do not know how the Opposition can table such a motion as this. Perhaps they will withdraw it when they have heard these facts and figures. The Government are spending £130 million more on heating additions in real terms than when we came to office.
  Before the hon. Member for Oldham, West talks about unemployment, it is important for him to remember that unemployment is only one factor among many. The Government have increased the additions as well, as the figures show. In 1979–80 the Government introduced heating additions with immediate effect for those on supplementary benefit above the age of 70. The Labour Government could have done so, but did not. We came to office, saw the light and did it. The elderly had no automatic heating allowances under Labour, despite all that the Opposition have said today. We introduced heating additions for those on supplementary benefit aged 70 and older, as well as for those with children below the age of five. Hundreds of thousands of British people are grateful to the Government for introducing those additions at that time.
  We have heard good speeches on energy policy from Conservative experts on energy, although we do not always agree entirely. My hon. Friends the Members for Havant (Mr. Lloyd) and for Bedfordshire, North (Mr. Skeet) have both spoken on the matter, as well as my hon. Friend the Member for Devon, North (Mr. Speller).
  Mr. Frank Field rose——
  Dr. Boyson: I shall not give way. I am speaking my mind. I am sorry that I cannot give way to the hon. Gentleman for whom I have the greatest regard, but I must continue with my theme and talk about the views of my hon. Friends. We have only seven minutes left before a Division.
  Reference has been made to the over-80s by my hon. Friend the Member for Bedfordshire, North. The Government have helped the over-70s on supplementary benefit as well as unemployed men aged 60-plus who were in need of long-term supplementary benefits. [Interruption.] Those men were in need of benefits, which the Labour Government did not provide. Now they receive £11 a week more than on short-term supplementary benefit. I appreciate that the benefit addition at the age of 80 is only 25p a week and I shall look at this matter, although I cannot guarantee that we shall be able to increase it.
  Mr. Ashdown: On a point of order, Mr. Speaker. We are listening avidly to what the Minister has to say, but if he insists on addressing his remarks to his hon. Friends with his back to the Opposition we cannot hear his important remarks.
  Dr. Boyson: I apologise. I shall not turn my back on the Opposition again.
  Mr. Speaker: Order. I would rather the Minister did not turn his back on me, either.
  Dr. Boyson: I apologise, Mr. Speaker. You have brought me entirely to order. I am glad that the hon. Member for Yeovil (Mr. Ashdown) is following my argument so closely.
  In 1978–79, towards the end of the Labour Government's period of office, £124 million was spent on
  1098
  additional heating allowances. Indexed for inflation, that would now be £250 million. We are spending £380 million—a real increase of £130 million—and more than £200 million of that goes to pensioners. Heating additions are now paid to 2·5 million households, compared with 1·6 million households in 1978, and help is now given to 1·6 million pensioners compared with 1·2 million in 1978.
  Mr. Allen Adams: Will the Minister give way?
  Dr. Boyson: We have given automatic heating additions to pensioners over the age of 70 and to households with children under five, as I have mentioned.
  The Opposition motion suggests that we have no insulation policy. In the last year of the Labour Government, 239,000 lofts were insulated, compared with 431,000 in 1982–83. We have almost doubled the number. All who need to insulate their lofts are eligible for a local authority grant of up to £69, or 66 per cent. of the cost. Pensioners and the severely disabled on supplementary benefit or housing benefit can obtain 90 per cent. of loft or home insulation costs up to £95. This was mentioned by my hon. Friends the Members for Bedfordshire, North and for Havant and by the hon. Member for Dundee, East (Mr. Wilson) and the right hon. Member for Salford, East. We all agree on the need for insulation. The Labour Government gave some assistance, but we have increased it. The Opposition motion is therefore somewhat ungrateful.
  The hon. Member for Oldham, West (Mr. Meacher) referred to poverty. I refer him to the ministerial statements of his right hon. Friend the Member for Salford, East, who said that no Government had ever accepted that the supplementary benefit level was the poverty level. The right hon. Gentleman said in answer to an oral question:
  "Poverty is a relative matter, and the Government do not accept that a simple poverty line can be drawn."—[Official Report, 26 October 1976; Vol. 918, c. 255.]
  The hon. Member for Oldham, West should have dinner with his right hon. Friend afterwards and get the full story.
  A little nearer Christmas in the same year, the right hon. Gentleman said in a written answer:
  "It is a paradox that using supplementary benefit levels as the poverty line can mean that the number of people in poverty can increase whet} a Government improve benefit levels".—[Official Report, 13 December 1976; Vol. 922, c. 497.]
  The very fact that we have increased virtually every benefit, including a 5 per cent. improvement in real terms in short-term and long-term supplementary benefit rates, means that we are now attacked for allegedly putting more people into poverty. That is the nonsense of trying to draw the poverty line in that way. I hope that the hon. Gentleman will talk to his right hon. Friend and get this sorted out so that the same argument does not arise on every occasion. We have increased virtually every benefit since we came to office, but time does not allow me to recite the list of 18 or 20 examples.
  I conclude as I began. In a free society producing goods and services there must be a proper pricing policy related to return on assets in energy as in any other industry. This is a necessary indication for both producers and consumers. As my right hon. Friend the Minister of State said in his opening speech, there is only about a 1 per cent. return on assets in the electricity industry. There is concern

  1099
  on both sides of the House about the need to help the poorer families. We have considerably increased the help given to those families, as our amendment makes clear.
  The Government were elected and re-elected to bring inflation under control. We have not just talked about that: we have done it. The Labour Government had 110 per cent. inflation in five years. They shed no tears for the people whose life savings they destroyed. In many cases, that is why those people are now in the queue for fuel assistance. As the Gallup poll of two weeks ago showed, old people are still more concerned about the effects of inflation than the size of their pensions—no doubt because they remember their sufferings under the Labour Government.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 202, Noes 289.

  Division No. 197]

  [7 pm

  AYES

  Abse, Leo

  Dubs, Alfred

  Adams, Allen (Paisley N)

  Duffy, A. E. P.

  Alton, David

  Dunwoody, Hon Mrs G.

  Anderson, Donald

  Eadie, Alex

  Ashdown, Paddy

  Eastham, Ken

  Ashley, Rt Hon Jack

  Edwards, Bob (W'h'mpt'n SE)

  Ashton, Joe

  Ellis, Raymond

  Atkinson, N. (Tottenham)

  Evans, John (St. Helens N)

  Bagier, Gordon A. T.

  Ewing, Harry

  Banks, Tony (Newham NW)

  Field, Frank (Birkenhead)

  Barnett, Guy

  Fields, T. (L'pool Broad Gn)

  Beckett, Mrs Margaret

  Fisher, Mark

  Beggs, Roy

  Flannery, Martin

  Bell, Stuart

  Foot, Rt Hon Michael

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

  Forrester, John

  Bermingham, Gerald

  Forsythe, Clifford (S Antrim)

  Bidwell, Sydney

  Foster, Derek

  Blair, Anthony

  Foulkes, George

  Boothroyd, Miss Betty

  Fraser, J. (Norwood)

  Bray, Dr Jeremy

  Freeson, Rt Hon Reginald

  Brown, Gordon (D'f'mline E)

  Freud, Clement

  Brown, Hugh D. (Provan)

  George, Bruce

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

  Gilbert, Rt Hon Dr John

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

  Godman, Dr Norman

  Bruce, Malcolm

  Golding, John

  Callaghan, Rt Hon J.

  Gould, Bryan

  Callaghan, Jim (Heyw'd & M)

  Gourlay, Harry

  Campbell, Ian

  Hamilton, W. W. (Central Fife)

  Campbell-Savours, Dale

  Hardy, Peter

  Canavan, Dennis

  Harman, Ms Harriet

  Carlile, Alexander (Montg'y)

  Harrison, Rt Hon Walter

  Carter-Jones, Lewis

  Hart, Rt Hon Dame Judith

  Clark, Dr David (S Shields)

  Haynes, Frank

  Clay, Robert

  Healey, Rt Hon Denis

  Cocks, Rt Hon M. (Bristol S.)

  Heffer, Eric S.

  Cohen, Harry

  Hogg, N. (C'nauld & Kilsyth)

  Coleman, Donald

  Holland, Stuart (Vauxhall)

  Concannon, Rt Hon J. D.

  Home Robertson, John

  Conlan, Bernard

  Howell, Rt Hon D. (S'heath)

  Cook, Frank (Stockton North)

  Howells, Geraint

  Cook, Robin F. (Livingston)

  Hoyle, Douglas

  Corbyn, Jeremy

  Hughes, Dr. Mark (Durham)

  Cowans, Harry

  Hughes, Robert (Aberdeen N)

  Craigen, J. M.

  Hughes, Roy (Newport East)

  Crowther, Stan

  Hughes, Sean (Knowsley S)

  Cunliffe, Lawrence

  Hughes, Simon (Southwark)

  Cunningham, Dr John

  Janner, Hon Greville

  Dalyell, Tam

  Jenkins, Rt Hon Roy (Hillh'd)

  Davies, Rt Hon Denzil (L'lli)

  John, Brynmor

  Davies, Ronald (Caerphilly)

  Johnston, Russell

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

  Jones, Barry (Alyn & Deeside)

  Deakins, Eric

  Kaufman, Rt Hon Gerald

  Dewar, Donald

  Kilroy-Silk, Robert

  Dixon, Donald

  Kinnock, Rt Hon Neil

  Dormand, Jack

  Lambie, David

  Douglas, Dick

  Lamond, James

  1100

  Leadbitter, Ted

  Redmond, M.

  Leighton, Ronald

  Rees, Rt Hon M. (Leeds S)

  Lewis, Ron (Carlisle)

  Robinson, G. (Coventry NW)

  Lewis, Terence (Worsley)

  Rogers, Allan

  Litherland, Robert

  Rooker, J. W.

  Lloyd, Tony (Stretford)

  Ross, Ernest (Dundee W)

  Lofthouse, Geoffrey

  Ross, Wm. (Londonderry)

  Loyden, Edward

  Rowlands, Ted

  McCartney, Hugh

  Ryman, John

  McDonald, Dr Oonagh

  Sedgemore, Brian

  Mackenzie, Rt Hon Gregor

  Sheerman, Barry

  McNamara, Kevin

  Sheldon, Rt Hon R.

  McWilliam, John

  Shore, Rt Hon Peter

  Madden, Max

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

  Marek, Dr John

  Silkin, Rt Hon J.

  Marshall, David (Shettleston)

  Skinner, Dennis

  Martin, Michael

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

  Mason, Rt Hon Roy

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

  Maxton, John

  Snape, Peter

  Maynard, Miss Joan

  Soley, Clive

  Meacher, Michael

  Spearing, Nigel

  Meadowcroft, Michael

  Steel, Rt Hon David

  Michie, William

  Stewart, Rt Hon D. (W Isles)

  Mikardo, Ian

  Stott, Roger

  Millan, Rt Hon Bruce

  Strang, Gavin

  Miller, Dr M. S. (E Kilbride)

  Straw, Jack

  Mitchell, Austin (G't Grimsby)

  Taylor, Rt Hon John David

  Molyneaux, Rt Hon James

  Thomas, Dr R. (Carmarthen)

  Morris, Rt Hon A, (W'shawe)

  Thompson, J. (Wansbeck)

  Morris, Rt Hon J. (Aberavon)

  Thorne, Stan (Preston)

  Nicholson, J.

  Tinn, James

  Oakes, Rt Hon Gordon

  Torney, Tom

  O'Brien, William

  Wainwright, R.

  O'Neill, Martin

  Warden, Gareth (Gower)

  Orme, Rt Hon Stanley

  Wareing, Robert

  Owen, Rt Hon Dr David

  Welsh, Michael

  Park, George

  White, James

  Parry, Robert

  Wigley, Dafydd

  Patchett, Terry

  Williams, Rt Hon A.

  Pendry, Tom

  Wilson, Gordon

  Penhaligon, David

  Winnick, David

  Pike, Peter

  Wrigglesworth, Ian

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

  Young, David (Bolton SE)

  Powell, Raymond (Ogmore)

  Prescott, John

  Tellers for the Ayes:

  Radice, Giles

  Mr. James Hamilton and Mr. Allen McKay.

  Randall, Stuart

  NOES

  Adley, Robert

  Channon, Rt Hon Paul

  Aitken, Jonathan

  Chapman, Sydney

  Ancram, Michael

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

  Arnold, Tom

  Clark, Dr Michael (Rochford)

  Atkins, Rt Hon Sir H.

  Clark, Sir W. (Croydon S)

  Atkins, Robert (South Ribble)

  Clarke, Rt Hon K. (Rushcliffe)

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

  Clegg, Sir Walter

  Baker, Nicholas (N Dorset)

  Colvin, Michael

  Banks, Robert (Harrogate)

  Conway, Derek

  Beaumont-Dark, Anthony

  Coombs, Simon

  Bellingham, Henry

  Cope, John

  Bendall, Vivian

  Couchman, James

  Benyon, William

  Crouch, David

  Best, Keith

  Dorrell, Stephen

  Body, Richard

  Douglas-Hamilton, Lord J.

  Boscawen, Hon Robert

  du Cann, Rt Hon Edward

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

  Edwards, Rt Hon N. (P'broke)

  Boyson, Dr Rhodes

  Emery, Sir Peter

  Brandon-Bravo, Martin

  Fairbairn, Nicholas

  Bright, Graham

  Fallon, Michael

  Brooke, Hon Peter

  Favell, Anthony

  Brown, M. (Brigg & Cl'thpes)

  Fenner, Mrs Peggy

  Browne, John

  Finsberg, Sir Geoffrey

  Bryan, Sir Paul

  Fletcher, Alexander

  Buchanan-Smith, Rt Hon A.

  Fookes, Miss Janet

  Buck, Sir Antony

  Forman, Nigel

  Budgen, Nick

  Forsyth, Michael (Stirling)

  Bulmer, Esmond

  Fowler, Rt Hon Norman

  Burt, Alistair

  Fox, Marcus

  Butcher, John

  Franks, Cecil

  Carlisle, Kenneth (Lincoln)

  Fraser, Peter (Angus East)

  1101

  Freeman, Roger

  Knox, David

  Gale, Roger

  Lamont, Norman

  Galley, Roy

  Lang, Ian

  Gardiner, George (Reigate)

  Latham, Michael

  Gardner, Sir Edward (Fylde)

  Lawrence, Ivan

  Garel-Jones, Tristan

  Lawson, Rt Hon Nigel

  Gilmour, Rt Hon Sir Ian

  Lee, John (Pendle)

  Glyn, Dr Alan

  Leigh, Edward (Gainsbor'gh)

  Goodhart, Sir Philip

  Lennox-Boyd, Hon Mark

  Goodlad, Alastair

  Lester, Jim

  Gorst, John

  Lewis, Sir Kenneth (Stamf'd)

  Gow, Ian

  Lightbown, David

  Gower, Sir Raymond

  Lilley, Peter

  Greenway, Harry

  Lloyd, Ian (Havant)

  Gregory, Conal

  Lloyd, Peter, (Fareham)

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

  Lord, Michael

  Griffiths, Peter (Portsm'th N)

  Lyell, Nicholas

  Grist, Ian

  McCurley, Mrs Anna

  Ground, Patrick

  Macfarlane, Neil

  Grylls, Michael

  MacKay, Andrew (Berkshire)

  Hamilton, Neil (Tatton)

  MacKay, John (Argyll & Bute)

  Hampson, Dr Keith

  Maclean, David John.

  Hanley, Jeremy

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

  Hannam, John

  McQuarrie, Albert

  Hargreaves, Kenneth

  Major, John

  Harvey, Robert

  Malins, Humfrey

  Haselhurst, Alan

  Malone, Gerald

  Havers, Rt Hon Sir Michael

  Maples, John

  Hawkins, C. (High Peak)

  Marland, Paul

  Hawksley, Warren

  Marshall, Michael (Arundel)

  Hayes, J.

  Mates, Michael

  Hayhoe, Barney

  Mather, Carol

  Hayward, Robert

  Maude, Hon Francis

  Heathcoat-Amory, David

  Mawhinney, Dr Brian

  Heddle, John

  Maxwell-Hyslop, Robin

  Henderson, Barry

  Mayhew, Sir Patrick

  Heseltine, Rt Hon Michael

  Mellor, David

  Hickmet, Richard

  Meyer, Sir Anthony

  Hicks, Robert

  Miller, Hal (B'grove)

  Higgins, Rt Hon Terence L.

  Mills, Iain (Meriden)

  Hind, Kenneth

  Mills, Sir Peter (West Devon)

  Hirst, Michael

  Miscampbell, Norman

  Holland, Sir Philip (Gedling)

  Moate, Roger

  Holt, Richard

  Monro, Sir Hector

  Hooson, Tom

  Montgomery, Fergus

  Hordern, Peter

  Moore, John

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

  Morrison, Hon C. (Devizes)

  Howarth, Gerald (Cannock)

  Moynihan, Hon C.

  Howell, Rt Hon D. (G'ldford)

  Mudd, David

  Hubbard-Miles, Peter

  Neale, Gerrard

  Hunt, David (Wirral)

  Needham, Richard

  Hunt, John (Ravensbourne)

  Nelson, Anthony

  Hunter, Andrew

  Neubert, Michael

  Irving, Charles

  Newton, Tony

  Jackson, Robert

  Nicholls, Patrick

  Jenkin, Rt Hon Patrick

  Norris, Steven

  Johnson-Smith, Sir Geoffrey

  Onslow, Cranley

  Jones, Gwilym (Cardiff N)

  Ottaway, Richard

  Jones, Robert (W Herts)

  Page, John (Harrow W)

  Joseph, Rt Hon Sir Keith

  Page, Richard (Herts SW)

  Kershaw, Sir Anthony

  Parkinson, Rt Hon Cecil

  Key, Robert

  Parris, Matthew

  King, Roger (B'ham N'field)

  Patten, John (Oxford)

  Knight, Gregory (Derby N)

  Pawsey, James

  Knight, Mrs Jill (Edgbaston)

  Peacock, Mrs Elizabeth

  Knowles, Michael

  Percival, Rt Hon Sir Ian

  1102

  Pink, R. Bonner

  Stewart, Ian (N Hertf'dshire)

  Pollock, Alexander

  Stokes, John

  Porter, Barry

  Stradling Thomas, J.

  Powell, William (Corby)

  Sumberg, David

  Powley, John

  Tapsell, Peter

  Price, Sir David

  Taylor, Teddy (S'end E)

  Prior, Rt Hon James

  Temple-Morris, Peter

  Proctor, K. Harvey

  Thomas, Rt Hon Peter

  Pym, Rt Hon Francis

  Thompson, Donald (Calder V)

  Raff an, Keith

  Thompson, Patrick (N'ich N)

  Rathbone, Tim

  Thorne, Neil (Ilford S)

  Rees, Rt Hon Peter (Dover)

  Thornton, Malcolm

  Renton, Tim

  Thurnham, Peter

  Rhodes James, Robert

  Townend, John (Bridlington)

  Rhys Williams, Sir Brandon

  Townsend, Cyril D. (B'heath)

  Ridsdale, Sir Julian

  Tracey, Richard

  Rifkind, Malcolm

  Trotter, Neville

  Roberts, Wyn (Conwy)

  Twinn, Dr Ian

  Robinson, Mark (N'port W)

  van Straubenzee, Sir W.

