Commons Sitting of 23 January 1985

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. Marlowasked the Secretary of State for Foreign and Commonwealth Affairs if he will make representations to the Government of Israel that the Falashas should not be settled in a manner which would disrupt the progress towards Palestinian self-determination.
    The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): The settlement of the Falashas in Israel is a matter for the Israeli Government. Our firm commitment to the Palestinians' right to self-determination is well-known.
    Mr. Marlow: As those of us who have seen at first hand the inhumane way in which the Palestinians under Israel control are treated will not believe that the Falashas have been hijacked from their natural environment for humanitarian reasons, will my right hon. Friend reassure the House that Her Majesty's Government neither knew of nor assisted in the so-called Operation Moses? Will he make most firmly the point with the Israeli Government that we would not expect the Falashas to be used as front-line troops in the conflict on the West Bank?
    Mr. Luce rose—
    Mr. Speaker: Order. Before the Minister replies, I make a special appeal for shorter supplementary questions.
    Mr. Luce: The Government welcome any efforts that are made to alleviate the sort of suffering that we have been seeing in Ethiopia in the past few weeks and months. We deeply deplore settlements in the occupied territories and regard them as illegal. We are disturbed by the settlements because we think that they are an obstacle to peace. However, that is a separate issue.
    Mr. Janner: Having regard to the amazing and unique nature of this mercy operation, which I for one had the honour of seeing, would it not be right just once for the House as one to salute a tremendous enterprise of compassion that has been carried out by a nation with great difficulties?
    Mr. Luce: As I have already said to the hon. and learned Gentleman, the Government welcome any measures that are taken to alleviate grave suffering in Ethiopia. I am glad that the British Government have played a prominent role to that end.
    Mr. Steen: I think that the views of my hon. Friend the Member for Northampton, North (Mr. Marlow) are well known. However, will my right hon. Friend tell the House what steps the Government will take, either officially or unofficially to help save lives in Ethiopia, and especially to save the lives of Falashas and help to re-establish their link with Israel, which has offered them a home and a future?
    Mr. Luce: The bringing of the Falashas to Israel is a question for the Israeli Government, and the events in Ethiopia form a separate question. I must reinforce the view that the British Government are taking a prominent lead with the provision both of RAF aircraft and of supplies of food and care.
    Mr. Faulds: Is the Minister right in saying that this is a matter of concern only for the Israeli Government? Surely there should have been some reference to the Ethiopian Government in this matter? Is it acceptable that even Israel, which seems to think that it can behave in this exclusive and selective fashion, can mount an operation in another country which leads to a mass exodus during which many thousands of people die? It has been an incomplete exercise, which has partly failed. It was mounted in the interests of one community, to the disregard of millions of others who are starving in the same circumstances.
    Mr. Luce: That is specifically a question for the Israeli Government. People have a right freely to move across borders, and that is the Government's view. What matters in all this is that suffering in Ethiopia should be alleviated.
    Mr. Latham: Is it not deplorable that my hon. Friend the Member for Northampton, North (Mr. Marlow) and the hon. Member for Warley, East (Mr. Faulds) have criticised Operation Moses without having made any reference to the thousands of black Jews who were starving to death and who are now safely housed in Israel?
    Mr. Luce: I have noted my hon. Friend's views.

    Namibia
    Mr. Willie W. Hamiltonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his recent visit to central Africa, with particular reference to the future of Namibia.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): I visited Zimbabwe, Zambia and Kenya between 5 and 12 January. In each country I had discussions with the Head of State or Government, the Foreign Minister and other Ministers. Our talks covered a wide range of international, regional and bilateral issues. In all three countries, I found deep concern over Namibia. We discussed how best to achieve our common goal of ensuring early implementation of Security Council resolution 435. During my visit I was able to see something of the contributions which British industry, our aid programme and the British Council are making to the development of the three countries' economies.
    Mr. Hamilton: I thank the right hon. and learned Gentleman for that reply. Does he, with the whole of the free democratic world, deplore the continuous procastrination by the South African Government in denying Namibia the right to freedom? What steps is the right hon. and

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    learned Gentleman taking with our allies in the United States to ensure that much speedier progress is made towards that end and to ensure that increased pressure is brought to bear on the South African Government to attain that end?
    Sir Geoffrey Howe: Namibia was a major topic of discussion in all those countries. Everyone agreed on the importance of early independence for Namibia on the basis of Security Council resolution 435. The main hope of achieving a settlement leading to that result lies in the current United States-led negotiations, which we support. I have urged other Governments in the region to support those negotiations. We shall continue to do everything that we can with our allies to encourage those negotiations to reach a conclusion and to move towards the implementation of Security Council resolution 435.
    Mr. Jim Spicer: Does my right hon. and learned Friend agree that, although it is fashionable to put Namibia at the top of the list, the problems posed by the complete disintegration of Mozambique must rate highly with the problems involving the Republic of Zimbabwe, because without—
    Mr. Speaker: Order. The question is about Namibia.
    Mr. Anderson: Security Council resolution 435 was passed long ago, in September 1978. Does the Foreign Secretary now understand the frustration and impatience of other African countries at the long delays? Is the right hon. and learned Gentleman content with the fact that the Contact Group appears to be dormant and to rely entirely on the United States Crocker initiative, which may be construed as bypassing resolution 435? Will the right hon. and learned Gentleman state that there is no linkage between the Angolan-Cuban proposals and independence for Namibia?
    Sir Geoffrey Howe: I certainly need no reminding of the widely felt impression about the long time taken in implementing Security Council resolution 435. That resolution is endorsed internationally and universally as the basis of Namibian independence, and it needs to be fulfilled as soon as possible. We are in close touch with the other Foreign Ministers concerned with the Contact Group. I recently discussed this question with the Foreign Ministers of France, Germany and Canada. We are ready to do anything in this or any other context that will help to promote a settlement. One must recognise that the best possible prospect for settlement lies in the negotiations now led by the United States.
    Linkage was no part of the Security Council's resolution. We do not recognise it as a precondition for settlement, but the fact that a linkage has been made cannot be ignored if a settlement is to be reached. We welcome the fact that Angola has put forward proposals for Cuban withdrawal. We shall continue to press the negotiations forward in that framework as hard as we can.

    Arms Control
    Mr. Corbettasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on arms control talks.
    Mr. Chapmanasked the Secretary of State for Foreign and Commonwealth Affairs if he will report progress at the various disarmament conferences taking place.
    Sir Geoffrey Howe: As my right hon. Friend the Prime Minister told the House on 9 January, we warmly welcome the agreement to resume US-Soviet negotiations. We fully share the objective of working out effective agreements aimed at preventing an arms race in space and terminating it on earth, and limiting and reducing nuclear arms and strengthening strategic stability.
    At the Geneva conference on disarmament, our priority is to achieve a complete chemical weapons ban. We also hope for serious negotiation to begin at the Stockholm conference. On MBFR, the East continues to reject the West's latest initiative on force data.
    Mr. Corbett: As we approach the 40th anniversary pf VE day, will the Foreign Secretary acknowledge the heroic role played by the people of the Soviet Union and the Red Army in the allied defeat of Hitler and Fascism? Will he bear that in mind in the arms control talks and take seriously the new Russian determination to try to secure nuclear and general disarmament?
    Sir Geoffrey Howe: I certainly subscribe to the hon. Gentleman's first point. One of the matters very much in my mind during my visit to Moscow last summer was that the Soviet Union suffered massive casualties in the second world war and, with the rest of the alliance, played a notable part in securing victory.
    With regard to the negotiations, the fact that both sides agreed at Geneva to begin the negotiating process now in train is confirmation of the genuineness of both sides in that search. We have certainly done everything that we can to convince them of the necessity of sustaining it and we shall go on doing so.
    Mr. Chapman: Should not the United States research programme into space weapons be commended, if only because it raises the prospect, however remote, of an antidote to nuclear weapons being found? Does my right hon. and learned Friend agree that in any case that research programme has been principally responsible for bringing the Russians back to the negotiating table on the question of long and medium-range nuclear weapons?
    Sir Geoffrey Howe: The United States research programme is to be considered alongside the research into precisely the same kind of technology already undertaken by the Soviet Union. In so far as that research contributes to a strengthening of defence as part of the balance of armament, no doubt it is to be welcomed. The existence of that programme was no doubt one of the factors which the Soviet Union had in mind in agreeing to the resumption of the talks.
    Mr. Winnick: Does the right hon. and learned Gentleman agree that it would help to create the right atmosphere for the arms control talks if representatives of the Soviet Union and the United States were invited at the appropriate time this year to celebrate the 40th anniversary of victory over Fascism? Does he appreciate how concerned we were at the original answer given by one of his junior Ministers that VE day would not be celebrated? Will he try to exercise greater control over his Department in the future?
    Sir Geoffrey Howe: The Government's position on that is quite clear. Together with, I think, all the other Governments concerned, we recognise the case for commemorating the fact of 40 years' peace in Europe and

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    doing so in a fashion that takes account of the interest in the future of peace and conciliation in Europe, not only of our allies in that conflict, but of all who participated in it.
    Mr. Walden: Is my hon. and learned Friend aware that on 13 January Mr. Gromyko said in a television interview that he did not at all insist that Britain and France should eliminate their nuclear weapons? Will my right hon. and learned Friend find a tactful way of explaining to the Opposition the implications for unilateralism of that statement?
    Sir Geoffrey Howe: I entirely agree about the importance of that point. Mr. Gromyko's observation was in line with that made by Mr. Andropov, and recently quoted by a Soviet spokesman, that the concept of unilateral disarmament could not be contemplated by the Soviet Union because
    "we are not naive people."
    Mr. Healey: As the Foreign Secretary is now aligning himself more and more closely with Mr. Gromyko, and bearing in mind that the refusal of the British and French Governments to allow their missiles to be counted in the INF talks was one important reason for the failure of those talks, does the right hon. and learned Gentleman agree that in the statement to which the hon. Member for Buckingham (Mr. Walden) referred Mr. Gromyko insisted that British missiles should be counted in the forthcoming talks on strategic weapons, especially as the British Government regard them as strategic weapons and they are committed by treaty to NATO, and that if the British Government completed the Trident programme they would be capable of destroying 10 times more Soviet targets than would the present Polaris force?
    Sir Geoffrey Howe: The right hon. Gentleman will not be surprised to hear that I do not agree with that proposition. Our view on the position of the British nuclear force in arms negotiations is as stated by me in my speech to the United Nations two years ago, and is very closely in line with the statement made to the same assembly by President Mitterrand. If Soviet strategic arsenals and those of the United States were substantially reduced, and if there were no significant changes in Soviet defensive capabilities, Britain would review its position and consider how best to contribute to arms control in the light of the reduced threat.

    Ethiopia
    Mr. Jannerasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of relations between the United Kingdom and Ethiopia.
    The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): We have normal diplomatic relations with Ethiopia. In recent months, ministerial visits have enabled our two countries to discuss our relations more deeply. We continue to provide those in need in Ethiopia with very considerable amounts of emergency food aid.
    Mr. Janner: Will the aid that we are able to give to Ethiopia now be increased in order to meet the danger of the reported outbreak of cholera in that country? Secondly, is this nation, or any nation other than Israel, making any effort to settle or re-settle anyone who is suffering in, or is a refugee from, that sad land?
    Mr. Rifkind: The United Kingdom has given about £30 million of aid over the past two years. That is a major contribution towards dealing with the real problems of Ethiopia.
    On the second part of the hon. and learned Gentleman's question, it would be reasonable to assume from our existing knowledge that most of the Ethiopian refugees in the Sudan will ultimately wish to return to Ethiopia when circumstances permit.
    Mr. Bowen Wells: Will my hon. Friend tell the House why he has declined to support the World Bank's special fund for Africa, which is designed to prevent a recurrence of the famine and starvation in Ethiopia and other sub-Saharan countries?
    Mr. Rifkind: We have great sympathy with the initiative proposed by the World Bank, but any specific contribution that the United Kingdom made to it would be at the expense of other existing bilateral and international commitments. We must bear that in mind. I hope that the World Bank's initiative will continue to make progress as an important contribution to the problems.
    Dr. Owen: Is the Minister aware that the cholera epidemic in Ethiopia is extremely serious and will almost certainly spill over into the Sudan? There is a great shortage of medical personnel and nursing staff—
    Mr. Yeo: Why does not the right hon. Gentleman go?
    Dr. Owen: I would consider myself dangerous. I would not offer my services, even in that limited role.
    Will the Minister consider discussing with Health Ministers and with his right hon. Friend the Minister for Overseas Development whether it would be possible to mobilise medical and nursing teams from the United Kingdom to be sent to the Sudan and Ethiopia?
    Mr. Rifkind: I acknowledge the force of the right hon. Gentleman's point. There is no doubt of the seriousness of the difficulty. The United Kingdom has committed some £14 million to Ethiopia, and my right hon. Friend the Minister for Overseas Development will give careful thought to the best way in which that money can be used to make a contribution, both bilaterally and in co-operation with other interested parties.
    Mr. Baldry: The whole House warmly welcomes the extension of the United Kingdom's Hercules airlift to Ethiopia. However, is my hon. Friend aware that that airlift will be as nothing without long-term, preferably bilateral, aid to back it up and to assist in the development of agriculture in Africa so that the problem of hunger can be tackled?
    Mr. Rifkind: I appreciate my hon. Friend's point, but the present priority is to deal with the immediate problems of hunger and starvation in Ethiopia. In the case of longterm developmental aid, the needs of Ethiopia, which are certainly significant, must be balanced against the interests of the various other countries in Africa, who also have serious needs, and with which we have close bilateral relations.
    Mr. Tom Clarke: In view of the disappointment expressed publicly by the Secretary-General of the United Nations about the fact that warnings of famine in Ethiopia which were uttered well over one year ago appear to have been ignored, should not the British Government, in the light of the close relationship that the Minister has

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    mentioned, be encouraging Ethiopia to take the United Nations more seriously? Should not the Government be setting an example themselves?
    Mr. Rifkind: The United Kingdom did not ignore the warnings. Although we did not have a formal bilateral aid programme with Ethiopia, in the two years before the famine the United Kingdom gave food aid worth more than £15 million. I agree that Ethiopia should take the United Nations as an important international agency, as should all countries.
    Sir John Biggs-Davison: Did my hon. Friend's reply to my hon. Friend the Member for Banbury (Mr. Baldry), in which he mentioned the Royal Air Force contribution, mean that the Hercules aircraft will be kept there for as long as is necessary?
    Mr. Rifkind: My right hon. Friend the Minister for Overseas Development recently announced an extension of the Hercules airlift until March. The matter will then be reviewed to see what will be appropriate.

    Latin America (Debts)
    Mr. Wareingasked the Secretary of State for Foreign and Commonwealth Affairs if he will assess the implications for the United Kingdom's relations with the countries concerned of the current Latin American debt crisis.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton): The Latin American debt crisis has of course led to an intensified dialogue between ourselves and the debtor countries of the area. As my right hon. Friend the Chancellor of the Exchequer told the House on 25 October 1984, the British Government have played a leading role in promoting co-operation between Governments, international institutions and banks to tackle the problem of international debt.
    Mr. Wareing: What will be the Government's response when the rescheduling of the Nicaraguan debt is considered later this year? Will they merely follow their usual role as puppets of President Reagan, or will they be generous and take on board the overriding regional development problems of the area, as our EEC partners are doing? Does the Minister agree that we should be looking for other ways in which to finance development in countries such as Nicaragua, especially through direct investment in the natural resources of such countries, to overcome their long-term problems?
    Mr. Renton: The Government are playing a constructive part in considering and helping to restructure the international debt problems of Latin American countries. We are aware of Nicaragua's economic difficulties. We hope that its Government will agree to follow International Monetary Fund advice on policies to tackle those difficulties. We understand that the World Bank is discussing with the Nicaraguans the resumption of regular payments of outstanding debts to the World Bank.
    Mr. Maxwell-Hyslop: With the return of an elected President to Brazil, will the Government use their best endeavours, with other creditor nations, to ensure that Brazil is not submitted to stresses that are incompatible with a full return to democratic Government throughout that enormous country?
    Mr. Renton: We strongly welcome the election of the first democratically elected President of Brazil for 21 years. My right hon. Friend the Prime Minister has sent a message to Dr. Neves congratulating him. As my hon. Friend said, it is significant that Brazil is making important steps towards tackling her overseas debt problems. It is a matter of great pleasure that my right hon. Friend the Minister for Trade was able to announce in December that, for Brazil, there is now a resumption of medium-term export credit cover from Britain. I shall bear in mind the other points that my hon. Friend has made.
    Mr. Healey: Now that the Government and British banks have contributed to the agreement on Argentine debt, which was reached a few weeks ago, is it now established policy of the Government to lend Argentina money which might be spent on rebuilding the Argentine armed forces with weapons supplied in part by British firms?
    Mr. Renton: I am glad that the right hon. Gentleman expresses support for the action taken by the Paris club recently in agreeing to multilateral settlement of Argentina's debts. We look forward to playing our part in establishing what can be done on bilateral debt arrangements between Argentina and Britain.

    Departmental Costs
    Mr. Thurnhamasked the Secretary of State for Foreign and Commonwealth Affairs if he will give an updated report on action to control the total running costs of his Department.
    Sir Peter Blakerasked the Secretary of State for Foreign and Commonwealth Affairs what further developments there have been regarding the planned level of activity in the forthcoming financial year of the Diplomatic Service, the British Broadcasting Corporation External Services and the British Council respectively.
    Sir Geoffrey Howe: I gave details on 14 November of measures which are being taken or planned to control running costs in the Foreign and Commonwealth Office. I have since announced a list of 10 diplomatic and consular posts which will close or not reopen. The Overseas Development Administration has carried forward its plans to consider putting out to competitive tender a number of in-house services.
    I refer my right hon. and hon. Friends to my statements in the House on 22 November and 18 December 1984. There has been no further change.
    Mr. Thurnham: Will my right hon. and learned Friend say how the recent decline in the pound-dollar value will affect future resources? Yesterday's White Paper showed strict control on future spending in sterling terms.
    Sir Geoffrey Howe: As I made clear in my answer to the Select Committee on Foreign Affairs in October, rises in expenditure resulting from exchange rate movements and differential inflation will be considered as requirements based on changed economic assumptions. In fixing the longer-term programmes of the Department in the public financial survey, account will be taken of changes of economic assumptions, up or down, in setting the base line for future years. Obviously, much will depend on movements in exchange rates and overseas inflation. If there are major adverse movements, they can be reviewed during the next public expenditure survey.
    Sir Peter Blaker: Is my right hon. and learned Friend satisfied that his Department and its various parts can plan satisfactorily on that rather vague statement about the extent to which rises in costs incurred overseas may or may not be taken into account? Surely something much more precise is required. Do we not need a definite statement that his Department will compensate for any overseas risen costs, whether resulting from a fall in sterling or from excessive inflation overseas?
    Sir Geoffrey Howe: I understand the importance of my right hon. Friend's point. The sentence that I quoted from the statement in Cmnd. 9367 states that in fixing the longer-term programmes of the Department account will be taken of changes of economic assumptions, up or down, in setting the base line for future years. I understand the importance that my right hon. Friend attaches to that. It must always be subject to consideration, together with other questions, in the public expenditure survey.
    Mr. Kirkwood: Is the Foreign Secretary aware of the valuable work that the British Council does, especially in relation to Ethiopia? Is he further aware that it has projects in hand at the moment, which are of vital importance to Ethiopia, which use English as a secondary teaching language? Will he assure the House that any projected cuts in his Department will not interfere with that aspect of the British Council's work?
    Sir Geoffrey Howe: I recognise the importance of the work done by the British Council. In the year ahead there is no cut in grant in aid to the British Council. It is being increased by £5·8 million in 1985–86 to meet overseas risen costs, leaving the council to absorb £1·1 million of overseas risen costs. The council is still considering how to absorb that amount. I share the hon. Gentleman's hope that that can be done in ways that do not damage the excellent work done by the British Council.
    Mr. Soames: Does my right hon. and learned Friend accept that some hon. Members believe that cuts of this type in his Department are shortsighted folly in terms of Britain's interests? Will he assure the House that the cuts that are being made have not affected our efficiency and ability to represent Britain's case abroad?
    Sir Geoffrey Howe: I certainly understand and welcome the support given by my hon. Friend for the work done by my Department. It is inevitable that the reductions, which involved the closure of 10 diplomatic and consular posts, represent a reduction in the coverage of the services offered by the Department. A reason for proceeding in that way is to maintain the standard of the work being done by the Department elsewhere.
    Mr. Campbell-Savours: In the light of evidence given to the Committee on Public Accounts, could not savings be made if, instead of paying the school fees of the children of Foreign Office officials in Britain's public schools, the Foreign Office sent those children to comprehensive schools in the state sector, whether voluntary-aided or not, which have boarding facilities? If the Secretary of State is determined to save money, should he not consider this matter objectively? Real savings could be made and boarding facilities could be retained for the use of the children of Foreign Office officials.
    Sir Geoffrey Howe: I am sorry that the hon. Gentleman's vision of such matters is so limited by his narrow class perceptions. He must acknowledge that the
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    people employed in the Diplomatic Service have for many years, as a result of consecutive recommendations by external and internal Committees to successive Governments, had their salaries supplemented in precisely that way, just as occurs with many private sector employees. If one must serve in a remote station for a long time, and is likely to do so regularly, there is no substitute for a boarding school education for one's children. It would be wrong to make the narrow changes envisaged by the hon. Gentleman for the narrow, bitter, class reasons that he advances.

    Arab-Israeli Dispute
    Mr. Adleyasked the Secretary of State for Foreign and Commonwealth Affairs what assessment his Department has made of the likelihood of negotiations taking place in 1985 on the subject of the Arab-Israeli dispute.
    Mr. Luce: We remain deeply concerned about the Arab-Israel dispute as an important and dangerous threat to peace in an area of great importance to Europe. We have noted statements in favour of negotiations from Israel and the Arab side. Progress depends on the parties themselves. With our partners in the European Community, and, on the basis of our balanced approach, we shall continue to urge the parties to move forward towards negotiations. The United States' role continues to be of central importance.
    Mr. Adley: I thank my hon. Friend for that reply. Does he agree that the recent proposals by King Hussein, supported by the Egyptian Government and the PLO, are the most fair and realistic proposals that have come forward for a long time? Do the Government support them? Will he confirm that it is not Government policy to lend support or credence to a policy of countries invading and occupying neighbouring countries because they do not agree with their politics?
    Mr. Luce: We watch with great interest the development of some proposals and the efforts being made by King Hussein, in consultation principally with Egypt and other Arab countries, and with some Palestinian leaders, with a view to putting forward some proposals, which have not been fully evolved, to provide a basis for discussion. King Hussein is keeping us fully informed.
    Mr. George Robertson: Will the Minister pay careful attention to the fact that there are signs of conciliatory approaches in the Arab world, and to the fact that a Labour Prime Minister in Israel was associated with the pull-out from Lebanon, which provide a unique opportunity for an initiative to be taken in that troubled part of the world? Will he ensure that the United States is not diverted by something else in the meantime from the urgent task of making that initiative a front part of its policy?
    Mr. Luce: We have noted with interest the desire of the Israeli Government to negotiate; Israel's Prime Minister has already said that in public. President Reagan made it clear in his address to the United Nations Assembly that his proposals of 1982 remain firmly on the table as a basis for discussion. My right hon. Friend the Prime Minister has already had discussions with the President about the middle east and other important matters, and will do so again soon. We have a close interest in those matters.

    Brazil
    Mr. Maginnisasked the Secretary of State for Foreign and Commonwealth Affairs whether he has received an invitation to attend the inauguration of the next President of Brazil.
    Mr. Renton: As far as I am aware, the Government of Brazil have not yet issued any such invitations.
    Mr. Maginnis: In view of the recently established link between the aircraft builders Shorts of Belfast and Embraer of Brazil, will the Government let the new Brazilian Government know that the United Kingdom will encourage such economic co-operation between our countries?
    Mr. Renton: I appreciate the hon. Gentleman's interest in the matter. The position as regards the new trainer is as follows. My right hon. Friend the Secretary of State for Defence has invited Shorts and British Aerospace to submit best and final offers by 24 January. I understand that Hunting and Westland also intend to submit revised tenders by then. In addition, the option of refurbishing the Jet Provost has been kept open. Every relevant consideration, including foreign policy factors where appropriate, will be carefully assessed before a final decision is made.

    Lebanon
    Mr. Lathamasked the Secretary of State for Foreign and Commonwealth Affairs what is the latest position regarding possible United Kingdom logistical support for a strengthened United Nations force in Lebanon.
    Sir Geoffrey Howe: I was able to discuss the situation earlier today with the United Nations Secretary General. Her Majesty's Government have emphasised to all the parties the need for agreed and effective security arrangements in areas to be vacated by Israeli forces. A United Nations presence could play a valuable part in these arrangements. It is important that all the Governments concerned, not least the Lebanese, should now make practical proposals to that end.
    Mr. Latham: Does my right hon. and learned Friend welcome the Israeli withdrawal, which is beginning, and will he ensure that some early steps are taken to fill the vacuum, otherwise there may be serious inter-communal massacres?
    Sir Geoffrey Howe: That was the point of my answer. We welcome the fact that the withdrawal is to commence and we look for early, complete and orderly Israeli withdrawal. If that withdrawal is to be orderly, it requires co-operation with the Lebanon and with other countries, and full consideration of the effects of that on the stability of the area and the safety of civilians. That is why I have emphasised the importance of all the Governments concerned making practical proposals for possible United Nations presence in this area.
    Mr. Healey: I welcome the Foreign Secretary's statement that he has discussed this matter with Mr. Perez de Cuellar and agree with the sentiments that he has expressed. The Opposition would welcome a British contribution to a United Nations force if this were required, and if conditions laid down by the Foreign
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    Secretary were met, we would be satisfied. Does the Foreign Secretary agree, in the light of our experience of the ill-fated international force in Beirut, that before agreeing to put British troops into such a force it is vital that there should be the most precise definition of its role, and clear and strict arrangements governing consultation among components in the force about the possible use of weapons by the force?
    Sir Geoffrey Howe: I am grateful to the right hon. Gentleman for his acceptance of our view that the United Nations presence could have an important part to play in this area. He will appreciate that there are already substantial United Nations forces there, in UNIFIL or the United Nations Truce Supervision Organisation, and in other sectors as well. It is important that the conditions in which there are invited to play a part should be clearly defined along the lines that the right hon. Gentleman described. This is why I stress the need for early proposals, particularly from the Lebanese Government, to that end. Any question of an increase in the size of the United Nations force might arise hereafter. A British troop contribution has not been requested. We take the view that we are well placed, and remain better placed, to help on the logistical side of such an organisation.

  EUROPEAN COMMUNITY

    Own Resources
    Mr. Andrew F. Bennettasked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to discuss the increase in own resources at the Foreign Affairs Council.
    Sir Geoffrey Howe: This issue is on the agenda of the Foreign Affairs Council of 28 and 29 January.
    Mr. Bennett: Does the Foreign Secretary agree that the only people pushing the British Government to expand the VAT base are the Commission and the other member states? Is it not unacceptable to the British people to be contemplating putting VAT on books, newspapers, children's clothes and other things such as food? Will the right hon. and learned Gentleman make it clear that the House will not put up with such a proposal?
    Sir Geoffrey Howe: The hon. Gentleman has misunderstood the position. The scope and coverage of VAT in this country does not relate to the proposal, which has been accepted, for an increase in resources by raising the maximum VAT rate. They are quite separate and distinct from each other. Under the adjustments agreed at Fontainebleau, which include the acceptance of a possible increase in own resources, our adjusted net contribution will be about half what it would have been without that agreement, and our effective VAT rate in the Community will remain below the 1 per cent.
    Mr. Yeo: Does my right hon. and learned Friend share my hope that any increase in own resources will be subject to the same critical scrutiny as the Government quite properly apply to all sectors of public expenditure? Will he undertake not to recommend the House to accept any such increase in own resources unless it can be shown that it is in the interests of Britain?
    Sir Geoffrey Howe: The question of an increase in own resources has at all times been stated to be conditional

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    upon other conditions being fulfilled. That remains the position. It is on that basis that it will eventually be brought before the House.
    Mr. Foulkes: Can the Foreign Secretary tell the House how much of the increase in own resources is attributable to enlargement, how much is attributable to paying the United Kingdom abatement and how much is attributable to new expenditure? Can the Foreign Secretary also tell the House what will happen to the United Kingdom abatement if there is a delay in enlargement and a delay in the agreement to increase own resources?
    Sir Geoffrey Howe: There is no recent estimate of the extent of the increase that is likely to be necessary as a result of enlargement. Earlier Commission estimates suggested that at the end of the transitional period enlargement would cost annually between 0·1 and 0·2 per cent. of the present VAT ceiling. The increase in own resources is connected with enlargement. That is why the Fontainebleau agreement provides for 1 January 1986 as the completion date for the enlargement negotiations. The agreement also provides for the abatement of the United Kingdom's contribution for 1985 to be met on the revenue side during that year.
    Mr. Budgen: Will my right hon. and learned Friend explain why the public expenditure White Paper published yesterday anticipates that a further supplementary payment of £200 million will be required to be paid to the EEC in 1985?
    Sir Geoffrey Howe: There are a number of reasons for variations between the figures set out in the public expenditure White Papers for this year and last year. I should not like to hazard an answer to the question posed by my hon. Friend on the premise that his question might be accurately founded.
    Mr. Spearing: I understand that the scope of VAT in the United Kingdom is partly, at least, the responsibility of the Chancellor of the Exchequer and partly that of the European Economic Community, does the Foreign Secretary agree that the actual rate of VAT "take" that we now send to the EEC is in the region of 10 or 11 per cent.? Will not that go up with the increase in own resources, and does it not increase if sterling declines relative to the ecu?
    Sir Geoffrey Howe: It is right that the increase in the own resource ceiling, while not affecting the VAT rate payable by way of tax in this country, is bound to have an effect on the sum being transferred, gross, from this country to the EEC. That was the importance of securing in the course of the Fontainebleau negotiations the machinery that we achieved for the very substantial abatement of our own contribution, thus achieving the significant reduction in our net contribution that I have described.

    Spain and Portugal
    Mr. Pikeasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with progress on the accession of Spain and Portugal to the European Economic Community.
    Mr. Rifkind: The Community and the applicant states are now in the final stages of the accession negotiations, after the agreement on Community negotiating positions on fisheries and wine. Agreement was also reached in
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    December on arrangements for the dismantling of Spain's highly protective industrial tariff regime. We are working for completion of the negotiations as soon as possible so that Spain and Portugal may accede on 1 January 1986.
    Mr. Pike: Is the Minister aware of the views of the new President of the Foreign Affairs Council, who indicated that he hoped for the early accession of Spain and Portugal in order to increase the own resources element as soon as possible and also to aid the Community's problems during the coming year? How realistic does the Minister think these views are, and what prospect is there of achieving that aim?
    Mr. Rifkind: As I said, there has been considerable progress in the past few weeks and it is still perfectly possible to keep to the political commitment to allow the negotiations to be concluded at a time that will enable the ratification procedures by each of the member states to be concluded, thereby permitting Spain and Portugal to enter the Community on the date proposed.
    Mr. Jim Spicer: My hon. Friend made no mention of the problems of the Spanish fishing fleet,. In view of the size of that fleet that seems to be a major obstacle that has still to be overcome. Will he say a word about that?
    Mr. Rifkind: My hon. Friend is correct. That is one of the remaining outstanding issues. The Community has adopted a position that is in accordance with the enormous importance that we attach to the fisheries question. It will prove a complicated question, but the Spanish Government are realistic enough to realise that the Community, having acquired a common fisheries policy only after many years of difficult negotiation, would not be able to consider any significant change to it that weakened the protection that is afforded to existing fishermen within the Community.

    Community Budget
    Mr. Deakinsasked the Secretary of State for Foreign and Commonwealth Affairs if the Council of Foreign Ministers has approved the European Economic Community budget for 1985; and what proportion of the budget is to be spent on agriculture.
    Mr. Rifkind: The draft European Community budget for 1985 was rejected by the European Parliament on 13 December. The exact proportion of the budget to be spent on agriculture is not, therefore, established.
    Mr. Deakins: Will the hon. Gentleman accept that in the draft budget, although rejected by the European Assembly, the proportion to be spent on agriculture rose last year from 67 to 74 per cent., and that there has been a decline in real terms on the other programmes of major interest to Britain? What is there in the new mechanism of budget discipline that will prevent agriculture getting a larger and larger share of the Community budget in future?
    Mr. Rifkind: The figure in the draft budget is 73 per cent., which is unacceptably high, although it is considerably lower than the average figure during the previous Labour Government, which I think was 76 per cent. With regard to the implications, I refer the lion. Gentleman to the agreement that has been reached, which binds the members of the Council of Ministers to ensure that any increase in agricultural expenditure is less than the

    979
    growth in own resources. That is not a growth of 40 per cent., as the hon. Gentleman incorrectly suggested in the debate in the House yesterday.
    Mr. Marlow: Is there likely to be a supplementary budget for 1985? If so, as the United Kingdom is the country that is most concerned and which works hardest for financial discipline, will he undertake to the House that we shall not be required to make a net contribution, as we did yesterday?
    Mr. Rifkind: As my hon. Friend is well aware, the draft budget that was sent to the European Parliament did not reflect the likely commitments of the Community during the year in question, but did reflect the legal limit of the 1 per cent. ceiling. The precise way in which that particular problem is to be resolved has still to be agreed, but, as my hon. Friend the Economic Secretary said yesterday, we cannot rule out the possibility, or indeed the likelihood, of some form of supplementary finance being necessary.
    Dr. M. S. Miller: What steps is the hon. Gentleman taking to protect British interests in relation to the accession of Spain and Portugal in connection with that matter? The British situation will worsen, as Spain and Portugal are likely to be net beneficiaries from the Common Market.
    Mr. Rifkind: Certainly the whole reason why the negotiations with Spain and Portugal have lasted so long is that the Community as a whole, including the United Kingdom, has been determined to be cautious to ensure that the financial implications of enlargement are kept to a minimum. One of the United Kingdom's main objectives is to ensure that mistakes that were made in the past with regard to northern agriculture, which produced unacceptable surpluses, should not be made with regard to Mediterranean agriculture. That is a particular priority.
    Mr. Dykes: Now that the system of financial control and husbandry in the Community is largely resolved, is it not rather sad and pathetic that some hon. Members should continue to grumble about the possibility of the United Kingdom paying an extra amount this year into the budget which would represent 0·7 per cent. of our GNP compared with the United Kingdom's existing budget deficit, which represents 2·25 per cent. of GNP?
    Mr. Rifkind: My hon. Friend is right to put the matter in its proper perspective, but we must also insist that any increase in the resources of the Community is used for desirable areas of extra expenditure and does not contribute to the continuation of undesirable and unnecessary surpluses.
    Mr. George Robertson: Is there not something bizarre and indefensible about a draft budget that will increase the proportion to be spent on agriculture from 67 to 73·7 per cent., which is closer to 74 than 73 per cent., at a time when over 14 million European Community citizens are out of work, and more than 25 per cent. of all young people in the Community are out of work, especially when that will be at the cost of programmes in industry, energy, transport, science and technology, which could make the best contribution to increasing the industrial viability of the European Community countries?
    Mr. Rifkind: I entirely agree with the hon. Gentleman that the proportion of the budget represented by agriculture
    980
    is unacceptably high. It is precisely for that reason that the United Kingdom has successfully insisted on a new formula that will ensure that agriculture will progressively represent a smaller and smaller share of the total Community budget.

    Community Reform
    Mr. Teddy Taylorasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement outlining his aims for the achievement of reforms in the European Economic Community in 1985.
    Sir Geoffrey Howe: Our aims were set out in our paper "Europe—The Future", copies of which are available in the Library of the House, and in the Queen's Speech of November last year.
    Mr. Taylor: Will my right hon. and learned Friend make it clear that in 1985 the Government will provide no official co-operation whatsoever to the bands of so-called European Members of Parliament who descend on this country to investigate matters of purely domestic interest, such as the conduct of the police during the miners' strike? Will he deny access to such groups?
    Sir Geoffrey Howe: The question of such groups having access to this country does not arise, as I understand it, because the bureau of the European Parliament, the Standing Committee, decided that the Committee could meet only in Strasbourg, Brussels or Luxembourg—its working places. Certainly I can give my hon. Friend the assurance that we will not co-operate with inquiries on subjects outside the European Parliament's responsibility. That includes policing matters. It is deplorable that the Labour party allowed this matter to be dragged on to the Floor at Strasbourg, with very scant respect for the authority of this House.
    Dr. Owen: Does the Foreign Secretary agree that it is now a major British interest to establish a genuine internal market, particularly in insurance and financial services? This becomes ever more important with the enlargement of the Community to 12. Does he further agree that that will be achieved only by more extensive use of majority voting and that Britain should not block but should encourage this?
    Sir Geoffrey Howe: I certainly agree with the right hon. Gentleman about the great importance for employment prospects throughout the Community of swift and comprehensive progress in establishing an effective internal common market in insurance and many other services. I do not believe that it is necessary to contemplate any change in the existing treaty provisions, provided that they are used effectively to achieve substantial advances towards a proper internal market.

    Dublin Summit
    Mr. Tony Lloydasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with progress made in implementing the decisions of the Dublin summit.
    Sir Geoffrey Howe: The decisions reached at Dublin helped set in place for the first time a mechanism to control Community spending. As a result of the discussions on enlargement, the negotiations with Spain and Portugal are now entering their final stages.
    Mr. Lloyd: In view of the overwhelming good will and compassion of the ordinary people of this country and throughout Europe to those who are starving in the Sahel region of north Africa, can the Foreign Secretary tell the House why progress has been so slow in implementing the decision taken in Dublin to provide 1·2 million tonnes of grain to that region, especially in the light of the 139 per cent. increase in grain stocks in Europe?
    Sir Geoffrey Howe: The substantial food aid commitments that were made by the Community in November are being delivered now. The commitments made in Dublin enabled the Community and the recipient countries to plan famine relief throughout the year ahead.
    Mr. Forth: Will my right hon. and learned Friend confirm that he will not ask the House to approve any increase in EC resources until the conclusion of the enlargement negotiations? If enlargement is not to be recommended to the House because the negotiations have not succeeded, will he confirm that he will not ask for an increase in EC resources?
    Sir Geoffrey Howe: Plainly, there is a close link between the conclusion of the enlargement negotiations and the time at which an application for an increase in own resources will be brought before the House.
    Mr. Hardy: Since summits over the last few years have persistently committed themselves to reducing the amount of money granted for the support and subsidy of agriculture, and since in that period no reduction in such expenditure has occurred, when can the House expect to be informed that there has been such a reduction?
    Sir Geoffrey Howe: The hon. Gentleman is one among many who believe that it is possible easily to reconcile the case, supported in all parts of the House, for support for our agriculture industry with a proper management of the resources devoted to that purpose. As a result of the decisions reached at Fontainebleau, an effective budgetary discipline has been put in place and a series of policy decisions have been taken either for the freezing or the reduction of prices, and for the installation of quotas. To give just one example, as a result of those decisions a substantial reduction in the output and, therefore, ultimately the cost, of milk is taking place. That policy will have to be sustained for a number of years.

    Institutional Progress
    Mr. Dykesasked the Secretary of State for Foreign and Commonwealth Affairs if he plans to press for an early meeting of European Economic Community Ministers with the newly appointed commissioner in Brussels to discuss ways and means of securing new institutional progress within the Community structure.
    Mr. Rifkind: Discussion is already taking place in the Ad Hoc Committee on Institutions. The European Community Commission is represented on this committee by Mr. Ripa di Meana.
    Mr. Dykes: Is my hon. Friend aware that I meant commissioners in the plural? As there is a need to press ahead with developments in the Community, and as the new Commission is beginning to make plenty of new suggestions, cannot the European Parliament and Commission, working together with the Council, achieve a new form of progress that will stand in contrast with the conflicts that have existed between those institutions in the past?
    Mr. Rifkind: The Ad Hoc Committee on Institutions was appointed by the Heads of Government to look at this issue. A commissioner was appointed to it to ensure that the Commission's views would be fully taken into account in any recommendations made by the committee.
    Several Hon. Members rose—
    Mr. Speaker: Order. We started these EEC questions one minute late, so I shall call one more question.

    Spending Priorities
    Mr. Parkasked the Secretary of State for Foreign and Commonwealth Affairs what effect he expects the text on budgetary discipline adopted at the Dublin summit will have on the spending priorities of the European Economic Community.
    Sir Geoffrey Howe: Your precision is admirable, Mr. Speaker.
    The agreement provides that the net expenditure relating to agriculture markets will increase by less than the rate of growth of the own resources base. This provision should allow greater headroom within the VAT ceiling for expenditure on non-agriculture policies, in accordance with the maximum rate provisions of the treaty.
    Mr. Park: Is it not a fact that the budgetary discipline document will do nothing to prevent agricultural expenditure from increasing as a proportion of the budget? Given the vast surplus in all farm products, is there any justification for such an increase?
    Sir Geoffrey Howe: The budgetary discipline provisions provide a framework within which the decisions about agricultural prices will have to be taken. As a result, the increase in the 1985 draft budget for CAP spending stands at 5 per cent., which is the lowest figure for several years. Under the Labour Government the average annual increase was 28 per cent. Thus, the measures are already having an effect.

Coal Mining Dispute
3.32 pm
Mr. Geoffrey Lofthouse: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter —[Interruption.] —that should have urgent consideration, namely,
"the coal mining dispute."
Before those public school punks on the Conservative Benches take any more sadistic pleasure out of the plight of the miners, perhaps they will listen to the case. Yesterday you, Mr. Speaker, said:
"I am in no doubt that an appropriate moment, and when it will be helpful to the settlement of the dispute, we should have a debate on this matter."—[Official Report, 22 January 1985; Vol 71, c.878.]
I believe that the time has now come to hold that debate. The matter is certainly urgent and specific. The Government caused the dispute in the first place by their decision on Cortonwood, and they have deliberately manipulated the miners strike. It is reported to have cost between £90 million and £100 million a week to try to defeat the miners. But the Chancellor of the Exchequer believes that that is a good investment. The Government never take any notice of the social costs involved.
The Government have a responsibility for creating the great distress that exists in the mining industry —[Interruption.]
Mr. Speaker: Order.
Mr. Lofthouse: There are great hardships, broken marriages, shocking bitterness and business bankruptcies. In my area the local chamber of trade has assessed that 25 per cent. of the businesses will be going out of business—yet we see the grinning and sadistic pleasure of Conservative Members. Let me say to Conservative Members who do not understand the situation that miners—[Interruption.]
Mr. Speaker: Order. I ask the House to allow the hon. Gentleman to make his application. He is addressing me and not, as he said, Conservative Members.
Mr. Lofthouse: I am grateful, Mr. Speaker, but I can assure you that Conservative Members will not stop me from putting the case.
The miners and the mining communities are not bothered about personalities. They are bothered that their jobs and standard of living are being destroyed. Most of the 42 per cent. of youngsters under the age of 25 in my constituency would normally have found their way into the mining industry. The Government have a duty to say in a debate in the House what opportunities those young people will have when the Government have destroyed the pits.
The miners feel, as do I and many hon. Members, that the door is open for negotiations. They feel also that the Prime Minister and the Government, and all the Prime Minister's satellites on the Conservative Benches, believe that if they sit back and do nothing they will drive the miners back to work through hunger, poverty and distress—and there is some evidence that some men, through sheer hardship, and not through any disloyalty to their union have been driven back to work. If the Government know anything at all about the miners or the mining community, they will or should know that that is the worst possible thing because, although the miners may be driven
984
back to work in that way, the country will still need coal and will still need the good will of the miners. That is not a victory, if that is what the Government think it is.
The present situation is very serious. It is not sufficient for people to say, "All right, we've taught them a lesson—go to the bitter end and make quite sure that we rub their noses in the mud and that we starve them back." The miners have a right, after their past performances on behalf of the country, to expect that the Government, even if they feel that they will achieve a great victory, will exercise their duty to consider that the dispute should be settled by negotiation and to bring about an honourable settlement. I hope that you, Mr. Speaker, will feel able to grant the application.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the coal mining dispute."
I have listened with great care to what the hon. Gentleman has said. I stand by what I said yesterday on a similar application. However, I regret that I do not consider that the matter which he has raised is appropriate for discussion under Standing Order No. 10, and I cannot, therefore, submit his application to the House.
Mr. Alec Woodall: On a point of order, Mr. Speaker.
Sir Kenneth Lewis: On a point of order, Mr. Speaker.
Mr. Speaker: Order. There is to be another application under Standing Order No. 10. I will take the points of order afterwards.
Mr. Woodall: My point of order arises out of the application made by my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse).
Mr. Speaker: Order. I will not take the hon. Gentleman's point of order now.
3.41 pm
Mr. Bob Clay: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration—it is a different aspect of the mining dispute—namely,
"the further evidence that has emerged last night and this morning that the Government and elements in the National Coal Board are determined to prevent a negotiated settlement of the mining dispute."
The matter is specific because, as was revealed last night and commented on this morning, at 5 minutes to 1 on Monday, the NUM went to Hobart house and, from then until 25 minutes past 3, had discussions with Mr. Ned Smith. At the end of those discussions, a minute was signed by both sides recording that they both viewed the discussions as having been useful.
As the union representatives left Hobart house at 3.25—no one having left the room since 5 minutes to 1—they were greeted by the 1 o'clock edition of The Standard which quoted Mr. Michael Eaton as saying that the talks had failed. It is clear that a senior official of the NCB, who must have had authority from the Government, had told the press that the talks had failed even before they had

985
started. If further evidence were needed of the determination of the Government and the hawks in the NCB to prevent negotiations on any conditions, that is it.
If any senior member of a nationalised industry behaved in that manner in any dispute, it would be a matter of grave and immediate public concern, whatever the length of the dispute or the matter at issue. For a senior NCB representative to announce to the press that talks had failed before they had even started would be a serious enough matter at any time. In current circumstances, it is infinitely more serious.
The matter is specific and of great public importance and it is also urgent. There are some matters that Conservative Members pretend to fail to understand. I was told today—as I am told every day—by representatives of the NUM in Durham that when that sort of thing happens it leaves men on the picket line with the feeling that they have no recourse left. If they are to be told that there will not be a negotiated settlement and they are determined not to go back to work, the feeling is that sooner or later—and probably sooner, because every time the Government behave like this it makes it more imminent—disorder will break out—[HON. MEMBERS: "Threats."] Of course it is not a threat; it is an observation of reality. People who believe that Parliament does not give a damn about what is happening have no recourse left. That is what Conservative Members do not understand.
I urge you, Mr. Speaker, in the interests of Parliament, to disregard the indifference of Conservative Members and to ensure that this desperately important matter is debated.
Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the further evidence that has emerged last night and this morning that the Government and elements in the National Coal Board are determined to prevent a negotiated settlement of the mining dispute."
I have to give the hon. Gentleman the same answer that I gave to his hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse). I do not consider that the matter that he has raised is appropriate for discussion under Standing Order No. 10. The hon. Gentleman knows that the only decision that I have to take is whether the matter should take precedence over the business set down for today or tomorrow. I regret that I do not consider that the matter that he has raised is appropriate for debate under Standing Order No. 10 today.
Mr. Woodall: On a point of order, Mr. Speaker. I do not wish to contest your ruling, but in the recent abortive attempt to resume talks between the National Coal Board and the National Union of Mineworkers—I raise this matter in the presence of the Leader of the House—it appears that there has been indecent haste on the part of the Government through the Secretary of State for Energy and National Coal Board spokesmen—[HON. MEMBERS: "Progress".]—to deny that there has been any attempt by the Government to abort the attempt to resume talks—[Interruption.]
Mr. Speaker: Order.
Mr. Woodall: Conservative Members are a rowdy lot.
Mr. Speaker: Order. I think that the hon. Gentleman is tempting Conservative Members by raising matters that are rather wide of his point of order.
Mr. Woodall: I accept that, Mr. Speaker. My appeal through you is to the Leader of the House.
Mr. Speaker: This is not really a matter for me. There will be an opportunity during business questions tomorrow to question the Leader of the House on business for the following week. I can deal only with points of order that are matters for to me.
Mr. Woodall; With due respect, Mr. Speaker, I accept that. However, Her Majesty's Government, through the Secretary of State for Energy and NCB spokesmen, sought to deny that they had interfered almost before any accusation had been made.
Mr. Speaker: The hon. Gentleman is an experienced Member and he knows that he is raising matters that I cannot answer.
Sir Kenneth Lewis: On a point of order, Mr. Speaker. Have you received today, Mr. Speaker, any requests from the Leader of the Opposition or the Shadow Leader of the House to change the business for today, which is an Opposition Day, from a debate on post office closures to one on the miners strike?
Mr. Speaker: The hon. Gentleman is even more experienced in this place than I am. He knows that an application of that sort would not be made to me.
Mr. Peter Hardy: On a point of order, Mr. Speaker. I do not challenge your decisions on the Standing Order No. 10 applications, Mr. Speaker, but it will be within your recollection that at Question Time Conservative Members were sustained by a ministerial reply on the interests of the European Parliament in certain aspects of the miners strike. The Minister said—some of us would have some sympathy with him—that the Government would afford no facilities to the European Parliament to consider the aspects of the miners strike in which it has expressed an interest. If the Government are refusing, quite properly, to afford any facilities to the European Parliament to interest itself in aspects of the miners strike, perhaps you will agree, Mr. Speaker, that the Government should not refuse to afford facilities to the House to fulfil the same responsibilities.
Mr. Speaker: Again, that is not a matter for me. The business for next week will be announced tomorrow and none of us knows what will feature in that.
Mr. Anthony Steen: On a point of order, Mr. Speaker. I wonder whether you are aware that there has been the unilateral withdrawal of Post Office services today in the House of Commons Post Office. This is obviously having adverse effects on the services that Members can give their constituents. We pay tribute to the sterling work of the House of Commons Post Office and that of its workers, but if the withdrawal of services is to become a regular occurrence, Mr. Speaker, will you make alternative arrangements for Members of Parliament?
Mr. Speaker: I have heard that certain services will be withdrawn for a period today. I hope that this will not recur. It may be that this serious matter, which has caused many difficulties, will be overcome in due course.
Mr. Jeremy Corbyn: Further to points of order concerning the miners strike and the applications made under Standing Order No. 10, Mr. Speaker, I do not wish, Mr. Speaker, to challenge your

987
ruling in any way. I believe that the points made by my hon. Friend the Member for Sunderland, North (Mr. Clay) are extremely important and serious. Would it be in order for the Secretary of State for Energy to make a statement to the House on the cost of the dispute, his involvement in the NCB and communications with NCB officials on Sunday and Monday which led to newspaper stories appearing before the conclusion of the meeting between the NUM and NCB officials?
Mr. Speaker: The hon. Member has not been a Member as long as others in the Chamber, or he would know that newspapers make statements that do not necessarily have any relevance to the House.
Mr. J. F. Pawsey: Further to the point of order raised by my hon. Friend the Member for South Hams (Mr. Steen), can you, Mr. Speaker, advise the House with whom discussions took place about the withdrawal of the facilities at the Members' Post Office and when those discussions occurred? The action seriously impedes Members in the execution of their duties.
Mr. Speaker: I do not know the answer to that question. I shall look into the matter.
Mr. Sydney Bidwell: Further to the points of order about the mining dispute, Mr. Speaker. Is there anything to prevent the Leader of the House from announcing that there is likely to be a debate in the House?
Mr. Speaker: That is patently not a matter for me. A business statement will be made tomorrow.
Mr. Michael Meadowcroft: On a point of order, Mr. Speaker. Some hon. Members, including myself, feel that it is important to debate the mining dispute but are concerned about the fact that, day by day, the business of the House is interrupted at about 3.30 pm. Some of us have no power to compel the Government to hold a debate in Government time or to compel the Opposition to initiate a debate in Opposition time. I urge, therefore, that time be allocated for a debate so that we can avoid continued disruption at 3·30 pm.
Mr. Speaker: I, too, am disturbed by the fact that I continually have to hear applications under Standing Order No. 10, but that is my duty and my responsibility. I have
988
to make difficult judgments on these matters, and I have had to make a difficult judgment today. I cannot go beyond what I have already said.
Mr. Peter Bruinvels: On a point of order, Mr. Speaker. Is it not hypocritical and an abuse of this House, to demand today of all days a debate under Standing Order No.10 when the Opposition claim that the closure of post offices is a far more serious matter?—[Interruption.]—If the Opposition, some of whom are threatening the House—
Mr. Speaker: Order. I cannot hear the hon. Member.
Mr. Bruinvels: I was referring to an abuse of the House and the hypocrisy—[Interruption.]
Mr. Speaker: Order. The hon. Member, like me, does not have the advantage of great height which others have. I cannot hear what he is saying.
Mr. Bruinvels: Thank you, Mr. Speaker. I shall try to make up for it with my voice. Is it not hypocrisy for the Opposition to demand today of all days that there should be a debate under Standing Order No. 10 on the mining dipute when the Opposition wish to hold a special debate on post offices? If the Opposition consider that the closures of post offices is not as important as the miners, why have they not ceded the debate on post offices? I suggest, as a means of helping you, Mr. Speaker, that the Opposition might like to come to the House on Friday to debate the miners dispute.
Mr. Speaker: The hon. Member and the House know that I am not responsible for the subjects for debate chosen by the Government or the Opposition.
Mr. Dennis Skinner: On a point of order, Mr. Speaker. As a keen observer of these matters, and as reference was made last Thursday, unwisely or otherwise, to there being a planned operation, would you now consider drawing up a list—it would have to be a long one—of all those Members who have jumped on to the bandwagon since then? Now that the Liberals and possibly even the Social Democrats are joining in, I suspect that if you drew up a list on a big sheet of paper and then had a good look at it you might well reach the conclusion, by early next week or even before then, that the planned operation was necessary and that we might as well get on the journey.
Mr. Speaker: I do not think that I want to get writer's cramp.

Companies (Procedure)
3.55 pm
Sir Brandon Rhys Williams: I beg to move,
That leave be given to bring in a Bill to amend the law relating to the election and responsibilities of directors of companies; to require the circulation of particulars of candidates to the members and the consideration of the appointment of non-executive directors before any election of directors; to require the directors to prepare certain data and estimates; to make provision in regard to the establishment of audit committees; and to make other changes in the law relating to companies.
I am seeking once again to introduce a Bill relating to company procedure. I am sure that the whole House is concerned that the British economy should function as efficiently and as fruitfully as possible. I hope that the House will also consider that there is a need to examine the provisions of company law, especially as it relates to the functioning of small and medium-sized companies.
I have introduced a Bill on this subject in every Session since 1969 and I hope that on this occasion, too, the House will consider that my Bill deserves to make progress. I know that the Government are actively and rightly concerned at this time with the protection of investors when they are setting out to make their choice of investment. The Insolvency Bill, which recently had its Second Reading in the other place, is also concerned to deal with companies that have come to the end of their days. It seems to me, however, that there is a gap in the consideration given by the Government to what might be described as the middle ground—that is, the protecting of investments that people make in companies that then do not function as efficiently and effectively as they might. I believe that this gap in our company law deserves the attention of the House. I appreciate that a monumental job is now in progress in the consolidation of existing company law, but, as any practitioner will confirm, much of our company law is completely obsolete and unworkable in practice.
In every public company there are certain supervisory elements which could work more effectively than they now do for the benefit of customers, the work force, the management and shareholders alike. At present, in all too many cases they cannot function effectively in practice because the necessary procedures and background of law are not provided for them by the House. I am thinking in particular of non-executive directors who, all too often, are weak or ineffective members of boards. I think, too, of the auditors who, all too often, are content to look backwards over a company's performance and to consider it in strictly arithmetical terms, rather than to exert themselves to give boards and senior management the advice that they could well be providing as to the future direction of the company. I think, too, of the major institutional sources of finance, which all too often find themselves acting like absentee landlords instead of offering a really effective supervisory service to management—as they also well might and in other countries do.
I believe that quite minor changes in company law, relating mainly to the formal procedures of companies, could make a significant difference and could assist the whole economy to operate more fruitfully. I recognise the objection that the proposals that I have included in my previous Bills—and which I hope to reintroduce now—
990
are of a minor character and that companies, if they chose to do so, could very well do all the things that I recommend within the present framework of the law. That is no reason why there should not be legislation. We need to bring the less progressive companies up to the standards of the best. The House is failing the economy if it allows problems to develop such as are now developing, unnecessarily, in all too many companies.
The Bill deals with the election of directors. ensuring that competition for vacancies on boards will be more effective than it is at present in many cases. The Bill also deals with the preparation of data and estimates, to make sure that a company mobilises its own resources of information about its own likely performance in tile market against competition, so that it can judge how profitably it is likely to operate over a period of time.
The Bill also contains recommendations about setting up audit committees. On the New York Stock Exchange it is obligatory for every company that seeks to be quoted to have appointed an audit committee. In this country, the practice, though widely approved, is not often brought into effect. I believe that in our largest companies it should be generally adopted, and that smaller companies would then learn the routine and appreciate the value of setting up an audit committee. It would be desirable to stimulate such a development through legislation. There will, therefore, be a small provision in my Bill to encourage companies to set up audit committees and I intend once again to reprint a schedule showing a form of model practice for the operation of an audit committee. I believe it would deserve the attention of auditors and senior management, showing how the relationship between the boards and the auditors could be improved on a routine basis.
I hope also to include a schedule showing model articles for companies operating as a result of management buyouts, or in the form of very substantial partnerships. We have not paid sufficient attention to the problems arising when shareholders who are also employees retire from service and wish to dispose of their holdings. There are various possible legislative measures that might be helpful in such circumstances, though I would hesitate to introduce any compulsory measures at this time. However, with the help of hon. Members on both sides of the House, I hope I may be able to draw up a form of model articles for such a company that would be worthy of consideration.
Those are the proposals that I hope to bring in. On two previous occasions I have had the honour of seeing my Bill complete its Committee stage. I believe that on each occasion the House succeeded in attracting attention to areas of company practice that have been neglected and that ought to be studied. I therefore trust that, once again, I shall be given the leave of the House to bring in my Bill.
Question put and agreed to.
Bill ordered to be brought in by Sir Brandon Rhys Williams, Mr. Sydney Bidwell, Sir Edward du Cann, Mr. Bob Edwards, Sir Anthony Grant, Mr. Jeremy Hanley, Mr. Robert McCrindle, Sir David Price, Mr. Tim Rathbone, Mr. Tim Smith, Mr. Richard Wainwright, and Mr. Mark Wolfson.