  Roe, Mrs Marion

  Vaughan, Sir Gerard

  Rossi, Sir Hugh

  Viggers, Peter

  Rost, Peter

  Waddington, David

  Rumbold, Mrs Angela

  Waldegrave, Hon William

  Ryder, Richard

  Walden, George

  Sainsbury, Hon Timothy

  Walker, Bill (T'side N)

  St. John-Stevas, Rt Hon N.

  Walker, Rt Hon P. (W'cester)

  Sayeed, Jonathan

  Wall, Sir Patrick

  Shaw, Giles (Pudsey)

  Waller, Gary

  Shaw, Sir Michael (Scarb')

  Walters, Dennis

  Shelton, William (Streatham)

  Ward, John

  Shepherd, Colin (Hereford)

  Wardle, C. (Bexhill)

  Shepherd, Richard (Aldridge)

  Warren, Kenneth

  Shersby, Michael

  Watson, John

  Silvester, Fred

  Wells, Bowen (Hertford)

  Sims, Roger

  Wheeler, John

  Skeet, T. H. H.

  Whitfield, John

  Smith, Tim (Beaconsfield)

  Whitney, Raymond

  Soames, Hon Nicholas

  Wiggin, Jerry

  Speed, Keith

  Winterton, Mrs Ann

  Speller, Tony

  Winterton, Nicholas

  Spencer, Derek

  Wolfson, Mark

  Spicer, Michael (S Worcs)

  Wood, Timothy

  Stanbrook, Ivor

  Woodcock, Michael

  Stanley, John

  Yeo, Tim

  Steen, Anthony

  Young, Sir George (Acton)

  Stern, Michael

  Stevens, Lewis (Nuneaton)

  Tellers for the Noes:

  Stevens, Martin (Fulham)

  Mr. Douglas Hogg and Mr. Archie Hamilton

  Stewart, Allan (Eastwood)

  Stewart, Andrew (Sherwood)

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments) and agreed to.
  Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House welcomes that increases in the prices of the nationalised energy industries are now below the rate of inflation and that the Government has maintained and improved the real value of social security particularly for the neediest members of the community.".

  Alexandra Park and Palace Bill (By Order)
  Order for Second Reading read.
  7.11 pm
  Mr. Norman Atkinson: I beg to move, That the Bill be now read a Second time.
  In January 1980, Alexandra park and palace were transferred from the Greater London council to the council as trustees, together with the sum of £8·5 million in consideration of the agreement by the council to accept the transfer of functions. It has been and remains the policy of the council to comply with the requirements of the trust, whilst ensuring that the expenses of the park and palace are not thrown upon the rates.
  For most of their existence over 100 years, the park and palace have been a financial liability. In agreeing to accept the transfer, the council as trustees was aware that in a short space of years the £8·5 million would be used in maintenance and repair costs and that, unless a fresh approach were made to the nature of the activities at the park and palace, losses would inevitably be incurred and the council, as local authority, would have no alternative but to turn to the rates to make good the losses. This was unacceptable.
  It was therefore resolved to ask Parliament for amending legislation to alter the powers of the trustees with respect to what activities should be permitted to take place at the park and palace. A Bill was promoted in the 1979–80 Session. Unfortunately, in July 1980 there was a serious fire at the palace, which caused substantial damage to the building and in the circumstances the council withdrew the Bill.
  The council's proposals for the palace and park are that the western end of the building, including the great hall, is to be developed largely as an exhibition centre, including an hotel, while the eastern end of the building will be set aside for cultural and leisure purposes, including sports facilities, a concert hall, a television museum and a drama school. The provision of car parking and other works in the park are also proposed. The planning application which was considered by the Secretary of State sought only such planning approvals as were necessary for the scheme, and the planning permission for the hotel has subsequently been granted.
  The present Bill takes account of the decision of the Secretary of State. Part of that development is already within the statutory powers of the trustees. The Bill amends the acts of 1900 and 1913 and the 1966 order and, for convenience, those Acts and that Order, as amended, are scheduled to the Bill. A number of other minor amendments to the trustees' powers are also proposed.
  Use of the park and palace in accordance with the existing Acts and order, as amended and added to by the Bill, would be in accordance with the duties of the trustees. The trustees believe that these proposals represent the best way in which the park and palace can be made financially viable without imposing a burden on the ratepayers. They also believe that the proposals are the most appropriate compromise between various conflicting interests and claims on the use of the park and palace.
  May I, on behalf of the promoters, give the House this undertaking:
  1104
  "The Promoters undertake that at no stage in the passage of the Bill will they seek to introduce an amendment the effect of which is to empower the Council to insist on the appointment of the chairman of the proposed advisory committee."
  I hope that the House will accept that and the way in which the promoters present the statement to the House.
  Perhaps I can comment on remarks which have been made since the statement of the promoters was circulated to every Member of the House. When it was first circulated, I and others were asked it there was unanimity of opinion within the borough. I must say, in all honesty, that there are some controversies and differences of opinion arising out of the very nature of Haringey as it has been since 1963, an amalgamation of existing boroughs which represent very different groups of people and income levels.
  The amenities at either end of the borough are startlingly different. The borough runs east-west and, according to the degree of eastern interest as against western interest, the differences are quite marked. For instance, in the western end of the borough there are some 3,000 acres of woodland and open green space. Within that 3,000 acres there are two golf courses as well as the palace, and there are also some other protected areas. Near the palace itself is a wildlife conservation area. From that point of view it has an extremely privileged position within the borough as against the eastern end, where there are scant facilities of this sort and very little open space because virtually the whole of the Lea valley is taken up with reservoirs and water-covered areas. There is certainly very little access for people at the eastern end. Because of that geographical difference, those who live in the more densely populated end of the borough are envious of those who live a little more luxuriously in the western end.
  It is worth noting that the rate yield per acre from the eastern end of the borough is greater than from the western end, although I immediately concede that people living around the Alexandra palace area pay higher rates than those who live at the eastern end of the borough.
  There is communication between the two parts of the borough. Tottenham has one of the most noted heronries in the country on the River Lea. Each night, the heron communicate between east and west. I understand that underneath their flight path they have nicked every goldfish between Tottenham and Alexandra palace. At one time, the RAF seriously suggested that it would make available fighter aircraft and electronic surveillance equipment to discover what the heron were doing at night, and some hon. Members may recollect the correspondence in The Times.
  More seriously, my final point relates to the rates and the amenity itself. As I have already mentioned, the undertaking by the promoters that the activity must be self-viable means that the people who will most enjoy the amenity will not contribute to its upkeep through the rates. However, some other problems will be involved, and I readily acknowledge the existence of those problems. Because of the essential viability of commercial enterprise within the palace area there will, of necessity, be events during the year that attract 10,000 or possibly more people. That could mean the arrival of 4,000 vehicles—on one occasion there were 4,000 motor cycles—which could cause disruption to the amenities of the area.
  However, we cannot have it both ways. If there is to be commercial viability, of necessity there must be disruption to the area. That must follow, if there is to be

  1105
  no charge to the rates. If it were decided that vehicles would not pass through the neighbourhood, the only alternative would be a charge on the rates.
  The promoters have, however, given an assurance to minimise any disturbance. They have said that they will take all possible measures, within the terms of the proposals of the amenity committee, to avoid the sort of disturbance to which I have referred. I commend the Bill to the House.
  7.22 pm
  Sir Hugh Rossi: Listening to the hon. Member for Tottenham (Mr. Atkinson) move the Second Reading and describe the large amount of open space that my constituency has the good fortune to enjoy, I wondered for a moment whether he was going to suggest that we should use that land to build houses and industrial premises. Fortunately, he is promoting a Bill part of the objective of which is to preserve the open space in the parkland surrounding the Alexandra palace.
  I am grateful to Mr. Speaker for selecting the instruction to the Committee on the Bill which stands in my name. In recommending it to the House, I should point out that its terms have been agreed by the Bill's sponsors, after protracted negotiations. It is in return for their agreement that I do not propose to divide the House on the Bill.
  The instruction flows directly from the recommendation made by the inspector of the planning inquiry into the proposals by the London borough of Haringey for this 200-acre site, which lies in the centre of my constituency, and for the burnt-out shell of a substantial Victorian building which dominates the landscape of north London.
  The Alexandra palace and park have had a chequered history, as the hon. Member for Tottenham has just mentioned. The palace was first built in 1875 and has been burnt down twice. It has been through a number of hands—private owners and public trustees—and in January 1980 the GLC paid the London borough of Haringey more than £8 million to take it off its hands. At the time, Sir Horace Cutler described that transaction as the best property deal he had ever made in his entire professional and public life. But divine providence came to the assistance of Haringey, and six months after it acquired the building and £8 million, the palace was substantially destroyed and damaged by fire. That produced an insurance settlement of £ 18·5 million, which has been well invested since.
  My right hon. Friend the Secretary of State for the Environment then agreed to the public inquiry into the future of the site, which has considerable regional significance. The proposals before the inspector included the provision of 11,360 sq metres of exhibition space, including back-up areas. No other venue south of Birmingham can provide between 2,500 and 10,000 sq metres of clear span, solid floor space with at least 9 metres head room, except for Olympia. Thus the importance of these proposals.
  They also included extensive leisure and recreational facilities, a concert hall with a fine Willis organ, museum, theatres and drama school. Deemed planning permission has already been given by Haringey to itself to build a hotel and provide 10 acres of parking space.
  1106
  After hearing evidence for five months into these proposals, with a great number of local objections, the inspector produced a detailed 200-page report in which he concluded:
  "the proposals would benefit the local and wider community firstly, by preserving a building of considerable character and historical interest which forms an important landmark on the London skyline and which is held in affectionate regard by many people. Secondly, by providing a modern exhibition and public events venue of a suitable size for London, which is likely to benefit the exhibition industry and visiting public. Thirdly, by providing recreational and leisure facilities for the use of people living both in and around the borough. Fourthly, by improvement to the Park which would upgrade it to Metropolitan park standards."
  However, the inspector drew attention to several disadvantages, the main one of which stemmed
  "from the impact on the area due to excessive volumes of traffic and numbers of parked cars which may be generated by events at the Palace."
  He recognised that considerable problems had been caused to local residents in the past and the objections these had generated to the council's current proposals before him. However, he went on to say:
  "I feel that it would be wrong to condemn a potentially beneficial scheme just because it might be mis-managed in the future. However, in view of the history of past problems, including for example the noise disturbance caused by the recent Jam Concert at the Pavilion, some arrangement for independent monitoring and control of the running of the Palace is needed."
  He suggested the setting up of a small advisory committee, independent of the Haringey council but upon which there would be equality of representation, to keep an eye on activities at the palace in terms of their impact on the area. Excessive interference in the running of the palace would, he said, be undesirable, but the committee should have some form of veto on the type and size of events proposed.
  As we all know, the inspector had no power to make the setting up of such a body a condition of the grant of planning permission. The Secretary of State—who endorsed the findings, including the establishment of the committee—does not have that power either. Unfortunately, Haringey was not for a while disposed to set up a committee voluntarily, seeking to rely on an advisory body which it dominates and which, according to the inspector,
  "is not … a suitable body to exercise such control."
  Hence my need to trouble the House. However, agreement has finally been reached with the sponsors, on the basis of the inspector's recommendation.
  Paragraph (1) of the instruction carries through the recommendation by requiring the establishment of an advisory committee upon which the local authority and local residents' associations will have equal representation. I am grateful to the hon. Member for Tottenham (Mr. Atkinson) for his parliamentary undertaking that the council will not seek at any stage during the passage of the Bill to produce an amendment which would give it the right to appoint the chairman of the committee.
  The committee will advise on events and activities in the palace and park with a view to ensuring that they do not cause nuisance or annoyance, and are not of detriment to the amenities of local residents. No absolute right of veto is proposed, as this could amount to excessive interference in the running of the palace, but the council will have to give full, proper and due weight to the advice that it receives and to do its best to carry out the recommendations of the independent statutory committee.

  1107
  Paragraph (2) seeks to ensure that the affairs of the palace are conducted in a prudent and businesslike manner, that the council does not overreach itself and that no burden or cost falls upon the ratepayers, who bear the heaviest burden in the whole of greater London. The hon. Member for Tottenham will be relieved about this, since his constituents fall within that body of ratepayers. This paragraph covers an undertaking given repeatedly by the council when putting forward its proposals.
  Paragraph (3) deals with the vexed question of car parking in adjoining streets. The inspector found that
  "the introduction of car parking charges in the park"
  —as proposed in the Bill—
  "would make street parking an … attractive proposition."
  On the other hand, if no charges are made, it would be difficult to cover the cost of—for instance—a multistorey car park. The inspector said:
  "the Borough Council should reconsider the possibility of introducing residents' parking permits, or some similar measure, in the surrounding area."
  Such permits could be issued free to local residents, enforcement taking place only on the occasion of major public events.
  However, the Bill cannot deal with what happens outside the palace and the park. Therefore, that third and final paragraph requires the Committee on the Bill to satisfy itself on this matter, as it can do by receiving appropriate parliamentary undertakings from the sponsors.
  Having explained the intent of the instruction and the reasons for its being made, that there has been agreement between the sponsors and myself, and that we seek only to give effect to the proposals of an independent planning inspector who heard evidence for over five months in order to assess the position for himself, I commend the Bill to the House.
  7.36 pm
  Mr. Robert Atkins: I wish to declare an interest as a ratepayer in Haringey and as one who was a member of the council of the London borough of Hackney for nine years, representing two wards immediately adjacent to the palace and park. As one whose family has lived in the Hornsey area for over 150 years, I can claim to have some knowledge of the area.
  I congratulate the hon. Member for Tottenham (Mr. Atkinson) on the way in which he presented his case and the grace with which he conceded the instruction which my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) has tabled. I also congratulate my hon. Friend the Member for Hornsey and Wood Green on the way in which he tabled the instruction and the work that he has done for his constituents, of whom, in part, I am still one, in trying to obtain relief for them.
  I was in a small way responsible for objecting to the Bill, in loco parentis for my hon. Friend, who was then
  1108
  a Minister and therefore unable to do so. I am delighted with the instruction which now appears on the Order Paper and I wish the palace and the park, and the adjacent residents, good fortune. This important site in north London has a great history and, I believe, a great future.
  Question put and agreed to.
  Bill accordingly read a Second ime and committed.
  Ordered,
  That it be an Instruction
  1. (a) that they amend the Bill by including a provision establishing a statutory advisory committee to assist the Trustees in fulfilling the Trusts and ensuring that no activities undertaken or permitted by the Trustees in Alexandra Park and Palace shall be a nuisance or annoyance or of detriment to the amenities of local residents;

  (b) that the statutory advisory committee shag he composed as follows:

  (i) eight Councillors appointed by the council of the London Borough of Haringey of whicn not less than one shall represent each of the wards currently known as Alexandra, Bowes Park, Fortis Green, Hornsey Central, Muswell Hill and Noel Park; and

  (ii) eight representatives of local residents associations from within the above named wards;

  (c) that the powers and duties of the Committee shall be to consider and advise the Trustees on the following matters—

  (i) the general policy relating to the activities and events arranged or permitted in the Palace and Park;

  (ii) the effects of such activities and events upon the local inhabitants and local environment;

  (iii) the frequency of activities and events attracting more than 10,000 people at any one time and the maximum number to be permitted on such occasions;

  (iv) the adequacy of car parking arrangements within the Palace and Park so as to avoid overflow into adjoining residential streets;

  (v) any proposals which require planning permission;

  (vi) the establishment and maintenance of the Park as a Metropolitan Park;

  (vii) the furtherance of recreation and leisure in the Alexandra Palace and Park;

  (viii) such other matters as the Committee to which the Bill is referred may consider appropriate;

  (d) that the Trustees shall consult the statutory advisory committee on all matters listed in (c) above, shall have due and proper regard to the advice received, and shall use their best endeavours to give effect to such reasonable recommendations of the statutory advisory committee as are consistent with the Trusts;

  2. That, subject to the approval of the Charity Commissioners, they amend the Bill by including a provision that nothing therein shall permit any contribution to be made out of the Rate Fund by the London Borough of Haringey towards any of the expenses of the maintenance, management or administration of the Park and Palace; and
  3. That they satisfy themselves that the Council of the London Borough of Haringey will take all reasonable steps to ensure that car parking does not occur in residential streets near the Palace and Park as a result of the activities and events therein.—[Sir Hugh Rossi.]