Companies (Procedure)
Sir Brandon Rhys Williams accordingly presented a Bill to amend the law relating to the election and responsibilities of directors of companies; to require the circulation of particulars of candidates to the members and the consideration of the appointment of non-executive directors before any election of directors; to require the directors to prepare certain data and estimates; to make provision in regard to the establishment of audit committees; and to make other changes in the law relating to companies: And the same was read the First time; and ordered to be read a Second time upon Friday 3 May and to be printed. [Bill No. 62.]
Opposition Day
[5TH ALLOTTED DAY]—considered
Opposition Day

  Post Office Closures
  Mr. Speaker: Before we proceed with the debate, I should like to announce to the House that I have selected the amendment in the name of the Prime Minister.
  I understand that it is hoped to end the debate at about 7 pm. A very large number of right hon. and hon. Members have so far indicated their wish to take part. Unless they speak briefly, we may be here until 10 pm.
  4.5 pm
  Mr. John Smith: I beg to move,
  That this House regrets that the financial policies of the Government towards the Post Office may lead to the closure of 78 Crown post offices and 900 sub post offices and to other reductions of Post Office facilities, thus causing serious social harm, inconvenience and disadvantage, particularly to the elderly, the disabled and the parents of small children and imposing extra travelling expense; and calls upon the Government to moderate its financial requirement so that an extensive and socially responsive network of post offices is maintained.
  I need hardly seek to persuade the House of the social value of the network of post offices that this country has enjoyed for many years. For many communities and, probably, groups in every community, the post office—whether a Crown post office or a more humble sub-post office—is not just a retail outlet for the normal services of a postal system. Post offices happen to be part of the largest retail chain in the United Kingdom, but they are much more than that. The post office is a vital contact point in the administration of our social security system, and it is the most important and often crucial connection between many of our citizens and the organisation of the state.
  As the principal disbursement agency for retirement pensions and family and disablement benefits, the post office probably performs a unique role. There are three groups of people who particularly rely upon its services and upon easy access to them. A large majority of our senior citizens in receipt of retirement pensions collect those pensions from the post office. Their weekly visit is not just a business transaction. It is often a social occasion of great importance to them. At the post office they meet their friends and neighbours as well as collect their pensions. For the mothers, and sometimes the fathers, of young children, easy access to a post office to collect child benefit is of great assistance. For the disabled, such access is not only important but is at the heart of the service that we provide.
  The post office's customers probably include the least mobile members of society. Small distances can often make all the difference to their capacity to go in person to collect their benefits. Our network of convenient post office counters is one of the most important facilities for disabled people.
  Post offices in the United Kingdom may well be unique in that respect. No doubt international comparisons will be made in the debate with reference to the number of post offices in relation to the size of the population. We must always bear in mind that post offices in many other countries do not fulfil the obligations laid upon the post

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  office here as the payment centre for social security. In any event, I am not impressed by international comparisons in this context. It may be pointed out that in West Germany, France, Italy, Japan or the United States, fewer post offices serve as many people. I do not conclude that we should reduce our services to the low international mean. If we have a better service—as I believe that we have—we should retain it. We should remain superior and continue to provide a better service.
  The social obligations and the importance of the post offices have been recognised by Parliament, which has placed statutory social responsibilities, as well as commercial obligations, on the Post Office Corporation. At the heart of our debate is the question of balancing social and commercial responsibilities. We believe that the Government's financial policies towards the Post Office have become so rigorous, enforcing commerciality of an especially narrow kind, that the social responsibilities have been allowed to become subordinate and are steadily being eroded.
  A closure programme involving 78 Crown post offices and 900 sub-post offices is being embarked upon. I have chosen to state the figures positively in the motion, hoping that they bring home to Parliament and the public the scale of the closure programme. In all of the documents that the Post Office and the Government have provided concerning closures, the issue has been approached in a different way. We are told that there might be some difficulty with the network of counters, but that we can rest assured that 95 per cent. of the network will be maintained. It is never stated that 900 sub-post offices and 78 Crown post offices will be closed, although that is the truth. One of the consultation documents says that
  "the strategy involves some proposals for reducing the network, there will be proper consultation before any closures are carried out"
  I know that some of my right hon. and hon. Friends have some doubt about the effectiveness of consultation, especially in regard to some of the proposals that have been made in their constituencies.
  It is all very well to talk in terms of percentages and to say that there will be a 5 per cent. reduction or that the network will remain at 95 per cent. of its former size, but for the area that loses its post office the loss is not 5 per cent. but 100 per cent. For people who depend on the facilities of a post office, such a closure is a serious withdrawal of facilities which makes the service less valuable.
  Why are the Government's financial policies having this effect on the Post Office when it is making a profit? In the first six months of this year, the Post Office made a profit of £40 million. As it usually makes much more in the second half of the year because of Christmas and other factors, it is clearly heading for a profit of more than £100 million. Such a profit is a credit to the corporation's efficiency. When the Post Office is doing a good job for the public by making such a large profit and contributing to the state, why should there have to be closures? For financial purposes, counter services are reckoned in isolation, but they also make a substantial profit—it is likely to be £12 million this year.
  For the answer, we must go back to 1981 when the Government adopted a new approach. The Government changed from paying the Post Office on a cost plus 2 per cent. basis for services provided to Government Departments to what was called an agency services
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  agreement. The new system was introduced in 1982. The new regime sets much more rigorous targets for the Post Office and effectively demands a given level of profit from counter services. The targets have been set at a level which require counter services to be subjected to a major cost-cutting exercise. That necessarily leads to closures when counter services are under pressure because the Government are taking business away from them by encouraging other methods of paying pensions — for example, by direct payments into bank accounts.
  I am not suggesting that the Post Office should be the sole vehicle for payments of pensions and the like, but when the Government are reducing the scope of the work that is handled at the counter it cannot make good sense to impose an especially heavy financial burden on counter services. The targets which have been set for counter services neglect grossly the social considerations that must be involved in the balance of social and commercial obligations. The Government are saying not that the Post Office must staunch losses that have been incurred by keeping a substantial number of post offices open, but that post offices must be sacrificed to reach a level of profitability that the Government have determined. Most of us regard that as quite a different proposition from staunching an outflow of public funds which are subsidising post offices. The Post Office is profitable and to insist on it being more profitable, although that involves closing facilities, seems an entirely wrong set of priorities.
  We know that the Government's actions will result in big problems and that the savings will not be great. I should like to give an example that illustrates the case dramatically. My hon. Friend the Member for Newham, South (Mr. Spearing) pursued with the Post Office the costs in closing eight post offices in the borough of Newham. He was informed, after some correspondence, that the estimated savings from closing eight post offices was £39,000. That represents less than £5,000 for each post office. The total cost of post offices in the borough of Newham is £1·7 million. For less than £40,000, eight post offices are being removed from the scene. I fail to see how that can ever be regarded as a sensible balancing of social and commercial responsibilities. The savings are paltry as compared with the loss of service. I am grateful to my hon. Friend the Member for Newham, South for, as always, pursuing the matter indefatigably and for producing such a good example.
  Our criticism is that counter services are being asked to make too high a contribution to overall profits. The result will be a large loss of jobs and a reduction in services for many people. I am sure that many of my right hon. and hon. Friends and Conservative Members will give examples, drawn from their constituencies, of the social impact of closures. I do not intend to elaborate as I want to enable as many other hon. Members as possible to speak.
  The closures seem to many of us to be part of the relentless process of increasing unemployment and reducing public and community services simultaneously. Not one day, let alone one week, goes by without there being another cut in a community service, thus throwing even more people into the dole queue. The Government do not build, but destroy. They do not open new opportunities for our people, but close facilities that are essential to civilised life. Seldom are they persuaded that they are wrong, and they yield only occasionally to public opinion. This is an occasion for Parliament to speak on a

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  crucial community matter and to act. Many Conservative Members have been vocal in their opposition to post office closures in their constituencies. They have a chance today to speak and to vote. As we know from recent history, there are occasions when Conservative Members do not hesitate to try to influence the Government on issues that are close to their hearts or their sense of self-preservation.
  We are not asking Conservative Members to commit their Government to an outrageous extension of public expenditure. All we ask, and all that this issue requires, is some moderation in the financial targets that are set for the counter service section of the Post Office, even after the adoption of which substantial profits would accrue. It is not much to ask, but it means a great deal to many disadvantaged people. That is why we feel entitled to ask for the support of the whole House for the motion.
  4.18 pm
  The Minister for Information Technology (Mr. Geoffrey Pattie): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  'recognises that the future of the Post Office counters network will depend on its ability to compete successfully by operating efficiently and reducing the costs of its operation while having regard to the social needs of the United Kingdom; and fully supports the Post Office's efforts to secure by these means the future of an extensive and socially responsive network.'
  The Opposition motion states that
  "serious social harm, inconvenience and disadvantage"
  may result from the post office closure programme. The right hon. and learned Member for Monklands, East (Mr. Smith) must not be surprised when I say that, by definition,
  "serious social harm, inconvenience and disadvantage"
  must have applied with equal force to the post office closure programme that took place in the last five years of the Labour Government.
  During the first five years of our Administration 734 net post office closures took place, compared with net closures during the last five Labour years of 1,140. That was 230 a year. Is the right hon. and learned Gentleman saying that post office closures under a Conservative Government cause
  "serious social harm, inconvenience and disadvantage",
  but that post office closures under a Labour Government have a different social effect? Or is he saying that the Labour Government were not responsible for the closures because the earlier Labour Government in 1969 established the Post Office as a separate publicly owned corporation for the purpose of running its own business and with its own board of directors? He would be right, for once, if he were saying that.
  Lest there should be any doubt about the matter, the 1978 Labour Government White Paper on nationalised industries set out the basis of the relationship between Government and nationalised industries, and how Government were to discharge their responsibilities for monitoring and control. It is a bit much for the right hon. and learned Gentleman to wax rhetorical, talk about closures and about the Government destroying parts of the framework and infrastructure of Britain. I have just given the figures for post offices. If my right hon. Friend the Secretary of State for Social Services were to give the figures for hospitals, it would be apparent that far more
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  hospitals were closed under the Labour Government than under the Conservative Government, and if today we were having the debate that is so strongly desired by the Opposition that they will not select in their own time—the debate on the miners' dispute—it would become apparent that more coal mines were closed by the Labour Government. Who, then, is engaging in closures?
  Mr. John Smith: Our argument is that the adoption of new financial targets in the agencies services agreement is the reason for the closures and is a point of departure from policy by this Government as opposed to previous Governments. The Minister knows that "cost plus 2 per cent." was replaced by new rigorous targets. Does the Minister deny that the closures are caused by the agencies services agreement and the new targets for counter services?
  Mr. Pattie: Yes, I do. In 1982–83 the so-called agencies services agreement came into operation. It does not mean a change to a system that requires a mark-up in the services provided for Government Departments. It presupposes real unit reductions consistent with the Post Office's efficiency target. That means that greater efficiency requirements will be made of the Post Office. The agreement does not require a mark-up. The counter network will reduce real unit costs consistent with the whole business target of a real unit cost reduction of 5 per cent. over the three years from 1982 to 1985.
  Mr. Harry Ewing: No doubt the Minister is pleased with himself for making the clever point about closures under the Labour Government. Does he not understand that the closures were part of an agreement with the unions involved and the public, which was entered into to bring about postal mechanisation? The complaint now is that, the postal mechanisation programme having been completed and the jobs having been surrendered, the workers and the public are being stabbed in the back by the Government who are breaking that agreement.
  Mr. Pattie: The Post Office workers are not being stabbed in the back by the Government, or by the Post Office Corporation. Since the establishment of the Post Office as a separate corporation in 1969, no Government have had the power to intervene in the day-to-day decisions and workings of the Post Office. It is interesting that the hon. Gentleman talked about modernisation because in today's Financial Times there is news of a new cash machine network which is to be launched, and which has various partners, including the National Girobank. What is being sought is not mere accounting efficiency and returns, but ever-increasing operating efficiency so that the Post Office can compete.
  It is important to remind the House that, even after the contemplated programme of closures is completed, there will be the largest retail network of any sort in the country. It will involve 21,000 sub-post offices and 1,567 Crown offices. I shall not make the international comparison to which the right hon. and learned Gentleman alluded, because such comparisons can be misleading.
  I share the right hon. and learned Gentleman's belief that many hon. Members will wish to intervene to cite examples from their own constituencies. I imagine that there is hardly a constituency that is not affected by the programme, and mine is no exception. Hon. Members will

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  tell us of the difficulties that certain individuals have in getting to post offices. When the Opposition use the phrase "serious social harm"—
  Mr. John Smith: That is what it is.
  Mr. Pattie: I disagree. I am not aware of any products or disbursements of benefits that cannot be disbursed and made available over a post office counter to anyone authorised to act on behalf of a recipient of such a benefit, usually the elderly, infirm and disabled. There are thousands of arrangements of that sort. Throughout the country in the 21,000 sub-post offices and the Crown post offices people draw benefits for other people. The closure programme focuses on urban areas, not rural areas. So long as there are other shops or meeting points in a local community that people can regard as a social meeting place, there will be no serious social harm.
  Mr. Charles Wardle: Is my hon. Friend aware that in my constituency, which has the highest average-aged population in the European Community and where there is therefore an extremely high weekly collection of pensions, there is a proposal to close a sub-post office in Sackville road? Is he further aware that the chairman of the Post Office and senior management have taken a personal interest in the consultation process to ensure that the interests of the many elderly people in the town are adequately safeguarded? Does he agree that that is a clear example of the Post Office's determination to ensure that its social function is properly attended to?
  Mr. Pattie: I am grateful to my hon. Friend, who is right to say that all closures are considered carefully, in many cases by the chairman of the Post Office in person and by his staff.
  The right hon. and learned Gentleman cast some aspersions on the consultation process. Although it is not a statutory requirement, in at least 10 per cent. of the cases where representations were made the decision was varied. That shows that the process is not a charade. The chairman and the Post Office board would resent any suggestion that it was a charade, because all representations are considered seriously.
  Mr. Frank Field: May I ask the Minister about his representations? When he was told about the closures, did he not believe that they may have a major social impact? If he thought that, did he communicate his views to the Post Office? If he did, what guarantee was he given that there would not be the impact that the Opposition believe there will be?
  Mr. Pattie: I did not believe that there would be such a social impact. Therefore, I did not make representations along those lines. I had to satisfy myself that the Post Office's proposals, which meant that 21,000 sub-post offices and 1,567 Crown offices would remain, would leave the network in an effective condition. Once I was satisfied on that, I accepted the proposals. The Post Office alone decides on its operating requirements.
  Mr. George Park: Will the Minister give way?
  Mr. Pattie: I shall be happy to do so, although I bear in mind what you said, Mr. Speaker, about many hon. Members wishing to speak in the debate.
  Mr. Park: The Minister has got it the wrong way round. Did the Government say to the Post Office, "Your
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  profits must be 4 per cent. instead of 2 per cent. and you must meet this?" From my correspondence with Ministers I have learnt that they said, "We set the targets and it is up to the Post Office to implement them." How could the Minister make representations after doing that?
  Mr. Pattie: I was asked by the hon. Member for Birkenhead, (Mr. Field) to say whether I shared his view and the view of the Labour party that there would be extensive social damage. I told him that I did not. However, I understand, as does the Post Office, that it cannot close post offices anywhere without causing some inconvenience and increased cost to those who must travel further. But neither factor leads to serious social harm.
  The right hon. and learned Member for Monklands, East said that he was worried about the effects not only on Post Office customers, but on staff. I must ask what is best for the Post Office, its customers and staff? Would it help the staff if the Post Office board gave no thought to the efficiency of its operation? What would be the reality of having a post office on every corner? It might be very convenient, but the facility could not be enjoyed for long without someone having to pick up the bill and the entire business being jeopardised. If the Post Office counters network is to operate successfully, it must provide a service that is efficient and effective at prices that customers are prepared to pay. The majority of the business undertaken at counters is work which the Post Office handles on an agency basis for Government Departments, public corporations and local authorities. They use the counters network because it provides a cost-effective way of meeting their requirements. It would be wrong for Departments to be expected to use the network irrespective of the cost of the services provided.
  Therefore, to retain existing business and secure new business, it is essential that the counters network provides an efficient and cost-effective service. In this way, the Post Office will secure a future for the counters business, to the benefit of its agency customers, its staff arid those who use the services. If it fails to follow that path, it will slip quickly into a vicious circle of charging unattractive prices, losing business, having to charge higher prices to cover its costs and, as a consequence, losing still more business. Once it is in that position, the future of the entire network would be imperilled. I cannot believe that the Labour party would regard that as sensible or desirable.
  Mr. Paddy Ashdown: How can the Minister say that the future of the network will be imperilled when the Post Office counters network is making £12·5 million a year?
  Mr. Pattie: I would ask the hon. Gentleman to raise his sights for a moment to the future and to say that the important thing for any business is to ensure that it maintains its efficiency. If it makes profits today, that is fine, but will it make profits next year or the year after?
  Among those who have made representations to my Department about the closures was the Union of Communication Workers, which expressed concern about the implications for its members in Crown post offices. Clearly, the precise implications must be discussed by the union and the Post Office board. However. I understand that the Post Office expects to carry out the reduction in Crown post offices without redundancies. Apart from 12 closures during the past 18 months, the Post Office plans to close between 60 and 70 Crown offices out of a total

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  of 1,567. The reduction is hardly draconian. The House must recognise the important points that I have made about how vital it is to the future of the network and, therefore, to the jobs in those Crown offices, that the Post Office continues to try to improve efficiency.
  As the House will be aware, since 1945, the Post Office has had a criterion of providing post offices at one-mile intervals in urban areas. In 1983, the Post Office instituted a review of the town sub-office network, which showed that against that criterion, despite closures over the years, there was an excess of 2,000 offices. The review also showed that if the Post Office were to limit the urban network to offices that made a financial contribution to central overheads, again, the number of offices was 2,000 more than could be justified. Nonetheless, because of its social obligation, the Post Office decided to restrict the number of sub-offices to be closed to 1,000 or 5 per cent. of the total, with a similar proportion of Crown offices.
  A major reason for the excess over the standard criterion was that changes in the distribution of population had not been reflected in the provision of post offices. That was especially the case in the cities and in some inner city areas that had had substantial reductions in population in recent decades, which were not matched by appropriate reductions in the number of post offices, although many offices had been opened to service new centres of population.
  Reference has been made to the special needs of areas of social deprivation in old inner city areas. Again, the Post Office has taken that into account. For example, during the past 20 years, the population of inner London has decreased by 28 per cent. The reduction in the network is nothing like that, and inner London will continue to benefit from a network of sub and Crown offices that will be about twice as large as it would be if the Post Office standards in existence since 1945 were applied rigidly. It should also be noted that until the Post Office review showed that the great majority of sub-offices in rural areas were run at a loss to the Post Office, for social reasons the Post Office intended no closures there, except where it was unable to find an acceptable sub-postmaster willing to take on the job.
  Mr. Alfred Morris: The Minister mentioned the social reasons for not closing post offices. Is he aware that the managing director of Post Office counter services told me that there would be a facility for a friend or welfare worker to collect pensions or allowances on behalf of the elderly or disabled? He speaks as though social workers grew on trees. It will be impossible for many elderly and disabled people to make arrangements for the collection of their benefits. Is he further aware that post offices are regarded as community centres where information is available? Will he reconsider the entire proposal?
  Mr. Pattie: The hon. Gentleman was not present at the start of the debate, when the right hon. and learned Member for Monklands, East was deploying similar arguments and I dealt with some of those points. In particular, I said that there are many examples of arrangements to ensure that the appropriate benefits are collected, whether by social workers, friends or relatives.
  The Government were informed of the outcome of the closure review and of the Post Office board's subsequent
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  decision to reduce the size of the urban network. In accordance with our responsibility for general policy matters, we considered the proposals and were satisfied that the proposals were not inconsistent with the Post Office's statutory duty both as regards social needs and efficiency.
  The right hon. and learned Member for Monklands, East spoke about serious social harm. This suggestion does not bear close examination. I have already said that the review revealed 2,000 urban offices in excess of the one-mile criterion and 2,000 urban post offices that are unprofitable, as are about three-quarters of the 11,000 rural post offices. A hard-nosed commercial approach would see all or most of these offices closed. The fact that they are to remain open is the strongest possible evidence that the Government and the Post Office both recognise that the Post Office is not simply a commercial organisation but has social responsibilities as well. The Post Office takes these responsibilities extremely seriously.
  Mr. James Couchman: Is my hon. Friend aware that in my tight urban constituency, of the 27 sub-post offices, only one is proposed for closure? That is a quarter of a mile from an under-used Crown office and a quarter of a mile from another sub-post office. Keeping that office open would be taking the social responsibility of the Post Office too far.
  Mr. Pattie: I am grateful to my hon. Friend for that point, which requires no further amplification from me.
  A further illustration of the acceptance by the Post Office of its social responsibilities was its decision—with no prompting from Government or anyone else—to defer all the Crown office closures then under consideration until the effect of the DHSS's dispute was dealt with. Although the strike has now been resolved, it will still be some four or five months before normal service is resumed, and the closure programme will not be reactivated before then. It also decided to defer all sub-office closures where the sub-postmasters concerned were willing and able to remain in business for the same period. The Post Office has acted with real responsibility during this dispute, and unfairly taken criticism for long queues resulting from industrial action in which it had no involvement.
  I pay tribute at this point to the dedication and hard work of the counter staff, who have had to endure many months of an appalling increase in their workload because of the cynical and unjustified strike at the DHSS offices in Newcastle.
  I have referred to the Government's recognition of the role that post offices play in the social life of the country, a role that has been recognised by previous Governments and is reflected in the legislation. I have also made it clear that this Government, like their predecessors, also recognise the commercial nature of the business, and this too is covered in the legislation. I think that it would help the House if I set out the statutory position on the Post Office's duty, and correct the misleading impression which the right hon. and learned Gentleman has given by his selective interpretation of the relevant provision.
  Mr. Eddie Loyden: Is not the Minister ignoring the fact that the role of the Post Office has changed dramatically in the post-war period, year by year? Post offices have now become an outlet for the

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  payment of benefits, and there is a clear responsibility on Government to see that that provision is made. If it is not made by the Post Office, some other agency should be taking up that responsibility. When this matter has been raised, the DHSS, which has prime responsibility for the distribution of benefits, has appeared not to be interested. Traditionally, this has always been a matter for the Post Office, so it is nonsense to say that these closures will not cause social difficulties and hardships. The Minister should visit post offices where sometimes queues for benefit payments extend for 20 or 30 feet outside the post office. What will happen in the future if further closures—
  Mr. Deputy Speaker (Mr. Harold Walker): Order. Interventions should be brief. Many other hon. Members are waiting to take part in this debate.
  Mr. Pattie: I am probably unwise, Mr. Deputy Speaker, in that, in seeking to assist the House, I gave way perhaps more frequently than I should do, although I was aware of Mr. Speaker's injunction to keep speeches brief as many hon. Members wish to speak in this debate. With your permission, Mr. Deputy Speaker, I shall restrict myself to not giving way any more.
  Section 59(2) of the British Telecommunications Act 1981 imposes on the Post Office, in providing its services, a duty to have regard to the social, industrial and commercial needs of the United Kingdom and to efficiency and economy. The Labour party has chosen to ignore the requirements as to efficiency and economy. The right hon. and learned Member for Monklands, East referred to efficiency and economy.
  Mr. John Smith: I did not mislead the House.
  Mr. Pattie: I did not say that the right hon. and learned Gentleman had misled the House. I should think long and hard before saying that.
  I make no apology for the fact that the Government, like their predecessors, look to the Post Office to satisfy its statutory duty as regards efficiency and economy—just what the right hon. and learned Gentleman would—just as we look to it to satisfy the requirement as to social needs. The right hon. and learned Gentleman has accepted the economic requirement, and we all know that it was established originally by a Labour Government in the 1969 Act. He has rightly said that conflict clearly arises between satisfying the social requirement on the one hand and the efficiency requirement on the other. A post office on every street corner might satisfy social needs but would not be efficient or economic.
  In formulating its plans and policies, the Post Office's statutory duty requires it to seek to strike an often difficult balance between the social needs of those whom it serves and the need for reasonable economy and efficiency. It will always be a matter of judgment whether in any particular case it has got the balance right. As I have explained, our judgment was that the Post Office's proposals for the urban counters network were not inconsistent with the Post Office's statutory duty.
  However, that is the extent of the Government's involvement. My Department has received a very large number of representations against specific closure proposals, as have other Ministers and my right hon. Friend the Prime Minister. I hope that I have made clear to the House why the response in all cases has been the
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  same. That is to say that the Government are not involved in specific closure proposals and have no power or desire to intervene. I am sure that many hon. Members will give us details about their constituencies, but when my hon. Friend the Under-Secretary of State for Trade and Industry replies to the debate the answer will be exactly the same.
  The need for the Post Office to respond to competition is reflected in the Post Office announcement of a network of 180 automatic telling machines, which, in time, will be part of a much larger network provided by it and its partners. Response to competition is why the Post Office is so keen to come forward to the Government with a programme of counter automation this spring.
  That also is why the Post Office wants to modernise its premises—so that it can compete. However, it cannot afford to do this if it continues indefinitely to provide a network that remains so much in excess of standards that have existed for 40 years. It was absolutely right that the Post Office should publish the facts so that we could understand what it was doing to provide a viable modern network for the future.
  It has been claimed that the Post Office has only had to consider closing post offices because of Government policies, which have taken work away from the counters network. This is another assertion that does not stand up to examination. It is of course a feature of the counters network that it is an operation that has high fixed costs and the economics of running it depend heavily on the volume of business that is undertaken.
  When the Post Office put its proposals to us, these included its intentions to consult the National Federation of Sub-Postmasters, the Post Office trade unions and the Post Office Users' National Council. It also confirmed that individual closure proposals would be subject to the existing code of procedure agreed with POUNC, which provides for consultation with local interests before final decisions are made to close an office.
  Mr. Max Madden: That is a sick joke.
  Mr. Simon Hughes rose—
  Mr. Pattie: I shall not give way. Had the hon. Gentleman been here earlier, he would have heard me say that I had given way consistently and was not prepared to do so any further.
  I am aware that criticisms have been made about—
  Mr. Hughes rose—
  Mr. Pattie: I said earlier, whether or not the hon. Gentleman heard me aright, that over 10 per cent. of the proposals that have been examined have resulted in the decisions being varied. It would be something of a slur, which I am sure that the hon. Member for Bradford, West (Mr. Madden) did not intend, upon the Post Office board and upon the senior personnel of the Post Office to suggest that the consultation process, which is not a statutory requirement, is a charade. I know that the hon. Member is not saying that.
  Mr. Madden: I am. I said that it was a sick joke.
  Mr. Pattie: The hon. Member is, then, saying that. It is most unworthy. He now says that it is a sick joke. I have told him that over 10 per cent. of these consultations result in the decision being varied. It means that if consultation

  1003
  had never taken place there might be some substance in what the hon. Member is saying. The fact that the Post Office has withdrawn proposals in a number of cases demonstrates that it listens to local views. If anybody is open to reason, that must dispose of the suggestion that the consultation procedure is a formality in advance of a foregone conclusion.
  I repeat that when the Post Office told the Government about its proposals for reducing the size of the urban counters network we were satisfied that they were not inconsistent with the statutory duty of the Post Office. In undertaking the review and in framing the proposals for closures the Post Office is looking to improvements in the efficiency and cost-effectiveness of the counters network and to securing its future. This exercise must be to the benefit of the community. The Government fully support the Post Office in these efforts.
  4.51 pm
  Mr. Roy Mason: I was very disappointed in the Minister's speech. He had a cold, unemotional script. He did not appreciate the problems faced by our communities. He gave the impression of not understanding what is happening in the towns, boroughs and rural areas of Great Britain.
  I was disturbed and sorry to note in the press of December 1983 a report about the future of town sub-post offices. The report said that more than 1,600 post offices faced closure as a result of an internal review undertaken by the Post Office. The review was to examine the profitability of town sub-post offices and main post offices. Internal minutes of the September meeting of the Postal Business Joint Council revealed that the study concluded that 1,609 of the 9,533 town sub-post offices should be closed if the Post Office insisted that they all made a profit. We all know that the review was forced upon the Post Office as a result of the tough financial targets set for the service.
  The Post Office is now specifically looking for loss makers. It is the profit test. Profit, not need, is now the theme. I never thought, as a former Postmaster-General, albeit for a short time, that I would see the day when the profit motive would be determining the existence and future of our sub-post offices. When I was Postmaster-General I was imbued with the spirit that the Post Office cares. All my civil servants cared about the rural post offices, the country pillar box, the rural telephone kiosks. They cared about the service that they provided and they were proud of it. That caring rubbed off on me. That is why I intervene briefly today. However, the profit motive can never be the test of country or rural sub-post offices. Nor should it be the test where a case of need exists and is seen to exist in a town sub-post office. This is a harsh streak in Post Office policy now, emanating from the Government's monetarist policy which is already causing distress to many thousands of people who are sorely in need of help but who, by the Post Office closure decisions, are being denied that help.
  I raised the case for the survival of the Union Court sub-post office in Barnsley. The postmistress was about to retire. The postmaster and the chairman of the Post Office used the words "seizing this chance" to close it. That is the language of the profiteer. It is not the caring Post Office that I used to know. The head postmaster in Barnsley
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  informed the interested parties that because the postmistress had tendered her resignation he had formed the view that Union Court could close and that the needs of its customers could be adequately met elsewhere, naming Dodworth road sub-post office as an alternative as well as the town's main post office. The mayor and the councillors met the postmaster and explained the harshness of his decision. The alternatives meant a long walk along hilly terrain for pensioners, with no bus service to cater for them, negotiating traffic through the town, the difficulties of the winter months and the persistent queues in the town post office and a counter service where people queue for 20 minutes for any service at all. Their protest was long and it was loud.
  But why all this fuss? Why did the entire town council express opposition to this closure? There was a petition that contained 1,800 signatures in opposition to the closure. There was a demonstration of opposition by pensioners and disabled people outside the general post office. There was a major intervention by Age Concern in Barnsley and district, because this post office was right in the centre of a housing development that was built mainly for pensioners and disabled people, all within 100 yards of the post office. Around the post office are flats and maisonettes just for these people. The fact is that 138 pensioners from nearby high-rise flats use this post office, and eight out of 10 of the disabled and elderly people who live there depend upon it.
  This was a special case. The post office was built with local authority assistance. It was custom built, because of the circumstances. It was opened only in 1969 because of the special needs at that time. Since then there has been more development. The local authority is building another 28 dwellings to house 58 aged and handicapped people in the immediate vicinity. The local authority made the appraisal that this post office was an absolute necessity. It would be handy and convenient because of the preponderance of old people in the area. It was a sensible, caring decision. It was caring based on need. That is why we have had over 50 years of unbroken Labour party local authority in Barnsley. It is because the local authority cares.
  Nevertheless, the postmaster and the chairman of the Post Office ignored all pleas from all quarters and went ahead with the closure. The mayor, echoing the feelings of the townspeople, said:
  "It is an inhuman decision taken with callous disregard for the needs of the elderly and disabled living in the area".
  Even the housing director issued a statement, saying:
  "It seems very unreasonable to me, the council having gone to such considerable capital expense, that the post office should unilaterally withdraw their facility".
  So much for consultation with the postmaster and the chairman of the Post Office. These were all storms of genuine protest from all sections of the community. Everybody but the head postmaster believed this closure to be an outrage. The image of the caring, compassionate Post Office service in my town has been blighted. The community will never have the same faith, trust and confidence in the Post Office again.
  But that is not all. Since that closure one of the alternatives quoted to us all that could be used, namely, Dodworth road sub-post office, has now been given its notice to close. Indeed, I have no doubt that but for the Newcastle computer strike it would have been closed by now, or we would be once more in the midst of a battle

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  to save it. However, let the Post Office and the Minister beware that that is yet to come. All over the country there are skirmishes and battles taking place to try to preserve the social role of the Post Office. The point is that 157 sub-post offices closed in the year ending March 1980; 162 in 1981; 62 in 1982; and a further 98 in 1983, most of which have been contested by local people.
  The differences between the closures when a Labour Government were in office and now is that need was then recognised. Now it is profit that is recognised. Why should the Post Office be so heartless when the half-year gross profits for 1984–85 are £40 million? Gross profits are therefore running at an annual level of £80 million. The profits are so high because community need is now being neglected. The Post Office is losing its social conscience. That is my sad conclusion.
  My Department will be feeling sad and sore at this most invidious predicament in which it finds itself. For the first time that I can remember the British Post Office is being blighted throughout the land because it is being forced down the path of profit and efficiency to the complete disregard of its social, caring and human qualities.
  The Government will no doubt reap their electoral reward through all those people whom they have hurt. That time will not be long and when it comes those people will be able to register their national disapproval of the targets that have been set by the Government to force the Post Office down this callous and cruel road.
  5 pm
  Mr. Conal Gregory: Both the substantive motion and the amendment refer to the economic and social aspects of the Post Office's work. I appreciate that the Post Office cannot be treated exclusively as a commercial organisation. and therefore it is right that today we should debate one aspect of its policy. Who is the biggest customer of the Post Office? It is the taxpayer, through the agency of Her Majesty's Government. Efficiency with a social heart should be the watchword of today's debate.
  My constituency of York has experienced the closure of three sub-post offices since my election. Those closures illustrate the specific nature of the debate. The Post Office plans to close some 500 post offices nationally in this financial year. It tells the local authority of any office proposed for closure to allow views to be made known. That is well and truly putting the cart before the horse.
  The Post Office has seen a decline in its agency work performed for the Government. If it continues to reduce counters, there may well be demand for offices in building societies and clearing banks to take on the agency functions such as cashing pension allowances and family benefit. But the elderly population relies on state pensions.
  The Post Office has given an assurance that 95 per cent. of the network will be maintained over the next three years. I have been pleased to learn from the managing director of counter services that the policy to close sub-post offices in urban areas that are within one mile of each other is not rigid. My hon. Friend the Minister for Information Technology referred to a flexibility there. I chose not to join all those hon. Members who intervened, but he did not say where the criterion of one mile came from. Is it because the Post Office's compass works on local geography of one mile? I have not heard a justification for that and I should like to hear it in due course.
  1006
  How much credence can one attach to the Post Office's statement that
  "Each closure proposal is made after full consideration of the economic and social factors"?
  I should accept that if the Post Office had consulted the professional people involved—the social workers and voluntary agencies such as Help the Aged, Age Concern, and so on. But in the examples that I am about to come to the social workers and professional people involved were not consulted. The Post Office suggested that the local authority, if it deemed fit, should contact those agencies.
  Mr. Chris Smith: The hon. Gentleman may care to reflect on an answer that the Under-Secretary of State for Trade and Industry gave to an Adjournment debate on 9 March 1984 when I raised the question of the one-mile interval. Referring to the Post Office, he said:
  "This, it believes, is representative of the fair balance between the service that its customers would like and the costs involved." — [Official Report, 9 March 1984; Vol. 55, c. 1156. ]
  Does that not reveal that we are back at the same old formula that the Minister came out with earlier today about service and cost, with cost predominant in the thinking of the Government and the Post Office?
  Mr. Gregory: I well recall reading that Adjournment debate. We are back to the difficult matrix between the social philosophy and the economic aspects to which], and I am sure other right hon. and hon. Members, will return.
  If we take into account not only the distance but also the type of terrain, which may be important in the case of a community home, the alternative facilities, local transport, future plans for the development of the area, and the ability of other offices to absorb the additional business, we can see that a complicated formula faces the Post Office.
  Let me refer to three examples from my constituency which illustrate those factors. Poppleton road in York illustrates the agency business. That has now been closed by the Post Office following, as at so many sub-post offices, the retirement of the postmaster. The business was relatively small and the number of pensions dealt with had fallen by some 6 per cent. to about 346 a week and family allowance payments had been reduced by 12 per cent. to 219 in the years 1982–83. But—this is an important factor to bear in mind when considering the elderly, the disabled and the young mother with children—it meant a one-and-a-half-mile round trip to the alternative post office.
  Cromer street serves some 8,200 inhabitants in York, of whom 1,335 are elderly. It is in a primarily residential shopping area and is certainly disadvantaged. In that catchment area over 900 people claim housing benefit and 229 claim rent allowances. Clifton sub-post office, the alternative, lies about one mile away, but that involves crossing a busy main road. That is another factor that the Post Office management needs to consider seriously. Crichton avenue sub-post office is some 740 yards away.
  If the post office in Heslington road is closed. as has been proposed by the postmaster, the elderly will have to cross the heavy traffic at Barbican road, Lawrence street and Foss Islands road, which are en route to the proposed alternative of Walmgate sub-post office. We are talking about 6,500 people in that catchment area.

  1007
  I appreciate that hon. Members may not be able to follow the detail of this but the argument two years ago for the closure of another sub-post office at Lawrence street was on the basis of its proximity to Heslington road. Now that the Heslington road office is to be closed we are seeing the decimation of the urban area of the fine medieval city of York.
  People prefer to collect their own pensions rather than make alternative arrangements with neighbours and managers of community centres, relying upon the good will of other people.
  At no stage has the Post Office in any of the three examples that I have given, given any economic justification either in private to me or in public. Are they making a profit or a loss? I am sure that the people not only of York but nationally would like to know. It is understandable that the postmasters are attracted by voluntary redundancy when sums of about £17,000 are offered as an inducement. In Yorkshire more have applied for redundancy than there are offices proposed for closure.
  Why is there not more adequate consultation? Will the professionals and volunteers in the field, whom I have mentioned, be consulted at a much earlier stage when considering effects? Surely in any proper evaluation the consequences should be taken into account. Should we not look at the role of market research? The customer rather than the bureaucrat must come first, especially as the Post Office recorded a pre-tax profit of £40 million in the half year to September 1984.
  By all means encourage the Post Office to attract new business, modernise its services and buildings and allow marketing, not rigidity, to rule. Some sub-post offices are prohibited from selling postage stamps and other services before the clock strikes 9 am. If they want to open earlier and sell newspapers, why on earth should they not? That would prevent people being driven from their local post offices. It is a curious aspect of local service that I would commend and it would lead to a better future for users, particularly the elderly, the disabled, the infirm and young parents.
  The briefing document "The Post Office Counters Network: A Strategy for the Future", published in May 1984, concludes that
  "there is a fine balance between meeting social needs and the statutory requirement to run an efficient service".
  The proposals for York fall far short of that criterion. They do not display the flexibility referred to by my hon. Friend the Member for Chertsey and Walton (Mr. Pattie). Senior Post Office management should have greater social awareness and care within the exciting possibilities offered by new technology.
  5.10 pm
  Mr. J. D. Concannon: I do not think there is any need to go into all the detail that has already been covered by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and by my right hon. Friend the Member for Barnsley, Central (Mr. Mason). We have to try to explain to the Minister what it is like in the real world outside. There have always been closures of post offices. In areas like mine, when the Co-operative used to run the shop on the corner, it doubled as a post office. With the rationalisation of the Post Office there have been closures. A post office was opened on a new
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  estate in my constituency recently, so negotiations can work both ways. I have had meetings and discussions with the head postmaster for Nottingham and I have no complaints about my negotiations with the Post Office.
  Last year I was surprised when I was notified that four sub-post offices in my area were to be closed. The local council and I said immediately that we wanted negotiations with the postmaster. Before the negotiations took place the matter was covered in the local press. Suddenly I found out that the people who were running the post offices had already been contacted by the Post Office. I was told that redundancy had been offered and accepted. Therefore, I wondered if it was all a fait accompli. Then I had a phone call from one of the sub-postmasters saying, "I know you have to do your job, but do not do it too well and do not be too successful." I had to tell him that, although I might sympathise with his position. I had to think about the social consequences for the people who use the post offices.
  I should like the Minister to explain where he gets the 10 per cent. variation. Three of the post offices proposed for closure in Mansfield feed directly to the general post office. The local councillors and I had a good meeting with the postmaster. However, I suppose it takes a poacher to catch a poacher. It was not long before I found myself in a Chinese bargaining position. All of us who have bargained in the trade union world know what that is. If the authorities want to close three post offices, they say that they want to close four. It is so obvious that one should not be included that at the end of the day they can give a victory on that one.
  We got our victory, but three are still to be closed. Unfortunately, those three feed on to the general post office. In the discussions I think the postmaster agreed that the facilities at the general post office in the centre of Mansfield leave a lot to be desired. At Christmas, in the foul weather and driving snow that we have had recently, there have been queues outside the general post office, even before the others have been closed. This must not be taken as a reflection on the staff of the general post office. Facilities in that post office cannot cope with business now, never mind what will come from the post offices that are to be closed.
  We had our victory. The postmaster was very good. He listened to all our complaints. Then he went away, got out his little wheel and walked down into the centre of Mansfield. It is downhill all the way from Victoria street, one of my areas; then one has to cross a busy main road. The postmaster is a fit young man in his forties or fifties. The general post office in Mansfield is on the lowest ground and it is uphill from it in any direction. Victoria street is in one of the older established areas and needs a post office. I am told that the post office there must be closed. I could have understood the argument about the closure of some of the sub-post offices if the general post office could take the extra workload, but it cannot conceivably cope with any more business.
  I am sorry for the postmaster in Nottingham. Those in charge will suffer the brunt of the wrath of the people. I had not been at the meeting in Mansfield town hall long before I realised that a Government Minister should have been there to answer for the Government. The blame for these closures can rest only on the decision of the Government and not on the Post Office. Once again, because of the actions of the Government, it will be the weaker sections of society who will suffer most. I hope

  1009
  that Government Back Benchers will not just voice their opinions but will vote according to their opinion to try to shock the Government into carrying out their responsibility properly.
  5.16 pm
  Mr. Richard Alexander: It has been difficult to secure this debate, partly because these days no Government Minister takes day-to-day responsibility for the decisions of the Post Office and also because it is hard to call the Post Office itself to account for its day-to-day decisions. It is closing two excellent little sub-post offices in Newark. The decision is causing widespread concern, anxiety and resentment.
  These emotions are held against a background of seriously deteriorating service in the Crown post office, such as the right hon. Member for Mansfield (Mr. Concannon) has described in his constituency. Queues often stretch into the street. The chairman of the district council, as an exercise, went into the post office recently to buy stamps. It took 40 minutes between going in and coming out for him to get a book of stamps. Yet the head postmaster in Nottingham has told me in correspondence that the decision to close the sub-post offices can be carried out without undue hardship to his customers. I tell him that he is wrong.
  It is the elderly, the handicapped and the mothers with young children who are not so mobile who will have to trudge to the Crown post office. They will have to swell the queues. The Crown post office will not be able to cope. I am astonished that the Post Office is willing to contemplate the resulting hardship.
  I listened with great care to what my hon. Friend the Minister said about dealing with the hardship. He said that the elderly or the handicapped can find a friend to go to the post office for them. Perhaps some can, but many elderly people live on their own in total, splendid isolation and they are proud, private people. Their families have gone. They do not have the close friends that they can trust with their personal affairs. It is just possible that a social worker will come on the scene, but generally the change will cause hardship to many elderly people. It was particularly galling for them just before Christmas when it was announced that the sub-post offices were to close, because there was a lot of advertising on television showing smiling old ladies popping into their post offices, collecting their money and savings within a few seconds, and sweetly coming out very happily. The grim reality of the Newark Crown post office and of others in Britain bears no resemblance to some of that advertising.
  We are told that the Post Office wants to cut its costs. Let it cut out unnecessary and misleading advertising for a start. From time to time we receive glowing reports from the Post Office. Indeed, we received a report this week called "News Review", dated January 1985. We are told that there is a "World First for Intelpost" — whatever that may be. We are also told that there are
  "Girobank Postcheques for Corporate Customers."
  Perhaps one day we will receive a report saying "Average waiting times in Crown post offices cut to five minutes. Sub-post offices extended throughout the country." I urge the Post Office to cut out all that frippery, to put its stodgy Crown post offices into the 20th century and to bring back 19th century standards of service, courtesy and speed for its customers.
  1010
  Crown post offices would not be convenient for all, even if they could get in and out of them promptly. Often the post office is bang in the centre of town, and customers find it almost impossible to park nearby. The bus station is generally well away from it.
  Although the technology might be fantastic at the rarefied level of international business, the plodding clerking that goes on in the Crown post offices remains a disgrace. A person still cannot buy a pound's worth of stamps in a slot machine and walk away. The technology in the Crown post office is generally nil. Yet, as the right hon. and learned Member for Monklands, East (Mr. Smith) said, in the last half year the Post Office made £40 million before tax. The right hon. and learned Gentleman asked, and regrettably my hon. Friend the Minister did not answer, why, if the Post Office has that money—and there is no reason to suppose that it will not have another £40 million after the next half year—it decided to cut the number of sub-post offices despite the hardship that that will involve? I hope that my hon. Friend the Minister will deal with that point. Only some of that £40 million need be used to keep open the sub-post offices instead of going in for the international computerisation that we have heard about.
  People want a nearby, friendly, safe service. That is all that they ask for from their post offices. Old people do not want a pile of leaflets stuffed in front of them whenever they go into a post office. They want prompt service, and a smiling helpful face. They find that helpful face in the sub-post office. Without any disrespect to those who work in Crown post offices, it must be said that, as they are busy, they cannot be so helpful or friendly to the many people who need help.
  I suggest to my hon. Friend the Minister that, if we are to close anything, we should think of closing the Crown post offices and of building up the sub-post offices. But, of course, the Crown post offices are virtually a nationalised industry and are not responsive to customer demand or need. They certainly could not do much worse under private enterprise than they are at present, and even most Opposition Members will perhaps agree with that.
  The decision concerning my constituency is a disgrace. It has been taken against clear evidence of hardship for the least fortunate—those who are least able to cope and those who need help most. Life for them will become more grim and more harsh as a result of that decision. That should not be happening in a caring, civilised community.
  5.25 pm
  Mr. Harry Ewing: I begin by declaring my interest, being the only Member of Parliament to be sponsored by the Union of Communication Workers. Together with my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), I had the pleasure—I suppose that some would say the doubtful pleasure—of receiving outside the House a petition that contained more than 150,000 signatures complaining about the proposed closure of 700 sub-post offices and 70 Crown post offices.
  The hon. Member for Newark (Mr. Alexander) spoilt a good speech towards the end by suggesting that the Crown post offices should be closed. Of course, their closure would be just as big a disaster as the proposal to close the 700 sub-post offices. It would be wrong to assume that, as no Minister takes day-to-day responsibility for the Post Office, Ministers do not have a hand in what

  1011
  goes on. If we thought for a moment that the Government did not have a hand in these proposals, we would not have raised this subject for debate. But we not only think but know that the Government are behind the proposals to close the Crown post offices and sub-post offices, and that is why we decided to initiate a debate on this important subject.
  There was an interesting forerunner to this debate. The hon. Members for South Hams (Mr. Steen) and for Rugby and Kenilworth (Mr. Pawsey) raised points of order because the closure of the post office in the House for perhaps an hour or two caused them great inconvenience. But the proposed closures will cause great inconvenience to hundreds of thousands of people, because those post offices will be closed not for one or two hours but permanently.
  I was bitterly disappointed that the Minister should seem to say that later tonight his ministerial colleague would virtually tell hon. Members that they were wasting their time in holding a debate, because the Government had made up their mind that the closures would go ahead. That was a very distressing attitude for the Minister to adopt.
  Mr. Pattie: I was attempting to make it clear that because the Government had no responsibility for the details of individual closures—the merits of one street versus another—any such representations would receive the same answer as we have already given in correspondence.
  Mr. Ewing: I am grateful to the Minister for making that clear, but I intend to show that the Government have responsibility and authority, even in the case of individual closures.
  I wish to put on record my disagreement with the Minister about the number of closures that took place under previous Labour Governments, particularly between 1974 and 1979.
  One of the legitimate complaints of the Union of Communication Workers, which has a vast membership in the Post Office, is that the closures which took place between 1974 and 1979, and, indeed, later in the early years of the incoming Conservative Government, were part of the postal mechanisation programme. In the process of that programme, 1,700 postal officers posts went by agreement. These closures were part of an agreement made between the Union of Communication Workers and the Post Office as part of the postal mechanisation programme with effects on job security and the continuation of the Post Office counter network as we know it. The complaint of my union is that that agreement is being thrown overboard. Those workers had pledged themselves to modernise the industry.
  I disagree with the hon. Member for Newark who suggested that we should take the Post Office back into the 19th century. Some of us have fought long and hard to drag it out of the 19th century. Workers who fought long and hard and who co-operated in bringing the Post Office out of the 19th century into the 20th and 21st centuries are now being betrayed.
  The members of the Union of Communication Workers who are employed in the Post Office feel that they have been betrayed by the Government and, to a certain extent, by the Post Office as a result of these proposals, although
  1012
  there are mitigating circumstances in the case of the Post Office in that it has no control over the external financial limits imposed on it by the Minister acting on behalf of the Treasury.
  One of the problems that the Post Office faces at present and will face in years to come is the requirement to meet the external financial limits imposed on it by the Government. The Post Office has mistakenly come to the conclusion that the only way in which it can meet these external financial limits is by closing 700 sub-post offices and 70 Crown post offices. The Minister states that even after those closures the Post Office will still have the largest retail network in comparison with any similar organisation in the country. That is true. However, that will be so only until the next round of closures because, judging the Government on their record, what we are debating tonight is only the beginning. While we are worried about the present proposals, we are also worried about what will ensue.
  The Post Office is working under the severe handicap of the external financial limits that are placed upon it. The social responsibility of the Post Office is written into the British Telecommunications Act 1981, as are the Minister's powers. Section 60 of the Act provides that the Secretary of State has powers to give directions to the Post Office. That the Minister is currently failing to do. He is not giving any direction to the Post Office in response to the representations that are being made by the public and by hon. and right hon. Members on both sides of the House.
  I deal next with two constituency points. I recognise the point that was made in this respect by my right hon. Friend the Member for Barnsley, Central (Mr. Mason), a former Postmaster-General. In my constituency of Falkirk, East I had notification that two sub-post offices were to be closed, one in Grangemouth and one in Bo'ness. The difference in the attitude of the two head postmasters in different areas — and I suspect that this goes on throughout the country—would have to be seen to be believed. To deal first with the Bo'ness closure in a small part of the town called Grangepans, when the head postmaster of West Lothian wrote and informed me that the office was to close, I requested, and subsequently had, a meeting with him. I did not need to go to his head office, which is in another part of West Lothian, but he willingly came to Bo'ness where we met. I persuaded the head postmaster that it was necessary not only to consult the local authority but also to speak to community groups such as young mothers' clubs and old-age pensioner organisations.
  I wish to place on record my thanks to the head postmaster of West Lothian, who met all the community groups that asked to see him. As a result, he changed his mind and the decision to close the sub-post office in Bo'ness was reversed. I pay tribute also to the sub-postmaster, because, as was stated by my right hon. Friend the Member for Mansfield (Mr. Concannon), the sub-postmaster had in his pocket an offer of £20,000 to give up the sub-post office. He too joined the decision to reverse the closure for which I pay tribute to him.
  With regard to the proposed Falkirk closure, the head postmaster of Falkirk wrote to me. He consulted only the district council. He did not bother to consult the old people's organisations, the young mothers' clubs or any other group. The users of the sub-post office which he intends to close were never consulted. He stuck to his

  1013
  original decision: the Oswald avenue post office, Grangemouth, according to the postmaster of Falkirk, is surplus to requirements and will, therefore be closed. The people who use that post office will have to walk not one mile but something like two or three miles across busy main roads. That illustrates the difference in approach of various head postmasters which I suspect is to be found throughout the country.
  I return to the central theme of the debate which was set by my right hon. and learned Friend the Member for Monklands, East in opening the debate. The Union of Communication Workers has a proud record of cooperation in modernisation. As I said earlier, we gave up 1,700 jobs in order to bring the Post Office into the 21st century.
  The union and the Opposition do not intend to sit back and take the closures as if they mean almost nothing. They cause genuine social hardship. The Minister has failed singularly to understand or to appreciate the social hardship that they entail. For that reason, I know that my hon. and right hon. Friends who have at heart the concern of the people who use the post offices will vote enthusiastically to seek to impress upon the Minister that he has a duty and can use the powers contained in section 62(1) of the British Telecommunications Act 1981. He can give directions to the Post Office. He is not at liberty to hide behind the coat tails of Ron Dearing or of any other member of the Post Office board. He is the responsible Minister. We ask only that he accept his responsibilities.
  5.37 pm
  Mr. Roy Galley: As a former employer of the Post Office, it may be appropriate for me to declare an interest, however obliquely, in the matter before the House. Having taken a view as a manager, and more sharply now as a consumer, I hope that I may have a balanced view of the issues under debate.
  The Opposition motion, which seeks to blame Government directly for sub-post office closures, is arrant nonsense. It stretches logic rather too far to complain about the level of profit in order to complain simultaneously about the stringency of Government targets. One has to have a degree of balance about the management of post offices.
  It has been a remarkable task over a decade and a half to transform a Civil Service department into a commercial body with not a little agony and with great credit upon the people who have worked in that organisation. It must be a relevant consideration that we have one of the most compehensive post office networks in the world.
  Mr. Nigel Spearing: At the moment.
  Mr. Galley: And even after these closures, which I do not entirely support. The hon. Gentleman should not jump the gun. Even after the closures as proposed, we shall have one of the most comprehensive sub-post office and post office networks in the world.
  It must be a relevant consideration that there is to be £25 million of additional expenditure on refurbishing and modernising Crown offices, and grants will be available to improve sub-post offices. It also has to be a relevant consideration that about £20 million will be spent on the automation of counters and, at long last, the installation
  1014
  of cash dispensers and the like. The Post Office has lagged behind the banks in many respects. It is at last beginning to grapple with the need to modernise in many areas.
  Sir Bernard Braine: I am following my hon. Friend's comments with great interest and I can see that there may be a case for closing a sub-post office if a Crown office is to be establised in that area.
  However, what does my hon. Friend say when a sub-post office is closed in a well populated area and its customers are obliged to go to another sub-post office which cannot properly cope with even its existing customers? Does my hon. Friend agree that in such circumstances there should be a pause for reconsideration so that the social difficulties can be avoided? If no Crown post office is planned for an area, ought not this silly and anti-social business be abandoned?
  Mr. Galley: The point made by my right hon. Friend may be valid, but so may mine. There is a need to modernise the counter network and to market new services and compete in many areas. There is also scope to allow the Post Office more commercial freedom in its counter operations and what may be sold in post offices.
  It must be a relevant consideration that there have been significant demographic and housing changes resulting in some sub-post offices being in the wrong place. That is the case with one of the closures in my constituency. Many of the surrounding houses have been pulled down and the sub-post office is no longer needed.
  The revision of the counter network has been based on a combination of discovering which sub-postmasters would be willing to accept compensation for the closure of their office and the acceptability of those offers to the Post Office management, working on the criteria of the agreed guidelines.
  I applaud the fact that, as my hon. Friend the Minister said, consultations have taken place and decisions changed in 10 per cent. of cases. However, I have some reservations about the consultation procedure. It is my impression from most of the cases with which I have been dealing that nobody was prepared to budge from the decision, despite considerable public pressure, extensive petitioning and proof of serious social problems.
  The House has to balance its judgment about the need to modernise the counter network and, in the same way, the Post Office has to balance its judgment on the closure of sub-post offices by considering the social and commercial factors. That is a matter for the Post Office and not for the Government.
  Historically, it has been the practice in making such decisions to take into account the topography and the terrain of an area, along with the composition of the population and other social factors. It has also been standard practice to take into account the availability and quality of services in the surrounding area.
  It is not acceptable to close a sub-post office when the standard of service at the Crown office a mile or so away is accepted by Post Office management to be inadequate. I do not wish to go into detail on local cases, because they are not the responsibility of the Government.
  Attempts have been made to improve staffing arrangements and staff are working more efficiently. I know that the Post Office faces great difficulties because of the peaks and troughs of its business during the day and during the week. I accept that the DHSS strike has

  1015
  produced enormous problems for the Post Office for a long time. The callousness of those involved in that strike is incredible.
  However, it seems insensitive, to say the least, for the Post Office to close a town centre sub-post office when there is an inadequate Crown office service in that centre. If such closures must go ahead, the public must be convinced that the service at the Crown counter has been improved.
  A more widespread cause of concern is the fact that it is not acceptable to close a sub-post office in an area where a large proportion of the population served are elderly and the terrain is hilly.
  It is argued that the friends, neighbours, home helps and social workers of elderly people can collect their pensions, but that is not true in every case. I have submitted to my local head postmaster, so far without effect, some harrowing letters from people in their 70s and 80s in an area where many of the local people are elderly. Their friends and neighbours are elderly, they have no home help or social worker and, because of the mobility of our modern society, their families have moved away. What are they to do? There is no one to whom they can turn for assistance.
  It is argued that many elderly people would have to make a journey during the week to do their shopping. However, many elderly people can buy most of their day-to-day needs within a small area near their home. Not every pensioner will take a long journey each week to do the shopping.
  The Post Office must take into account the needs of the elderly and the disabled when taking detailed decisions and it must show more sensitivity. If sub-post offices must close, it may be possible for the Post Office, in conjunction with charitable organisations such as Age Concern or Help the Aged, to set up a joint scheme, at little cost, to provide a delivery service to pensioners in difficulties. I urge the Post Office to consider that option. There may be difficulties about the security of cash, but that does not seem to be much different from what happens when neighbours collect pensions. It may be argued that the Post Office is not running a social service, but it has a responsibility to its many customers.
  Single queuing has been implemented at many Crown post office counters, to good effect in many cases. However, there are still difficulties because of the wide range of transactions that take place at the counters. Some are simple stamp purchases or money transfers, but some are complex licence or passport applications. It is about time that the Post Office followed the banks and established quick service tills for the simple transactions. That could be operated within a single queuing system.
  There are many problems and I believe that the Post Office is not being sufficiently sensitive. I accept that it is trying to implement many laudable schemes, but it must not steamroller through sub-post office closures in difficult areas to the extent that it is now doing.
  5.50 pm
  Mr. Paddy Ashdown: I listened to the hon. Member for Halifax (Mr. Galley) with some interest. He made the sort of speech that we have come to expect from someone who has been a chairman of the Young Conservatives in his area. I listened with more interest and
  1016
  in more agreement to the hon. Members for Newark (Mr. Alexander) and for York (Mr. Gregory), who made a powerful case against the Government's proposals. If the hon. Members for Newark and York fail to find the courage to vote for the Opposition motion and against the Government amendment, many of us in the House and many outside it will find their brave speeches somewhat empty and designed, apparently, more for their local newspapers than for the central debate.
  A local post office is a social resource and not merely a facility. It is for many pensioners and others one of their only points of contact with the outside world. In many instances, it is the means by which those engaged in small businesses can find an assured income of sufficient size to enable them to run a small shop. The closure of local sub-post offices in our towns and cities means the removal of facilities for cashing pensions, buying stamps and changing postal orders, but in many instances, especially in cities, it means the closure of yet another corner shop. That is a loss that must be added to the closure of so many of our churches, pubs and small schools. Our local communities depend on these facilities as they give a sense of identity within the faceless conglomeration of cities and towns.
  We live in a harsh and no doubt troubled and brutal world in which, perhaps, efficiency, profit and cost-effectiveness are gods which we are required to worship. Perhaps we must grit our teeth and remove sentimentality from our minds if that costs us money. If the Post Office counter network were making a loss, there might be good reason to wield the knife and slice off cosy and human inefficiencies, if inefficiencies they were, which we loved but could afford no longer. However, the Post Office is not making a loss. It is making a profit of perhaps £110 million this year. The counter network is about to make a profit of £12.5 million, as the Minister agreed.
  It is true that the return on investment and capital is not up to commercial standards, but the Post Office is not solely and wholly a commercial organisation. That is reflected in section 59 of the 1981 Act. The Post Office is a balance between economy and social need. The closures are not coming about because of loss or diminished social need. The contrary is the case. The social need to provide child benefits, for example, is greater than it was. The closures are taking place because the Government have decided to impose a new and more stringent set of targets. Indeed, they have added £10 million to their target figure to make it £70 million. That has been done in pursuit of inefficiency that is measured in economic terms but most assuredly not in human terms. The Government require higher counter turnover.
  The closure programme is the direct result of a hastily and insensitively implemented Government policy. The Minister was right to say that there have been closures previously, but they have all been carried out in return for a greater degree of efficiency, the automation of our postal services and a better service for the public. The present closure programme will result in a worse service for the public. There will be a net loss of service. That is what distinguishes the present closure programme from previous ones.
  The Government are responsible for the closure programme but the Minister claims that the Post Office is responsible for the decisions that are taken. So be it, but behind the decisions of the Post Office is the Government's new policy. The Minister is responsible