  European Community (Information Technology)
  7.37 pm
  The Minister for Information Technology (Mr. Kenneth Baker): I beg to move,
  That this House takes note of European Community Document No. 7619/83 concerning the proposed European Strategic Programme for Research and Development in Information Technology (ESPRIT); and supports the Government's endorsement of the programme at the Research Council on 28th February as helping to strengthen the technological competitiveness of the Community's information technology industry.
  I am aware that the motion must be set against the background of the current difficulties facing the Community, the breakdown of talks yesterday over the future funding of the Community, and the attempts to establish a solid financial base for its future development. The Prime Minister made clear in her statement today the Government's determination to resolve the difficulties so that we shall have a fairer and more secure Community which can play its full role in the world. My right hon. Friend said:
  "We shall, however, persevere in our efforts to achieve reform of its finances and to make its internal and external policies more relevant to the needs of today's world. I want to see a more effective Community, developing its full potential."
  Our debate tonight should serve as a signal of our commitment to the development of industrial collaboration in Europe in the vital area of information technology.
  The House will be aware that the European Community has for some time been discussing ESPRIT as part of the overall research and development strategy formulated when I was president of the Research Council in 1981. The aim of the programme is to lay the basis for Europe to compete in advanced information technology with Japan and the United States. That Europe has major strengths in IT is not in doubt, but it is clear that these strengths have not always been used to the full. As the introduction to the ESPRIT proposal says, Europe's industry commands only 10 per cent. of the world IT market and less than 40 per cent. of the indigenous European market. Unless we can do better than that, the trade deficits in all IT products will continue to grow substantially. We must improve the position. That has been recognised by the Community and by Europe's IT industry, which have come together in a most encouraging way in the preparation of the ESPRIT programme.
  I shall now consider what is happening in Japan and America, as they pose a challenge for Europe. We must ensure that we retain our standing in advanced technology. Europe's competitive position is weaker and our major rivals in America and Japan have embarked upon substantial programmes to maintain or increase their technological lead.
  The Japanese Government are reported to be investing some £200 million in their fifth generation programme, which is designed to extend the frontiers of information technology beyond data processing and computation into knowledge processing. This programme, which is only the latest in a series of Japanese programmes which have the stated objective of securing 40 per cent. of the world market in IT, has rightly been seen as a challenge which other countries will need to match. Our own Alvey programme has been set up to provide the national basis for meeting this challenge.
  1110
  I remind the House that the Alvey programme for cooperative pre-competitive research amounts to some £350 million during the next five years—£200 million from the Government and £150 million from industry. It concerns research into the next generation of computers. It is probably the biggest national research programme since the jet engine.
  Other countries in Europe have also set up national programmes—that of West Germany was announced only last week. They have taken the same view as us—that there is a need for a national and a Community effort, each reinforcing and complementing the other.
  American industry is also organising itself in response to Japan's fifth generation programme. The strengths of America's IT corporations are well known and are now being pulled together through various collaborative ventures such as the Semiconductor Research Corporation and the Microelectronics and Computer Corporation. In addition to these private sector-led ventures, there are also major Government-sponsored programmes operated by the United States Department of Defence.
  The ESPRIT programme covers research and development in five vital areas of information technology. The first is advanced microelectronics. Europe is heavily dependent on microelectronic components purchased from America or Japan and this over-dependence is at the root of our general lack of competitiveness in IT. It is essential to have a national and a European capability to produce the most advanced microcircuits and microchips, as they will help our industries in the early development of hardware. If they are developed in America and Japan first, companies there will develop the ensuing equipment earlier.
  Mr. Tam Dalyell: It was with pleasure that I accompanied the Minister on a visit to Nippon Electric at Livingston last year. He told me of the enormous sums of Government money that had been poured into that company, which even now employs only some 70 youngsters and a few Japanese engineers. How does all this tie in with the huge quantity of taxpayers' money which, rightly or wrongly, is going to several formidable international corporations? I also represent Hewlett-Packard, and the same argument applies to the Americans.
  Mr. Baker: I remember the visit well. Nippon Electric is an important development in the hon. Gentleman's constituency. It is the first stage of what I hope will be a full production facility. At the moment, the large factory that we visited is used for assembling microchips. I agree that it employs only about 70 or 80 people, but it is doing the type of work which has hitherto been done offshore, in Taiwan or Korea. It is interesting that we have reached the point at which the post-assembly of chips is done onshore. Nippon Electric plans to do post-assembly onshore, and I believe that this year or next year it will develop the manufacturing capability for the microchip—the ovens, the baking of chips and the implantation of images on them.
  I remind the House that Scotland has been extremely fortunate in attracting a high level of overseas investment in the electronics industry. In addition to Nippon Electric, as the hon. Gentleman said, there is Hewlett-Packard at South Queensferry, the investment of which will produce another 700 jobs. National Semi-Conductor recently

  1111
  announced an investment of £100 million in chip manufacture in Scotland. We also have the Motorola investments in the south of England. Only yesterday I celebrated with Commodore the building of a factory in Corby which is to make about 2 million microcomputers a year, 75 per cent. of which will be exported. That is all excellent news for Britain. We have undoubtedly become a magnet for overseas investment in electronics on a substantial scale. It is therefore all the more important for us to have the underlying research and development in companies and universities to ensure that that thrust continues. I believe that we are ahead of many of our European partners, but that lead will not be retained unless we have our own national research programme and a cooperative international research programme.
  There is a consensus that Europe must become more self-sufficient. The research teams in our IT firms and research centres are the basis of our self-sufficiency. The benefits of linking such teams across national frontiers could be substantial.
  The second technical area of ESPRIT is software technology. Software development in Europe and elsewhere still has more of the characteristics of a craft than the true engineering discipline which it must become. There is an urgent need for powerful techniques to produce cheaper, more reliable and standardised software. That will lead to higher productivity. The size of the British market for software is estimated to be about £2 billion a year. There are no accurate figures, but it appears to have grown enormously from a few hundred million a year in the middle and late 1970s. The programme of work in software technology is exciting. It is an area in which British organisations—our software houses, larger electronics companies and universities—will be well placed to take part.
  The third technical aspect of the ESPRIT programme is advanced information processing in which the thrust will be on knowledge-based systems. This is perhaps the most futuristic part of ESPRIT, as the aim is to develop computers with reasoning capacity to allow the accumulated knowledge and experience of human experts, such as doctors, to be put on to a data base. A huge data base for diagnostic purposes will be much closer to the human mind than the present generation of computers. Such research work is at the very frontier of knowledge and will require work in single processing so that machines can deal with speech, images, how the brain works in cognitive science and human factors.
  The three areas which I have so far mentioned cover the key technologies at the core of TT. Their mastery is the key to the application of IT and to the competitiveness of Europe's IT industry. Europe lags behind Japan and America in the supply and use of these systems, and for this reason two other areas have been chosen for ESPRIT because of their growth potential and importance. They are office systems and computer integrated manufacture.
  A key dimension of ESPRIT will be that Europe as a whole will be encouraged to work to common standards and conventions. That is of special importance in the IT sector, in which it is not viable for any one company or country in Europe to operate on its own with incompatible products.
  ESPRIT should also give a real impetus to collaboration between European firms outside the specific fields of research and development included in the programme. This spill-over effect is already happening. It is for United
  1112
  Kingdom firms to decide the extent of their links with Europe, but Europe is a large market which it is open to our IT industry to penetrate. ESPRIT, European standards and wider collaboration can assist this penetration.
  I do not think that we are making anything like the progress that we should be making in Europe in agreeing common standards. It is a very difficult task. There are so many different areas of IT that it will be impossible to develop European products that can be sold easily right across the world unless there is movement on standards. There are so many different bodies and I think that this is an area in which the new European Community will be able to play a much greater and more determining role.
  ESPRIT is an ambitious project and it was right to test the commitment of European industry by pilot proposals. The formal ESPRIT proposal was introduced in June 1983 only after a pilot stage which the Community agreed in December 1982. The contracts for the pilot projects were let last year and there were 38 in all. I do not know whether the proposals have been laid before the House, but I should be very happy to see that they are, because they are very interesting.
  The United Kingdom was very successful in securing participation in these projects; it is involved in over half of them and in the lead in about one third. So this is a Community programme in which there is a very positive net benefit to the United Kingdom and British companies. We have a more influential and involved role than any other member state of the Community.
  The British representation includes major IT companies such as GEC, Plessey and ICL; software houses such as Logica, Scicon and SLD; engineering firms such as Babcock Power and British Leyland; research bodies such as Cranfield Institute of Technology and the Welding Institute Ltd., both outstanding research bodies in the United Kingdom; and several universities, including Newcastle, Southampton and Queen Mary college. The projects in which Britain is involved are wide-ranging. They include a high level computer-assisted design system; a software production and maintenance system; advanced algorithms and architecture for signal processing; standardisation of local area networks; and' the exploitation of real time imaging for arc welding. The British participation in the pilot phase reflects our expertise in these areas. I am sure that the House will join me in expressing pleasure that British companies and universities have taken such a prominent position in the ESPRIT programme and are doing so well.
  I have talked to the companies and to some of the universities involved in ESPRIT and the undoubted view is that this is an excellent programme. They have already benefited from co-operating with the French, the Germans, Danish and Dutch universities and Italian companies. This is already beginning to show through in their own research programmes.
  When the proposal for the main programme was introduced, it was clear that it enjoyed general support throughout the Community. The Stuttgart summit endorsed ESPRIT as an exemplary project. The United Kingdom has always attached a high priority to ESPRIT, which we see as just the kind of new policy which the Community needs for its future development.
  Although there has been strong support for the ESPRIT proposal and a determination that the programme should be established, its scale has posed difficulties. ESPRIT will cost 1,500 mecu over five years. Half of this—

  1113
  some £430 million—will be borne by the Community, the other half by the participants. I am sure that the House appreciates that half the money will come from Community sources but that half will have to be paid by the various institutions and companies which co-operate in ESPRIT projects.
  It was therefore necessary to find a basis for financing the programme within the budetary framework for research and development. Essentially, it is a question of priorities, and at the Research Council on 28 February the Community agreed that ESPRIT was of sufficient priority for the necessary funds to be allocated to it over the next five years within the research and development resources available to the Community.
  Mr. Dalyell: Would the Minister confirm that almost more money is spent by one Japanese firm, or possibly three Japanese firms, and almost more money is spent by four, if not five, American firms, and that all the money that has been promised to ESPRIT is peanuts compared to what is spent in Japan and America?
  Mr. Baker: I would not agree that the sums of money we are talking about are peanuts. This represents a programme of some £900 million—£860 million, to be precise—half of which is going to be provided by companies and half by the research and development body of the European Community. On top of that, we have to take into account all the individual national research programmes. Our own, just in this area, is £350 million. Germany announced a programme last week of £600 million or £700 million. The House will remember that, in the Budget debate on Monday of this week my right hon. Friend the Secretary of State for Trade and Industry announced a further £170 million or £180 million of assistance to high technology, of which £120 million was to be for the development of microchips. We have committed that money over the next six years, in addition to Alvey and ESPRIT, because we want to ensure that the research which is being done in the ESPRIT and Alvey programmes is developed in products that can be sold in the market places of this country and of the world.
  At the Research Council member states were also concerned to secure an effective technical work plan and adequate management arrangements for the programme. Important improvements have been made to the original management proposals which will have the effect of involving member states directly in decisions on major projects and the general direction of the programme. This is a point on which we rightly insisted. We have also pressed for much of the management to be carried out by people on secondment from industry rather than by permanent officials. That is a very important change.
  As to the technical work plan, considerable effort has gone into drawing up a technical programme for ESPRIT. Industry has been closely involved in this process and many British firms have played their part. I regard this involvement of companies as extremely important as a means of ensuring that the programme is not just a bureaucratic exercise but is genuinely affected by the market place. All who are concerned with sponsoring and supporting research in our laboratories—this goes for previous Governments as well—have been impatient that a lot of our research and development does not get into the market place quickly enough. With programmes such
  1114
  as Alvey and ESPRIT, a system is necessary to pull all this out of the laboratory into developing projects and products.
  Mr. Paddy Ashdown: On this point, I absolutely agree with what the Minister has said. Would he agree that one of the most valuable aspects of the ESPRIT proposal is the yearly review which is going to be conducted and that this will be a very important mechanism to ensure that it does not fall into the hands of the Eurocrats in Brussels? Admitting that, as I see he is doing, will he tell us precisely what form he would wish that review to take? It is nice to have that written into the agreement but it is really the mechanism and the form that that annual review will take that will determine whether it will be effective.
  Mr. Baker: We would envisage that the annual review would be undertaken and a report would be prepared by the Commission and the secretariat that deals with the ESPRIT proposal and submitted to the Governments and the Research Council. I should be very happy to make documents of this sort available to the House. What we are doing more and more is make available the research that the Government pay for by publishing the results at an early stage. Some research gets published through scientific journals, but in various other projects—we are going to do it with Alvey, for example, and we are doing it with the office project pilot schemes—we are publishing the results of our developments so that people can benefit from them. I note what the hon. Gentleman has said and I will do as I have said.
  Agreement on ESPRIT has been possible only because of the importance which all member states have attached to the programme. As I have said, there has been considerable discussion within the Community on the funding of ESPRIT, its management and the technical work plan. I very much regret that the time scale for resolving these issues was such that the House was not able to debate the proposals in detail before the council decision. The conditions allowing ESPRIT to proceed moved quickly over the days preceding the Council meeting and only fell into place on the day of the Research council meeting, by which time there was a clear necessity to take a decision if the programme was to be agreed in keeping with the original time scale.
  Even though agreement had been reached on the main decision for ESPRIT, no progress would have been possible unless the work plan had been endorsed at the same time, and provision was made for this in the decision itself, although subsequent annual work plans will come before the council well before their need to be adopted. I hope that hon. Members can accept it was necessary to endorse the work plan at the Research Council, even though it had not been formally reported on by the Scrutiny Committee.
  I have great sympathy with the view that we should try to arrange debates before decisions are taken. In this case, events moved quickly and a decision had to be taken. I regret that, as I would have much preferred a debate. This debate provides an opportunity for hon. Members to give their views on the work plan and the Government will take these into account when considering the Commission's proposal for the next work plans. There are occasions when the timetable of events in the Community does not allow us to debate some proposals in the House. I regret that ESPRIT fell into this category.

  1115
  I regard ESPRIT as one of the most exciting initiatives that the Community has taken. I hope that it will involve the sort of co-operation that will characterise future development of the Community. It presents major opportunities for Europe to build on its IT capability and to benefit from collaboration. I have no doubt that the United Kingdom must sieze these opportunities to the full. As I said earlier, Europe has to come together technologically if it is to meet the challenge from America and Japan. This programme allows that to happen.
  The programme cannot make this happen—that must depend on the universities and the talents and abilities in the companies and the research departments. We are at least providing the means and possibility for that to happen. That is why I hope that the House will endorse this most important programme.
  8.1 pm
  Mr. Tam Dalyell: I thank our colleagues on the Select Committee on European Legislation. My hon. Friend the Member for Newham, South (Mr. Spearing and other colleagues of all parties who do unsung work on a non-party basis for the House have had the good sense to put this subject forward as being worthy of debate. Often the Select Committee does not get credit, so I give it credit for this and for the work that it does on behalf of the House as a whole.
  I am in the position of a bad fairy—a bad fairy whose heart wants to believe in ESPRIT but whose head tells him that certain questions should be asked. Therefore, my speech will be in the form of a number of questions to the Minister, but not, I hope, in too curmudgeonly a spirit. He can judge that for himself.
  First, on universities and finance, I point out to the Minister that last night, about midnight, a group of us were pleading with his colleague, the Under-Secretary of State for Education and Science, for the department of pharmacy at the Heriot-Watt university to be kept open. In an age when a number of science and technology departments of our universities are being closed, are we sure that money is best spent in this way?
  What consultations have taken place with the University Grants Committee about ESPRIT money? The Under-Secretary of State for Education and Science rather wrung his hands—I am not criticising him—and said that as a Minister he could not tell Sir Peter Swinnerton-Dyer, the chairman of the UGC, what to do with the choices that come within its orbit. Does the ESPRIT programme fit in with the priorities of the UGC? Has the UGC agreed on all this? If so, may we have examples of particular university departments that are being helped by ESPRIT money?
  My second question relates to personnel. The Minister said that he was glad that personnel were to be seconded from industry rather than that decisions should be made by professional civil servants. I am not one of those who criticise professional civil servants as bureaucrats. Often their decisions are as good as anybody else's, and sometimes a good deal better. What is more, if decisions are not made by professional civil servants, what is the basis of continuity? I should like to know a little abaut the folk who will be seconded. For how long will they be seconded, from where, and on what basis and criteria?
  Mr. Rob Hayward:: The hon. Gentleman asked about education departments that are
  1116
  already involved in this project. Strathclyde university, which is close to his constituency, is already involved in one of the initial projects.
  Mr. Dalyell: I do not doubt that; but if there is to be an overall pattern and if all this money is to be put in, there must be an overall plan. This is an important issue, because, without an overall plan, there might be some difficulty in allocating ESPRIT money between universities.
  My third question relates to standards. Here my heart goes out to the Minister. For some years I used to have to listen to Mr. Spinelli—enough said—when he was Commissioner for Technology. To be fair to Mr. Spinelli, and particularly to Guido Brunner when he `lad that portfolio, those Commissioners sweated their proverbial guts out to get some sort of standardisation.
  I do not want to tell my grandmother how to suck eggs, but the Minister knows that this is all about money. If there is to be standardisation along the suggested line, which the Minister said was an important objective, who will pay for it? Huge amounts of compensation will be involved. Time and again, when I was exiled to the European Parliament and was on the Budget Committee, it became clear that we could have standardisation—for example, the Energy Committee in Brussels was told this—but at a cost! Is this a priority for the European taxpayer? Perhaps the Minister will elaborate on this point about standardisation.
  My fourth question is on a fundamental issue. We go back to the Japanese and their fifth generation computers. The Minister will recollect the sum that he told me—I think that the conversation was private, so I shall not repeat it—that was going to Nippon Electric from Government money, of all sources. The sums are substantial. Can we afford to subsidise the great international companies and then, concurrently, say that we must have a European scheme?
  Mr. Kenneth Baker: I think that the hon. Gentleman will appreciate that large investment projects, such as that of the Nippon Electric silicon plant, are internationally mobile. The company has the choice of putting the factory here, in France, Germany, Ireland, Italy, or some other part of the world. Therefore, as he knows, we have programmes of assistance to attract those internationally mobile investment programmes to this country. I do not apologise for that, because it strengthens the base of what is happening in Scotland in electronics. One of the reasons why Scotland has done so well in the electronic age is that, with assistance from successive Governments, it has attracted big international companies and a range of investments. It has built up its own attraction. It acts as a magnet, and people and companies come of their own volition. I hope that the hon. Gentleman is not going to say that he wishes us to dismantle such support, because, if he did, we should lose some of those internationally mobile projects.
  Mr. Dalyell: I do not want to look a gift horse in the mouth, but the reply to that is that we shall have to go on attracting such people.
  Mr. Baker: One is beginning to see that happening in Scotland. Companies are coming of their own volition, because a critical mass has been built up. A critical mass is not just a number of companies in related industries, but changes in the education infrastructures producing a

  1117
  greater number of technicians, electronic engineers or computer scientists. By using the money as catalytic or magnetic money, one is not committed to doing it for ever. One builds up a capability which acts as its own attraction.
  Mr. Dalyell: I am not goading the Minister, but I shall be interested to hear in his winding-up speech how the ESPRIT programme will help to create what he calls this "critical mass".
  All I am saying is that other firms in the category of Nippon Electric come along to Scotland and other areas, inevitably ask for huge amounts of Government money and be given it. There are so many competing factions for Government expenditure. We should not forget that just up the road from Nippon Electric is Leyland at Bathgate, where many more people are employed. If anything happens to Leyland for want of Government money and looking at the matter from the point of view of employment, I know what most of my constituents will think.
  I do not want to be ostrich-like or Luddite about the matter, but I gently ask the question: if we are to attract great international firms, are we sure that we should also put money on this scale into the ESPRIT programme? Is it not one or the other? If the House can be persuaded that the two are complementary, I shall be quite satisfied.
  I want to ask a number of specific questions. The document, in page 2, says:
  "Measures taken so far, however, have not been sufficient to reverse the trend, and by and large have only managed to slow down the deteriorating process. The situation threatens now to get dramatically worse: our balance of payments in IT products and services".
  Could we have some flesh on that? What is the Government's estimate of how dramatically worse it is likely to become? It would certainly be useful if the Minister could tell us that.
  That last paragraph in page 3 says:
  "Long lead-time R&D at precompetitive level, sufficiently upstream of the product development phase, would appear a suitable domain for such co-operative action, and one which could be started without delay."
  It says:
  "could be started without delay".
  Are we to start it without delay? What is the time
  In page 4, paragraph 3, we read that
  "in the sector in Europe of some $5 billion per year and given the fact that the largest American companies active in the field invest every year, individually, some US $2 billion."
  I do not want to give the figures, because I cannot remember whether I was given the information privately or publicly, but I can say that the Hewlett-Packard investment is enormous in this respect. Furthermore, the distinction that some of us would like to make about incoming companies is that Hewlett-Packard, for instance, to its enormous credit, does its advanced work and research in its international divisions, others tend to use such factories as they have as supplies or sales offices for Europe. I do not mean Nippon Electric. We shall have to wait and see.
  However, the Minister knows, as does every hon. Member, that some Japanese firms, which had marvellous intentions when they started, nevertheless had a sales point of getting into Europe. Is that not so? That distinction must be made, and we should be very clear on what basis such firms are setting up.
  The document, in page 8, says:
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  "By 1980 the trade deficit had reached $5 billion, and according to certain sources, the $10 billion mark was passed in 1982.
  The problem of the trade deficit is compounded by the fact that Community imports are primarily high technology products—such as central processing units and computer memories—from the United States and Japan, while its exports"—
  here I come to the point—
  "are the more mature older technology products that formed its past strength but are now only of interest as a replacement market and for the less developed countries."
  On the question of mature products, can we be sure that the ESPRIT programme and the giving of money will act quickly enough? We come back to the matter of decision-making. One of the striking aspects of the success of Hewlett-Packard is how quickly it gets decisions out of Stamford and its Californian headquarters. That is one of the main reasons for its success.
  The Minister must agree that there have been endless delays with the ESPRIT programme. I shall not go into them. How will we avoid delay in the decision-making in the ESPRIT programme? It may be overcome, and it may be just a question of being convinced.
  That brings me to page 10, paragraph 17:
  "The main criterion used in defining the R & D work was to be highly selective in order to enable the programme to focus on the key technological factors."
  Who will carry out the selection-making? I see the Minister's adviser holding up a document. Perhaps it is the same document that I read on this subject, but it does not make clear who is to make the decisions. Here we are concerned with the speed of decisions.
  Paragraph 21, in page 12, says:
  "Funds will be made available to launch in the Community cooperative projects of precompetitive industrial R & D falling within agreed strategic technological lines."
  Agreed by whom? How long will this agreement take? It is easy to make cheap remarks about European decision-making but frankly, after this week, as well as the past years, what evidence is there that any agreement will be reached quickly? We may be told that things will be different in this area from the macropolitical area.
  All I can say to the Minister, with total good will, is that I served for four years as a member of the Energy Committee of the indirectly elected European Parliament, and things were sometimes as slow as the Dickensian circumlocution office. Will things be different in future? The Minister smiles. If he can persuade us that things will be different, he is a man of magic. He will have transformed the continent! However, that is counter to the frustrating experience that some of us have had.
  The document, in page 14, says:
  "Projects that rely mainly on flexible infrastructure and on individual thinking rather than on a system approach, and require relatively much smaller resources. Such activities, that will be referred to as type B projects, could range from very long term, very speculative R & D to relatively shorter term very specifically oriented R & D".
  Who will choose those projects? Will it be the people who are seconded? Will it be the Department? I do not cast any contemptuous glances. On the contrary, I think that the civil servants have probably given good advice. Nevertheless, who will choose those smaller projects? Will it be done on a commercial basis? Will it be done on a short-term or long-term commercial basis?
  In paragraph 26, we read:
  "The remaining 50 per cent. should normally be provided by the industry itself'.
  I do not know what "normally" means, but I do know that matching grants in this area takes an immensely long time.