  1017
  ultimately. The Minister can say until he is blue in the face that he has no responsibility for the closures, and the Under-Secretary of State may well decide to hand the matter back, as it were, to the Post Office when he replies, but that is not what the facts tell me. Section 11(2) of the Post Office Act 1969 states:
  "If it appears to the Minister that there is a defect in the general plans or arrangements of the Post Office for exercising any of its powers, he may, after consultation with it, give it directions of a general character for remedying the defect."
  Does the Minister agree that that means that we can take every individual case for closure to the Minister to ask him to remedy what we regard as a defect? The Minister has ultimate responsibility in law as well as in fact. He is the ultimate arbiter and he cannot dodge that responsibility. It is clear that it rests with him.
  We need a serious review of the Post Office. We must decide how the social function which is set out within the 1981 Act is properly to be funded. We shall not be able to create a decent network which responds effectively to the economic nature of the world and social responsibilities until the Government are prepared to come clean on the way in which social responsibilities will be honoured. Unless that is done, all subsequent reviews will be, as this one is, inappropriate, insensitive and damaging.
  The consultation process has proved to be a sham. My hon. Friend the Member for Truro (Mr. Penhaligon) has reiterated the statement of other hon. Members that closure decisions had already taken place in October 1984. My hon. Friend the Member for Isle of Wight (Mr. Ross) has fought hard against the closure of five post offices on the island. He tells me that the Post Office had already decided that many, if not all, of the closures should take place. He has spoken of the Post Office acting as judge and jury. My hon. Friend the Member for Cambridgeshire, North- East (Mr. Freud) has said that, even if a Member manages to save a post office, the postmaster, "flushed with redundancy payments, is up and away in any event." My hon. Friend the Member for Leeds, West (Mr. Meadowcroft) has said that the post offices concerned have accepted the direction as if it were inevitable.
  I shall squeeze into my speech a constituency example. I asked Post Office officials to tell me what the savings would be from the closure of the sub-post office in Station road, Ilminster. I was told that the information was not available. The Government and the Post Office tell us that they want to make savings and yet there was no information about the savings that would flow from the closure. Having gone to the top and seen the director of counter services, I was offered a global figure. There was no back-up information to provide evidence on which I could judge whether the figure was correct. I was told that the savings over the year would amount to £4,000.
  There are 100 pensioners in the area that is covered by the sub-post office at Station road, Ilminster. They will have to go into Ilminster to collect their pensions. They may be robbed of the facility provided by the shop in which the sub-post office is presently situated. If 100 pensioners cost 50p a week in these terms, the Post Office might save £3,000, but that sum will be dumped on the backs of pensioners. The net saving to the community will perhaps be £1,000 or about £3 a day.
  That does not take account of the fact that 11 firms use the sub-post office regularly for all their postal services. The work forces of those firms use the facilities of the sub-post office during their lunch times. They will not transfer
  1018
  their business to the post office at Ilminster. What a ridiculous way to go about cutting a service that has proved so successful and useful for my community.
  Mr. Simon Hughes: Will my hon. Friend give way?
  Mr. Ashdown: I do so briefly.
  Mr. Frank Haynes: On a point of order, Mr. Deputy Speaker. The hon. Member for Southwark and Bermondsey (Mr. Hughes) is really naughty. He has just walked into the Chamber and he now wishes to intervene. Many hon. Members are waiting to take part in the debate.
  Mr. Deputy Speaker: Order. The House knows that this matter is beyond my control. Clearly interventions are made at the expense of other hon. Members. Some hon. Members have been waiting a long time to participate in this debate.
  Mr. Hughes: I wish to add a brief point of great importance. In the case of an important office, such as the south-east district office, there will probably be no saving. There will probably be a profit, and there will be, therefore, no justification for closure. Will the Under-Secretary of State take responsibility if the consultation process does not allow such post offices to remain open?
  Mr. Ashdown: That is an important point, and I hope that the Under-Secretary of State will address his remarks to it.
  I do not mean to suggest—I am sure that other hon. Members do not wish to do so either—that the Post Office has no problems. We recognise that the business of the Post Office is changing. We recognise that there has been a decline of 30 per cent. in the sale of stamps over the counter, that the number of postal orders issued has decreased from 502 million to 61 million and that national savings business decreased by 5 per cent. in 1982–83.
  We recognise that, because of demographic changes, some post offices have become stranded in inadequate catchment areas. We need to review our post office services, but that should be done as part of a long-term strategy — not as a panic measure to meet the Government's latest whim. Page 12 of "Post Offices Counter Network 'A Strategy for the Future'" says that the review is part of such an overall strategy. The Post Office, however, gave the game away on page 9 when it stated:
  "Closure is only considered when post masters retire or resign."
  Sub-post offices are singled out for closure not because they incur a loss or do not perform a social service but because they happen to suffer from the supreme had luck of having a postmaster who is ready for retirement. What a way to set up a decent strategy for the Post Office of the future.
  Our post office network is the envy of Europe, but this chaotic programme of closures threatens that structure. This programme has been brought about by Government policy. It is the result of the Government's whim. The programme is being insensitively and capriciously carried out. The public consultation promised is a sham. Closures will cause the further destruction of our communities and more misery for the vulnerable. We need a comprehensive strategy for the post offices, not a short-term panic measure to implement theoretical targets instituted by the Government, irrespective of the cost or disruption to a vital institution.
  The Liberal-SDP alliance would not oppose a sensible, long-term plan for the restructuring of the post office

  1019
  network, but it opposes this shortsighted and destructive programme of closures which will save little and add much to the burden of misery for many.
  6.3 pm
  Mr. James Hill: My hon. Friend the Minister for Information Technology made a telling point when he gave us the figures for closures under respective Governments. He said—he can correct me if he wishes—that in their five years of office the Labour Government had closed 1,140 sub-post offices and that in the past five years the Conservative Government had closed 734 sub-post offices. The position is clear. There have been steady closures for many years. My only difficulty lies in the fact that there is unsatisfactory consultation about the sub-post offices that should close. I believe that the consultation procedures are not adhered to by those concerned.
  I was extremely embarrassed when I first heard of the closure of a post office in my constituency in a letter written on 4 July telling me of the need to close the post office at Lower Brownhill road, Redbridge, Southampton. Mr. Gilbert, who is an excellent head postmaster in Southampton, said that he had already telephoned the sub-postmaster concerned. The sub-postmaster told him that he would be willing to accept voluntary redundancy under the terms recently agreed between the Post Office and the National Federation of Sub-Postmasters. Mr. Gilbert said:
  "If there are, however, any other factors which you feel I should take into account or if you have any other comments on the proposals, please let me know."
  As soon as news of the closure was reported in the local press, I received a massive number of complaints. A local Labour councillor got in touch with me and gave me a petition from more than 500 pensioners who were dismayed at the closure. They admitted that the sub-post office was within the one-mile limit set down, but they believed that the road they had to travel was one of the trickiest roads in that part of Southampton.
  Who decided the distance between sub-post offices? Was the decision made in Victorian times? Was allowance made for the fact that Southampton is a sea port? Did people think of master mariners with peg legs and parrots on their shoulders? Was some other criterion used? Each time closures are decided, it is simple for the head postmaster to note on a map any two post offices within one mile of each other. The head postmaster can immediately telephone one or both of the sub-postmasters and ascertain whether a sub-postmaster wishes to take voluntary redundancy. I believe that the consultation process has been pretty thin.
  Following the complaints, I got in touch with Mr. Clinton, the managing director responsible for counter services. He said:
  "I appreciate that when an office closes the elderly may experience some difficulty".
  Mr. Clinton will be old one day, but perhaps he will not experience the same difficulty. He continued:
  "I sympathise with those who may be affected in this area. It is however possible for those who do experience difficulty travelling to a post office to nominate a friend"—
  how does one nominate a friend?—
  "relative, or member of the welfare service to collect their pension or allowances for them".
  Does not Mr. Clinton realise that the very elderly already do this, because many of them are housebound? Is this not
  1020
  an additional burden on welfare services? Could welfare services cope if overnight there were a serious number of closures?
  I believe that the Post Office began to listen to some of the protests about my closures. A letter dated 14 September 1984 told me that the Post Office had "carefully reviewed" the position. The letter stated:
  "from this first trawl the only office to emerge as a candidate for closure in your constituency was Lower Brownhill".
  The letter went on:
  "We have however considered very carefully the views expressed by our customers who took the trouble to write in".
  That sounds democratic but, unfortunately, another letter from the Post Office dated 27 September 1984 stated:
  "Before reaching the final decision"—
  I believe the Post Office was close to making that decision—
  "we took very careful account of the views that had been expressed to us, and I would add here that in addition to the letters from Councillor Allan, only three other letters were received concerning the closure."
  Why did the man who could possibly avoid making the closures receive only three letters, while I received dozens of letters and a petition from more than 500 people? Why was he almost in purdah? Why did he not receive the necessary information? Could he not have arranged for a leaflet to be dropped in the area saying that the sub-post office was about to close and asking whether any people objected to the closure? One Opposition Member with such a wonderful head postmaster in his constituency was able to attend all the public meetings. Was there no way of saying to the local councillors, myself or even the chief executive of the Southampton city council, "Call a public meeting. I shall attend that meeting and listen to the protests?" That is democracy. That is what a Member of Parliament must do from time to time, and I do not understand why the Post Office should not do the same.
  I am all for economies and efficiency. I am delighted that the Post Office made a profit of £40 million in the first six months and that it may make a further £40 million in the next six months. I also agree with closures that must take place of necessity, but I am far from delighted at the lack of consultation and the lack of sympathy shown for the problems caused. I should say in the Southampton head postmaster's defence that in the middle of this fiasco Mr. Gilbert was moved to another area. But why does the head postmaster not involve himself more? Why does he just sit in his office waiting for protests? Why does he not go out and face the protests head-on rather than saying that, although everyone knew about the proposed closure, he received only three letters? We can all keep our heads tucked down behind the barricades and then say that we have received minimal post on a very important matter.
  My hon. Friend the Minister put up a first-class case, given that he had no trump cards at all. I hope that he will now ask the chairman, Sir Ronald Dearing, a very able person, to consult further. The exercise may end with exactly the same result, but at the moment there is strong feeling in the area that consultation has not been good enough and we hope that the chairman of the Post Office will think again.
  6.11 pm
  Mr. Frank Haynes: The Minister stood at the Dispatch Box for 31 minutes without telling us anything that we did not already know. The problem is not the Post Office but the Minister and the Government. You,

  1021
  Mr. Speaker, will recall pulling me up the other day when the Secretary of State for Employment announced the closure of many skillcentres and I called him a coward.
  Mr. Speaker: Order. I am not sure that that is quite right. I do not think that the hon. Gentleman really meant that.
  Mr. Haynes: Thank you, Mr. Speaker. I was afraid that I was in trouble again. I shall not call the Minister a coward today. I shall simply say that the Minister is hiding behind Ron Dearing and his organisation. The problem is not the Post Office but that lot on the other side of the House. I am glad that so many Conservative Members have spoken out today. I hope that they will be going into the correct Lobby to vote. The hon. Member for Rugby and Kenilworth (Mr. Pawsey) laughs. If he has the opportunity to speak in the debate, I shall be interested to hear his contribution. The Government in general and the Minister in particular are hiding behind the Post Office.
  Consultation on post office closures in my area was a complete waste of time because the decision had already been taken, due to Government pressure on the Post Office to close a certain number of offices and to save a certain amount of money. [Interruption.] If the Minister spends his time talking to his Whip instead of listening, how can he reply to the debate? He is being really naughty.
  It has been suggested that redundancy is being offered to people who have reached the age of between 59 and 65 years, but in my area it is being offered at the age of 42. That is very early retirement. Moreover, no one else will be able to take the job, so there will be one more person on the dole queue. The Government talk about their compassion for people who cannot find work. Yet here they are destroying jobs yet again. We have not heard much about that aspect from Conservative Members.
  I have been through all this before when a post office in a rural area was closed. It was situated in a basin, so the elderly people using it were forced to climb a hill to use any other post office. There is much talk about how far people have to walk to reach the next post office. Our postmaster in Nottinghamshire, a man in his forties, talked about how long it took him to walk from the post office to be closed to the next available office. If I told the House how long he said that it took, hon. Members would wonder why he is not representing this country in the Olympic mile. It is ridiculous that elderly and disabled people should be expected to walk such long distances.
  There are two complexes with 52 elderly people in each just across the road from the sub-post office proposed to be closed. Many of those people walk with frames. Going to the post office just across the road is a little exercise for them, but, according to the Government's policy, they should be expected to walk a mile. The Government know very well that that is just not on.
  The Government must take note of what is being said in the House and outside. I hope that the Minister will take this seriously because we are not satisfied with what is going on. If that sub-post office is closed, elderly people will have to cross a busy main road without a pedestrian crossing. They should not have to do that, but the Government are trying to push them into it. The Government are supposed to represent people too. I wonder whether the Minister knows where the sub-post offices are in his constituency. I very much doubt it. If he did, he would understand the message of this debate and
  1022
  the problems caused by the Government's attempts to close post offices. I hope that the Minister has now understood that message. He has had his ear clobbered today, and if he does not change his mind he will have it clobbered again.
  6.18 pm
  Mr. Tom Pendry: My ever-friendly Whip, the hon. Member for Ashfield (Mr. Haynes), has asked me to make a short contribution. He should not knock the hon. Member for Yeovil (Mr. Ashdown) too much for giving way to his hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) after making constituency points on behalf of his hon. Friends the Members for Leeds, West (Mr. Meadowcroft), Isle of Wight (Mr. Ross) and Cambridgeshire, North-East (Mr. Freud) because one cannot hope to become leader of the Liberal party if one does not pay attention to that kind of detail. Moreover, they have now all disappeared except the hon. Member for Southwark and Bermondsey.
  I proposed to say that this was a very timely debate for many hundreds of my constituents. However, it will be timely only if Ministers will listen to it. There has been no evidence so far that they intend to take note of the points that have been made. I am always giving the Parliamentary Under-Secretary advice, in Committee and in the Chamber. I advise him now to stand up for himself. He should stand up to his senior Ministers and make his own contribution, because I believe that he has a future. He must face some of the detailed points that have been made.
  In my constituency, a sub-post office has been closed in an area where many elderly and disabled people rely on it very much. Like other hon. Members, I have received nothing but the greatest co-operation from the postal board. The chairman of the North-Western postal board has been most helpful, and the postmaster has stomped the area with me and met many of the elderly people and many representatives of pressure groups. Our quarrel is not with the postal board but with the Government and their rigid approach to the question. The Government have ignored the social consequences of their actions. They are trying in a deceitful and underhand manner to use Post Office cuts in their spending programme. In my constituency, industry is affected as well as the disabled, the pensioners and the less fortunate.
  The sub-post office was closed on 7 January. Yesterday I received a letter from Mr. Varney, managing director of Allen-Wellerman Limited, which is an industrial concern in my constituency. Mr. Varney says:
  "I write to add the support of our Company to your campaign to have the above"—
  in other words, the sub-post office—
  "re-opened. The Company started in business on Commercial Brow in July 1984 and, although its level of activity during the remainder of the year was relatively low I anticipate a turnover in the region of £2 million during 1985, rising steadily thereafter. The loss of this facility will therefore represent a significant inconvenience and cost."
  The decision to close has had a significant effect. There have also been protests and representations. I hope that the Minister will therefore intervene and ask the Post Office to reconsider that decision. There must be flexibility.
  A massive petition has been organised in my constituency by a lady who lives there and by Councillor Clark. The lady has written to me telling me of a visit to the central post office in Hyde where she joined a queue that spilled out into the snow. There were many elderly

  1023
  people in the queue. The lady is in despair. She relies on me and other hon. Members to put pressure on Ministers and on others outside the House so that she and others may enjoy a proper service.
  I have been brief, as I was asked to be. In conclusion, I should like to point out that we have heard courageous speeches from the hon. Members for York (Mr. Gregory) and for Newark (Mr. Alexander) and others. We have heard about their compassion. We expect them to have guts as well. We expect them to join us in the Lobby tonight and show how much they disapprove of what the Government are doing. I hope that there will be a healthy vote tonight, and that we shall be joined in the Lobby by many Conservative Members.
  6.24 pm
  Mr. John Golding: I declare my interest as an assistant secretary of the Post Office Engineering Union. I protest not only against the Government's insistence upon post office cuts but also against the way in which those cuts have been implemented. Both Ministers and Post Office management are at fault. They try to hide behind each other, but in doing so they simply make it clearer that the Government have ordered cuts and that the management has carried them out in a docile, cynical and ham-fisted fashion.
  The document prepared by Mr. Brian Roberts, the director of industrial relations, suggests breaking a solemn agreement—the job security agreement—and sacking up to 5,000 post office engineers and motor transport staff. It was a bombshell to my union. It is the most shoddy, disreputable and disgraceful document that I have seen in 25 years as a national union officer. Management says that it is only a working document. I advise management to scrap it.
  Management claims to have legal advice that the job security agreement is negotiable. The job security of the union's members is not negotiable against the background of over 3 million unemployed. The Post Office management entered freely into that agreement and will not be allowed easily to renege on it now. We want our members to be at work, not on the dole. Problems should be settled by negotiation on shorter hours — on the POEU's "broad strategy," which has already been presented to the management. Many POEU members and Union of Communication Workers counter staff joined the Post Office as civil servants. They accepted lower pay than they could have earned in industry in order to enjoy the job security and pensions of civil servants. The POEU accepted craft flexibility and productivity bargaining because of the existence of job security, and job security must stay. The Government and the management are determined to make a shambles of the Post Office.
  I am concerned about the public service aspect. Last year the local postmaster shut the George street sub-post office in my constituency. I argued to keep it open. The arguments were strong and familiar. The closure of the post office brought hardship to many old people. They either have to walk up and down to the bank—although many of them are ex-potters, ex-miners and ex-foundrymen suffering from chest complaints — and through a subway which they hate, or to travel by bus with all the attendant difficulties. The remaining post offices are crowded and the old people have to wait for ages. Our
  1024
  Crown post office is understaffed and cannot cope properly with extra business. One sub-post office to which those once using George street were directed now displays a notice asking people not to call on Tuesday or Thursday unless it is essential for them to do so.
  That is the state that we are in. Our post offices are now more crowded on Thursdays than was the black hole of Calcutta, but the talk is not of relief but of further closures. Why should we treat our old people in such a way?
  The response from authority to my arguments was less than helpful. Our local postmaster, Mr. Cole, commended the local bus service. Perhaps that is why the Government mean to take it away. He also suggested that relatives or friends could collect pensions. That must be the standard response given by postmasters to Members of Parliament who complain.
  We are concerned for the dignity of pensioners. They do not want to be reliant upon other people. They want to collect the pensions themselves. I also wrote to the Director General of Fair Trading, Sir Gordon Borrie, who sent my complaint to the Minister for Local Government. If the Director of Public Prosecutions received a complaint from the police, would he send it to Dr. Crippen? In this case, Dr. Crippen turned out to be the Parliamentary Under-Secretary. The Minister for Local Government himself had more sense than to send me daft replies. The Under-Secretary wrote that this was
  "a matter for the Post Office Board and the Government cannot intervene."
  I was referred from the Post Office to the Minister, and the Minister referred me to the Post Office. Off I trotted to see Sir Ron Dearing. He told me that it was hard luck, but that the Government were insisting on a 5 per cent. cut. The Government have discovered the secret of perpetual motion. I was referred from the Office of Fair Trading to the Government to the Post Office to the Office of Fair Trading. It is a vicious circle, but our people are caught in it, and they are fed up with it. The closure of George street post office was a disgrace, but even more disgraceful was the inability of local people to challenge the decision and the buck-passing of those in authority.
  I should have liked to have spoken longer. but time is short. We in the Post Office unions oppose the closures. We want service for the public, we want time to give service with a smile, we want work, not the dole, for our members and we want the Government and the management to stop destroying this great public service.
  6.29 pm
  Mr. John Fraser: I represent a constituency where two post offices have already been closed-both almost by accident. One was closed as a result of robberies and the other was closed as a result of legal proceedings.
  I should like to give the figures concerning one post office—the Post Office has been helpful in supplying them. Every week, the post office served 1,500 main customers. More than 750 were pensioners, more than 500 were people picking up child benefit, almost 100 were picking up Girocheques and the rest were making Giro deposits and Giro withdrawals. That gives a total of 1,500 people who made good use of the service each week. Saying that they should turn their attentions elsewhere and travel a longer distance is to apply to post offices the type of argument that is used against mines. They are closed

  1025
  because of a definition, which is conjured up by the Government, of what is uneconomic, without paying regard to the needs of the community and the customers.
  The reaction of my constituents and those of the hon. Member for Dulwich (Mr. Bowden), who has worked with me on this matter, has been anger and astonishment. There have been masses of meetings, petitions and letters. We have both seen the director of the London region and Sir Ron Dearing, but without success. I was amazed at the self-satisfaction of the Minister for Information Technology when he talked of people collecting pensions. I wonder whether he or the civil servant who wrote the speech trudge down to a post office in the cold and I wonder whether they would like to trudge another 1,300 yards in a city where bus services are to be cut. I wonder whether they will see the time of home helps being wasted. I also wonder whether they will risk robbery.
  We read in The Standard that the special patrol group has been drafted into Brixton and that there are surveillance and targeting operations because there are so many robberies on the streets. What do the Government do? They close the post office in Croxted road so that people must walk a lonely path to the main Crown post office, thus being exposed to risk of robbery. And what happens when people get to that post office? I wonder whether the Minister or the civil servant who wrote that speech would like to be in a queue of 80 people, as has been reported by some of my constituents. Relying on Post Office figures, they would find 55 people in front of them in the queue at 9 am, 38 at 9.45 am, 37 at 10.45am and 31 at 14.45.
  The closure is wholly unrealistic and has been proposed by people who do not live in the real world where vulnerable and poor people will have to suffer the inconvenience of going to Crown post offices which are grossly overcrowded because they are unable to cope with the weight of business. It is impertinent for the Minister to tell us that he will do nothing about any individual closure—the blame rests fairly on the Government's shoulders. They treat the Post Office and other nationalised industries worse than the Mafia treats the victims of a protection racket. They extract from the Post Office a profit of £80 million a year at the present rate, compel it to reduce its unit costs by 5 per cent. and require it to make a profit on turnover of 4 per cent. So far, that is analogous to the Mafia which extracts money out of those whom it controls, but if the Mafia were extracting money from ice cream parlours, the last thing it would do would be to demand, as the customer, that it pay less for its ice cream. However, that is what the Government are doing because 20 per cent. of the Post Office's business is the mail, which makes a profit, about 16 per cent. is the savings bank and the rest is business for which the Government are the customer. The Government are putting the Post Office in a double grip. At one end they are demanding a higher rate of return and greater efficiency—ignoring social responsibilities—and at the other, acting as a monopoly customer of the Post Office, they are saying that they are not prepared to pay the right amount for the job.
  All we can do when we see Ron Dearing or our local regional director is choose which of two evils is to be executed. The Post Office says that it must maintain a balance between social responsibilities and economic ones. It says in its standard letter that it is finely balanced. It is not. It is crudely balanced because of the way that the
  1026
  Government have weighted the scales. The Government should at least have the decency to own up to their own responsibilities.
  6.35 pm
  Mr. Frank Field: The noticeable feature of this debate is that nobody, not even among Conservative Members, has defended the Government's policy. Even the hon. Member for Halifax (Mr. Galley), who came nearest to giving a defence, strained at the leash for much of his speech, wishing to criticise Government policy. We have all centred some of our comments on the criteria that the Government have decided on to judge whether there will be hardship. The more the Minister for Information Technology tried to defend himself with the one-mile formula, the more I was reminded of a comment that Aneurin Bevan was reported to have said having listened to a speech by Neville Chamberlain: "Listening to the Prime Minister is like a trip round Woolworths—everything is in place and nothing is over sixpence." We have been trying to tell the Minister that our constituents' needs do not come in neat packages, nothing costing more than sixpence. Saying that there is to be a sub-post office within one mile of those which are to be closed does not mean that there will not be real hardship.
  If the Minister is still in doubt about the hardship that closures will cause, I advise him to get in touch with the chairman of the Post Office north-west region who came to a meeting called by Merseyside county council and at which my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) and I were present. We described, as did many local councillors, the effect of the closure programme on our area.
  As we have been asked to be brief, I shall concentrate on just one closure in my constituency—the one in the St. Anne's district. We are told that my constituents will have little or no difficulty using other post offices or sub-post offices. We are told that they should go to Hamilton street. Going from St. Anne's to Hamilton street involves climbing a gentle incline. It is easy enough for the Minister and for me to climb but it is much more difficult for people who suffer from emphysema, who use a wheelchair or who have children to push. We are told that, alternatively. they can go to one of the Crown post offices, but the Crown post offices in Birkenhead are on major roads. It is easy enough for the Minister or me to cross them but it is difficult for many of my constituents.
  I should like to reinforce what my hon. Friend the Member for Norwood (Mr. Fraser) said about the risk of crime. He is the only hon. Member to have mentioned it. Those of us who represent inner city areas are aware of the level of crime and the frequency with which our constituents suffer muggings. It is not uncommon to see in our surgeries constituents who have tasted their second or third mugging. The Government are doubling the journey, and therefore the risk of being mugged, of people who go to post offices to pick up their main, or only, income.
  If the Minister is still as satisfied with the one-mile rule as he appeared to be at the beginning of the debate, I should like to make one plea to him. If he lived in central Birkenhead, the closure that he and the Post Office are proposing would be unacceptable to him and his family just as it would be unacceptable to me and my family. If it is unacceptable to us, it is unacceptable to my constituents. I hope that the Minister who is to reply will

  1027
  show that he has listened to what the House has said. I hope that he will say that the closure programme will be considered and that the one-mile radius and the making of profits are not the only criteria. Having said that, St. Anne's is to be closed although it is making a profit. I hope that he will recognise the message that the House has given—that people's needs matter more than profits.
  6.39 pm
  Mr. George Park: I agree with my colleagues who said that many hon. Members who have taken part in today's debate aimed their criticisms at the wrong target. Post office closures are one more facet in the illusion being created by the Government that they are determined to ease the burden of taxation. While the Chancellor of the Exchequer dangles the carrot of reductions in income tax, he is engaged in increasing charges, which force up the cost of living. Apart from the Post Office, the water, gas and electricity boards have all been required to raise their charges above the necessary levels, and the Treasury takes the excess profits that are generated.
  We may get income tax cuts, but the cost of living is definitely higher. That particularly affects those on low fixed incomes, and that same section of the population are most hurt by the closure programme outlined in the post office document, "A strategy for the future". I am surprised that there has been only passing reference to it. The Government set the targets and stepped back, and the Post Office produced a revealing document.
  On page 1 of the document it states that:
  "Savings…will be ploughed back into the business"
  but it does not say that during the past three years the Post Office has been required "to loan" £72 million to the Government. In the foreword on page 3 it states that the Post Office has worked out a policy designed, among other things, to
  "meet social obligations to the communities".
  How that can be reconciled with the closure programme, which will force pensioners to travel further to already busy offices to stand in longer queues, I fail to see.
  Page 6 deals with "The Changing Market". It gets to the heart of the matter because it illustrates how the Government have completely changed the method of running the Post Office. From being a public service operating on a cost—plus pricing agreement, it is now committed to cutting its counter services by 5 per cent. and to making a profit of 4 per cent. on turnover in 1984–85. The conclusion must be that public service has taken a back seat in favour of commercial considerations. That is affirmed in the "Conclusion" on page 12.
  The Post Office has shown a profit for eight successive years. In 1984 the profit amounted to £116,900,000. Because each sector must individually show a profit, it means that high profit sectors must not support the less profitable sectors, as is normal practice in industry and commerce.
  The Post Office is well on the way to meeting the recommendations of the Rayner report of 1982. It recommended the closure of 200 main Crown offices and 3,000 sub-post offices. The closure programme has already hit 2,500 offices. The Government have an arms length approach right across the board. Their policy is,
  1028
  "We set the targets. You carry out the work, and don't come to us about it". From my correspondence with Ministers it is clear that that is their approach.
  Head postmasters are given the responsibility of designating which offices in their areas are to close to meet the 5 per cent. target. The Coventry head post office covers the city of Coventry and most of Warwickshire. Closures in Warwickshire are largely excluded because it is a rural area. That means that the closures in Coventry are proportionately heavier. Page 9 of the document states that town and country areas are to be taken together. The national figures given in the Post Office annual report show that on average the United Kingdom has one post office for every 2,480 people. In Coventry, before the latest closure programme, there is already only one post office for every 4,500 people.
  It strikes me as odd that, although 12 or 13 considerations are to be taken into account in deciding whether to retain sub-post offices, the Post Office has chosen consistently to use the distance-of-a-mile consideration. All hon. Members know of the anomalies that that can create.
  Page 15 explains that the closure programme begins with the resignation of a sub-postmaster. At the two public meetings that I arranged and to which I invited the head postmaster—I hope that the House will note that I arranged the meetings and he attended them—the head postmaster, having carefully gone through the technical side—I have no personal grouse against him—said that if the sub-postmasters concerned had not resigned the two sub-post offices would not have been closed. That blows the whole matter sky-high.
  When I contacted a postmistress, she said that she had been unable to get any assurance about the future life of her sub-post office and had therefore accepted the 23 months' salary on offer, as against a three months' salary which she would have received if she had stayed and then been told that her sub-post office was to be closed. That is a perfectly understandable decision to take.
  It should be borne in mind that refurbishment of post offices, as detailed on page 11 of the document, relates only to the Crown offices. Paragraph 5 makes a fleeting reference to the fact that any refurbishments or improvements at sub-post offices are the responsibility of the people who run them. How many of them will wish to take up the loan suggested, even at preferential rates, for an uncertain future, as the Government change the targets? In addition, my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said that discussions have already started about massive redundancies among staff in post offices.
  Finally, I wish to draw attention to the local government and housing association aspects. About 200 local authorities and 300 housing associations use the Giro system for rent collection and issue Girocheques for housing benefit payments. The charges are high, considering the number of sub-post offices available when they were fixed. They will need revision when the network is decreased. If the closures are to continue, local authorities may have to consider ending their use of the Giro system and looking for an alternative. That cannot be in the long-term interests of the Post Office.
  In conclusion, many hon. Members referred to the effects of closures on elderly people, and I do not intend to go over them again as by now the House should know about them well enough. If we cannot get the programme

  1029
  withdrawn or amended, I hope that we shall place the responsibility squarely on the Government's shoulders, because they are the initiators of the closure programme.
  6.48 pm
  Mr. Alan Williams: The Minister for Information Technology must be looking forward to the speech of his hon. Friend the Parliamentary Under-Secretary because it will be the first one this afternoon that may support the Minister's opening speech.
  This has been a remarkable debate, with protests from Conservative Back-Bench Members. Usually the Government find it possible to identify some placeman, poodle or man of ambition who is willing to support the Government, but today not a single supporting voice has been heard. That is hardly surprising. The Government's proposals could mean the closure of 78 Crown post offices and 900 sub-post offices.
  That would be bad enough in terms of morale within the Post Office, coming as it does after a carefully negotiated and agreed programme of mechanisation in which 1,700 jobs were lost, against an assurance of job security for those who remained. It is small wonder that the word "betrayed" has been used to describe the attitude of those who work in the Post Office. The proposal is not only disastrous for morale; it is completely unnecessary. The Post Office made a profit of £40 million in the first half of the year, and it will almost certainly make a bigger profit in the second half. The proposal has nothing to do with the internal requirements of the Post Office or the redundancy of sub-post offices and Crown offices; it relates to the arbitrary imposition of a £10 million external financing limit by the Government, which by coincidence is the amount that the Post Office will save as a result of the operation.
  Although the Government will gain an additional £10 million, the weak will suffer. Many hon. Members have referred to the elderly and the handicapped, and the Minister does not seem to understand the reality of the suffering that the proposal will cause. He said that the elderly could nominate friends to collect their pensions. However, one should not overlook the fact that some people are extremely proud. Some regard such matters as confidential. As my hon. Friend the Member for Birkenhead (Mr. Field) rightly said, in some areas those who collect multiple pensions could become targets for mugging. But, even more importantly, my hon. Friend the Member for Bradford, West (Mr. Madden) passed me a note saying that he consulted his local DHSS office about the procedure of nominating a friend to collect one's pension. It was made clear to him that the DHSS regards this only as a temporary facility. It should not be a permanent arrangement. As my hon. Friend said, the proposal will present special problems in multi-ethnic communities, especially in those where some beneficiaries may have difficulty with the English language and may not be able to establish their identities at the post office counter.
  It has also been suggested that home helps should collect pensions for the elderly, but home helps are being cut and the remaining ones are overworked. This would be a misuse of the home-help system, and it would be unfair to impose such responsibility on them.
  Hon. Members on both sides of the House have expressed doubts about the consultation that took place. The hon. Member for York (Mr. Gregory) said that in
  1030
  areas with a predominance of elderly and perhaps handicapped people no attempt had been made to seek the advice of the social workers or those who look after the interests of the elderly and the handicapped. My right hon. Friend the Member for Mansfield (Mr. Concannon) gave the example of a sub-postmaster in his constituency who told him that he had already agreed his terms for compensation with the Post Office before the consultation started. There is a grave suspicion that the consultation was more cosmetic than real.
  Even Conservative Members, who will feel the wrath of their constituents, recognise that the result of the proposals will be longer queues at post offices, longer waiting times, longer walks to reach post offices and more bus fares, insofar as bus services will be allowed to survive. Those who are lucky enough to have ears will probably discover that it is almost impossible to park near the main post offices.
  The best thing that the pensioners' organisations can do, if they have a Tory Member of Parliament in a marginal constituency near to where they hold their meetings, is to lobby him and tell him that they also have power. They should tell him that they are not impressed by the financial arguments of the Treasury and that their dissatisfaction will be expressed in the appropriate way at the appropriate time. Those hon. Members who had the courage to attack the Government today—as I said, no one had the courage to defend them—for the shortcomings of their policy should follow that attack to its logical conclusion. I invite them to join us in the Lobby and vote against the proposal.
  6.55 pm
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. David Trippier): The right hon. and learned Member for Monklands, East (Mr. Smith) and his hon. Friends have competed with each other in the passion that they brought to their condemnation of the Government in this matter. We have heard many emotive phrases. The hon. Member for Bradford, West (Mr. Madden) called it a "sick joke". The right hon. Member for Barnsley, Central (Mr. Mason) referred to our monetarist policies, and the hon. Member for Falkirk, East (Mr. Ewing) went further and referred to a stabbing in the back.
  Yet if we examine the charges and wade through the crocodile tears to reach the solid facts, what do we find? Opposition Members are accusing the Government of following the very policies that their right hon. and hon. Friends continued when they were in office between 1974 and 1979. They were also followed by the Conservative Administration, having been introduced by a Labour Government in 1969. I wonder whether it was as a result of "monetarist policies" that the right hon. Member for Chesterfield (Mr. Benn), the then Secretary of State for Industry, aided by his lieutenants the right hon. Members for Glasgow, Rutherglen (Mr. MacKenzie) and for Manchester, Gorton (Mr. Kaufman), and the hon. Members for Liverpool, Walton (Mr. Heffer) and for Oldham, West (Mr. Meacher), presided over the closure of 223 post offices in 1974–75 and a further 270 offices in 1975–76. Was it "stabbing in the back" when the former right hon. Member for Chesterfield, aided by his lieutenants the right hon. Members for Gorton, for

  1031
  Rutherglen and for Swansea, West (Mr. Williams), presided over the closure of 266 post offices in 1976–77 and a further 203 post offices the following year?
  The hon. Member for Falkirk, East told us about an arrangement—he called it an agreement. During the debate we checked with the Post Office, which is unaware of that agreement. The Department of Trade and Industry is certainly unaware of it. The hon. Gentleman referred to the Union of Communication Workers' proud record of co-operation on mechanisation, but I wonder why he did not tell the House when the union will lift the embargo on the extention of mechanical inward sorting that it has maintained for the past few years.
  Mr. Ewing: I suspect that the UCW is more concerned with its distrust, as a result of the Government's directive to the Post Office—[Interruption.] The Secretary of State for Trade and Industry, who has just returned to the Chamber, should learn to shut his mouth now and again and to listen to what is said. The problem for the UCW and its members is that they no longer trust what is being said to them because of the way in which the Government betrayed them over the closures.
  Mr. Trippier: With great respect to the hon. Gentleman, he is changing his case and taking an entirely different line. I would not suggest that he means to mislead the House, but he gave a clear understanding that there had been an agreement. As we have now checked this with the Post Office—
  Mr. Ewing rose—
  Mr. Trippier: We can probably solve this problem through correspondence. However, it is important that, as a Government spokesman winding up this debate, I should say that we do not know about that agreement in the Department of Trade and Industry and the Post Office does not know about it either.
  Mr. Ewing: It is unfair of the Minister deliberately to mislead the House. I can understand him doing it inadvertently, but any deliberate attempt—
  Mr. Speaker: Order. The hon. Gentleman must not say that the Minister deliberately misled the House. He may say that the Minister inadvertently misled the House.
  Mr. Ewing: For the sake of good order, I shall withdraw the "deliberately". During the period of postal mechanisation, the Union of Post Office Workers, as it was then—the Union of Communication Workers as it is now—willingly entered into arrangements with the Post Office whereby, in exchange for job security for those who are left in the industry after mechanisation, it agreed to shed 1,700 jobs. It does not matter a tuppenny damn what the Post Office says to the Minister. That was the position, and that is why the union feels betrayed.
  Mr. Trippier: I have been fair to the hon. Gentleman in allowing him to intervene on two occasions. I understand that, and what he said in his main speech. I am simply saying that the Post Office board says that it is unaware of any arrangement or agreement, and the Department of Trade and Industry is also unaware of such an agreement.
  A number of hon. Members have argued that the Government should intervene to prevent the closure of
  1032
  particular offices within their constituencies. I can obviously understand that, but when Labour Members seek to imply that the Government are somehow different for refusing to intervene in individual cases. I am bound to ask why they are so coy about telling the House of their successful intervention to prevent individual office closures during their term of office. How many times did the right hon. Member for Chesterfield intervene when he had responsibility for these matters? I understand why Labour Members are so coy about telling the House how many times the Labour Government intervened. We have heard a number of speeches from hon. Members who were members of that Government, and so had collective responsibility as Ministers within that Government. Not once did the Secretary of State for Industry in the last Labour Administration, or the one before that, intervene on any closure. They were pursuing the policy that this Government are pursuing now—that individual office closures are a matter for the Post Office board and not for the Government.
  An interesting question is which right hon. or hon. Member first thought of creating the Post Office board and forming the Post Office corporation. Surprise, surprise, it was the right hon. Member for Chesterfield—that flag-carrier of the lunatic Left, the headless dragon, the man who spends a lot of his time in the House trying to play the part of Pontius Pilate. He will have a great deal of difficulty in washing his hands of this one. He was responsible for setting up the board that had the delegated powers to deal with closures, collectively and individually. He will have to take his share of the responsibility for that.
  So much for the sincerity of the view expressed by Labour Members. The main feature of today's debate has been that it has exposed the hypocrisy of Labour Members who seek to condemn this Government for following policies that they pursued when they were in office. I have no doubt that they would pursue those policies again in the unlikely event of their ever regaining office.
  I and my hon. Friend the Minister thought that my hon. Friend the Member for York (Mr. Gregory) raised an interesting point on the service being made available before 9 am. I am sure that the board will look at that.
  The House should be clear that the Government are not closing post offices any more than the previous Labour Administration were.
  Mr. David Ashby: Is my hon. Friend aware that I have received a letter from the head postmaster of Derby, saying that the sub-postmistress in a village has resigned because only 10 pensions and 12 allowances were collected a week, and the Post Office has been unable to attract any applicants for this sub-post office, although it has advertised profusely? The sub-postmistress offered to open for three days a week, but, quite rightly, the Post Office does not feel that it should be following this course. One other point arises—
  Mr. Speaker: Order. The hon. Gentleman should be making an intervention, not a speech. One point is enough.
  Mr. Trippier: I am grateful to my hon. Friend for that intervention. It does not require any amplification.
  Some hon. Members have suggested that post office closures are a direct result of the financial and performance objectives set by Government. Indeed, some Labour Members have sought to suggest that such targets are some

  1033
  sort of wicked Conservative invention—ignoring the fact that the Post Office has had a financial target for 20 years and performance targets were first set in the late 1970s by the Labour Government.
  The essential rebuttal of that charge is that the benefits of the closures will not be realised during the period for which targets have been set. But, as my hon. Friend the Minister for Information Technology said earlier, the Government make no apology for pursuing the policy set out in the 1978 White Paper on the nationalised industries. The White Paper established a framework of financial discipline within which the Post Office is required to operate, notwithstanding the fact that it was a White Paper setting out the policy of the Labour Government.
  So what is this debate about? It is about the Labour Members seeking to claim that they, and they alone, care about pensioners, mothers of small children and all other users of post offices, and that they have some sort of monopoly on compassion. Mr. Speaker, that is the ludicrous fantasy of the Opposition. The plain fact is that there has been no change of policy since 1969.
  Of course this Government care. They care that the Post Office should be in a position to offer a wide range of services on behalf of Government Departments and other public sector bodies.
  The Post Office will not do that through charging prices that are higher than those charged by competitive organisations. The Government are not forcing people to have their pensions paid into their bank accounts. To remain competitive and ensure its future the counters business must remain efficient. That point was made by my hon. Friend the Member for Newark (Mr. Alexander). If that business remains efficient, that will bring benefit to the public, to sub-postmasters and sub-postmistresses and to Post Office staff. There is nothing new in this view. As I have shown, the need for efficiency and economy in the operations of the Post Office was recognised by the Labour Government in their 1969 Post Office Act.
  I must correct the view put forward by some hon. Members today that the Post Office is somehow mishandling the issue of individual closures. The Post Office goes to great lengths to ensure that all those with an opinion on a particular closure have the chance to make their views known—this was accepted even by the right hon. Member for Mansfield (Mr. Concannon)—and those views are considered carefully.
  It is the job of Her Majesty's official Opposition to oppose the Government, as their Leader keeps reminding them. They do not listen, but he keeps reminding them. I am deeply disappointed that some Labour Members have chosen to attack the Post Office board. Even the right hon. Member for Barnsley, Central and the hon. Member for Newcastle-under-Lyme (Mr. Golding) alleged that it does not care about the public that it serves. I know that such remarks will deeply offend the chairman, his board and his senior managers. I find it sad that hon. Members opposite should have stooped to such a low form of attack. We owe to all of these people a debt of gratitude. They have been dealing with a very difficult situation, particularly due to the strike at the Department of Health and Social Security in Newcastle.
  In conclusion, the post office counters business has made significant advances over the last few years. The Government recognise that. We also recognise that the counters staff deserve credit for much of this
  1034
  improvement, through their co-operation with management, in bringing in changes. But no one owes the Post Office a living. In the real commercial world there is effective competition for many of its services. If the counters business is to build on recent advances and to thrive, it will do so by offering good service at a price that the customer is prepared to pay. That is the way to ensure that volume is maintained and increased. That is the way to protect jobs. That is the way to fight closures. I urge my right hon. and hon. Friends to vote for the amendment.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 208, Noes 348.

  Division No. 75]

  [7.11 pm

  AYES

  Abse, Leo

  Douglas, Dick

  Adams, Allen (Paisley N)

  Dubs, Alfred

  Alton, David

  Dunwoody, Hon Mrs G.

  Anderson, Donald

  Eastham, Ken

  Archer, Rt Hon Peter

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

  Ashdown, Paddy

  Evans, John (St. Helens N)

  Ashton, Joe

  Ewing, Harry

  Atkinson, N. (Tottenham)

  Fatchett, Derek

  Bagier, Gordon A. T.

  Field, Frank (Birkenhead)

  Banks, Tony (Newham NW)

  Fields, T. (L'pool Broad Gn)

  Barnett, Guy

  Fisher, Mark

  Barron, Kevin

  Flannery, Martin

  Beckett, Mrs Margaret

  Foot, Rt Hon Michael

  Beith, A. J.

  Forrester, John

  Bell, Stuart

  Foster, Derek

  Benn, Tony

  Foulkes, George

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

  Fraser, J. (Norwood)

  Bidwell, Sydney

  Freeson, Rt Hon Reginald

  Blair, Anthony

  Freud, Clement

  Boothroyd, Miss Betty

  Garrett, W. E.

  Boyes, Roland

  George, Bruce

  Bray, Dr Jeremy

  Godman, Dr Norman

  Brown, Gordon (D'f'mline E)

  Golding, John

  Brown, Hugh D. (Provan)

  Gould, Bryan

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

  Gourlay, Harry

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

  Hamilton, James (M'well N)

  Bruce, Malcolm

  Hamilton, W. W. (Central Fife)

  Buchan, Norman

  Hardy, Peter

  Caborn, Richard

  Harrison, Rt Hon Walter

  Callaghan, Jim (Heyw'd & M)

  Hart, Rt Hon Dame Judith

  Campbell, Ian

  Hattersley, Rt Hon Roy

  Campbell-Savours, Dale

  Healey, Rt Hon Denis

  Canavan, Dennis

  Hogg, N. (C'nauld & Kilsyth)

  Carlile, Alexander (Montg'y)

  Holland, Stuart (Vauxhall)

  Carter-Jones, Lewis

  Home Robertson, John

  Cartwright, John

  Howells, Geraint

  Clark, Dr David (S Shields)

  Hoyle, Douglas

  Clarke, Thomas

  Hughes, Dr. Mark (Durham)

  Clay, Robert

  Hughes, Robert (Aberdeen N)

  Clwyd, Mrs Ann

  Hughes, Roy (Newport East)

  Cocks, Rt Hon M. (Bristol S.)

  Hughes, Simon (Southwark)

  Cohen, Harry

  Hume, John

  Coleman, Donald

  Janner, Hon Greville

  Concannon, Rt Hon J. D.

  John, Brynmor

  Cook, Frank (Stockton North)

  Johnston, Russell

  Cook, Robin F. (Livingston)

  Jones, Barry (Alyn & Deeside)

  Corbett, Robin

  Kaufman, Rt Hon Gerald

  Corbyn, Jeremy

  Kennedy, Charles

  Cowans, Harry

  Kinnock, Rt Hon Neil

  Cox, Thomas (Tooting)

  Kirkwood, Archy

  Craigen, J. M.

  Lambie, David

  Crowther, Stan

  Lamond, James

  Cunningham, Dr John

  Leadbitter, Ted

  Davies, Rt Hon Denzil (L'lli)

  Leighton, Ronald

  Davies, Ronald (Caerphilly)

  Lewis, Ron (Carlisle)

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

  Lewis, Terence (Worsley)

  Deakins, Eric

  Litherland, Robert

  Dewar, Donald

  Lloyd, Tony (Stretford)

  Dixon, Donald

  Lofthouse, Geoffrey

  Dobson, Frank

  Loyden, Edward

  Dormand, Jack

  McCartney, Hugh

  1035

  McDonald, Dr Oonagh

  Robertson, George

  McGuire, Michael

  Robinson, G. (Coventry NW)

  McKelvey, William

  Rogers, Allan

  Mackenzie, Rt Hon Gregor

  Rooker, J. W.

  Maclennan, Robert

  Ross, Stephen (Isle of Wight)

  McNamara, Kevin

  Rowlands, Ted

  McWilliam, John

  Ryman, John

  Madden, Max

  Sedgemore, Brian

  Maginnis, Ken

  Sheerman, Barry

  Marek, Dr John

  Shore, Rt Hon Peter

  Marshall, David (Shettleston)

  Short, Ms Clare (Ladywood)

  Mason, Rt Hon Roy

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

  Maxton, John

  Silkin, Rt Hon J.

  Maynard, Miss Joan

  Skinner, Dennis

  Meacher, Michael

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

  Meadowcroft, Michael

  Smith, Cyril (Rochdale)

  Michie, William

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

  Mikardo, Ian

  Soley, Clive

  Millan, Rt Hon Bruce

  Spearing, Nigel

  Miller, Dr M. S. (E Kilbride)

  Steel, Rt Hon David

  Mitchell, Austin (G't Grimsby)

  Stewart, Rt Hon D. (W Isles)

  Morris, Rt Hon A. (W'shawe)

  Strang, Gavin

  Morris, Rt Hon J. (Aberavon)

  Straw, Jack

  Nellist, David

  Thomas, Dafydd (Merioneth)

  Oakes, Rt Hon Gordon

  Thompson, J. (Wansbeck)

  O'Brien, William

  Thorne, Stan (Preston)

  O'Neill, Martin

  Tinn, James

  Orme, Rt Hon Stanley

  Torney, Tom

  Owen, Rt Hon Dr David

  Wainwright, R.

  Park, George

  Wallace, James

  Parry, Robert

  Warden, Gareth (Gower)

  Patchett, Terry

  Wareing, Robert

  Pavitt, Laurie

  Weetch, Ken

  Pendry, Tom

  White, James

  Penhaligon, David

  Wigley, Dafydd

  Pike, Peter

  Williams, Rt Hon A.

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

  Wilson, Gordon

  Powell, Raymond (Ogmore)

  Winnick, David

  Prescott, John

  Woodall, Alec

  Radice, Giles

  Wrigglesworth, Ian

  Randall, Stuart

  Young, David (Bolton SE)

  Redmond, M.

  Rees, Rt Hon M. (Leeds S)

  Tellers for the Ayes:

  Roberts, Allan (Bootle)

  Mr. Frank Haynes and

  Roberts, Ernest (Hackney N)

  Dr. Roger Thomas.

  NOES

  Adley, Robert

  Brinton, Tim

  Aitken, Jonathan

  Brittan, Rt Hon Leon

  Alexander, Richard

  Brooke, Hon Peter

  Alison, Rt Hon Michael

  Browne, John

  Amery, Rt Hon Julian

  Bruinvels, Peter

  Amess, David

  Bryan, Sir Paul

  Ancram, Michael

  Buck, Sir Antony

  Arnold, Tom

  Bulmer, Esmond

  Ashby, David,

  Burt, Alistair

  Aspinwall, Jack

  Butcher, John

  Atkins, Rt Hon Sir H.

  Butler, Hon Adam

  Atkins, Robert (South Ribble)

  Carlisle, John (N Luton)

  Atkinson, David (B'm'th E)

  Carlisle, Kenneth (Lincoln)

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

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

  Baker, Nicholas (N Dorset)

  Carttiss, Michael

  Baldry, Tony

  Cash, William

  Beaumont-Dark, Anthony

  Chalker, Mrs Lynda

  Bellingham, Henry

  Channon, Rt Hon Paul

  Bendall, Vivian

  Chapman, Sydney

  Bennett, Rt Hon Sir Frederic

  Chope, Christopher

  Benyon, William

  Churchill, W. S.

  Bevan, David Gilroy

  Clark, Dr Michael (Rochford)

  Biffen, Rt Hon John

  Clark, Sir W. (Croydon S)

  Biggs-Davison, Sir John

  Clarke, Rt Hon K. (Rushcliffe)

  Blackburn, John

  Clegg, Sir Walter

  Blaker, Rt Hon Sir Peter

  Cockeram, Eric

  Bonsor, Sir Nicholas

  Colvin, Michael

  Bottomley, Peter

  Conway, Derek

  Bottomley, Mrs Virginia

  Coombs, Simon

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

  Cope, John

  Bowden, Gerald (Dulwich)

  Cormack, Patrick

  Brandon-Bravo, Martin

  Corrie, John

  Bright, Graham

  Couchman, James

  1036

  Cranborne, Viscount

  Howarth, Gerald (Cannock)

  Critchley, Julian

  Howe, Rt Hon Sir Geoffrey

  Crouch, David

  Howell, Rt Hon D. (G'ldford)

  Currie, Mrs Edwina

  Howell, Ralph (N Norfolk)

  Dickens, Geoffrey

  Hubbard-Miles, Peter

  Dicks, Terry

  Hunt, David (Wirral)

  Dorrell, Stephen

  Hunt, John (Ravensbourne)

  Douglas-Hamilton, Lord J.

  Hunter, Andrew

  Dover, Den

  Hurd, Rt Hon Douglas

  du Cann, Rt Hon Sir Edward

  Irving, Charles

  Dunn, Robert

  Jenkin, Rt Hon Patrick

  Durant, Tony

  Jessel, Toby

  Dykes, Hugh

  Johnson Smith, Sir Geoffrey

  Edwards, Rt Hon N. (P'broke)

  Jones, Gwilym (Cardiff N)

  Eggar, Tim

  Jones, Robert (W Herts)

  Emery, Sir Peter

  Jopling, Rt Hon Michael

  Evennett, David

  Joseph, Rt Hon Sir Keith

  Eyre, Sir Reginald

  Kellett-Bowman, Mrs Elaine

  Fairbairn, Nicholas

  Kershaw, Sir Anthony

  Fallon, Michael

  Key, Robert

  Farr, Sir John

  King, Roger (B'ham N'field)

  Favell, Anthony

  King, Rt Hon Tom

  Finsberg, Sir Geoffrey

  Knight, Gregory (Derby N)

  Fletcher, Alexander

  Knight, Mrs Jill (Edgbaston)

  Fookes, Miss Janet

  Knowles, Michael

  Forman, Nigel

  Knox, David

  Forsyth, Michael (Stirling)

  Lamont, Norman

  Forth, Eric

  Latham, Michael

  Fowler, Rt Hon Norman

  Lawler, Geoffrey

  Fox, Marcus

  Lawrence, Ivan

  Franks, Cecil

  Lawson, Rt Hon Nigel

  Fraser, Peter (Angus East)

  Lee, John (Pendle)

  Freeman, Roger

  Lennox-Boyd, Hon Mark

  Fry, Peter

  Lester, Jim

  Gale, Roger

  Lewis, Sir Kenneth (Stamf'd)

  Galley, Roy

  Lightbown, David

  Gardiner, George (Reigate)

  Lilley, Peter

  Gardner, Sir Edward (Fylde)

  Lloyd, Ian (Havant)

  Garel-Jones, Tristan

  Lloyd, Peter, (Fareham)

  Glyn, Dr Alan

  Lord, Michael

  Goodlad, Alastair

  Luce, Richard

  Gorst, John

  Lyell, Nicholas

  Gow, Ian

  McCrindle, Robert

  Gower, Sir Raymond

  McCurley, Mrs Anna

  Grant, Sir Anthony

  Macfarlane, Neil

  Gregory, Conal

  MacGregor, John

  Griffiths, Peter (Portsm'th N)

  MacKay, Andrew (Berkshire)

  Grist, Ian

  MacKay, John (Argyll & Bute)

  Ground, Patrick

  Maclean, David John

  Grylls, Michael

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

  Gummer, John Selwyn

  McQuarrie, Albert

  Hamilton, Hon A. (Epsom)

  Madel, David

  Hamilton, Neil (Tatton)

  Major, John

  Hampson, Dr Keith

  Malins, Humfrey

  Hanley, Jeremy

  Malone, Gerald

  Hannam, John

  Maples, John

  Hargreaves, Kenneth

  Marland, Paul

  Harris, David

  Marlow, Antony

  Harvey, Robert

  Marshall, Michael (Arundel)

  Haselhurst, Alan

  Mates, Michael

  Havers, Rt Hon Sir Michael

  Mather, Carol

  Hawkins, C. (High Peak)

  Maude, Hon Francis

  Hawkins, Sir Paul (SW N'folk)

  Mawhinney, Dr Brian

  Hawksley, Warren

  Maxwell-Hyslop, Robin

  Hayes, J.

  Mayhew, Sir Patrick

  Hayhoe, Barney

  Mellor, David

  Hayward, Robert

  Meyer, Sir Anthony

  Heathcoat-Amory, David

  Miller, Hal (B'grove)

  Heddle, John

  Mills, lain (Meriden)

  Henderson, Barry

  Mills, Sir Peter (West Devon)

  Heseltine, Rt Hon Michael

  Miscampbell, Norman

  Hickmet, Richard

  Moate, Roger

  Hicks, Robert

  Monro, Sir Hector

  Higgins, Rt Hon Terence L.

  Montgomery, Sir Fergus

  Hill, James

  Moore, John

  Hind, Kenneth

  Morris, M. (N'hampton, S)

  Holt, Richard

  Morrison, Hon C. (Devizes)

  Hordern, Peter

  Morrison, Hon P. (Chester)

  Howard, Michael

  Moynihan, Hon C.

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

  Mudd, David

  1037

  Murphy, Christopher

  Speed, Keith

  Neale, Gerrard

  Spence, John

  Needham, Richard

  Spencer, Derek

  Nelson, Anthony

  Spicer, Jim (W Dorset)

  Neubert, Michael

  Spicer, Michael (S Worcs)

  Newton, Tony

  Squire, Robin

  Nicholls, Patrick

  Stanbrook, Ivor

  Norris, Steven

  Stanley, John

  Onslow, Cranley

  Steen, Anthony

  Oppenheim, Phillip

  Stern, Michael

  Oppenheim, Rt Hon Mrs S.

  Stevens, Lewis (Nuneaton)

  Osborn, Sir John

  Stevens, Martin (Fulham)

  Ottaway, Richard

  Stewart, Andrew (Sherwood)

  Page, Sir John (Harrow W)

  Stewart, Ian (N Hertf'dshire)

  Page, Richard (Herts SW)

  Stokes, John

  Parkinson, Rt Hon Cecil

  Stradling Thomas, J.

  Parris, Matthew

  Taylor, John (Solihull)

  Patten, Christopher (Bath)

  Taylor, Teddy (S'end E)

  Patten, John (Oxford)

  Tebbit, Rt Hon Norman

  Pattie, Geoffrey

  Terlezki, Stefan

  Pawsey, James

  Thatcher, Rt Hon Mrs M.

  Peacock, Mrs Elizabeth

  Thomas, Rt Hon Peter

  Percival, Rt Hon Sir Ian

  Thompson, Donald (Calder V)

  Pollock, Alexander

  Thompson, Patrick (N'ich N)

  Porter, Barry

  Thorne, Neil (Ilford S)

  Portillo, Michael

  Thornton, Malcolm

  Powell, William (Corby)

  Thurnham, Peter

  Powley, John

  Townend, John (Bridlington)

  Prentice, Rt Hon Reg

  Townsend, Cyril D. (B'heath)

  Price, Sir David

  Tracey, Richard

  Prior, Rt Hon James

  Trippier, David

  Raffan, Keith

  Trotter, Neville

  Raison, Rt Hon Timothy

  Twinn, Dr Ian

  Rathbone, Tim

  van Straubenzee, Sir W.

  Rees, Rt Hon Peter (Dover)

  Vaughan, Sir Gerard

  Renton, Tim

  Waddington, David

  Rhodes James, Robert

  Wakeham, Rt Hon John

  Rhys Williams, Sir Brandon

  Waldegrave, Hon William

  Ridley, Rt Hon Nicholas

  Walden, George

  Rifkind, Malcolm

  Walker, Rt Hon P. (W'cester)

  Rippon, Rt Hon Geoffrey

  Ward, John

  Roberts, Wyn (Conwy)

  Wardle, C. (Bexhill)

  Robinson, Mark (N'port W)

  Warren, Kenneth

  Roe, Mrs Marion

  Watson, John

  Rost, Peter

  Watts, John

  Rowe, Andrew

  Wells, Bowen (Hertford)

  Rumbold, Mrs Angela

  Wells, Sir John (Maidstone)

  Ryder, Richard

  Wheeler, John

  Sackville, Hon Thomas

  Whitfield, John

  Sainsbury, Hon Timothy

  Whitney, Raymond

  Sayeed, Jonathan

  Wiggin, Jerry

  Shaw, Giles (Pudsey)

  Wilkinson, John

  Shaw, Sir Michael (Scarb')

  Winterton, Mrs Ann

  Shelton, William (Streatham)

  Wolfson, Mark

  Shepherd, Colin (Hereford)

  Wood, Timothy

  Shepherd, Richard (Aldridge)

  Woodcock, Michael

  Shersby, Michael

  Yeo, Tim

  Silvester, Fred

  Young, Sir George (Acton)

  Sims, Roger

  Younger, Rt Hon George

  Skeet, T. H. H.

  Smith, Sir Dudley (Warwick)

  Tellers for the Noes:

  Smith, Tim (Beaconsfield)

  Mr. Robert Boscawen and

  Soames, Hon Nicholas

  Mr. Ian Lang.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Question on amendments) and agreed to.
  MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House recognises that the future of the Post Office counters network will depend on its ability to compete successfully by operating efficiently and reducing the costs of its operation while having regard to the social needs of the United Kingdom; and fully supports the Post Office's efforts to secure by these means the future of an extensive and socially responsive network.