  1119
  I fear that in this whole project decisions could be overtaken by events, because the Japanese and some American firms take these decisions extremely quickly. Does the Minister doubt what I say? One cannot read facial expressions into Hansard.
  Paragraph 35, in page 18, says:
  "For the expected overall synergetic effect to take place, access for a project team to foreground knowledge generated by another team working on a different project within the ESPRIT framework shall also be arranged under privileged conditions in as far as such information enables better or quicker results to be obtained from the project which needs it."
  "Gobbledegook" is an unpleasant word, but I wonder what that means.
  Paragraph 37 says:
  "To be meaningful and stimulate the new strategic thinking that must underly the definition and execution of the R & D programme, a Community intervention would have to stimulate a joint long term effort in precompetitive R & D of the same order of magnitude (i.e. of at least 5 to 10 per cent. of the current overall industrial effort)."
  If the document means what it says, we are talking about huge sums of money.
  May we have spelt out precisely what global sums are involved from member states such as the United Kingdom, not necessarily this year or next year, but the year after? Are we sure that we will not be involved in slow decision-making in relation to the formidable international, multinational firms? In particular, is there not an overlap between the huge sums that are given as of right to international companies coming to the United Kingdom—extremely welcome though they are—and the kind of project that we have in hand?
  The ghost of Mr. Spineli and all that he stands for rather haunts me.
  8.21 pm
  Mr. Ian Lloyd: It is not often that I seek the leave of the House to speak a second time on the same day, and I should immediately give any hon. Member who had the misfortune to be here earlier this afternoon when I spoke consent to leave the Chamber.
  I have, as hon. Members may know, a certain enthusiasm for this subject, which I believe to be of immense importance. It is somewhat sad that, although we have been given the opportunity to discuss this subject, only about a dozen hon. Members are able, willing and wish to discuss it, That is a sad matter, because this is probably one of the most important single decisions facing the United Kingdom and western Europe for the rest of the century. That is my firm judgment and I would defend it in any quarter.
  The absence of Members is particularly sad today when the whole range of European policy has to some extent been cast in the melting pot. If we were discussing butter mountains and such matters, I have no doubt that the Benches would be crowded. Here we are discussing what could be the most catastrophic deficit of microelectronic circuits, with all that that means for British and European industry towards the end of the century, yet where are hon. Members? Alas, it is a sad matter.
  I start by referring to an interesting speech that M. Gaston Thorn made to the European Parliament not long ago. He said that
  "years have been wasted by Member States promoting national champions and feeding intra-Community rivalry instead of exploiting their complementary qualities to meet outside competition."
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  He was referring specifically to research and industrial cooperation. M. Thorn went to say:
  "In all, Community countries have invested more than 2000 million ECU"——
  roughly £1 billion sterling—
  "in recent years to boost their information technology industries, far more than Japan and the United States"——
  over the period to which he referred
  "But the results have been disappointing. Europe still lags behind—not because it lacks funds or ideas but because it lacks the ability to make a united effort."
  Today of all days that remark is pregnant with meaning and significance for all of us and for this subject.
  There is no doubt about the importance of the ESPRIT programme. It affects the future of many major countries and perhaps it is interesting that the motion does not strongly endorse that programme but merely takes note.
  I want to refer to three papers that are involved. The first is the document that has been put out by the Commission to summarise the ESPRIT proposal. It is an interesting document and the hon. Member for Linlithgow (Mr. Dalyell) has saved me a good deal of time by asking several significant questions. It is interesting that last week West Germany announced new spending plans for information technology which will eclipse the EEC ESPRIT programme if they are approved at a Cabinet this week. The German science ministry has put forward an £800 million programme for microelectronics over the next four years compared to aid of £435 million from the EEC under ESPRIT and Britain's £250 million Alvey plan. That is interesting, but sad, because it shows that within the German Government and Cabinet there is a lack of confidence in ESPRIT. I hope that our support for it shows that although we have our own programme in Alvey we do not lack confidence in what can and must be done.
  If ESPRIT succeeds it will redress Europe's information technology gap. It has a reasonable chance of overcoming that gap, but some policy is necessary—if not ESPRIT, something else; if not the ESPRIT resources, larger resources; if not spent in this particular way, spent in some other way; if not in the public sector or this particular mixture of public and private sector, in some other, more appropriate and more effective sector in the European context. That we must have. If we have 10 per cent. of the world market and 40 per cent. of the European market after this massive investment over such a Long period, it shows that something is seriously wrong.
  The Commission wants to achieve work in long lead time research and development. It wishes to address the large leading edge markets. I am sure that everyone would support that. It wishes to achieve technical parity with, if not superiority over, world competitors within 10 years. That is an ambitious target, but we must have such ambition. To provide the technology base to become and stay competitive such research must be done. That research must be done on advanced microelectronics, software technology, advanced information processing, office systems and computer integrated manufacturing. The overall responsibility, as has been pointed out, rests with the Commission. Should that be so? I ask that because the United States, which is one of the main mountains which we seek to climb in competitive terms—the other being Japan—has obviously gone down a different road.
  I want to draw the attention of the House to a remarkably interesting document—a publication of the Department of Trade and Industry. The overseas technical

  1121
  information unit has just produced a report, the author of which is Mr. Baxter, our science councillor in the embassy in Washington. It is an excellent report on Silicon Valley and the United States semiconductor industry. Mr. Baxter describes in the greatest detail how Silicon Valley has come into being, how venture capital supports technology there, and the interesting mixture that has now been created in hundreds, if not thousands, of small thrusting venture capital firms, the average turnover being about $8 million, and the interesting set of organisations which have been established, as it were, halfway between public sector and private research.
  The first is the Microelectronics and Computer Corporation in Austin, Texas, with a budget of $75 million and based on industry-wide co-operation between a substantial number of firms. The second is the Centre for Integrated Systems in Stamford, which has a $40 million budget from Government and industry, and represents 80 major companies, including IBM, International Telephone and Telegraph and General Electric. The third is the Semiconductor Research Corporation in north Carolina, which is an organisation put together by 13 United States ship manufacturers, joined now, I believe, by a further six, making it 19. It has already committed $9 million, and will be committing a budget of $30 million in 1984, much of which will be to funnel research into universities—a very interesting concept.
  This extraordinarily interesting contrast exists between the highly centralised philosophy and approach in ESPRIT and the very different approach in the United States. It is an interesting question why the latter has succeeded so obviously and effectively, and whether the former is the right device and set of institutions to compete.
  The other target—and every hon. Member knows this—is Japan. The United States is now very concerned, and these three organisations have been established because of that concern about the Japanese performance and predominance, particularly with regard to semiconductor manufacture and semiconductor equipment manufacture, which is now assuming much greater importance.
  That brings me to the last point that I wish to make, and I refer to yet another document produced by the same organisation in my right hon. Friend's Department. This is a study of the Japanese giant, Matsushita Electrical. It is a particularly interesting document, because it points out in a sense why ESPRIT is important and has been brought into being. It also describes the kind of target that ESPRIT will hit, if it is successful. The House may like to know some of the fascinating details that emerge from this study of the Matsushita organisation's most recent activities in information technology.
  The company's sales in 1982 were £10 billion, and its spending on R & D alone was £400 million. That is the basis of the operation with which we are competing. Such large figures sometimes mean very little. I wish to draw to the attention of the House a fascinating description of what the organisation is doing and how, in commercial terms, it offers a dramatic challenge to western Europe and the United States, which ESPRIT is designed to counter.
  The company has produced a completely new line of computer-controlled robot machine tools, known as software programmable robots. It has built up a series of three assembly lines making video tape recorders. The
  1122
  United Kingdom is a very large consumer of video tape recorders. I believe that we stand highest in the world in relation to our population, outside Japan. The United Kingdom has about 1 million video tape recorders, but a large market remains to be addressed.
  What has Matsushita done? It is aiming not at the United Kingdom, Japan or the United States, but at the world market. It has already developed three computer-controlled assembly lines for the manufacture of video tape recorders. The company takes the view that manned assembly lines have defect levels of 2 to 3 per cent. The company's target is zero defects, and it would like to eliminate manual assembly in as many areas as possible. That is the company's philosophy. The company has done this by establishing production lines. The older ones, which they call M1 and M2—this is nothing to do with monetary compensatory allowances—produce 2,500 video tape recorders a day. The next, more modern version, M3, produces 5,000 video tape recorders a day. The new line now under construction, as described to our science attache, will produce 10,000 video tape recorders a day. The factory intends to turn out 5 million video tape recorders per annum.
  What is the significance of this for ESPRIT? On the production line, the company has 127 work stations occupied by what it describes as Pana Robo modules. One is occupied by a human worker. His task, to fix and align the audio head, defied automation when it was being installed, but it will be automated on the next line so that it will go from 127 to one to 128 to zero. The company has developed special machines for this purpose. Its hardware costs for the production line now in operation are $6 million, or approximately £4 million.
  The company intends to use production engineering to turn the production of video tape recorders into a mass market. It is now achieving production not only of the video tape recorder, but of the manufacturing equipment behind it. The company's purpose is to cope with 15 per cent. of the world demand for video tape recorders. It expects that prices on the free market will fall by at least 50 per cent. in the comparatively near future. When this is achieved, the replacement market in the United Kingdom, according to its calculations, could be two to three million units a year, with a value of hundreds of millions of pounds.
  If our indigenous manufacturers are ever to compete successfully on equal terms, their production facilities will have to be at least on the scale of those developed at Matsushita. We shall therefore have to address the world market, or give up altogether. This applies not only to the United Kingdom, but to every country in western Europe. Indeed, for most countries in the world, the prospect is that video tape recorder sales will produce a constant drain of revenue towards Japan for the foreseeable future. That is the situation that we face with a product that is familiar to practically everybody in the country.
  The challenge is immense. We shall not meet it by sitting back and doing the things that we have done over the past few decades, pouring subsidies into industries which, because they are there, we think should go on being there.
  My right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) is not present, but I could not disagree with him more profoundly than when he argued the day before yesterday that we must have steel, shipbuilding and motor cars, and that the microelectronics world of

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  information technology was something on which we could not survive. I believe that I have demonstrated otherwise. The Japanese, as a matter of policy, have decided that they will feed their nation on the basis of such industry—the information technology explosion—which, by the end of the century, will be a much larger industry than the world steel industry, the world automobile industry and the world chemical industry. Information technology will be the largest of all, and it is moving rapidly in that direction.
  I can see no earthly reason why we in the United Kingdom should not so restructure our industrial apparatus that we take our appropriate share of that market, our appropriate share of the prosperity that it will give us, and forget about the other things. They will not do us much good, they will waste our resources, and they will inhibit our capacity to do this, whether through ESPRIT, or by other methods.
  8.39 pm
  Mr. Paddy Ashdown: There are two delicious ironies about today's debate. The first is that we are holding it today. That is ironic, because ESPRIT is a small example—as the hon. Member for Havant (Mr. Lloyd) said in a very perceptive part of his speech—of what Europe might have been had it not been for the closed minds and rather narrow vision that prevailed last night. It is interesting that the Government have significantly excluded ESPRIT from the blockage in the budget proposals. It will be remembered that they decided to end negotiations until they had solved the budget issue. However, they rightly excluded the ESPRIT programme and allowed it to go ahead. Would that they had managed the same imagination last night.
  In a real sense, ESPRIT is the sort of transnational operation that the EEC should be concerned with. What a pity, therefore, that the crude nationalism that seems to prevail in the Prime Minister's mind and sometimes in that of Labour Members, and that the narrow vision and little Englander mentality that sometimes prevails with Labour Members, should have prevented either the Labour or Conservative party from recognising that the spirit of ESPRIT—if that is not a Euro-pun—is the true spirit of Europe, and that its success is the single bright spot in an otherwise pretty bleak future as a result of last night's performances.
  The second irony has only just occurred to me. It consists of the rather curious spectacle of a Government who are usually committed to the concept of a free market and to non-governmental intervention in helping the economy to get going, nevertheless supporting and espousing—as the Minister has done with great knowledge and enthusiasm—a policy that is anything but free enterprise. It recognises the necessity for Government intervention to be able to make good an industrial deficit. Would that that spirit prevailed throughout the British economy.
  Incidentally, it is also ironic that the hon. Member for Linlithgow (Mr. Dalyell) should express doubts about ESPRIT because it is centralised and planned and not sufficiently left to the free market, when the Labour party believes in a centralised and planned economy. It would seem that the new technology is leading not only to new thinking in British industry but perhaps to new thinking in British politics—and a jolly good thing too.
  Mr. Hayward: The hon. Gentleman's analogy is unfortunate, because the Government have provide
  1124
  dassistance to several industries—including one, Westlands, in the hon. Gentleman's constituency—because they have recognised that there is a long-term benefit in investing in those industries that remain in a particular market, and in developing their technology.
  Mr. Ashdown: Of course there is a good deal of truth in what the hon. Gentleman says. However, if the Government had declared an interest in picking winners—there cannot be a clearer winner, of course, than Westlands—we could understand it, but they seem to be very capricious. Government intervention, and the way in which they have assisted Westlands and the new technologies, would be of benefit to all. It is not only my party that says that, but also recently the CBI.
  As hon. Members, including the hon. Member for Havant, who is very knowledgeable on this matter, have said, there can be no doubt about the need for ESPRIT. It is worth quoting the figures as they have not yet been mentioned. In 1975, Europe enjoyed a rough balance in trade in the new technologies and in information technology. By 1980, that had changed into a $5 billion deficit. In 1983 that deficit had increased to $10 billion. It is predicted that by 1992 that deficit will have increased to $16 billion. However, it is predicted that in 1992 the United States of America will have a surplus of $22 billion on that trade, while Japan—for many of the reasons given by the hon. Member for Havant—is predicted to have a surplus of $40 billion.
  I am told that eight out of every 10 personal computers in the United Kingdom are made in the United States, and that nine out of every 10 videos are made in Japan. In the world as a whole, 50 per cent. of printed circuit boards and integrated circuit boards are of Japanese manufacture. Meanwhile, it is predicted that in the next five years the world electronics market will have shifted from a total of £195 billion to £450 billion. The hon. Member for Havant and others have said that there are enormously rich pickings for Britain in a shift from our traditional industrial base to the new industrial base. Thus we cannot let the European deficit continue to grow, or let Europe become a subservient partner in the information technology market. There are fruits that have to be gathered.
  It is also true that, just because Europe has slipped behind, there has been a transition of key people within European research and development facilities to the production line facilities involved in the new technologies. I am told that Europe spends only 1 per cent. of its total budget on research and development in information technology, although Japan and the United States are now spending some 6 per cent.
  Therefore, there can be no argument about the need for ESPRIT. That need is urgent. However, throughout the document on ESPRIT and the Minister's otherwise extremely valuable and useful speech, there seemed to be far too much self-congratulation, which almost bordered on complacency. Perhaps the Minister rejected the statements of the hon. Member for Linlithgow far too lightly. We recognise that ESPRIT is an important programme, standing at £850 million and that it is a commitment to the future. At £350 million Alvey is also a commitment to the future. But the reality is that IBM spends £1·3 billion on research and development every year. That is equivalent to the total for ESPRIT and Alvey for the next five years.

  1125
  Of course the Minister is right; we must prime the pump. However, it should also be recognised that, given the scale of the current problem, the commitment to ESPRIT and Alvey combined is still not enough. It is the first, not the last, step. The agreement says that we will be driving towards parity and that we are seeking through the ESPRIT programme—the inference is, through the ESPRIT programme alone—to achieve parity in world markets. There is no chance that the ESPRIT programme on its own will take the European information technology industry from its current position, which is significantly behind the rest of the world, into anything like parity. We shall only stem the reversals that the European technology industry has suffered. I hope that the Minister will accept that this initiative is not the last, but rather one to be built on in future. The Government and the EEC cannot rest on their laurels in the face of the facts.
  The Minister used the phrase "critical mass". I assume that he means a nuclear analogy—that we have to get to a certain point before the chemical or nuclear operation will continue to work. Of course the Minister is right, and that is a useful expression, but the critical mass has to be contained within an environment that continues to make it work. Therefore, we should see this as the first and essential step that must be expanded on if we are to catch up in world markets.
  The Government have made an exception of ESPRIT and have allowed it to go ahead, but why have they not made an exception of the very important new European innovation initiative which is due to be launched towards the end of the summer? I believe that the Government are still blocking that. That innovation initiative provides seed capital for innovation and represents an important new European programme which could greatly help us. In many areas it might be taken as something that would allow the initiatives that could be developed through ESPRIT to be continued and expanded.
  I have two points of particular note for the Minister. First, in relation to small business, Mr. Jean Cadiou, the director of the European Community's information technology task force, said in reference to ESPRIT that it would also serve to provide
  "smaller off-beat projects with high risks and high potential returns".
  That is reflected in the ESPRIT agreement in article 1(2), which refers to
  "companies, including small and medium-sized undertakings".
  That is a piece of rhetoric and a commitment to the future which I welcome strongly, but we must find out how it will be done.
  Constantly and consistently I get complaints from the microcomputer industry and from new technology industries everywhere that small businesses are not getting a sufficient slice of the action even within Alvey. Only the other day, a respected computer manufacturer told me that, despite the attempts that had been made to provide sufficient funding for small businesses, where much of the important initiation, innovation and research is going on, he had given up on the Alvey programme. We must ensure that the rhetoric of article 1(2) is brought into action. The Government should insist that that happens. I ask the Minister how he will ensure that small, new, high-technology software houses in particular get some spin-off from ESPRIT.
  1126
  The Minister has heard me speak before on the second problem of extra-territoriality. I am sorry to have to bring that up in this debate, and I do not wish to subvert the debate. The Minister knows as well as I do that many people have strong feelings about the way in which the American high technology industry is using COCOM and related agreements to block British and European exports of high technology so that their own salesmen may move in. To give an example, only today I heard of a case in which, while COCOM was being used to block the export of system X telephone exchanges, at the same time the Americans have through the Bell Telephone manufacturing company in Belgium sold no fewer than four units to eastern European countries which are in the business of making telecom chips. That is totally at variance with decent practice.
  Whatever we may do to encourage an appropriate degree of information technology development and research in Europe, it is likely to be subverted unless we can protect our industry adequately. COCOM and the operation of the COCOM agreement have not been brought before the House. Given the impact that COCOM is having on the high technology industry in Britain and the impact that it could have if ESPRIT comes to fruition, it is high time the matter was brought back to the House and there was a proper debate on the effect the agreement has on our industry.
  We can warmly welcome ESPRIT, not only as an example of what Europe is really all about but as a genuine commitment and a declaration of intent by Europe that it intends to be in the forefront of technology. It is important that we reject too much self-congratulation or complacency. ESPRIT is only the essential first step in what is necessary to put Europe back among the leaders in information technology. While I welcome ESPRIT, I also urge the Government to recognise that much more will have to be done if we are effectively to build on the essential first step.
  8.53 pm
  Mr. Richard Page: In this brief contribution I want to make it clear that I endorse the Government's support for this programme. In doing so I shall not touch on the rather sore spot of EC financing. Let us hope that we reach agreement on that soon so that the necessary cash is available to enable the programme to go ahead.
  I, too, share the disappointment of my hon. Friend the Member for Havant (Mr. Lloyd) at the fact that this most important debate is not better attended. The consequences of not keeping up with the information technology revolution are devastating when we compare ourselves with the foreign competition. If we review what has happened over the last decade or so, we find once again that our overseas competitors have stolen a march on us. This time we are in companionship with the rest of the EC. To catch up and then go ahead, it is better if we work with the EC and use the combined talents, brains and resources of the EC.
  To deal quickly with what the opposition in the United States and Japan have done over the past few years, we see the huge research and development tax credits that are being pumped into the industry in the United States. Large companies are making huge investments and they have a good home base as a market for the products. The Japanese, with their lasar beam type investment and

  1127
  method of picking off the product, have done extremely well. Again they have put a huge investment into those specific areas.
  The hon. Member for Yeovil (Mr. Ashdown) apologised for quoting statistics on how we have been doing on imports. I shall not apologise because I think that we should repeat those figures time and time again to show the market that we are losing out on. In personal computers nine out of 10 come from the United States. Eight out of 10 videos come in from Japan. We are losing out on both those markets. If we do not keep putting the achievements of the opposition in front of us at every opportunity, we tend to put them to the back of our mind where they may be ignored.
  I should like to ride a personal hobby horse. I do not think we help much in the EC by having an import tax regime that helps completed products as opposed to the components. I see no advantage in havng a tax on made-up computers coming into the country that is lower than the tax on the components that are also being brought into the EC. Surely it must be sensible to have a tax regime that favours the assembly of the components in this country rather than bringing in the completed article from abroad. Therefore, I appeal to my right hon. Friend to maintain pressure on the EC to try to reverse that differential.
  The Japanese in particular have identified the areas in which they think they can sell a product and then they have exploited them ruthlessly. In some cases they have made sure that other Japanese companies have not got involved. The banks and various organs of Government have supported one or two firms making specific products. The Japanese have designated information technology as their major growth area for the next 10 years, because they see the huge rewards that they will get. We ignore that decision at our peril. The speed of development is so great that it will get harder and harder to catch up. The difficulty in catching up will become proportionately greater on a geometric rather than an arithmetic scale.
  We must remember that while we are embarking on this programme the opposition is not standing still. The House has already heard what the Japanese are doing with their fifth generation computer and what the United States are doing with the billions of dollars that they are pumping into this industry. We also tend to ignore the fact that other countries are leapfrogging various stages of their industrial revolution and that they are moving directly into the electronics industry. To the £850 million, we add our Alvey money and the other EEC countries are putting money in the project. The proposal for a Council decision states:
  "Measures taken so far, however, have not been sufficient to reverse the trend, and by and large have only managed to slow down the deteriorating process."
  The hon. Member for Linlithgow (Mr. Dalyell) also quoted from that document. I endorse what he said. Our position is stark, if we are to stay in the market. As my right hon. Friend the Minister said, only 10 per cent. of the world market involves EEC industries. We have only 40 per cent. of the EEC home market. I draw parallels with the telecommunications equipment that we had in Britain 25 years ago. Then we had 25 per cent. of the market. Today our share is in the low single figures.
  The proposal continues:
  "unless a co-operative industrial programme of a sufficient magnitude can be mounted, most if not all of the current IT industry could disappear in a few years time."
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  One has only to see the cost of our competitors' products to realise that if we do not match that cost we shall not be able to subsidise the products and stay in the business.
  I fully support the decision to follow the Japanese laser beam approach. The Japanese have carefully chosen their products which will be highly saleable. An investigation by Professor Bownas a few years ago showed that the Japanese spend a considerable time choosing the product to be made. Once the decision is made, they go like the wind to produce it cheaply, effectively and in huge numbers.
  Our EEC resources, small indeed compared with the money used to support the wine lakes and butter mountains, should be channelled into the development of selective products which will give us an industrial advantage. The arguments by universities that the work is too applied or by some industries that the work is too basic cannot be allowed to predominate if we are to prosper in the programme.
  I gain a degree of heart from the report when it says:
  "The main criterion used … was to be highly selective".
  If we are not highly selective we shall lose out. We cannot afford to spread resources too thinly. We must concentrate on specific, tight areas to succeed.
  Mr. Dalyell: Who is to do the selecting? That is the problem.
  Mr. Page: The hon. Member for Linlithgow anticipates the next point that I want to put to the Minister. Where will the practical control lie in the project selection? Will it be in the management and consultative committee or will it be rolled up inside the Commission? If it is to be the latter, I am worried about the time delay. Speed is of the essence. The opposition is moving so rapidly that if we do not match it or go ahead we shall lose out.
  Who will have use of the results of the research work? Will it be protected by patents? Will the industry that does the work successfully have the benefit of the patents'? Will industry have to repay the Commission and will there be free access for anyone who wishes to take advantage of this considerable investment?
  I should like to echo some of what the hon. Member for Yeovil said about the way that small businesses can be used in the project. Near my constituency is a small electronics firm—Case. It is an object lesson in skill and expertise. I am delighted to see in the Chamber my hon. Friend the Member for Watford (Mr. Garel-Jones) in whose constituency that magnificent company operates.
  I should like to see whether we can help small businesses. Only a few years ago Case employed about 100 people. Today it is desperately recruiting to reach a work force of about 1,000. That is an example of success in the small business sphere.
  I urge my right hon. Friend to keep pushing this fast development area at every available opportunity because that is what will provide the jobs, the employment and the income for the future.
  I have so far resisted commenting on an area that could be promoted. I am wrestling with a home computer, and I believe that the interface between man and machine could be considerably improved. Anything that can be developed to make computers easier to understand and operate will be successful in the market place. As those machines become more complex fewer people will be able to operate them. I hope that more skill and expertise will

  1129
  be directed to computer development, so that the number of individuals and companies who can operate these advanced machines can be increased.
  There is great potential for computer development in Britain and the EEC, and the programme will provide an opportunity to use it. I hope that we shall see rewards flowing to industries in Britain and Europe in the next five years.
  9.6 pm
  Dr. Jeremy Bray: I thought that it would be for the convenience of the House to spread the Front Bench speeches through the debate, as we have extra time available. I welcome the contributions of my hon. Friend the Member for Linlithgow (Mr. Dalyell) and Conservative Members. My hon. Friend the Member for Linlithgow very properly looked a gift horse in the mouth, as is his wont, and I hope that the Minister will be able to answer his cogent questions.
  The enthusiasm for the project that was voiced strongly on both sides of the House would be much more persuasive if, for example, hon. Members could plug computers into the Commons telephone system. It is not possible to use a modem in the House. Strictly speaking, we are not allowed to use acoustic couplers or the Serjeant at Arms will throw us out of our offices. By an extraordinary archaism, while we enthusiastically advocate striving at the frontiers of technology, we go on with cobwebs, oak and brass in the real seat of power. That explains many of the problems underlying the debate.
  I am suffering from an acute attack of nothing-new-under-the-sun-itis. The Minister of State was kind enough, before the debate, to allow me to see the director of the Alvey project who is much concerned with the ESPRIT programme. He occupies the office in Millbank tower that was used by Sir Richard Clarke, permanent secretary at the Ministry of Technology in the 1960s. In that room, the i's were dotted and the t's were crossed on the GEC and ICL mergers, arranged under the interventionism of the then Labour Government. I am also glad that the chairman of the British Computer Society's committee on expert systems, Mr. Alex d'Agapeyeff, is advising the Alvey directorate. He was one of my software advisers in the 1960s.
  The gurus of Alvey and ESPRIT work in that monument of 1960s brutalism which replaced the old mathematical laboratory at Cambridge in which in the 1950s I learnt to programme EDSAC, the first computer in Britain. In no way has that changed the atmosphere in which they work. I am still trying to discover what there is in the current jargon of intelligent, knowledge-based systems and expert systems that we did not discuss in Claude Shannon's information theory seminar at MIT in the 1950s with Marvin Minsky, now professor of artificial intelligence at MIT. One new feature, however, is the total disjunction between the interventionism of the Alvey and ESPRIT programmes, on the one hand, and the non-interventionism—not to say the nihilism—of the Government's main economic and industrial programmes.
  As a consequence of this, the peripheral and even trivial character of the applications and demonstrations proposed under the Alvey and ESPRIT programmes raises serious questions about the rightness of the concept. One must seriously question whether good results can be achieved
  1130
  with so great a stretch and such trivialisation or whether resources will be diverted into such distorted patterns that progress will be frustrated.
  Hon. Members on both sides are enthusiastic about more money being made available—and so am I—but the fact remains that recruitment plans for VLSI-trained electronic engineering graduates just for Inmos and National Semi-Conductor oversubscribe by a factor of two the total national supply of such engineers in prospect in the next few years. Within higher education, in both teaching and research, the universities are so preoccupied with cuts and maintaining their viability as institutions that no amount of isolated new-blood money to isolated academics who cannot build up research teams with proper Research Council backing, and no amount of unbalanced development of one department and neglect of another, can possibly produce the manpower and skills needed to carry out, not the kind of programmes for which hon. Members have called today, but even the kind of programmes that the Minister has succeeded in getting through the Cabinet. As a result, in the next year there will be an enormous increase in salaries for VLSI-trained electronic engineers in this country. I leave it to Conservatives to judge the wider inflation consequences of that.
  With regard to ESPRIT, I have searched in vain through document 7619/83 for any coherent definition of the problems and the programmes to tackle them on a deeper level than the general waffle of the kind that we could and did write 30 years ago. The nearest that I could find to a concrete example, on page 16 of the annex, was a reference to
  "a high level interface capable of understanding and synthesising the human voice."
  The document calls for
  "special algorithms for pattern recognition … and ultra high speed computing power"
  operating at 100 million instructions per second. That is getting on for the computing capacity of the human brain, which also has to cover the servicing of vision and the whole central nervous system.
  I suspect that if the Minister of State asked biologists working on the structure of the inner ear, they would tell him that that amount of computer overkill on voice recognition is not a sensible approach. If he wants the view of a distinguished applied mathematician able to judge both the biological and computing aspects, I advise him to talk to Sir James Lighthill who has a distinguished record and an interest in intelligent, knowledge-based systems. I would lay a fair bet that Sir James's work on the modelling of the inner ear is far more likely to produce a cost-effective solution to the problem of voice recognition than the romantic overkill of the ESPRIT programme.
  We do not know the technical details of the programme, and I doubt whether we ever shall, although the Minister was kind enough to say he would let us have the list of projects. They have been published. The details will remain commercially confidential as that is the whole point of the programme set-up. Therefore, there will not be much publicly judgable information on the real cost-effectiveness of the programme.
  As for the underlying logic of the programme, I confess that I am sympathetic to the idea of enabling technologies

  1131
  being, pulled through by demonstration projects, which is the basis of the Alvey project, with a similar concept in the ESPRIT project.
  The Alvey major demonstrators under consideration include the Department of Health and Social Security's tax benefit inquiry system, cellular radio, integrated designto-product systems, alert response systems, speech recognition, a groping submersible, and an aircraft cockpit. It is striking that none of these major demonstrators includes any mainstream data processing or process control applications, yet this data processing and process control account for 90 per cent. of the computer programmes written and computing done today.
  No inquiries have been made by the Department of Trade and Industry of the biggest and most successful computing operations in this country, which are, I suppose, the transactions systems between clearing banks and their customers and, in terms of profitability, the financial market information in the Monitor service of Reuters, which the investment analysts seem to value, according to press reports, at something like £1 billion. No approach has been made either to the clearing banks with their vast systems or to Reuters to ask what is in it for them.
  It could be argued that these ventures are so successful and profitable that they require no support and that no developments are needed. That is an extraordinarily complacent view. The clearing banks' software—and they have the advantage of being the largest bank chains in the world—is basically that of the 1960s. It is rigid and imposes an inflexibility on clearing bank operations of which we have begun to see the consequences in their pace of development, which will become a great deal more severe in the future.
  On financial market information, the dirtiest words that can be said in Reuters today are "a new Bretton Woods system", because the consequence of a regime which stabilised exchange rates and the price of financial assets to a greater extent than occurs today would be greatly to diminish the demand for the services of Monitor and diminish the value of those Reuters shareholdings to our press. The press has a very strong interest in maintaining the unpredictability of financial market prices.
  The contrast here with the approach taken in Japan is very instructive. In Japan, information utilities were developed by Nihon Keizai Shimbun—the Financial Times of Japan—and the same integrated approach was taken not only to the development of the transaction information that is the basis of the Reuters-type service, but also to the dissemination and analysis of economic models, forecasting, policy design work, and so on, which is all done now within that single network under the control of Nihon Keizai Shimbun, with its close links with the Japanese economic research centre, MITI, and so on.
  To go bigger still, it may not have escaped the notice of the Minister of State that next door to the splendid new Inmos factory in Newport is the Business Statistics Office which, if I am not mistaken, is the direct responsibility of the Minister. It is the most comprehensive information system, the most widespread intelligent knowledge-based system, the most expert system, that we have in this country. The Government could not function without it. Yet, at the behest of the Prime Minister's favourite corner grocer, Sir Derek Rayner, the Government are busy dismantling what was once the pioneering statistical system in the world.
  1132
  There is a most extraordinary statement on the record from Sir John Boreham, director of the Central Statistical Office and head of the Government statistical service.—it is reported in the current issue of Statistical News—in which he says:
  "I am speaking as the Head of the Government Statistical Service in a country which has developed, both economically and statistically. Other countries have other environments which are changing in different ways. A point of fundamental importance (but I shall not mention it again) is that the scientific establishment in Britain is strong enough to take the Government on, successfully on many issues".
  He is issuing an open invitation to rebellion against the Government. He added:
  "In the United Kingdom the Government Statistical Service now concentrates heavily on serving Government. This is a shift of emphasis since 1981; before that, serving 'society' (which includes industry) received more weight, it still gets some weight, but less than before 1981. The reason for the shift was that the Government decided that it is not an appropriate use of tax revenues to provide a heavily subsidised national statistical sevice, i.e. one for 'customers' outside Government. Whether or not to accept that decision is the question I shall raise at the end. I, obviously, accept it"—
  loyal civil servant that he is—
  "but some others may not".
  I cannot conceive how any person of common sense who has looked at the proper organisation of a serious information system can possibly argue that information collected for Government purposes should not be made available in the best possible form for private use as well as for the service of industry.
  Why are the Government deliberately playing in the junior league? Why are they actively sabotaging the nation's nervous system? One simple explanation is their politics. The present information technology programme is all that the Minister of State can get away with. Like most members of the Government, I do not for a moment think that he believes in all the hogwash of the Government's medium-term financial strategy, but, unlike other Government members, he learnt in the Treasury and Civil Service Committee what was wrong with it in detail and contributed notably to that learning.
  Politically, it was a smart move—and I admire him for it—to launch his information technology campaign while needling the Government on their economic strategy. It was much safer to have him in Government than out, and he makes an admirable Minister. But the price we are paying is the current distortion of information technology policy—the trivialisation of the application, with heavy support for particular narrow lines on hardware and software development.
  Should we gratefully accept the industrial support that we are offered and not look a gift horse in the mouth? Undoubtedly that is the reaction in industry and the universities today, which are so starved of resources that no coherent criticism is voiced at all—at least not to the Government or publicly. But, by crikey, there is to the Opposition.
  That attitude is perfectly understandable given the relations between Ministers and so on, but that should not be the attitude of the Opposition. In fact, the Government have no coherent strategy on applications, hardware or software production, research or development. The description of the present state of information technology in this country has been eloquently spelt out on both sides of the House, and I do not need to repeat it. However, I