Housing Support Grant (Scotland)
7.25 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): I beg to move,
That the draft Housing Support Grant (Scotland) Order 1985, which was laid before this House on 11th January, be approved.
It may be for the convenience of the House if we debate the following order and prayer with this order:
That the draft Housing Support Grant (Scotland) Variation Order 1985, which was laid before this House on 11th January, be approved.
That an humble Address be presented to Her Majesty, praying that the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order 1985 (S.I. 1985, No. 3), dated 4th January 1985, a copy of which was laid before this House on 11th January, be annulled.
Mr. Speaker: If the House agrees, so be it.
Mr. Ancram: Full details of the housing support grant settlement are set out in the report which accompanies the draft Housing Support Grant Order. Therefore, I shall not burden the House with an excessive amount of detail. However, I shall explain the thinking behind the proposals and also the limits which have been set out in the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order.
We have reached full agreement with the Convention of Scottish Local Authorities on the formula for the distribution of housing support grant this year. I should like to place fully on the record our thanks to the convention for its contributions to our discussions. In the housing support grant settlement for 1985–86, the Government have again aimed at concentrating resources on those authorities which require them. We have estimated eligible expenditure at £282 million and relevant income at £234 million. Housing support grant will therefore total £48 million which will be distributed among 23 authorities which we believe will incur deficits on their housing revenue accounts in 1985–86. We have of course left out of the reckoning the expenditure and income of authorities which could in our view generate a surplus.
As I have explained, the figure of £48 million reflects our best current estimate of the difference between eligible expenditure and relevant income. Housing support grant is of course, however, highly sensitive to changes in the level of interest rates. We shall therefore keep the situation under review. If in practice interest rates prove to be significantly different from our current assumptions, we shall bring forward an appropriate variation order in due course. The fact that we are today introducing a variation order in respect of the housing support grant for the current year, 1984–85, in the sum of £10·1 million reflects a similar undertaking given last year at this time. If the most recent movements in interest rates are sustained, a further variation order for the current year may in due course be required.
Labour Members will no doubt endeavour to present our housing support grant settlement proposals, and the rate fund contribution limits set out in the other order that we are debating today, as a direct attack on council house tenants, and as usual they will be talking rubbish. The decisions that we have made in previous years, and the figures in the orders before us today, reflect our continuing concern to balance the undoubted need for expenditure on housing against our responsibility to control public expenditure as a whole. It would, for example, be a waste

1039
of valuable resources, which have always been a matter of laughter for the hon. Member for Falkirk, East (Mr. Ewing), to pay grant to an authority at a level above that needed on reasonable assumptions to balance its housing revenue account.
In our estimation of expenditure, by agreement with the convention, we are again applying an average rate of interest to authorities' individual volumes of debt; and 10·4 per cent. has been assumed in the settlement. I repeat, however, that if differences in interest rates lead to significant differences in the level of authorities' loan charges we shall consider variation orders in due course.
The other main element of expenditure which we have to consider is the amount to be allowed for management and maintenance. In the 1984–85 settlement we allowed for an average expenditure of £262 per house—£226 million in total. Authorities, however, chose to budget for £284 per house—£245 million in total. However, no sound evidence has been presented to me of any need for a real increase in our provision for management and maintenance. As a consequence we have uprated the provision in last year's order by 4 per cent. to hold it generally constant in real terms at £272 per house—£232 million overall. Indeed, our stance on this expenditure has again been endorsed this year, with more than half of Scotland's housing authorities continuing to budget for a figure below that provided in our 1984–85 settlement.
On the income side, we are assuming for the purposes of the settlement that rents will increase by £1 per week over 1984–85 order levels, bringing rents to £12·59 in order terms. This assumed increase in rent matches our estimate of the overall average impact that the Government's decisions on housing support grant and rate fund contribution limits should actually have on council house rents.
This leads me to the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order which was also laid before the House on 11 January. It is right that we should consider this order at the same time as the Housing Support Grant Orders, since they are all closely linked.
It may be helpful to the House if I restate the reasons why we felt it necessary to take power in last Session's Rating and Valuation Amendment (Scotland) Act to limit the contributions which local authorities may estimate to make from their general rate fund to their housing revenue account in this way. The rate fund contributions meet the deficit on the account between local authorities' expenditure, mainly on servicing debt and management and maintenance, and their income from rents and grant. Over the past five years—and in spite of our efforts to persuade authorities to exercise voluntary restraints through the housing expenditure limits system—the rate contribution to housing has risen inexorably from £75 million, or £84 per house, in 1979–80 to £120·5 million, or £140 per house, in 1984–85.
The Government have a responsibility to take decisions about the total amount of resources which the nation can afford to devote to housing, within the general context of our objective of reducing public expenditure. We have, as I have already explained, reduced housing support grant in recent years in line with reasonable assumptions about authorities' expenditure needs and the amount of income which they might generate from rent and rates. I make no
1040
apologies for this. Authorities' decisions, however, to increase the resulting proportion of expenditure borne by the ratepayer—thereby keeping rents unnecessarily and artificially low—have had the unfortunate effect of limiting the share of public expenditure resources which could be made available for necessary capital works.
The result has been that in the present year alone local authorities in Scotland have forgone some £20 million which would otherwise have been available for much needed construction and improvement work in order instead to fund rent subsidies for council house tenants. Over the past four years, more than £110 million has been lost in this way. In the Government's view, this situation quite simply could not be allowed to continue. It places an intolerable burden on the ratepayers and, because it has led to the delay of much needed work on the housing stock, it is against the long-term interests of tenants themselves. It is bad for tenants and bad for ratepayers. On any view that made it unacceptable.
Our decision to ask authorities to budget for rate contributions to the housing revenue account not exceeding £89·5 million in 1985–86, as set out in the order before the House, has enabled us to issue provisional capital allocations on the housing revenue account totalling £267 million in Scotland next year. This figure is £40 million more than the final allocation of £227 million issued last March and represents in anyone's view a very substantial increase in real terms—particularly significant at a time when public expenditure elsewhere is necessarily being restrained. Local authorities will be able to spend the increased sum of £40 million on construction and improvement work, including tackling the problems of condensation and dampness. It is £40 million more work than possible this year. As a general guide, every additional £1 million of housing investment means that a further 42 small general needs houses, or 26 sheltered houses, can be built. Alternatively, 320 local authority houses can be modernised, or 60 properties which the local authority has acquired can be rehabilitated. Taken as a whole, this addition to the HRA is something which no reasonable observer can sniff at, and it is, I believe, an indication of a failure to understand the housing finance situation in Scotland so to do. The hon. Member for Glasgow, Garscadden (Mr. Dewar) sits in his seat laughing at the idea of £40 million more being made available to deal with problems of condensation and dampness. I trust that that will be noted by his constituents who suffer from such problems.
An additional feature of the system is that we have been able to introduce a new arrangement this year for any authority which budgets for a rate fund contribution below the prescribed limit. Where an authority's budget falls below its limit, we will be prepared to increase its capital allocation by an equivalent amount. Authorities will, therefore, have a real opportunity next year to increase the capital expenditure they can undertake even further, provided that they hold back on their rate fund contribution and then they can use it for dealing with dampness, condensation and so on. That is good for tenants and good for ratepayers.
In setting an aggregate limit to rate fund contributions of £89·5 million next year we have asked individual authorities to budget for a rate fund contribution 10 per cent. below the guideline issued for housing expenditure limit purposes last year, or not to exceed their actual budgeted figure, if that was lower. We have consulted

1041
authorities very widely about the implications of the individual limits set, in line with the undertakings which we gave during the passage of the legislation last Session. In particular, we have held detailed discussions with the Convention of Scottish Local Authorities and we have received and carefully considered representations from over half of all individual authorities.
As a result, we are convinced that the limits proposed in the order are fair and reasonable. Authorities were—at their own request—given very early notification at the beginning of October of the provisional limits which we proposed to set. We then allowed a substantial period for consultation between October and the middle of December, when final decisions had to be reached to allow us to proceed with arrangements for making and laying the necessary order.
During the consultation period, we indicated that we would look particularly carefully at representations from authorities which believed that they were faced, as a result of the rate fund contribution limit proposed, with making a rent increase significantly in excess of the average, which we estimated to be slightly over £1 per week—provided that the excess rent increase did not result from the authority's own decisions to ignore housing expenditure limit guidelines in the past, or provided there were other special circumstances which required the authority to budget for a higher rate contribution.
Mr. James Wallace: The Minister has said that there was consultation. To what extent did that consultation have an effect on the Government? He said that the Government expect an average increase of just over £1 per week. In Shetland the proposed increase could be £7. In Orkney the required increase is expected to be 30 per cent. Neither of these councils can by any stretch of the imagination be taken to be the bastions of socialism that the Minister so often castigates. What sort of figures did he have before him if rent increases in these authorities are to be so much in excess of the average that he has talked about?
Mr. Ancram: If the hon. Gentleman had been listening to what 1 have been saying he would have realised and appreciated that we were judging it against a number of assumptions which were agreed by COSLA in the consultations—assumptions as to the nominal rent level which we were seeking, as to the interest rates and as to the management and maintenance costs uprated to meet inflation in this year. As I have said, we looked at the representations made to us. In many cases we found that the authorities thought that their rent increases would be much higher than £1, because in the past they had either ignored housing expenditure limits or had found that their management and maintenance costs were much higher than the average for Scotland. Obviously, we considered the matter, because in the event we concluded that only two authorities met the criteria that we had set, and merited a higher rate fund contribution limit. It may surprise the hon. Member for Orkney and Shetland (Mr. Wallace) to know that they were Orkney, and Badenoch and Strathspey. We also accepted the argument of Edinburgh district council that, in its particular circumstances, if it was to be treated fairly with all the other authorities, its rate fund contribution limit needed to be raised. That we did in December.
In the case of all other authorities that made representations, we concluded that either the authority did
1042
not face a rent increase significantly in excess of the average, or that if it did it was due to its failure to observe housing expenditure limit guidelines in the past, or to its including in its calculations an estimate of loan charges significantly higher than we thought reasonable, or to its intending to increase expenditure on management and maintenance by significantly more than the rate of inflation. As the hon. Member for Orkney and Shetland, who is a lawyer, will I am sure accept, where those circumstances applied, we did not think that any increase in the rate fund contribution limit was justified.
No doubt we will hear during the debate exaggerated claims from Opposition Members about the impact of rate fund contribution limits on council house rents. We have made clear our view that, making reasonable assumptions about loan charges and management and maintenance costs, we believe that the average rent increase in Scotland next year need be only slightly above £1 per house. That figure was not seriously disputed by COSLA when I met it in December.
Obviously, the rent implications for individual authorities would vary considerably around the average, depending on their own estimates of loan charges next year and on their proposed expenditure on management and maintenance. But I believe that, provided authorities do not increase expenditure on management and maintenance by more than the rate of inflation, few authorities in Scotland need face a rent increase next year of as much as £2 per house per week. I reject totally some of the exaggerated claims about the likely consequences for rents which we have heard from certain authorities in recent weeks. I will return to some of those claims later.
In the current year the average Scottish local authority rent stands at approximately £10·46. The rents of many individual authorities are lower still. In Glasgow. the average rent this year is only £9·75. In Aberdeen it is £8·90. In Dundee it is £8·82. That compares with an average local authority rent in England and Wales of £14·71. Yet in 1984 the average earnings of manual workers in Scotland were actually higher than those of their counterparts in England and Wales, and the proportion of that being spent on rents was considerably lower.
With over half of all households in Scotland in public sector rented housing, it is difficult to justify such low rent levels. If tenants have genuine difficulty in meeting their housing needs, a full and adequate scheme of relief is available to them through the housing benefit system. I am sure that the majority of tenants would accept that their rents must make a realistic contribution to the cost of providing their houses. Indeed, I believe that many of them would be happy to pay higher rents in return for a better service. Perhaps local authorities fear that a more realistic relationship between rents and the cost of providing the service might lead more tenants to question whether their landlords are providing value for money.
I am convinced that there is room for greater efficiency—with consequent rent savings for tenants—in the way that local authorities run their management and maintenance services. For example, if Glasgow brought its management and maintenance expenditure per house down to the average for the other 55 authorities, A would save the equivalent of a reduction in rents of £1·14 per house per week. If Edinburgh, which now spends more on management and maintenance per house than any mainland authority in Scotland, were to do the same, it

1043
could cut £1·70 off every tenant's weekly rent. These figures speak for themselves, and I hope that tenants will ask whether their landlords are giving them value for money.
Mr. Robert Hughes: Will the Minister stop using the phrase "management and maintenance expenditure" and instead differentiate between management expenditure, and repair and maintenance expenditure? It is the figure for the latter that should be taken into account.
Mr. Ancram: If the hon. Gentleman had listened to me, he would know that we have uprated last year's figure to keep it in line with inflation. Thus the management and maintenance assumptions of last year are being maintained in real terms.
We are concerned to reverse the present rising trend in rate subsidies to housing. Such subsidies contribute nothing to the provision or modernisation of public housing. They do not encourage efficiency. They benefit only the better-off tenant who has no need for subsidy, and they are wasteful of scarce resources. We have consulted widely, and at length, on the individual limits in the order before the House, and I am satisfied that the figures are fair and reasonable. In particular, I believe that the impact on council house rents, which I calculate will be to raise rents on average by little over £1 per house per week, is not excessive and is justified in present circumstances.
In the past few weeks we have heard several claims being made. In particular, we have seen press reports that Edinburgh district council
"is refusing to put up rents by the Secretary of State's average of £1."
That is not surprising, because the council does not need to. Calculations carried out by Shelter—hardly one of the Government's arch supporters, and a body that generally sets its figures on the high side—suggest in the briefing paper sent to Members of Parliament that Edinburgh could comply with its rate fund limit and increase its management and maintenance costs in line with inflation with a rent increase of only 18p.
I think that ratepayers and tenants have a right to ask what the greatly increased expenditure that Edinburgh claims is needed is for. I have pointed out that Edinburgh already spends more on management and maintenance per house than any mainland authority; administration takes up a staggering £122 per house—more than 50 per cent. above the Scottish average. The plain fact is that Edinburgh has been very fairly treated indeed. We have revised its rate fund limit, and we have also increased its capital allocation on the HRA block by 50 per cent. this year.
Mr. Gavin Strang: The Minister does not seem to realise that Edinburgh's council rents are much higher than the rents of other Scottish cities. Indeed, I hope to be able to refer to that later. Furthermore, the hon. Gentleman does not seem to realise that Edinburgh's housing stock has been massively neglected in recent years. Hon. Members on both sides of the House have witnessed that. More expenditure is drastically needed.
Mr. Ancram: The hon. Gentleman has made my point for me. I have just confirmed that we have increased Edinburgh's HRA block by 50 per cent. this year. If that
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is not a substantial increase, I do not know what is. That has been done to enable Edinburgh to look after its stock. The hon. Gentleman made a valid point in saying that Edinburgh rents are high. But that is precisely why the district council is talking nonsense when it says that it is being required to impose excessive rent levels.
I have heard what Edinburgh has to say. but if Edinburgh chooses to go outside the law we can conclude only that it is doing so for purely dogmatic reasons. In due course I am sure that voters will take note, and that they will act accordingly. But for the more immediate future let me make it clear that if Edinburgh or any other local authority decides not to budget for rate fund contributions to the housing revenue account within the limits set by the Secretary of State they should be in no doubt that my right hon. Friend will take all possible steps open to him to ensure compliance with the law. The principal powers open to him are his default powers under section 211 of the Local Government (Scotland) Act 1973 under which —if following an inquiry he considers that an authority is in default—he can press for an order of specific performance from the Court of Session. Failure by the authority to comply with such an order of the court would constitute contempt of court, with all the penalties that that entails; and in certain circumstances individual councillors can be required personally to make good illegal expenditure incurred.
We have, however, as do the people of Scotland, a legitimate interest in the official stance of the leadership of the Labour party on this issue—the question of the breach of the law. Parliament has a right to know where the Labour party stands on the question of breaking the obligations placed on local government by this democratic Parliament. The hon. Member for Garscadden has been asked this before, and I am offering him the opportunity tonight to make his position clear. Those of us who have tried to follow the stance of the Scottish Labour party through the media must confess to being confused. On the one hand, it apparently does not condone law breaking—how comforting, if I may say so. On the other hand—and it is beginning to sound like the Liberal party in this—it supports councils in breaching statutorily imposed limits, or so it would seem.
But I understand that our Labour leaders in Scotland have reconciled their position in some amazing stretch of legal principle founded upon the belief that only proof of illegality, whatever the prima facie nature of the act, should merit their opprobrium and condemnation. What a miracle of twisted morality. What in effect they are saying is, "Do what we think is wrong with our blessing, and we will not withdraw that blessing and replace it with condemnation until we are told it is wrong and when it is too late to stop you. We will lead you firmly from behind." That is the message of the Labour leadership in Scotland to Labour councillors. What an abdication of leadership. What a run for cover from the threat of militant disapproval. What a farce.
The hon. Member for Garscadden is an honourable and reasonable man. I hope that he will take this opportunity to tell the House that his party has been misreported in the media. I trust he will tell the House that his party respects the law, that his party accepts the democratic decisions of Parliament unless and until they are changed and that he calls on his supporters in local government to respect the law and to abide by it. If he is honest, he cannot sit on the fence, he cannot lead from behind and tonight he cannot

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cavil. Today he has an opportunity to set the record straight. Does he in the true principles of democracy state that the law must be obeyed and that he will give no comfort to those who seek to break it, or does he subscribe to that dangerous path that supports its breach? He can wriggle no longer, for the question is simple and the answer in honesty is unavoidable.
It is in the confidence that Her Majesty's Opposition can only back the law determined by this Parliament that I commend these orders to the House.
7.52 pm
Mr. Donald Dewar: I do not know about my hon. Friends, but I was not terribly impressed with all that. There was a slight lack of continuity, I thought, about the hon. Gentleman's remarks. They had been very carefully prepared. I thought there was a great scarcity of argument for the Under-Secretary to remark, "I am satisfied that the figures are reasonable", and to conclude all argument and all discussion on that note does not seem to me to be entirely convincing.
I regret that the Secretary of State for Scotland did not open the debate. I say that not as a matter of protocol or etiquette—after all, some of my hon. Friends might think that he would not be missed in this or any other debate—but because this is a rather unusual event and we are not engaged in a run-of-the-mill outbreak of bickering between Government and Opposition, the kind of trivial arguments that sometimes mark debates in this place.
In these orders and in the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order we have a real and unwelcome departure from accepted practice and a real shifting in the balance of power between central and local government. I fully accept that on many occasions in the past we have had disappointing and sometimes plain bad housing support grant settlements. Very often over the last few years we have had some driech and dreary testimonies to the indifference and, if I may say so, insensitivity of Ministers who just do not seem to be able to grasp the reality of the crisis that is facing district councils and housing authorities in Scotland.
At this time there is no doubt that discontent is sharpening into dissent, and legitimate argument is reaching the point of escalating into confrontation. In that situation I do not think that it is satisfactory that some unfortunate junior Minister is put up to read a departmental brief in a thoroughly unsympathetic and, it seems to me, uncomprehending way. One of my hon. Friends was calling, "Bring back Russell Fairgrieve" — at least he wrote his own speeches. I can think of no fairer criticism of the efforts of the hon. Member for Edinburgh, South (Mr. Ancram).
Why do we protest? First, I wish to address myself to the figures and to the housing support grant settlement. We know of course that this year it is £48·2 million, a new low, and I believe—and I think I will carry a great deal of support across the range of opinion in Scotland—that is an insult when measured against the housing needs of the nation. When we remember that in 1979–80 it stood at £213 million and that it reached £228 million in the second year in which the hon. Gentleman was in St. Andrew's House, to see it now at £48·2 million marks the complete inadequacy of the Government's response to Scotland's housing needs. What we see in terms of the housing
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support grant is a remnant, a battered remains of the Government's contribution. As for the district councils, there are only 23 survivors. Thirty-three in some miraculous way have been given a surplus manufactured on improbable assumptions and based upon the arithmetic of make-believe.
The Under-Secretary in a sense used an interesting phrase in that regard when talking about surpluses. He referred to authorities "which could in our view generate a surplus". That may be the view of the Minister, but the artificiality of the figures that are used—the deemed amounts for maintenance and repairs, the deemed rent income — bears no reality in many cases to what is happening in local government in Scotland. It gives an air of complete unreality to these damning calculations which have resulted in the quite catastrophic slump in support to the housing revenue account. Even among the rump which have survived—those who are still receiving housing support grant — a large number of authorities are suffering greatly. Glasgow, which of course receives the biggest share of what remains, will receive £24·8 million in the coming year. Five years ago it received £52·2 million. As a Member of Parliament representing Glasgow I know nothing—and I put this as gently, as negatively, as I can— in the housing conditions of Glasgow that could justify that kind of catastrophic slide in the Government's commitment and their help and support.
Of course, it is not just the great conurbations that are suffering. Banff and Buchan authority is down about £700,000, and no doubt the hon. Member for Banff and Buchan (Mr. McQuarrie) will have views upon that The authority of the Minister's Parliamentary Private Secretary, the hon. Member for Moray (Mr. Pollock), comes down from £1·68 million to £980,000. Argyll and Bute authority, which is represented by the Under-Secretary of State, the hon. Member for Argyll and Bute (Mr. McKay), loses close on £500,000, which is a not insignificant sum, certainly for a district council of that size. Everywhere the situation is the same. One cannot take that kind of money from the maintenance of the housing stock without a substantial and worrying impact on all concerned.
The Under-Secretary, perhaps understandably, given that he had such a thin and miserable case on the current expenditure side, tried to make a good deal of the capital expenditure plans for the coming year. I am not sure that his figures compare like with like. I would think that £244 million to £270 million was a fairer comparison on the HRA side. Of course, these are figures in cash. Perhaps the hon. Gentleman would like to look at his Down White Paper on public expenditure which was published yesterday. After all, we are not looking at the capital side, and presumably he dragged it in as some sort of camouflage exercise for the purposes of the debate. The hon. Gentleman will observe that between 1984 and the next financial year the revenue expenditure of local authorities on housing is budgeted to drop from £111 million to £98 million. On the capital side, there will be a drop from £295 million to £260 million. The Minister will say that much of that is due to the private sector, the non-RHA, decline. I accept that, but he cannot get away from the fact that his White Paper shows that on both revenue and capital there will be a cut of about 15 per cent. between this year and next year. That seems to give the

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lie to and to undermine the spurious and specious claims that the Government have shown concern for the housing problems of Scotland.
Mr. Ancram: The hon. Gentleman seems to have great difficulty in understanding the figures on the HRA. Will he accept that housing authorities in Scotland have been given consent to spend £227 million this year? On the figures that I have announced today, they will be able to spend £267 million next year. That is a cash increase of £40 million, which will be spent on precisely the problems that the hon. Gentleman is talking about.
Mr. Dewar: I suspect that the Minister is omitting some factors. There was almost certainly an addition and the hon. Gentleman usually boasts about such additions during the financial year. The figures that I gave come from the Government's White Paper. I am not manufacturing anything. The Minister is doing the manufacturing and, in his desperation, he is reduced to arrogant sneering about the mental powers of others. He is in a poor position to make such comments.
Knowing some of the problems involved—I talk to the people involved and look at what is happening—I find it offensive for the Minister to suggest that the scourge of dampness in public sector housing in Scotland could be dealt with by a minor adjustment in the spending priorities of local authorities. That sort of statement trips too easily off the Minister's tongue. If he thought about it, he would recognise that he is being, at best, misleading and is, at worst, putting up a dishonest smokescreen to hide the reality.
The impact of the housing support grant settlement and the cuts that I have referred to will be frightening. We shall see the housing stock deteriorating and standards falling. The struggle in many areas is to maintain property in a wind and watertight condition. The Under-Secretary said that there is no sound evidence that we need more money for repairs of council houses in Scotland. He should visit almost any large housing scheme, certainly in west central Scotland and, on the evidence of my briefer acquaintance with other areas, almost any other part of the country.
I often feel sorry for the staff of housing departments who can see the problems and are often under siege from tenants who are suffering from the problems. Those staff know that they do not have the resources to provide the solutions that they would like to provide. I am even sorrier for the tenants who have to live with faults and defects that affect the quality of their lives. I have anger and contempt for a Government who, in the face of all the evidence—hon. Members should just read the Select Committee report on dampness — pretend that the problem is nothing to do with them and is not of their making.
Leaving for a moment the size of this year's settlement and moving on to the rate fund contribution limits order, our second objection is that the Under-Secretary failed to address himself to the points of principle behind that order.
I agree with the Minister that the housing expenditure limits system was unsatisfactory and involved a complicated and unjust series of penalties related to rent levels. We are glad to see the back of that system, but it is a perverse ingenuity for the Government to come up with a solution that is even worse. Housing expenditure limits should have been scrapped and not replaced.
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I believe that the Government's intention is to try to control rent levels in Scotland. That is an important departure, because I presume that the Minister intends to keep the machinery in place and that, year after year, we shall see rents forced up in an unacceptable manner.
District councils have many important functions, but I do not think that anyone would disagree that, basically, they are housing authorities. It is an essential power of a housing authority, and one of the reasons why its councillors are elected, that it can set its own rent levels. Soon, rents, rates and the pattern of housing expenditure, particularly now that guidelines are virtually mandatory—because of the way in which the general abatement works and the apportionment of the general abatement—will be dictated by men from St. Andrew's house.
The power of the Secretary of State is increasing. In the interests of local democracy, it ought to be diminishing. That is not merely a partisan party point, though it could be presented as such. I believe that my view is shared by COSLA, whatever the colour of the politics of various councils. My impression at yesterday's lobby organised by COSLA's district councils policy committee—I concede that many people were talking about the rate support grant as well as housing matters—was that Liberal councils, independent councils and even Tory councils —councillors of Eastwood and of Bearsden and Milngavie specifically asked to be associated with the lobby—did not like the fact that their powers are being undermined and that the balance of power is being tipped in favour of the Scottish Office.
I do not want to read a constitutional lecture, and I would probably not be competent to do so, but I make the simple point that one of the strengths of our country is that we have competing and balancing centres of power. That has been true of our government structure in Scotland. If we weaken the power of local government against central Government, we shall remove an important safeguard.
When we protest about the rate fund contribution limitation system, which is being used for the first time, it is not just because of the effect on rents. It is also because we believe that it is wrong and objectionable. I hope that the Minister will reply to those important matters.
The new scheme will force up rents. That is what the Government want to do and, to be fair to the Under-Secretary, he made no bones about that. The Government claim that the system will increase rents by just over £1. We all deal in averages, but I suspect that that average may turn out to be too low. The Minister conceded that in many areas rent increases will be considerably higher than that. For example, the rate fund contribution limitation will add about £1 to rents in Glasgow. On top of that come the cut in housing support grant and the effects of inflation. Glasgow tells me that it is looking at an increase of £2·20 or perhaps more. The hon. Member for Orkney and Shetland (Mr. Wallace) has referred to Shetland's startling figure of £7. There may be special circumstances there—the council has a big modernisation programme under way—but that is still a very large sum.
Even the Government's own figure is twice the going rate of inflation. I do not believe that we ought to hijack the traditional and central power of district councils to allow Ministers, who represent a rump of opinion in Scotland, to do a bit of unjustified social engineering. There is no doubt that it is a matter of social policy—we heard about the English comparisons and about wage

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rates in Scotland. I am unimpressed by those arguments and I believe that tenants will also be unimpressed. If rents are far too low in Scotland, why is the housing benefits scheme, constructed by this Government, extended to over 60 per cent. of council house tenants in Scotland? In the light of that one startling fact, how can it be claimed that rents are too low? By how much will that 60 per cent. figure increase if we allow the Government to push up rents as they suggest? The whole system is arbitrary and unreasonable, as is shown by the concept of a 10 per cent. cut across the board.
Edinburgh's rate fund contribution is £47 per house. The city has a legacy of neglect and inadequate services. Its rate fund contribution is half the average in Scotland and less than a third of the contribution of many of the larger councils in Scotland. What is the point of holding them down at that level, which is out of line with practically every other council in Scotland, and certainly every other comparable council? It makes no sense and the Minister must know that it is nonsensical.
The nominal rate fund contribution for Glasgow was £29 million and it is to be reduced to £26·5 million. Everyone knows that it was in fact £35 million in the current year. Therefore, £8·5 million is to be found from rents. A measure of the pass to which things have come is that Glasgow has raised in the Court of Session an action against the Secretary of State claiming that the order is ultra vires. That does not affect the debate because the proceedings have not reached the stage where they impinge upon the sub judice rule. The summons has only just been served.
The Minister preaches to me sanctimoniously about the rule of law. I think that there might have been a case for staying the Government's hand until the Court of Session had decided the outcome of the case. It seems that it is a stateable case, and I say that as modestly as I can.
The Minister spoke about consultation, but we know that one of the factors that brought the Glasgow case to the courts was the way in which Glasgow's representations about the considerable blow that the settlement would have on the rate fund contribution limit were met. They were answered by a stereotyped letter in which "Glasgow" had been written hurriedly in ink. That showed that the answer was being sent to all authorities irrespective of their cases.
I hope that the House will recognise that we feel strongly about this matter. I believe genuinely that the monstrous business is unnecessary. The housing revenue account between 1978–79 and 1985–86 shows that the Government's contribution to housing support grant in Scotland — that is the conglomerate housing revenue account—has decreased from 39 per cent. to 7 per cent. In other words, the Minister has cut his contribution to almost nothing.
The percentage of the housing revenue account that is met from rents, which are apparently such a worry to Conservative Members, has increased in the same period from 47 to 80 per cent. The Government's contribution has decreased massively while rents have increased massively. That is the trend and it is one that makes nonsense of the Minister's more excitable claims and those of his colleagues. I accept that the rate fund contribution has increased, but only from 14 per cent. to 18 per cent. It has been held steady over the past three years, and if the Minister has his way it will come down to 13 per cent.
The rate fund contribution has been largely static. There has been very little movement in that area while
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rents have been increased to meet a larger and larger share of the general burden on the revenue side. Total housing resources in cash terms this year as against last year will decrease by £71 million. There will be a decrease of £30 million in the rate fund contribution, of £14 million in the housing support grant and of £27 million in the capital account overall.
Mr. Barry Henderson: I do not follow the hon. Gentleman's figures. He has talked about the rate fund contribution having been decreased. The extent to which there is to be a rate fund contribution to the housing revenue account has been reduced. If we encourage local authorities to pay a substantial rate fund contribution, one of the effects will be to diminish the amount to be paid in housing benefit by the general body of taxpayers but not ratepayers.
Mr. Dewar: The hon. Gentleman has misunderstood at least some of the figures that I have recited. I was saying that the rate fund contribution has increased only marginally while rents have been increased massively. At the same time, the Government's contribution has been reduced massively. The overall resources available for housing have decreased by about £71 million. I accept that the rate fund contribution can be a controversial issue.
I understand that the local authority within the constituency of the hon. Member for Fife, North-East (Mr. Henderson) is facing a 37 per cent. increase in its rates in the coming year, although it is within the Government's guidelines. The hon. Gentleman is interested in helping the ratepayer by cutting the rate fund contribution, but if we really want to help the ratepayer we should do so by concentrating properly on the effects of revaluation. We should do so by stopping the savage reductions in the rate support grant which are facing so many councils at the same time as large rates increases. We should not do so at the expense of council house tenants by means of an artificial and unnecessary reduction in the rate fund contribution.
Mr. Michael Forsyth: Will the hon. Gentleman deal with the central point? By raising rents rather than increasing the burden on the ratepayer we shall move away from a system which is regressive, which makes those who cannot afford to do so pay towards a system that puts the burden on those who can pay. It is wrong for the hon. Gentleman to attack the Government because they are moving away from a system that subsidises council house tenants who may have large incomes to one that protects ratepayers who do not.
Mr. Dewar: I accept that the hon. Gentleman is obsessed with the tax burden generally and would like to see it cut. I am not sure about the equity of his proposition that the entire burden should fall on the comparative minority of tenants who do not receive housing benefit. I am not greatly attracted by that proposition. That shows the difference of approach between us, which we shall have to argue about on a wider stage.
This collection of orders illustrates a mean-minded approach which is likely and, I fear, intended to make council housing a less attractive option than it was. I fear that there are those in the Conservative party—I need look no further than those on the Conservative Benches—who feel that council housing should be a fall-back option or a safety net for those who are not fortunate