  1133
  am concerned with what we can salvage from the mounting pile of rubble while the Government remain in office.
  What lines should the Opposition take in developing and putting forward their own strategy? First, in response to the Government's policy, we should encourage the mainstream data processing and process control users in this country to get stuck into the Alvey and ESPRIT projects and make them into something serious. It is ridiculous that there is no cashless society or process control project on the list of Alvey projects.
  I know what the reaction would be if the Minister of State went to Reuters and said, "What about it?" Reuters would ask with whom, in Europe, it could sensibly form a partnership. However, that attitude misses the whole concept of the ESPRIT project, which is intended to form not just international but inter-functional links. Reuters is a well established company with a strong but by no means monopoly position in transaction data for foreign exchange and money market traders. Reuters could seriously go to the central banks and invite their partnership with Monitor in a study of transaction systems for the future and intelligence upon them.
  Following the Versailles summit, a study was done on exchange market intervention, under the chairmanship of Philippe Jurgensen. All the serious work in support of that technical study on the effectiveness of foreign exchange intervention had to be done by the United States Federal Reserve Board, and specifically by Dale Henderson in the international department, because nobody in Europe was equipped to do the job. There was nobody in the Bank of England, the Treasury, the French Ministry of Finance, the Banque de France, the Bundesbank or anywhere else. The mainstream apparatus for studying the future of the world's monetary systems should not be left solely in the hands of the Americans. But, if it is not, how is the practical work to be undertaken? Is it not open to Monitor to go to the Bank of England or the Bundesbank and suggest an exercise on the subject? I am sure that the Minister of State would not oppose such a move, and such enterprise and initiative would greatly stimulate the Commission itself. It is recognised on both sides of the House that part of the problem is that the Commission badly needs the stimulus of new ideas.
  Those in the mainstream of process control—mainstream control engineers, control theorists, economists and the econometricians—should also get stuck into the Alvey programme.
  Hon. Members may not appreciate that there is discontinuity in the Alvey and ESPRIT programmes between the data processing and process control applications, which account for 90 per cent. of computing today, and the systems described as intelligent knowledge-based or expert systems. I would not willingly give way to others in my interest in intelligent knowledge-based systems and artificial intelligence. I have maintained a steady interest in the subject, despite the ups and downs of fashion, for over 30 years. But if that area is to be in any way practical, it must stand upon the shoulders of conventional data processing and process control applications. We must not dismiss 90 per cent. of computer applications, leaving the problems of the applications until we have worked out the IKBS and expert systems. The progress that has been made in data
  1134
  processing and process control is based on the fundamentals of logic and information theory which will have to be reinvented if it is left to IKBS to find a way round simulating them.
  Another important area that does not figure in Alvey or ESPRIT and has had much work done on it is finite element analysis. The biggest finite element analysis computation that is done in the world today is weather forecasting. It can be argued that we should not include weather forecasting in an Alvey-type project because it is a one-off, but the same argument and the same mathematics apply to metal and plastic forming processes, fluid dynamics and reaction kinetics. It is a big and expanding area that is extremely scientific and technical. It will not be invented on the back of an envelope or recapitulated in an IKB system. It has heavy computing requirements and is admirably suited to the transputer. Why is there not a serious project on that?
  The explanation, when one goes into the matter with experts—I have spent much time talking to them in the past six months—is simply human. It is deplorable that no one in computer science at Cambridge has talked to the control theorists at Imperial college or Warwick or to the economists at the London School of Economics or even in Cambridge during the past 30 years. They are now all too busy in the Alvey directorate or among its expert advisers to look more widely. Unless the Minister and his officials require a wider spread over data processing and process control, tunnel development will continue in important projects.
  Let us demystify the language within IKBS and expert systems. We should insist that demonstrations be given to us in simple forms that we can understand and examine. Decision trees are, on the whole, things that are widely distributed in offices, even such as social security offices and others. That is all that an expert system really is, plus a few frills and furbelows. Why can we not have simple demonstrations of decision trees for fault-finding purposes, for diagnosing causes of crashes, risk analysis of metal fatigue, and even choosing which bus routes to take? That is what expert systems are about. Why can we not have a simple programme, such as Visicalc, which does the basic shell work of a programme, which can give us a practical demonstration of what the hundreds of millions of pounds of Government money are supposed to be doing?
  The consequence of the route that the Government have taken is that we are embarking on major expenditure programmes, produced by a small minority of interested experts, of a type that it is not reasonable to expect hon. Members to be able to judge. That has happened because of the straitjacket within which the Government's economic and industrial policies are formulated. They are not allowed to be generally interventionist so they must be specifically interventionist in areas of high glamour and total opacity which afford the maximum opportunity to pull the wool over people's eyes as to what they really amount to.
  The categories in the ESPRIT programme are somewhat wider and offer more scope for expansion and development of the type that I have been urging. The advanced microelectronics, the software technologies, the advanced information processing office systems and computed integrated manufacture are all capable of

  1135
  evolution in what I think would be generally regarded in customers' as well as suppliers' information technology systems as representing the balance of research needed.
  It is certainly the case that ESPRIT at present lacks the focus of the ALVEY programme, but it also avoids some of its eccentricities.
  I am entirely in favour of the European co-operation aspects of the ESPRIT programme. For years I have been trying to persuade the Treasury and the Social Science Research Council to take an interest in the French effort on computing in the economic field, and particularly the Moduleco project, into which they have put very substantial resources compared with the scale of any effort in this country.
  I have worked as corporate planning and personnel director in Mullard, which is a subsidiary company of a European company operating in this area, and I have seen the sort of co-operation that is possible across national boundaries. I confess that I am somewhat uneasy, though prepared to be persuaded, about the practicalities of working in international consortia. It is a great deal easier to work within a single company, although the relations and rivalries are difficult enough even then. But no doubt we shall learn from experience. Certainly ESPRIT offers a wider range of people a chance of seeing how things are done abroad and what the nature of the market is.
  My overall reaction to ESPRIT, therefore, is by all means to go ahead and make the best of it, but not to kid ourselves that it amounts to an information technology strategy. That design of a strategy has to be addressed to the main economic problems and the social needs of the people of Europe.
  I have argued elsewhere—so I shall not do so this evening—for the use of information technology within the mainstream areas of Government and decision-making in industry. It will happen, and we will get the linked enterprise, company, industry, national economy, and international models and so on which are needed to operate such systems. We will get the well-informed, democratic, widely distributed decision systems that information technology makes possible.
  The market as it is supposed to work, but as this project clearly assumes that it does not work, cannot possibly achieve that spread of an information system, open in access and free for people to use simply by its own internal dynamics. It needs facilitating by the Government, and the Minister of State has taken some actions—most particularly in the educational sector—which will help to facilitate it.
  There is a task for, and an essential contribution will be needed from, information technology. I do not think that ESPRIT and Alvey begin to glimpse what that task is. We have to make sure that in the way in which they are conducted they do not positively frustrate the performance of the real task waiting to be done.
  9.37 pm
  Mr. Rob Hayward: Having listened to the hon. Member for Motherwell, South (Dr. Bray), I can only describe his speech as surprising in places. There were a number of inaccuracies in the comments he made, but in the light of the limited time available this evening I intend to deal only with his references to the standard of education available in relation to information technology in general.
  1136
  The impression that we were given was that there were no universities or facilities available which were attractive to any company, whether British, European or any other. I find it somewhat surprising, therefore, that during the past year Wang has been attracted to Stirling because of the facilities available at the university and Hewlett-Packard—to which the hon. Member for Linlithgow (Mr. Dalyell) referred—has been attracted to both South Queensferry and Bristol because of the facilities available at Edinburgh, Bristol and Bath universities. I really feel, therefore, that these comments by the hon. Gentleman were probably the most disparaging of the several inaccurate statements in his speech.
  Dr. Bray: I put it in rather carefully phrased terms, and the hon. Gentleman will be able to check it by writing to Inmos and National Semiconductor asking them what their recruitment plans are for VLSI-trained graduate electronic engineers over the next few years, and comparing that with the output of the existing universities. I should like him to do that, as I think that he will find that the demand is approximately twice the existing supply.
  Mr. Hayward: If the hon. Gentleman checks the Official Report, he will see that I did not refer to VLSI engineers but to a separate section, with which he dealt in greater detail—the educational facilities available and on offer to high technology and information technology companies.
  The hon. Member for Linlithgow made several relevant comments about the development of companies in this country and how they are attracted here. I share his concern about the ESPRIT programme and the potential that it has for operating at speed. This view was also expressed by my hon. Friend the Member for Hertfordshire, South-West (Mr. Page). This is a worthwhile programme, but I am concerned that the European bureaucracy might not act with the speed at which the Japanese and American companies in particular seem to be so able.
  We have heard reference to the investment made in a number of places, and there have been comments about the disparity of investment and research and overall employment between Europe, the United States and Japan. Equally, we heard quite often about the magnet that this country is for overseas companies. However, there is a danger that that magnetic effect can be overdone. We are attracting many companies, but put in the context of the amount of money that is going on world-wide today it is a somewhat limited quantity.
  I have two particular concerns about the ESPRIT programme. One is the danger that it will be regarded as the ultimate—the be-all and the end-all—when it is not, either on its own or in association with Alvey. We have to encourage companies to invest large sums of money outside those two programmes. If companies invest only in them, and if the Government allow them to do this, we shall fall not merely further behind than we are but considerably further behind, despite the appalling statistics that have been cited by a number of hon. Members.
  The hon. Member for Yeovil (Mr. Ashdown) referred to extra-territoriality, particularly in relation to the United States. That concern is held not only by his party but by all parties.
  The other aspect of ESPRIT that conerns me is that I have some doubt, despite my originally complimentary

  1137
  comments, about the interrelationship between some universities and industry and about the effectiveness of the way in which they work together on this subject. There is not satisfactory liaison between the two. We should get encouragement from what happens in Germany and France, where industry works particularly effectively with universities on a number of subjects. We might learn and benefit from them.
  I do not wish to go over ground that has already been covered by other hon. Members. There has been consistent emphasis on the ESPRIT programme and discussion about how we should work within the European Community. I am concerned that British, French and German companies may work together without directing consideration to countries outside the European Community. For example, Sweden has much to contribute in information technology.
  Also, while we must be aware of, and concerned about, the challenge presented to us by the Japanese and the Americans, we should not presume that we cannot cooperate with companies from those countries. There is much to be gained from that as well as from working within ESPRIT, as there is from directing our attitudes and aims well outside the countries and companies of the European Community. In that way we can benefit from investment in research and development that is being currently carried out by those two countries, particularly in the case of companies that are investing in this country, whether Japanese or American.
  The hon. Member for Linlithgow was worried about the amount of money that we were contributing in trying to attract companies to this country. He failed to recognise that there tends to be a breeding effect within a few years of any company being established, in that people who previously worked as engineers in a particular company leave that company and set up a small company of their own, which then grows rapidly into a major company. They have seen a gap in the market, a gap in the technology. Technology is moving so rapidly that there is a complete change in technology in general within a period of three or four years.
  With those brief comments, I endorse the ESPRIT programme. I hope that it has the effects that the Government believe it will. I hope, too, that the Minister will reply to what I have said this evening, because I have certain worries not only about the programme but about matters outside the programme.
  9.45 pm
  Mr. Timothy Wood: I, too, welcome the ESPRIT programme, because its proposals are overwhelmingly desirable. I very much enjoyed the enthusiastic speech of my hon. Friend the Member for Havant (Mr. Lloyd), and I agree with what he said about the importance of information technology in all regards. The development of computer systems and the applications from those systems will make enormous strides during the next 10 or 15 years. One is scarcely talking about an evolutionary process; it is more of a revolution in this sphere. The impact of computer systems will be overwhelming.
  As has been said, there is no doubt that within Europe we have gradually been sliding back compared with many of our significant competitors. I, like the hon. Member for Motherwell, South (Dr. Bray), spent a period at the Cambridge mathematical laboratory. I confess that my
  1138
  development in terms of mathematics and logic seems slightly different from his. Many of the developments going on at the time I was there could be regarded as in the van of developments in computers, but some of the developments that are now taking place, which one would like to see taking place in this country, are following far too late behind those in the United States and, in some instances, in Japan.
  My worries follow some of those that have already been mentioned. A number of hon. Members have said that we must ensure that moneys made available under the ESPRIT programme are made available in a way that speeds up the development of new technology. It would be too easy to have long discussions about certain projects that should be supported. I was involved in my previous experience in ICL in precisely such discussions on a variety of Department of Industry programmes. Although money was made available in many instances, the discussions that preceded that often took several months, and in this sphere one cannot afford that time.
  The other point that I want to raise—it contradicts some of the arguments that were put by the Opposition—is about the quantity of money. In my opinion, the ESPRIT programme should act as a catalyst—not as a major funding activity, not as an expectation that this is the full source of funds for new developments in information technology. It will act as a stimulus, and just a stimulus. Certainly, much larger sums should be spent on development. I have been conscious, as has been touched on by others, of the fact that some of the major developments in recent years—the development of some of the chips that are now in widespread use in home computers, and so on—have been by bodies such as Motorola, Intel, and so on. Small innovative groups have often produced chips that have been taken up by other small micromanufacturers rather than by slow, ponderous and big research efforts.
  It is our task to ensure that on the one hand there is the environment and stimulus for small companies rather than the big, fat companies to take the initiative and then to provide opportunity in terms of a market so that those machines and developments have widespread application. One of the tragedies has been that the EEC has not fulfilled our hope of a more effective market for the sale of high technology products. Because the market has been and has continued to be so diffuse, the sales that are the main justification for any development have not followed. That, as much as anything, is the other aspect that must be pursued apart from research and development. Let the Government and the EC provide a catalyst for research and development, but at the same time we must ensure that within the EC we have that big market that ensures that when someone has a good idea it really is marketed on a large scale.
  Let me emphasise once more the importance of this field of high technology. Comments have already been made about constraints imposed by the transfer of technology, and so on, from the United States. In computers that is of the utmost importance and we must ensure that individual companies and Europe as a whole develop their ideas and develop them in the van, not five years behind other people.
  9.51 pm
  Mr. Kenneth Baker: This has been an interesting debate, and I shall try to answer the many points that have

  1139
  been made. I noted particularly the detailed comments of the hon. Member for Motherwell, South (Dr. Bray) about the programme's content. He said that he wanted to demystify the language. By their very nature some of his points were complex and intricate. I shall look carefully at his speech tomorrow in Hansard and I shall certainly draw it to the attention of the director of the Alvey programme and to that of our two representatives on the ESPRIT programme. Some of his points will be of great value to them.
  The hon. Member for Linlithgow (Mr. Dalyell) started the debate some hours ago with a series of questions. I fully respect questions that come from West Lothian. I do not think that I can answer them all, if only because I was not quick enough to take them all down. I hope that the hon. Gentleman will accept that those that I do not answer tonight I shall cull from Hansard tomorrow and write to him about them.
  The hon. Gentleman asked, as did my hon. Friend the Member for Hertfordshire, South-West (Mr. Page), about how the projects under ESPRIT will be selected. They have to be within the framework of the work plan and there is a deadline for the submission of applications to ESPRIT. The applications will then be examined by a panel of experts drawn from the Community. The larger projects will be put before the ESPRIT management committee, which includes representatives of all member states. We have two members on that committee. The committee will decide which projects are to be approved. A firm commitment is written into the rules of procedure that decisions must be taken within one month as a normal practice, and, exceptionally, in two months. I echo what my hon. Friend the Member for Stevenage (Mr. Wood) said. There is a danger in any bureaucracy, particularly in the bureaucracy in Brussels, that matters will get bogged down in elaborate bureaucratic procedure and one does not want that.
  Dr. Bray: If the Minister is not going to reply to any of my points, may I ask whether he has he checked the demand for VSLI electronic engineers in Inmos—never mind the other semiconductor companies that are proposing to invest in this country? Secondly, can he confirm that he has ministerial responsibility for the Business Statistics Office?
  Mr. Baker: I can confirm that the Business Statistics Office is responsible to my Department. I am not the Minister responsible but I am a member of the Department in the House. Of course I accept responsibility to answer for that. On the requirement and demand for the VSLI engineers and electronic engineers generally, I accept that there will be not only a national but an international shortage of electronic engineers and VSLI engineers for the next few years. We are trying to ensure that, in the new blood initiative, which the hon. Gentleman dismissed very scathingly, but in which there is a significant increase in the number of teaching posts, and undergraduate and postgraduate posts in the research projects, there is a concentration of resources.
  In the general context, we are trying to move the balance of the educational budget for the whole country, over a period of years, more from the humanities to the sciences.
  I was pressed by several hon. Members about the importance of small companies in the ESPRIT
  1140
  programme. My hon. Friend the Member for Hertfordshire, South-West and the hon. Member for Yeovil (Mr. Ashdown) emphasised how important it is to involve small companies. I recognise that, because many of the most innovative companies in the area of high technology, and in biotechnology, are very small companies. This involves the talents of one, two or three people. We want to tap those talents, to encourage them and to allow them to benefit from the ESPRIT programme. I will ensure that the points made by hon. Members about small companies are borne in mind strongly by our representatives on the ESPRIT committee. I think it can be accepted that, in the pilot projects, small companies have been involved. One such small company, Knowledge-Based Systems, a spin-off from the Polytechnic of the South Bank, is involved in one of the ESPRIT programmes. I should like to see many more such companies.
  On the question of the time scale of ESPRIT, as I have stated, 38 pilot projects have already started. The work planned for 1984 has now been adopted and published. Applications for 1984 have to be submitted by 7 May. These will be evaluated by the experts, and contracts will be awarded from August onwards. The time scale is fast, and I am as anxious as the hon. Member for Linlithgow, and my hon. Friends the Members for Stevenage and for Kingswood (Mr. Hayward), to ensure that the time scale does not slip. I will heed, and follow, their advice.
  Mr. Hayward: Are the universities, which may be involved in these projects, satisfied that August is early enough for them to prepare for the ensuing academic year?
  Mr. Baker: Six universities are already involved in the pilot projects. The work plan has been published. Ai the universities will regard this as a source of additional funding for some of their research, I am quite sure that the applications will be rapid.
  My hon. Friend the Member for Hertfordshire, South-West asked about tariffs, and referred to the adverse effects of the high import tariff on semiconductors. He will know that this has been raised in the House. I believe that the hon. Member for Yeovil has raised it on previous occasions. One result of the high tariffs is to discourage assembly of equipment and sub-assemblies in the EEC, and we deplore that. We have begun the process of persuading our Community partners of the benefits of the reduction in the tariffs, and we are pressing ahead with that as strongly as we can.
  My hon. Friend the Member for Hertfordshire. South-West and the hon. Member for Linlithgow asked about intellectual property rights—foreground knowledge, I believe, was the phrase used. I can well understand the problems. It is a difficult and complex subject—who owns the patent rights and who owns the licensing rights. The existing arrangements in the pilot projects are that ESPRIT provides for an exchange of patents and copyright between companies engaged in different projects where that is needed for the execution of the project, or for the exploitation of the results.
  The hon. Member for Linlithgow mentioned standards. One of the most useful things that I hope will come out of ESPRIT will be not only industrial collaborador on research and development, but a move towards closer, and agreed, European standards in high technology. This matter was touched upon in the data transmission points

  1141
  that were raised by the hon. Member for Motherwell, South. There is a variety and complexity of standards that hinders the development of the new industries in Europe. The hon. Member for Linlithgow asked what the cost was of moving towards standardisation. I accept that there is a cost in doing that, but there is an equally high cost in not moving towards standardisation. However, it is encouraging that many of the big high-tech companies in Europe are coming together to agree on standards. Without that, IBM will dominate standards not only in America, but in the whole of Europe.
  I have been asked about the secondments. Those involved will come from companies in Europe and will work in the small secretariat in the Commission dealing with information technology.
  I was also asked about overseas companies. Several hon. Members will know that we have become a magnet for major investment by overseas companies. That is good news for us all and is welcomed by hon. Members on both sides of the House. I agree with the hon. Member for Linlithgow that we do not want those companies just to be sales offices, but, on the other hand, I do not discourage sales offices or screwdriver assembly plants from starting up, because that is the beginning. Hewlett-Packard started as a screwdriver assembly plant near South Queensferry. It has led to another huge factory in Bristol and now to the first research and development facility for that great company outside America. I think that that is a cycle of virtue.
  Over the years my hon. Friend the Member for Havant (Mr. Lloyd) has been one of the great proponents of support for information technology and the new technologies. Just when I have persuaded my ministerial colleagues to spend more money on research and development, he gets up and says that it is not enough. He wants more and more. I try to satisfy his demands. We have increased expenditure on research and development in my Department from £100 million per year to £369 million this year. That is one of the largest increases in any Government area of expenditure.
  Mr. Dalyell: Bill Hewlett, a member of the Presidential Science Advisory Council, and Dave Packard, who became the Under-Secretary for Defence, would find it strange for Hewlett-Packard to be described as a screwdriver company. That company came to South Queensferry as a very formidable Californian organisation. However, the question is whether they and others have been consulted about ESPRIT. What do the large multinational companies think about it?
  Mr. Baker: The role of the multinational companies in both ESPRIT and Alvey is complex, because it depends on the extent to which they have an involvement in our country. The main thrust of both programmes is to develop our own research and development capabilities. I do not seek to be disparaging in talking in terms of screwdriver assembly, but that company started in a very modest way.
  1142
  However, it has made a major series of investments which we welcome—[Interruption.] However, in response to the hon. Gentleman, I should point out that Alvey has been asked. Some of the companies have been approached and others have approached us. Discussions are continuing. As far as I know, none of the American and Japanese multinational companies has applied to ESPRIT, so that question has not arisen.
  I turn to the funds that are available. We are talking about a £900 million programme, half of which is to be provided by the Community and half of which will be provided by industry. There is also the Alvey programme, which stands at £350 million. In addition, on Monday my right hon. Friend the Secretary of State for Trade and Industry announced £120 million for microchip development. Thus, we are committing substantial funds.
  In response to my hon. Friends the Members for Kingswood and for Stevenage, I should point out that the money is catalytic. One cannot expect national and international Government funds to bear the whole burden of research and development. The main thrust of research and development must come from the profitability of companies. Indeed, half of research and development in the United Kingdom comes from that source. Thus, the money is catalytic. In response to my hon. Friend the Member for Kingswood, I should say that I do not exclude international co-operation, such as ICL with Fujitsu of Japan. Yesterday I spoke to the Swedish Minister about possible research and development in medicine. ESPRIT does not exclude that.
  The debate has shown that there is widespread support. So far as I can see, there is no contention in the House about the need for industrial collaboration in the European context. The challenge from Japan and from America is vivid, real and growing all the time. If we do not develop these industries within a European framework or within our own countries, the trade deficit in these products will grow substantially over the next 10 years.
  I should like to express my gratitude to the House for the full expression of its views. I welcome the chance that we have had to debate this important issue. I again express regret that the debate could not take place earlier. I am aware of and strongly sympathetic to the requirements of the resolution of the House of 30 October 1980. Although I reported to the House in a written answer to my hon. Friend the Member for Thanet, North (Mr. Gale) on 29 February, I recognise that this did not fully discharge my obligations to the House. I hope that I have been able to do so in my opening remarks tonight. I commend the motion to the House.
  Question put and agreed to.
  Resolved,
  That this House takes note of European Community Document No. 7619/83 concerning the proposed European Strategic Programme for Research and Development in Information Technology (ESPRIT); and supports the Government's endorsement of the programme at the Research Council on 28th February as helping to strengthen the technological competitiveness of the Community's information technology industry.

  House of Commons (Services)
  10.5 pm
  The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,
  That paragraph (12) of Standing Order No. 103 (Select Committee on House of Commons (Services)) shall have effect for the remainder of the present Session as if the words ", Canada and the United States of America" were inserted at the end of line 54.
  Before the House now is the avowed intention of the Computer Sub-Committee of the House of Commons Services Committee, and I hope not to delay the House on the matter. None the less, when a similar motion came before the House before Christmas some right hon. and hon. Members expressed certain misgivings. It is therefore appropriate for me, as Leader of the House and Chairman of the Services Committee, to outline briefly the reasons for the appearance of the motion on the Order Paper.
  The Computer Sub-Committee of the House of Commons Services Committee is currently undertaking a study into information technology and how that technology might benefit Members of the House. In the course of that study, the members of the Sub-Committee have concluded that their investigations should take account of the experience of foreign legislatures in this field. They believe that a good deal is to be learnt from the United States Congress and the Canadian Federal Parliament. They therefore wish to visit those assemblies.
  The Services Committee has given its approval to this plan. The present position in regard to the Sub-Committee's ability to travel is, however, that it has the authority of the House to travel only within the United Kingdom. If, therefore, it is to seek approval for the proposed visits, Standing Order No. 103 requires amendment. The effect of the motion is to make the necessary amendment only for the remainder of the current session.
  As the House is aware, Select Committees have for many years had authority to travel abroad, and they do so fairly frequently. The Liaison Committee has on behalf of the House of Commons Commission the task of examining applications for overseas travel from Select Committees and gives or withholds approval as it sees fit. There is nothing in the motion to disturb this arrangement, nor in my view would it be right to do so. The Sub-Committee's proposed visit would be subject to that scrutiny by the Liaison Committee in the normal way.
  I do not propose myself to explain in detail the arrangements for and cost of the proposed visit. The chairman of the Computer Sub-Committee, the hon. Member for Blaydon (Mr. McWilliam), is present and will, I know, be glad to address any questions of that sort that may be raised. More important, the motion before us does not seek the approval of the House for this or any other visit but merely for the amendment to Standing Orders which is necessary before any such visit can be proposed.
  If the motion is passed, the Computer Sub-Committee will then seek the authority of the Liaison Committee for the proposed overseas travel, and the Liaison Committee will examine the request in the same way as it now considers other Select Committee requests. On that basis the Services Committee has recommended that the amendment be made, and in that spirit I commend the motion to the House.
  10.9 pm
  Mr. J. Enoch Powell: The House was very much in the debt of the Lord Privy Seal on almost Christmas Eve when he withdrew a closely similar proposal on 22 December.
  In accordance with the Greek proverb, "Second thoughts have been wiser, though not very much wiser", it was feared that what the House might have passed on the nod with the spirit of Christmas would have extended the facility to the whole of the world outside the United Kingdom.
  The proposal before the House this evening is more modest. It restricts the Sub-Committee's potential licence for foreign travel, subject of course to the overriding control of the Liaison Committee, to North America—to the United States and Canada. We are able to address ourselves more specifically to the hypothetical utility of the Computer Sub-Committee of the Services Committee adjourning from time to time and from place to place, not only in the United Kingdom, but in the United States and Canada.
  Before the Lord Privy Seal set us free for our Christmas holidays on the previous occasion, the hon. Member for Blaydon (Mr. McWilliam), the Chairman of the Sub-Committee offered—I was almost tempted to say "was injudicious enough to offer"—some reasons to the House in defence of the proposal. These can now he considered more closely as we have had warning that we are concerned with American and Canadian trips.
  Before the hon. Gentleman speaks tonight, one can refer to the observations and reasons that he gave on 22 December. First, he said as regards the United States:
  "experience in the United States has shown that the cost to the United States Government of the information technology provision for members of its legislative assembly is greater than the entire cost of providing for the Palace of Westminster, all its staff and all its Members."
  That is something that most of us would have assumed without any detailed knowledge of the circumstances. We would have assumed that the provision of computer technology for the Amercian Congress would be vastly expensive. It excited the curiousity, not unnaturally, of this very active and diligent Sub-Committee of the Services Committee and it wants to go to the United States. Its members want to examine the example of the United States to discover what the Americans did wrong.
  It is not in search of information that might be of use to the House that this Dickensian expedition to the United States is to be authorised. It is to find out why the benighted Americans are so benighted, even though we know in advance why. It stands to reason that if one provides computer services to the Members of that—I must be very careful and remember that I am referring to the democratic institutions of a friendly, if not an allied, state. I do not use the word "bloated" which occurred to me but leave reference to the United States Congress without any adjectival qualification.
  For my part, I should have thought that any reassurance as to the mistakes that the Americans have made and the cautionary benefit of their experience could have been adequately verified in writing without going to the United States and subjecting the Americans to the humiliation of an interrogation by a Committee of the House on why they went wrong.
  I can even imagine that the clerk to the Sub-Committee might write to them and inquire whether they had any ideas

  1145
  about why they had gone wrong. Any attendant information would be printed as an appendix to the eventual report and could contribute to the entertainment of the House. In short, is there really any reason for a trip across the Atlantic to satisfy our curiosity in regard to the United States' experience? I would answer that in the negative.
  There is also a question of going to Ottawa. The hon. Gentleman said
  "we wish to visit Ottawa to study specific measures that have been taken in the provision of information technology in linking building within a 10 km radius".—[Official Report, 22 December 1983, Vol. 51, c. 576–7.]
  We are all conscious of the vast extent of that great dominion and the constitutional inconveniences which are imposed upon it by the ocean of solid land by which various parts of it was separated. Even in the wildest imperial dreams of those who wish to build upon the Palace of Westminster, build new palaces of Westminster or build additional accumulations for Members of the House and their staff, research assistants and other hangers-on, I do not think that it has ever been suggested that such additions might go as far as a 10-km radius—that is, about six miles.
  Are we seriously contemplating a large excrescence six miles from Westminster and the installation of computers to keep ourselves in touch with what is going on here? It is bad enough when hon. Members exile themselves to the excrescences built on to this ancient edifice and thus fall out of touch not only with their colleagues in the House but with what from time to time might be going on in the Chamber.
  I should not have thought that the Canadian experience in coping with the enormous distances with which that country is afflicted would be relevant to any conceivable service or assistance required, or which ought to be acquired, or which anyone otherwise than in a nightmare would imagine could be required, by hon. Members of this House.
  Those are the two grounds which have so far been specified for the indulgence that the proposal seeks from the House. I submit that they are entirely insufficient and that, unless the hon. Member for Blaydon, like the Lord Privy Seal but perhaps much more so, has had wiser thoughts he would be wise to request the indulgence of the Lord Privy Seal—a delightful event—for a second time, to withdraw the proposal.
  10.17 pm
  Mr. Kenneth Warren: I rise to support the motion, having heard the magnificient speech by the right hon. Member for Down, South (Mr. Powell). I thought that I had left him behind some years ago in computer technology, in which I must declare an interest. He rightly says that what is happening in Washington and Ottawa is what we must learn to avoid and perhaps learn from.
  It is not sufficient that we should stay in this place and be ignorant of what others are doing and have done. We can surely rise above the faults of those across the Atlantic and try to understand how we can benefit the House and use the technology available across the world to improve the facilities of the House. I commend to the right hon.
  1146
  Gentleman the sentiment that we should have heart. Perhaps that phrase is unpopular now in the United States, but we in this place can believe in ourselves and learn.
  I served for many years on Council of Europe committees dealing with information technology and associated subjects. I was very much aware that hon. Members should never turn aside from the facilities available to them, which they may or may not choose to use, because that would be useful to hon. Members in their ability to do the task for which they are sent to their place of congregation, their Houses of Parliament. As a member of the Computer Sub-Committee, I commend this opportunity to the House. We should not neglect it, as it is a chance that may pass us by.
  10.18 pm
  Mr. James Tinn: I, too, congratulate the right hon. Member for Down, South (Mr. Powell) on his entertaining speech. I owe him an additional debt as I was one of those who faced the prospect of travelling to Ottawa and Washington in February—a duty that I did not contemplate with eager anticipation. Indeed, my hon. Friend the Member for Blaydon (Mr. McWilliam) will confirm—though not, I hope, repeat—that in my reaction to the idea I used some fairly blunt northern expressions. Nevertheless, for reasons that I shall develop briefly, I was convinced that we should undertake the trip. When it was suggested—not, I am sure, by the right hon. Member for Down, South—that we were seeking some sort of holiday jaunt, I certainly expressed myself in earthier, more Anglo-Saxon terms than are customary in this place.
  There are two common sense reasons why the House should approve the visit. So far, the Sub-Committee has travelled only within London and once to Glasgow to look at equipment installed by comparable, though not entirely comparable, establishments. For instance, we spent an interesting half-day with Strathclyde county council. It may be suggested that we should rest on the experience gained from those visits, but the establishments that we visited were neither Parliaments nor legislatures, and I believe that we should study the experience of other legislators and legislatures.
  The right hon. Member for Down, South fairly suggested that we could obtain the information by correspondence. A good deal can be achieved in that way, but not sufficient. We need to talk not just to the people who design, manufacture and, above all, sell the equipment but to the people in other legislatures, especially in Canada, who use the equipment so as to discover what the snags are. The right hon. Gentleman spoke as though we were merely going to look at the mistakes. Certainly, we want to learn from the mistakes of others, but we also want to learn from their achievements.
  I confess that I now look forward to the visit with a good deal more pleasurable anticipation than if it had taken place earlier, but I urge the House, in all seriousness, to enable a very hard-working Sub-Committee to complete its work by seeking relevant information and experience from at least two legislatures abroad.
  10.22 pm
  Mr. Rob Hayward: Since I have been a Member of Parliament I have attended four debates involving some form of high technology—Second

  1147
  Reading of the Telecommunications Bill, Second Reading of the Data Protection Bill, the debate on high technology on 17 February and the debate that has just ended.
  When the hon. Member for Blaydon (Mr. McWilliam) seeks to justify the proposed visit, I shall be interested to hear which hon. Members expect to take part, as those of us who sat for two and a half hours today and throughout the debate on 17 February are constantly amazed at how few Members have any interest at all in high technology in any form. As my hon. Friend the Member for Hastings and Rye (Mr. Warren) has said, if there is such a wealth of knowledge in the Sub-Committee, its members should have come to the debate earlier today or on 17 February to give us the benefit of their expertise rather than allow us occasionally to fill in time. They could surely have imparted that knowledge and their doubts about the operations here before going to the United States or Canada.
  Mr. Ian Lloyd: My hon. Friend may not realise that I am a member of the Sub-Committee and was present for all the technology debates that he mentioned.
  Mr. Hayward: I am aware that my hon. Friend is a member of the Sub-Committee and has attended the greater part of all four debates. I shall be interested to see how many other members of the Sub-Committee can make that claim. I see the hon. Member for Blaydon gesticulating to the effect that he was present for the debate on the Telecommunications Bill, on which he was an Opposition spokesman. However, I shall also judge on the basis of the Data Protection Bill, the debate on high technology on 17 February and the debate earlier this evening.
  There is another question. Why choose Canada and the United States? If we are to be confronted by technology, surely the aspects of technology and manufacture can equally be considered in a number of other legislatures, both in and around Europe where they make and install their own equipment and have the facilities. As the right hon. Member for Down, South (Mr. Powell) rightly said, legislators in Ottawa have confronted problems that we should not wish to meet ourselves. The legislatures of Europe might be more comparable with ours than are some of those suggested elsewhere.
  10.26 pm
  Mr. Paddy Ashdown: This is the third time this evening that I have sought the indulgence of the House to make a statement, but I could not resist intervening to support the motion, particularly in the light of the speech made by the right hon. Member for Down, South (Mr. Powell), which had about it a certain baroque magnificence which we find all too rarely in the House nowadays. It was sheer pleasure to listen to him. While I share the admiration of all hon. Members of those qualities of his speech, I part company with the right hon. Member when it comes to sharing his enthusiasm for the baroque nature of the building in which we live and of some of the institutions by which it is governed.
  Mr. J. Enoch Powell: It is mock-Gothic.
  Mr. Ashdown: I am happy to accept that it is mock-Gothic. I was trying to make my similies match.
  There is a computer saying that I know to my cost: "garbage in, garbage out". I have discovered that for myself since owning two computers in the House. It is possible to make major mistakes very easily through not having the information to hand and not having the benefit of the experience of others who have been involved in such things.
  Anything that can improve the knowledge of the House before it takes an important step towards what I regard as an essential reform, anything which gives Members information about operations elsewhere, will be of benefit to the Committee and will assist the decision which could have long-term implications for the services that we enjoy, not least those of cost.
  It may be, as the hon. Member for Kingswood (Mr. Hayward) has said, that we should not have confined our visits to America and Canada, but at least it is a first step taken, and to an area that I believe has some experience in this technology. The gaining of a wider kind of experience than has, I think, come before the Committee, well served though it has been, cannot but benefit us and protect us from perhaps making the wrong decisions about what can be a key reform for the House.
  10.27 pm
  Mr. John McWilliam: The hon. Member for Kingswood (Mr. Hayward) touches rather a raw nerve in me since I was present on 17 February and was prepared to speak at not inconsiderable length on new technology but had time only to declare my interest. I do not, therefore, accept any admonition from him that I was absent from any or all of those debates. I admit that I was not present on the occasion of the debate on the Data Protection Bill, but I was here on the other occasions to which he has referred and I either spoke or attempted to do so. I do not, therefore, believe that interest in high technology in the House is quite as narrow as he would suggest.
  As for the right hon. Member for Down, South, he has changed his ground somewhat in his objections to the visit, because on the last occasion he objected to it on the basis that it would somehow be improper for the Computer Subcommittee to take evidence outside this country. I prepared myself with the appropriate section of Erskine May to refute that argument.
  Mr. J. Enoch Powell: The hon. Gentleman followed me on that occasion. Therefore, when I spoke I was not apprised of the inadequate grounds—which they are—that he would advance. I was able to address myself to those tonight.
  Mr. McWilliam: I am grateful to the right hon. Gentleman, but I am sure that he will accept that he argued that it was inappropriate for Select Committees of this House to take evidence outside this country. Equally, I am

  1149
  sure that he will accept that on mature reflection, and on looking at the rules, that is not the case. That is not what we are talking about tonight.
  We are not asking the House to give us permission to travel overseas. We are merely asking for permission—much more limited than any other Select Committee—to make a bid to the Liaison Committee, purely within this Session of Parliament and purely for one visit, to cover the Unite States and Canada. That is much more modest than the request of any other Select Committee.
  The right hon. Member for Down, South also referred to the hypothetical utility of adjourning from place to place and from country to country. That is when he referred to his original objection. This is not hypothetical. The utility is one of learning from other people. I do not think that the font of all wisdom necessarily rests in this place. What is more, we have a duty to seek that wisdom wherever it may lie and try to use it to the benefit of hon. Members.
  The right hon. Gentleman also said that America was expensive, and suggested that it would be a humiliation if we asked the Americans what they did wrong. America is expensive, but I do not think that the Americans would be humiliated if we asked what they did and why. I believe that they would be proud to say, "All right, it is expensive, but that is the price of an informed democracy, and it is a price that we are willing to pay." That is one of the options that we must consider when discussing what information should be available to hon. Members.
  It may be that that is not a price that we are willing to pay—perhaps it is unreasonable—but we cannot say that until we have asked the Americans why they choose to spend that money and are told the reasons why that price was paid. We cannot pre-judge that situation.
  We received written evidence from the Congress and read it. It is one thing to consider the written evidence from officials sitting on Capitol Hill, but it is quite another to speak to the people who must use that system to find out how effective and efficient it is. It may well be that the written submission is biased, given the very nature of the people who wrote it.
  The right hon. Member for Down, South made great play about the vast reaches of Canada, and asked whether the linking of buildings within a 10 km—or, six mile—radius was appropriate. We also have buildings within a radius, and we shall always have parliamentary buildings within a radius. The Canadian Parliament has set up a local area network within its parliamentary buildings and has linked them to enable Members of the Canadian Parliament to have the benefit of access to the maximum amount of information available via that network.
  It has done something else even more important. It has built in fibre-optic cables alongside the coaxial cables used for the network. There is nothing to tell us why that was done, but we can assume that it was because the Canadians had a very good idea what the future of information technology would be, how much access to such technology Members would want, and what kind of
  1150
  hardware would be required to provide that access. That is an area that we should probe, and we cannot do so in this country. We shall need to see the people who took that decision and find out why they took it.
  I am grateful to the hon. Member for Hastings and Rye (Mr. Warren), who set out our case most succinctly. I can also reveal to the House that my hon. Friend the Member for Redcar (Mr. Tinn) gave a somewhat understated account of what he said to me when our original intention of going to Canada and the United States in February became known. We did not wish to go to the United States in February because we expected to find conditions there particularly comfortable. We wished to go because we wanted to finish the report for which we had taken so much evidence and on which my Committee colleagues had worked so hard. We wanted to make the report as complete as possible. In order to complete the report, we need the additional evidence which we wish to approach the Liaison Committee for permission to collect.
  The report should not be left incomplete. It is unlikely that another such report, involving so many sessions of taking evidence, will be produced in the foreseeable future. The amount of work involved is too great for that to be countenanced.
  The decision as to whether we go to Canada and the United States rests with the Liaison Committee. If the House agrees, the Liaison Committee will consider our application in the same way as it considers applications from other Committees. If we cannot make our application stand up, we will be knocked back just as any other Select Committee would be. The House does not have to decide whether we should go. It has to decide only whether we should be allowed to approach the Liaison Committee for permission to go.
  Question put:—
  The House divided: Ayes 77, Noes 13.

  Division No. 198]

  [10.38 pm

  AYES

  Alton, David

  Henderson, Barry

  Ashdown, Paddy

  Hind, Kenneth

  Bagier, Gordon A. T.

  Hirst, Michael

  Biffen, Rt Hon John

  Hogg, N. (C'nauld & Kilsyth)

  Boscawen, Hon Robert

  Hunt, David (Wirral)

  Brandon-Bravo, Martin

  Jones, Gwilym (Cardiff N)

  Bray, Dr Jeremy

  King, Roger (B'ham N'field)

  Bright, Graham

  Lamond, James

  Butcher, John

  Leighton, Ronald

  Butler, Hon Adam

  Litherland, Robert

  Callaghan, Jim (Heyw'd & M)

  Lloyd, Ian (Havant)

  Clark, Sir W. (Croydon S)

  Lloyd, Peter, (Fareham)

  Cocks, Rt Hon M. (Bristol S.)

  Lofthouse, Geoffrey

  Coombs, Simon

  Loyden, Edward

  Cope, John

  McDonald, Dr Oonagh

  Craigen, J. M.

  McWilliam, John

  Dalyell, Tam

  Maxton, John

  Dewar, Donald

  Miller, Dr M. S. (E Kilbride)

  Eastham, Ken

  Neubert, Michael

  Evans, John (St. Helens N)

  Nicholls, Patrick

  Franks, Cecil

  Norris, Steven

  Freeman, Roger

  Page, Richard (Herts SW)

  Gale, Roger

  Parry, Robert

  Garel-Jones, Tristan

  Penhaligon, David

  George, Bruce

  Pike, Peter

  Goodlad, Alastair

  Porter, Barry

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

  Powell, Raymond (Ogmore)

  Hargreaves, Kenneth

  Prescott, John

  Harrison, Rt Hon Walter

  Randall, Stuart

  1151

  Rathbone, Tim

  Thurnham, Peter

  Renton, Tim

  Wakeham, Rt Hon John

  Roe, Mrs Marion

  Waller, Gary

  Rogers, Allan

  Wardell, Gareth (Gower)

  Sainsbury, Hon Timothy

  Warren, Kenneth

  Sayeed, Jonathan

  Wigley, Dafydd

  Shepherd, Colin (Hereford)

  Wolfson, Mark

  Sims, Roger

  Speller, Tony

  Tellers for the Ayes:

  Stradling Thomas, J.

  Mr. James Tinn and Mr. Gerald Bermingham.

  Thompson, Donald (Calder V)

  NOES

  Beggs, Roy

  Molyneaux, Rt Hon James

  Forsyth, Michael (Stirling)

  Nicholson, J.

  Hayward, Robert

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

  Jones, Robert (W Herts)

  Rhodes James, Robert

  Leigh, Edward (Gainsbor'gh)

  Stern, Michael

  Maude, Hon Francis

  Taylor, Rt Hon John David

  1152

  Viggers, Peter

  Mr. William Ross and Mr. Neil Hamilton.

  Tellers for the Noes:

  Question accordingly agreed to.
  Ordered,
  That paragraph (12) of Standing Order No. 103 (Select Committee on House of Commons (Services)) shall have effect for the remainder of the present Session as if the words, "Canada and the United States of America" were inserted at the end of line 54.

  House of Commons (Services)

    INSHORE FISHING (SCOTLAND) BILL [LORDS]
    Order for Second Reading read.
    Ordered,
    That the Bill be referred to the Scottish Grand Committee.—[Mr. Donald Thompson.]

  Agricultural Grants (Northern Ireland)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Donald Thompson.]
  10.49 pm
  Mr. James Nicholson: I wish to draw to the attention of the House the anomaly between Great Britain and Northern Ireland in respect of agricultural grants. The difference exists in two respects—prior notification and field inspection on claims for payment.
  Prior notification requires inspection at claim stage. One reason that was advanced for continuing the present system to my right hon. Friend the Member for Down, South (Mr. Powell) and my hon. Friend the Member for Londonderry, East (Mr. Ross) in recent correspondence was that, in areas of outstanding natural beauty and sites of special scientific interest or in a national park, the proposal must be cleared with the relevant authority. The relevant authority in Northern Ireland is the Department of the Environment.
  The Department of the Environment is responsible for many things in Northern Ireland. It is a large conglomerate of many interests. However, I fail to see why it requires prior notification in agriculture. I shall develop that argument further.
  There is the matter of central Government involvement. The Department uses prior notification to identify problem areas. I find it hard to understand why we have this problem of prior notification. I have been a farmer. As a farmer, when I do a job, I depend on a number of factors. I depend on the contractor and when he can start. I depend also on the weather. When I wanted a grant, I rang the Department of Agriculture to give prior notification of my starting work at 10 o'clock that day. I fail to understand how prior notification will be of any use to the Department of the Environment in identifying scenic areas in Northern Ireland or, indeed, in any other area in Northern Ireland.
  The fact that we do not have proper local government in Northern Ireland should not be used to deny our farmers parity in this matter. That is another reason that has been advanced. The Department of the Environment is responsible for planning, although in fact planning should be the responsibility of the local district council. That should have no bearing on the matter of prior notification.
  Does the Minister feel that farmers in Northern Ireland are so stupid that they cannot identify the areas where they reside and have to inform the Department to take special cognisance of those areas, which may have tourist attractions? After all, farmers have been trusted in this respect down the years, and to the best of my knowledge they have not abused their conservation responsibilities in rural areas. I have yet to see examples where agriculture has ruined the landscape. In many instances the farmers have improved it. It would be difficult to find monstrosities that they have built that have ruined the landscape. They have acted responsibly.
  In many ways the farmers have acted more responsibly than many Government Departments in Northern Ireland. When the Department of the Environment constructed a road outside Armagh to a new housing estate, it pulled down more than 20 large trees which had taken 150 years to grow. Within one day they were lying flat. That is how
  1154
  the Department of the Environment goes about conservation. It believes that it can get away with it and does not worry too much about the rest. That is a bogus point to make about prior notification and it should be given little cognisance. The view that Northern Ireland is different should have no bearing on the case. I ask the Minister to remove that unwarranted anomaly.
  When one fulfils the terms of a grant and applies for payment, the work is subject to technical scrutiny. That is right. If money is paid to anyone in the form of a grant one should ensure that the money has been spent wisely and to good effect for the future. The anomaly arises because in Britain only a percentage of claims are inspected, while in Northern Ireland all claims are inspected. That has been the case for some years.
  In reply to my right hon. Friend the Member for Down, South on 16 December 1983, Lord Mansfield said:
  "Nevertheless, it has been accepted that in the circumstances prevailing in Northern Ireland difficulties could arise if my Department was seen to be applying checks on some farmers and not others. Not only could the Department become involved in the task of refuting allegations of discriminatory treatment, but there would be a real danger that once it was known that inspections did not have to be made in all cases the Department's staff in the field could come under pressure to refrain from inspecting in specific cases."
  The Minister replied in similar terms to a question by my hon. Friend the Member for Londonderry, East more recently.
  In some respects that is a fair point, but I submit that it is also fair for the rest of the United Kingdom. While Northern Ireland has a great many problems, that is not one that arises in the farming community in rural areas. Any farmer that I have ever known who applied for a grant to improve his land, buildings or whatever, knows only too well that he must do that job properly. Will the Minister elaborate on the difference between Northern Ireland and the rest of the United Kingdom? Surely the Department has enough faith in its officials to know that they will act in an impartial manner. There should be no fear that they will bear down more on one section of the community than on another.
  My experience and knowledge of grant officials who inspect the claims submitted by farmers in Northern Ireland is they know the people whom they must watch closely to ensure that the grant is properly used. They know the people who, when a claim is submitted, do not go back until the day on which the grant is passed. They know the people whom it is wise to visit three or four times before completion of the grant. Grant officials in Northern Ireland have a good knowledge and awareness of the claimants with whom they deal. I do not believe that any grant inspector in any area in Northern Ireland will ever be found to bear down more on one section of the community than on another. That is a foolish argument, and one that we in Northern Ireland have great difficulty in accepting.
  If the Department is afraid that farmers will apply for approval of work that is not completed, or if it has evidence of any such practice in the rest of Great Britain since the implementation of the scheme, that would be useful information to consider in future. However, this anomaly in Northern Ireland must be abolished, and the sooner the better.
  I ask the Minister to reflect on the saving that could be made if there were parity between Northern Ireland and the

  1155
  rest of Great Britain. A saving could be made by reducing the number of a staff employed in the Department of Agriculture.
  Another aspect that has given rise to great concern in recent months is the speed of approval of grant claims. One of the greatest problems that hon. Members representing constituencies in Northern Ireland have to deal with is the situation of constituents who telephone to say that, although they applied for their grants six months previously, they have received no money to date. Those constituents may have overdrafts at the Bank, say for a large silo complex or a drainage complex, because it takes months to process the claims. I believe that the present staff could be better deployed in carrying out such work. Spot checks by officials would be far more effective than the present checks, some of which are paper checks only. The official may go to the house, but he may never go to the field to inspect the drainage work. I think that the Department should take that under its wing. If the official visits the house only, that is no proof that the drains were in fact laid, as claimed.
  I do not accept that the Department of the Environment would require an increase in staff to monitor such claims. The Department of Agriculture will identify a grant application that requires planning approval, and the application will then be Passed to the Department of the Environment for its comthents. The only difference would be that the fanner would have to apply to the Department of the Environment after which an official of that Department would inspect the application. Rather than two Departments being involved, the farmer would apply to one Department only, and that would result in better liaison. Any problems would be easily solved by the planning officials making a visit to the applicant with the involvement, if necessary, of a local councillor instead of a Member of Parliament becoming involved. For example, a man might be seeking to widen his access to a road so that he can get bigger lorries or farm machinery in and out of the farm.
  In considering the savings, I refer the Minister to an answer that he gave to me on 17 February. In 1980, when we had the change from the prior approval system under the farm capital grant scheme to the prior notification system under the agriculture and horticulture grant scheme, it resulted in less time being spent on initial field inspections and in a consequent reduction of 27 in the number of technical staff and of 35 in the number of clerical staff in Northern Ireland. No doubt there was a lot of redeployment, but there was also a big staff saving when that reorganisation took place. If we went on to reorganise again, there could well be a further saving.
  The financial saving as a result of that change was £700,000 per annum. That saving could be much greater still if we did away with prior notification and inspection, and cut the number of staff to a minimum by redeploying them elsewhere. We could also give a much better service to the agricultural community and to the farmers that it represents. Therefore, I ask the Minister to consider my remarks about the anomaly, to get the Department in Northern Ireland to do away with it, and not to ask farmers in Northern Ireland to suffer something that farmers in the rest of the United Kingdom farmers do not have to suffer.
  11.6 pm
  The Minister of State, Northern Ireland Office (Mr. Adam Butler): I am glad to see that the hon. Member for
  1156
  Newry and Armagh (Mr. Nicholson) has brought this problem before the House. It is also good to see some of his right hon. and hon. Friends supporting him. Often, the House is empty for an Adjournment debate, apart from the hon. Member who has raised it, the Minister and the Whip.
  The hon. Gentleman has addressed himself to two main questions: prior notification and field inspection. He queried the justification for both of them. He also referred to the speed, or lack of it, in dealing with grant claims. He gave part of the answer that I would have given about the recent history of prior notification. It may be worth reminding the House that this feature of the agriculture and horticulture grant scheme came into effect in October 1980, as a result of a study carried out in consultation with Sir Derek Rayner of the administration of agricultural capital grant schemes. In consequence, savings were achieved. The hon. Gentleman drew attention to those, and indeed, one should be grateful that the costs of Government were so significantly reduced.
  The hon. Gentleman also mentioned the sum of nearly £750,000 and the total of 62 technical and clerical staff saved. He should accept that that was a very thorough review, and that if it had been deemed sensible to go further at that time, the team operating under Sir Derek Rayner would no doubt have so advised. Yet he questions whether prior notification is required and he looks for total parity of treatment with Great Britain.
  The fact is that the circumstances are different in Northern Ireland. The prior notification scheme operates in Great Britain in respect of special areas, to which he referred, such as areas of outstanding natural beauty, and in these areas a farmer must clear his proposal with the relevant statutory authority before starting work. Northern Ireland is different only in the sense that notification needs to be dealt with at central Government level because, as the hon. Member pointed out, these matters are dealt with centrally and not by district councils. I share his hope that at some time in the future it may be possible for that responsibility to be devolved to local councils, but it is not the case at the moment.
  The reason prior notification operates is to allow the farmer to meet his obligations in regard not only to conservation but also to planning matters. It is not a particularly cumbersome procedure. I have considered carefully the forms involved and it is relatively simple.
  The hon. Member suggested that the Department of the Environment might be the better authority to be informed on these matters. That is a point that clearly has validity, but that would mean that the farmer would be dealing with two Departments, and we have judged it preferable for notification to be made to the Department of Agriculture, with which he has most contact as a farmer. It is then up to the Department of Agriculture to liaise as appropriate with the Department of the Environment. I do not believe that to involve the Department of the Environment directly would accelerate matters. It might well lead to confusion.
  The hon. Member went on to ask why 100 per cent. field inspections were necessary. He referred only to the justification which my noble Friend had made. I do not doubt that in explaining the situation my noble Friend would have gone much wider than the possibility of allegations of discrimination. There are local circumstances of this nature which apply in Northern Ireland, but I do not believe that they should be mentioned entirely in isolation. Even in other circumstances, one fanner might

  1157
  begin to question why he had been subject to a field inspection when his neighbour had not. Certainly it is much more convenient if 100 per cent. field inspections are carried out on that ground alone—namely, the avoidance of allegations by one neighbour against another of discrimination.
  Surely there is the much more important point as to whether or not there has been any abuse of the scheme. One has only to think of a subject which was very close to our hearts a few years ago. If I remember correctly, a certain depth of hard core and a certain depth of concrete were required in concrete roads. I understand that in several instances the specifications were not fully met. I do not believe that in those circumstances the hon. Gentleman would have wanted anything but a proper inspection in all cases so that public money was not abused.
  There may be other circumstances in which field inspections are not absolutely necessary, but I suspect that for the time being at least it will be wise for us to continue in that way.
  Mr. Nicholson: The only argument I have with the Minister is that he seems to imply that in Northern Ireland only 3 in. of hard core might be put in, when in Great Britain 6 in. would be used, and that therefore inspection was not required in Great Britain. I do not necessarily disagree with the Minister. Perhaps a 100 per cent. inspection is the one sure way, but even with that, officials will not be 100 per cent. sure.
  Mr. Butler: Yes, but alternatively it is possible to argue that it would be preferable to follow the practice in Great Britain. We have to look at this. If we can be satisfied that anything other than a 100 per cent. inspection will ensure that public money is not misused, we would be justified in moving in that direction because a cost saving could be achieved. I should want to be satisfied about that before proceeding down that road. That is something that we have in mind to see whether we can make any change in the procedures.
  The hon. Gentleman questioned whether it might be possible to transfer staff involved in such activity to deal
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  with the grant claims. As 100 per cent. inspection is required, and will continue to be required unless and until changes are made, there is no question of changing staff to deal with grant applications. However, I am conscious of the problems caused by the delays in paying grant which have been mentioned in the Chamber—for example, by the right hon. Member for Down, South (Mr. Powell), on at least two occasions. Farmers have expressed concern. I appreciate that cash flow problems must have caused considerable inconvenience.
  There was an upsurge in applications, largely because various items were being deleted from the list of work eligible for grant under the grasslands scheme and because grant would be no longer available under the agricultural development programme for the initial application of lime and fertiliser.
  I have examined the situation carefully. In the period 1 April to 30 September, about 22 per cent. more applications were made for grant. That by itself does not seem significant, but when one breaks down the figures one finds that in August and September the application rate was nearly 60 per cent. higher. That, meeting the seasonal peak for other applications in respect of hill livestock compensatory amounts, calf premiums and sheep scheme payments, put a considerable strain on the Department.
  Extra staff were taken on, but they had to be trained. In the training period output fell. Overtime was worked in 1982, so the introduction of overtime in the autumn and winter of 1983 did not make for a relative improvement on the previous year. The decision to take on extra staff was justified.
  The delay was about 25 or 26 weeks, but it is now down to 18 to 20 weeks. Given no unforeseen circumstances, we expect to be back to normal by the end of May. That will be a consolation to the hon. Gentleman's constituents.
  I think that I have answered the hon. Gentleman's questions satisfactorily. They are important. We shall examine further the 100 per cent. inspections and if we make any changes we shall announce them in the appropriate way.
  Question put and agreed to.
  Adjourned accordingly at nineteen minutes past Eleven o' clock.