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enough or confident enough to be able to scramble successfully in the private sector. That is not a concept of public sector housing which commends itself to my right hon. and hon. Friends or to the majority of those in Scotland.
Councillors are bitter and disillusioned, as are many tenants and ratepayers generally. After all, tenants are ratepayers and that should not be forgotten. Council house tenants do not live in ghettos. They pay their rates and taxes and deserve fair consideration. The Minister should not underestimate the pressure on councillors from public opinion in Scotland, which they much more fairly represent than Ministers. No one on the Opposition Benches seeks confrontation. None of my colleagues wants to see local authorities and the Government at loggerheads and facing a complete impasse, which will necessitate the creaking and oppressive machinery of coercion coming into play. I do not want to share the Minister's vision of section 211 inquiries, Court of Session actions, surcharges and all the other procedures.
Mr. Ancram: I do not want that either.
Mr. Dewar: At least we have that in common. We should be considering how we can best avoid that happening. I will not encourage or support those who find themselves in defiance of court orders. That would not be proper and could not be done. Councils are entitled at this stage and are right to stand their ground and to put their point of view to Ministers, but if there is no response from the Government we could end up with confrontation. That will be a tragedy which no one wants.
Who can make the greatest contribution to avoiding that confrontation? That can come from Ministers, who are presently insisting on an unreasonable set of propositions which bear no reality to the situation that is faced by district councils. I say to the Secretary of State, his satraps and his mouthpiece for the day that if he wants to show a little common sense he will best do so by withdrawing from the brink, by recognising the housing needs of Scotland and by not forcing councillors into a position where choice becomes impossible. They should not be asked at his behest to betray the interests of those who elected them and to whom they are answerable.
Misery and more misery are offered by this clutch of orders. The orders offer poorer services and higher rents—people will pay more and get less. I believe that the housing support grant settlement as outlined is hopeless and inadequate. The rate fund contribution limitation is misconceived and oppressive. The Opposition want none of it, and we shall vote accordingly.
Mr. John Home Robertson: On a point of order, Mr. Deputy Speaker. In the light of what has been said, it would be intolerable if the Under-Secretary of State, the hon. Member for Edinburgh, South (Mr. Ancram), were to reply to the debate. Have you any way of ensuring that the right hon. Member for Ayr (Mr. Younger), who calls himself the Secretary of State for Scotland, faces the music?
Mr. Deputy Speaker (Sir Paul Dean): The hon. Member makes a political point. It is not a point for me.
8.20 pm
Mr. Barry Henderson: I listened with great interest to the hon. Member for Glasgow, Garscadden (Mr. Dewar).
Mr. Willie W. Hamilton: On a point of order, Mr. Deputy Speaker. I should like to clarify a point for future reference. If the Minister who opened the debate, the hon. Member for Edinburgh, South (Mr. Ancram), seeks to speak at the end of the debate, must he receive the permission of the House?
Mr. Deputy Speaker: Because the hon. Member for Edinburgh, South (Mr. Ancram) moved the motion, he does not need the leave of the House to wind up.
Mr. Henderson: It is astonishing how some people who feel bested in an argument have to find other ways of venting their frustrations.
The capital allocations, particularly for the HRA block, made available to local authorities are probably as much as most local authorities could reasonably have hoped for at present. I believe that the non-HRA block is not as generous as the HRA block and is more important in certain areas than in others. I should like my hon. Friend the Under-Secretary of State to examine more carefully the determination of non-HRA block for individual local authorities and to consider whether better criteria would lead to an improved allocation of non-HRA block funds which are more scarce.
I quarrelled with the hon. Member for Garscadden about rate fund contributions. It is appropriate to move from rate fund contributions to housing revenue accounts as rents generally begin to reflect costs and housing benefit is a more effective way of helping those who need help. Housing benefit is a cost ultimately met by the general body of taxpayers, not by the specific ratepayers of a local authority.
Mr. Jim Craigen: The fact is that local authorities, other than new towns and the Scottish Special Housing Association, must meet 10 per cent. of the cost.
Mr. Henderson: When there is a substantial rate fund contribution to the housing revenue account to depress rents and to save having to pay housing benefit, the local authority is responsible for 100 per cent. of that cost. It is sensible to move to a position in which one can get away from rate fund contributions to the housing revenue account.
The purpose of helping with housing costs is to meet the needs of people rather than to satisfy ideas about particular types of houses deserving subsidies. People, not houses, should receive help.
I have some sympathy with the point raised by the hon. Member for Aberdeen, North (Mr. Hughes) in an intervention when he distinguished between management costs and maintenance costs. I should like my hon. Friend the Under-Secretary of State to reflect more on the answer he gave off the cuff to the hon. Member for Aberdeen, North. There is no doubt that some of the costs which come under the heading of maintenance and management are grossly excessive. There are fantastic and inexplicable differences between local authorities. An analysis of the reasonableness or otherwise of management and

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maintenance costs would be helped if we could start by distinguishing between the costs of management and administration and the costs of maintenance.
Mr. Robert Hughes: The housing revenue account for the Aberdeen district council shows that management costs and repair and maintenance costs are identified separately.
Mr. Henderson: The more these matters are broken down, the more helpful it is to analyse what is sensible.
I should like my hon. Friend the Under-Secretary of State to consider the possibility of giving an element of support in our housing policies to recognise that local authorities have responsibilities for housing not related specifically to their council estates. I have in mind the monitoring of all housing conditions, advising about housing generally—not necessarily related to tenants—and examining some aspects of coping with homeless persons and community provision for non-council sheltered housing. I appreciate that those are not major expenditure items compared with the main items that must be considered in running council housing estates, but they show up when budgeting is tight, especially when a local authority is at the margin of eligibility for housing support grant. I take at random the case of the North East Fife district council which last year did not expect to receive housing support grant. To the council's pleasant surprise, during the year it received the small sum of £17,000 in housing support grant. That proves that the district council was at the margin. It would be helpful if we recognised the non-council housing costs of local authorities in determining the support available from the Exchequer.
I hope that some of my points will be borne in mind when the Government are seeking to determine the future appropriate levels of housing support grant and housing allocations generally.
8.27 pm
Mr. Hugh Brown: I shall not follow the remarks of the hon. Member for Fife, North-East (Mr. Henderson). His contribution about non-housing support grant seemed a little jumbled. To use the parliamentary jargon, I believe that the speech by the Under-Secretary of State should have been entitled, "Line 1, 'delete Lothian regional council and insert Edinburgh district council'". His speech had no substance and gave no indication that he understood some of its points. When the Under-Secretary of State was questioned by my hon. Friend the Member for Aberdeen, North (Mr. Hughes), the hon. Gentleman seemed confused about the two elements in the housing support grant. I give the Under-Secretary of State credit for one thing: attack is the best form of defence, and the hon. Gentleman did his best. I hope to demonstrate that the hon. Gentleman was wrong on both counts.
I do not wish to be too personal, but I have always thought that the Under-Secretary of State was slightly guilty of using slick language. That came through in his speech when, for example, he said that COSLA was in full agreement on the formula. We all know what that means, but the Under-Secretary of State wished to convey to those outside the Chamber that COSLA agreed with the settlement. That is entirely different. I know that the hon. Gentleman can wriggle out of that accusation. When the Under-Secretary of State was accused of attacking council
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tenants, he said that that was rubbish. We shall demonstrate that this measure is an attack on council tenants.
I object to the Under-Secretary of State saying, "We shall hear exaggerated claims from the Opposition". That might be all right for a press note. I have never been guilty of exaggeration in this place — [Interruption.] The Under-Secretary of State uses an omnibus approach which sounds good in debate. I personally resent that if only because on this occasion there is absolutely no need for us to exaggerate.
We have been inundated with representations. I shall claim a few moments' injury time to save others having to give the information again. Detailed representations backed up by facts and figures and well documented cases have come from the city of Glasgow council, the Strathclyde housing liaison group, the Scottish local government information unit, the Scottish Federation of Housing Associations, Shelter, and the Convention of Scottish Local Authorities. The largest delegation of local authority representatives that I have ever seen has come here to lobby Parliament. I hope that no one will be cynical enough to ask why so many people need to come to London at the ratepayers' expense. I see the Minister nodding already.
I have the greatest admiration for the Secretary of State — [HON. MEMBERS: "Why?"] I will put the boot in then. Representing an east end constituency in Glasgow I felt a certain obligation to attend a luncheon in Glasgow, on Friday held on behalf of his former company. I put it to any Conservative Member thinking of trying to make capital out of the large number of local authority representatives here this week that the cost of that was nothing compared with the lunch in Glasgow on Friday. I did not spend a lot of time there as I had to go on a housing meeting, but I am not trying to be virtuous about that. I do not complain about that lunch, but I hope that no one will make cheap, unworthy points about the cost of lobbying Parliament. We should appreciate the frustration of so many councillors and their need to feel that they can make representations in that way. I welcome the large number of representatives who have come to the House and the representations that they have made.
I know that it is a sign of age to be constantly looking backwards, but from time to time I feel obliged to draw attention to the needs of the so-called deprived areas. The argument about local democracy has been very strong in the representations made in the past couple of days. The Government are interfering with the rights of locally elected representatives to carry out policies and provide services as the people who elected them wish.
Some of those who criticise the Government for interfering may be unaware that that is traditional Conservative Government policy. The 1972 legislation not only interfered with local authorities and rent levels but specified annual amounts. That legislation, which was taken through the House by the Secretary of State for Scotland, included the ultimate phasing out of all subsidies. So there is nothing new about the policy, if such it may be called, now being pursued by the Government. They are trying to do the things that they were unable to do in 1972 because they had no basis for assessing the real housing needs of the people of Scotland. The result then was that the Clay Cross martyrs had to be rescued in England and their Scottish counterparts had to be rescued

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by my right hon. Friend the Member for Glasgow, Govan (Mr. Milian) from the penalties that the Conservatives sought to impose.
Previous housing legislation from Conservative Governments required Glasgow and Clydebank—
Mr. David Lambie: And Saltcoats.
Mr. Brown: Saltcoats is always worth mentioning in a housing debate, but Glasgow and Clydebank were actually taken to court for refusing to revise rents upwards. There is nothing new about Government interference of this kind. The sad fact is that all the examples are in periods of Conservative Government. The Conservatives are incapable of treating local authorities with respect or showing any confidence in them. There are faults on both sides, of course, and there is not time to analyse this in depth, but Conservative Governments seem incapable of reaching understanding with local authorities in Scotland.
Having received so many submissions, I intended to make a speech without citing any figures. So far, I have succeeded. I wish, however, to draw attention to another slick presentation by the Government. I give credit to the Conservative Government of 1970–74 for bringing forward the concept of housing associations as a genuine attempt to provide some means of replacing the dwindling private rented sector. Since then, there has been all-party recognition of the work done by housing associations and the need to support them. We have now been told in a very slick presentation that next year the housing associations' percentage of total housing resources is going up. How dishonest can Ministers be? How can they present the situation to the public in that way when the actual resources available to housing associations will be cut? It is no use the Minister shaking his head. We all know that figures and percentages can be juggled. I do not even remember the figures, but the presentation was blatantly dishonest.
It is pathetic for the Minister to try to deny that housing authorities face major problems. He shakes his head again, but if he does not deny that there are massive problems — dampness, multi-storey blocks, system-built houses and other problems that scream out for large amounts of money — the resources being made available are certainly utterly inadequate to meet the situation. The Government should come clean and admit that this is yet one more example of authorities being required to fit into the Government's public expenditure programme and do the best that they can.
Finally, I hope that the Minister will look sympathetically at the par value co-operative idea in Glasgow. If his answer is no, clearly I do not wish to hear that today, so I merely ask him to go away and consider this. It is a complicated matter and I do not wish to spend time on it now, but I hope that I offend no one when I say that in this context, as with housing co-operatives, the much maligned Glasgow district council is in the vanguard, albeit having been virtually forced into it due to lack of resources. Nevertheless, it is an imaginative idea and deserves support. It is not cheap. I accept that the Minister will have difficulties with it. However, I hope that he will consider the idea sympathetically. It is not a trick designed to get around the provision in the Tenants' Rights, Etc. (Scotland) Act 1980 giving every tenant the
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right to buy. At least in my eyes, that is not the main purpose of it. It is a genuine attempt, where there are limited resources, to give people hope.
I can give the Minister details. Calvay crescent in my constituency is a disaster area where there is no likelihood of resources being made available in the conventional way. I beg the Minister to consider the idea sympathetically and perhaps in due course help Glasgow by pushing forward the idea of a housing management concept that will give more people pride in their own area.
Lastly, there is the question of the peripheral estates. There is a leak in The Guardian today. The Government are subject to leaks at present, but this one seems well informed. It is about the future of improvement and repair grants. I imagine that the idea of par value co-operatives has been promoted in Glasgow as a means of getting into the private sector account. There is no deviousness. That might have been one way of escaping from the capital restrictions in the housing revenue account side and using some private sector money for improvements in private sector. I hope that we shall not hear bad news about cuts in even that area of housing expenditure. I give the Government credit for allowing reasonable resources for that in the past couple of years.
The Government do not have a housing policy. Although I do not intend to make any public announcement, I intend to make a decision about my future in due course and so I do not need to worry unduly about pressures from any quarter inside or outside the House. There is not enough fundamental thought about the whole of society at present. People are having to apologise for an economic system that cannot find useful work for almost 4 million people. It may be said that Socialism is not the answer.
Mr. Michael Forsyth: Socialism was not the answer.
Mr. Brown: I have no time for the small minds of people such as the hon. Member for Stirling (Mr. Forsyth). Under this crazy, outdated economic system, even the best educated people from Eton and Ampleforth—
Dr. Norman A. Godman: What about Fettes?
Mr. Brown: Even the best educated people cannot produce an economic system that uses the wealth of talent and skills available to the benefit of all our people.
Within the confines placed on us we are trying to argue for more public expenditure on housing. I would not claim that we can solve every problem by flinging money at it. However, we have to look at the conditions in which people are living in the deprived areas. It is obscene to argue that tax cuts should be a priority in the Budget. I feel humble at times when I see the conditions in which we ask people to live and then listen in the House to academic arguments from accountants to the effect that tax concessions lead to social justice and will improve the economic system. We all know that the biggest tax concessions will go to the wealthiest.
I beg Ministers to consider the problems. I have visited Pilton, Craigmillar and Western Hailles. The Secretary of State for Scotland has visited Provan once in his lifetime. Perhaps he should visit us again and see the deep social problems of drug-taking and so on that arise in deprived areas. Housing expenditure not only creates jobs but helps people. I wish that more resources were available for it.
8.45 pm
Sir Hector Monro: It is always a pleasure to follow the hon. Member for Glasgow, Provan (Mr. Brown). I am glad that he did not go over the brink and say that he is to leave the House. I very much hope that he will not do so. I should be as sorry to lose him as I should be to lose my pair. The hon. Gentleman's experience is most valuable and we have listened to him with interest.
The debate follows the publication yesterday of the White Paper on spending, which emphasises the importance of containing inflation. Local authority expenditure is public expenditure, and therefore we must consider it in terms of inflation. However, I welcome in the White Paper the increased expenditure in real terms on the National Health Service and on social security. That aspect of the White Paper nails for good the constant criticism from Opposition Members to the effect that we are cutting those two valuable services.
Increases in the number of doctors, nurses, dentists and other specialists have been dramatic. We should highlight that increased expenditure when debating subjects such as housing. Today we are debating housing and housing support. We are not debating rate support grant. We shall deal with that tomorrow.
The three orders mark out the pattern of local authority revenue spending on housing. I am glad that there is agreement within COSLA on the formula, although there is not yet agreement on the settlement. However, if a group of Ministers and local councillors understand the formula, that is certainly a step in the right direction. I have been totally at a loss to understand the rate support grant and housing support formula for several years. I am glad that someone is beginning to see the light.
The two grant orders set the proportion of subsidy to be provided by the Government, and the rate fund contribution order limits the amount of money to he transferred to the housing revenue account from the rate fund by certain authorities. The Minister explained his point of view. It is obvious that the district councils are far from happy. The figures — we shall deal with them much more thoroughly tomorrow in terms of the rate support grant and the rates that will be payable by residents in local authority areas — are very critical. From the figures that the Minister has given, on a stand-still budget —and we must accept that it could be possible to have a stand-still budget—the rate increases bandied about in the press and elsewhere are very much exaggerated. We must allow a percentage for revaluation, but the figures of 30 per cent. or 40 per cent., when balances and other resources have been taken into account, will turn out to be far in excess of what will in fact be levied.
I appreciate only too readily the difficulty that faces councillors in Scotland, but it is not new. During all of the years when I was a councillor we had to accept extreme constraints from the finance committee and the finance convenor. We always had to pare down many of the projects that we would have liked to carry forward and show ratepayers that we were developing the quality of life in the area. Housekeeping and budgeting tightly is not new.
Perhaps my hon. Friend the Minister could say a little more about the assumptions upon which he calculates the housing support grant. The grant is nearly £48 million and I think that I heard him say, amid the hubbub from the
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Opposition, that, in the light of changes in interest rates, he will probably have to introduce a variation order, as he is empowered to do under the Housing (Financial Provisions) (Scotland) Act 1978. Will the order be introduced in the early days of the financial year or will local authorities learn about it in the autumn?
I was interested in what my hon. Friend the Minister said about supervision and management. I strongly welcome his decision to increase the housing capital allocation to Nithsdale to £3·25 million, following representations from the council, me and my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Lang), as it will enable a start to be made with the complete renovation of a substantial number of flats in the Lochside area of Dumfries. They are of post-war construction but, sadly, have fallen far below acceptable modern standards. It is right that the district council should renovate them as soon as possible.
In regard to what my hon. Friend the Minister said about management, the additional funds, which I hope will be available, are important as it no use rebuilding that area of Lochside if we do not institute a much improved standard of management so that the flats do not fall into such disrepair again. I hope that the terms of the order will allow that.
As for the rate fund contribution for housing expenditure limits, we know that the housing revenue account is balanced by income from rents, contributions from the rate fund and the housing support grant. While the housing support grant has been diminishing, the rate fund contribution in many authority areas has been rising—hence the limits order stemming from the 1984 rating and valuation legislation. My hon. Friend the Minister can now set an overall limit, but has he done that arbitrarily on an assumption or is there a formula that has been agreed by COSLA?
Housing capital allocations are vital as they cover the improvement, construction and repair of council housing. I am glad that it is up by £43 million, or 19 per cent. That includes the apportionment that has been made to cover condensation and dampness. I was not a member of the Select Committee that made the inquiry, although I was a member of it when it concluded the report and published it, so I listened to the arguments of members of the Committee on the contentious issue of whether a house is damp or suffering from condensation. It is right for my right hon. Friend the Secretary of State to have made a start in this important matter because we have a much longer way to go than £16 million will make an impression on in the first year. There should be a rolling programme for 10 or 20 years to eliminate this detrimental aspect of local authority housing. As the Select Committee made clear, we must emphasise education because condensation is not understood by as many tenants as I should like. They frequently blame dampness when the problem arises from their reluctance to open a window or two during the day.
Overall, we have made a substantial advance in housing improvement. I am glad that my hon. Friend the Minister was able at the end of last year to give a substantial additional sum of £110,000 to Annandale and Eskdale district council, as improvements are crucially important. The Government are granting almost the entire bid of Annandale and Eskdale on the housing revenue account block of £2·82 million. That is welcome news. The non-housing revenue account allocation falls substantially below the council's bid, which was an increase of 90 per

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cent. on last year. Nevertheless, I note from my hon. Friend's letter, dated 21 January which I received yesterday, that the council can transfer resources from the housing revenue account to its non-housing revenue account if it wishes to do so. That is helpful.
The improvement of houses is perhaps the most important issue that we should consider today. I hope that my hon. Friend the Minister will say a little more about where we stand in regard to the percentage grant and the amount of resources that are available. We could improve our housing stock even more rapidly. That would help the construction industry and help reduce unemployment as well. I know that my hon. Friend was able to give a little additional money at the end of last year but more would be valuable.
We should consider the sale of council houses, as it is an important issue in regard to resources. We have a long way to go to make as much impact on the sale of council houses as I should like. There are two district councils in which I am interested. The first, Annandale and Eskdale, has 4,958 houses of which, according to a recent parliamentary question, it has sold only 319 or 6·4 per cent. The second, Nithsdale, has 8,589 houses of which it has sold only 683, or 8 per cent. Both figures are much below those of equivalent districts in Scotland. Although both councils have fulfilled their statutory duties, they could go out on a real selling drive to encourage tenants to purchase their houses. Mortgages are available. They would then have more resources to put into housing.
I have been much impressed by the excellent work of housing associations, especially in sheltered housing. Anything that my hon. Friend the Minister can do to help them keep up their rate of construction would be most valuable in the longer run. Housing associations have a cash limit of £90·7 million, but think that the number of completed houses will begin to fall after this year. If we can reverse that trend, so much the better.
The Minster has a difficult job to produce these orders within the financial targets. We must have an overriding view that winning the battle against inflation is of prime importance. The Minister has done a fine job in balancing a most complicated financial issue. When district councils appreciate what he has done on housing—I emphasis housing because we have a different debate tomorrow on the rate support grant — and that he has made a substantial amount of assistance available to housing authorities this year, they will strongly support these orders.
8.59 pm
Mr Robert Hughes: During Scottish questions a week ago my hon. Friend the Member for Dunfermline, West (Mr. Douglas), in an ironic exchange, said that the Secretary of State for Scotland was pretending to be Generous George. In reality the proper description of him is Gauleiter George. In truth he is an arrogant, overbearing, subordinate wielder of authority on behalf of the Prime Minister.
Never since the inception of the office of Secretary for Scotland in 1885, nearly 100 years ago, has anyone arrogated to himself such dictatorial powers. He is interfering in the rights and duties of elected local authorities in a manner which goes well beyond any reasonable attempt to influence policy matters of elected
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councillors. I accept, and always have, that central Government have a locus to seek to influence the policy of a local authority. However, on national policy, whether the establishment of comprehensive education, which I like, or tenants' right to buy, which I dislike, statute is the proper way to express that influence. But influence on local issues should be achieved, if it is to be achieved, by consultation, discussion and agreement. If agreement cannot be reached, providing the authority is not in breach of statutory responsibilities, the issue under discussion must be left to local judgment. At the end of the day the local electorate is the final arbiter.
What I have said is particularly apposite to the rate fund contributions to the housing revenue account, which the Secretary of State seeks to limit. In that case, he is directly intervening in the management of a local authority's affairs. He seeks directly to impose rent increases on all local authority tenants, irrespective of the judgment of elected councillors and of local conditions. Provided a local authority is not in breach of its statutory obligations, the local decision must prevail.
The Secretary of State must adopt that criterion. He has, and always has had, reserve powers under statute to bring to judgment a local authority that is behaving unreasonably and disregarding its legal responsibilities. The idea of a public inquiry is obnoxious to all, but if it is done purely on the basis of judging a local decision and in an objective manner, at least it allows the local authority publicly to explain itself. What is especially obnoxious is that the Secretary of State is compelling authorities to arrive at a certain figure. If it is not reached, he argues, there is a prima facie case that the authority is in breach of statute. That is not necessarily so.
Open public scrutiny of the housing revenue accounts of local authorities shows clearly that the Secretary of State has not taken proper regard to the financial problems to be faced. Unlike my hon. Friend the Member for Glasgow, Provan (Mr. Brown), I shall quote some extensive figures. I wish to quote the figures for Aberdeen, not because Aberdeen is in a unique position, but because its accounts are fairly typical. The 1984–85 expenditure figures in the housing revenue account show loan charges which are split into two different elements: instalments of debt at just more than £3 million, and interest payments at more than £15 million. That gives a total of more than £18 million. Interest payments are virtually five times the amount of debt repayments, and amount to more than 50 per cent. of the total expenditure on housing in Aberdeen. Total loan charges amount to almost 60 per cent. of total expenditure. The next highest sum on the expenditure side is the cost of repairs and maintenance, not management and maintenance, which is just more than £6,600,000. That is about one third of total expenditure. The figure for the following year is roughly similar.
Instalment payments must increase by £500,000, interest charge payments must increase by about £1·25 million, and payments for repairs and maintenance are estimated to increase by about £1·33 million. The increase in costs next year as compared with this year will be just over £3 million, of which £1·75 million is completely outwith the control of the local authority. The sum that is within the authority's control for repairs and maintenance represents what a prudent authority believes to be necessary to maintain the standards of an ever-ageing housing stock. If there were no repairs and maintenance in 1984–85, debt repayment would be 14 per cent. of the

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housing budget and interest charges would be 68 per cent. Therefore, 82 per cent. of housing costs would go simply to service debts incurred from building houses in years gone by. For 1985–86, the figure is estimated to be 83 per cent.
Even if there were no repairs and maintenance payments next year, the authority cannot escape from the fact that it must meet 80 per cent. of its housing revenue costs. There can be no default on those payments. The idea that the local authority has been profligate in respect of its housing budget is nonsense.
The Secretary of State's response to the financial problem is twofold: first, to reduce the housing support grant; and, secondly, to limit the rate fund contributions. He has set a limit for Aberdeen of £6,015,000, which is almost £3 million less than the previous year and far short of the budget forecast for next year. If that shortfall is met only by rent increases, rents in Aberdeen will have to increase by £3·86 a week. If not, there will be a savage cut in repairs and maintenance, which I know from my experience and from the experience of my constituents are extremely necessary in large parts of Aberdeen.
The Secretary of State seems to believe that tenants in Aberdeen can afford such increases, but he is completely wrong. He is one of those who believe that Aberdeen is an oil E1 Dorado. Let me disabuse him of that idea. Already 44 per cent. of tenants in Aberdeen receive housing benefits, and the figure is rising. Unemployment in the city is far from rosy, despite the favourable comparisons with other parts of Scotland. I concede immediately that many other areas in Scotland have far more serious unemployment. However, in the centre of the city — in the constituency of the hon. Member for Aberdeen, South (Mr. Malone)—in the Ferryhill area, which I know extremely well as I represented it on the council at one time—
Dr. Godman: A fine councillor, too.
Mr. Hughes: As they say in the courts, I am obliged to my hon. Friend. Unemployment in the Ferryhill area is 15·9 per cent. It is the worst pocket of unemployment in the Grampian region. Three other areas in the city are among Grampian region's six top blackspots for unemployment. In a decade of so-called oil boom in Aberdeen. 35 per cent. of manufacturing jobs have been lost. With such a background, we would expect the Secretary of State to have a sympathetic approach and to make available more finance for housing. The reverse has been the case, because he is making a much smaller financial contribution.
The most recent figures—I shall not return to those balmy days when a Labour Government gave full support to the local authorities—show that in 1982–83, housing support grant in Aberdeen was 27 per cent. of the income of the housing revenue account. In 1983–84, that figure was reduced to 13 per cent. In 1984–85, there has been a further reduction to 6 per cent., and in 1985–86, the figure will be 2 per cent. My understanding is that the following year there will be no housing support grant.
Hon. Members can say that it is all very well to quote clever statistics and percentages, but that we should say what they mean in money terms. In money terms, this means a reduction from the 1982–83 housing support grant of £8,670,000 to £802,000 in 1985–86. One does not have to be a mathematician to see that this is a fantastic cut in income to local authorities.
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The picture that I have set out for Aberdeen is indicative of Scotland as a whole. Since 1979–80, housing support grant has reduced from £213 million to £48·2 million in 1985–86. Some 33 housing authorities will get housing support grant. The interesting thing about that is that these non-qualifying authorities account for 63·4 per cent. of the Scottish housing stock. Where is the great support for local authority housing about which the Secretary of State boasted?
In 1979–80, the housing support grant represented 39 per cent. of the income of the housing revenue accounts. By 1985–86, that figure will be down to 7 per cent. By contrast, rents as a proportion have increased from 47 per cent. to 74 per cent., and the proportion is likely to go even higher the year after that. The Secretary of State is making a despicable attack on those least able to afford it. All this is designed for one purpose alone—to provide money for the Treasury. Council tenants in Scotland will not be the beneficiaries of the tax-cutting bonanza.
I remind the House that I was a member of the city of Aberdeen council from 1962 to 1971. I make no bones about saying that those were happy days. We had furious arguments, among ourselves in the Labour group, often, in the spirit of vigorous party political debate, in the council chamber, and fairly frequently with the Scottish Office, even with a Labour Secretary of State. There is one major difference between those recent years and the present. The issues that we were discussing and debating then were on the pace of developments—how best we could go, how best to deal with the problems facing the people of the city of Aberdeen. I give credit to our Tory opponents in the council chamber in those days, because they also wished to see the city thriving and prosperous. It was common ground that we should provide the best education, health, welfare, housing and leisure facilities. We did all those things, although we should have liked to do more.
In these days, the pressures and problems are worse. Discussions are about how councillors can meet the Government's guidelines laid down by edict, about how the councils can meet the statutory housing obligations, given the dictatorial cash limits of the Secretary of State for Scotland. I do not know how they can maintain their sanity when trying to deal with this problem.
In many respects, the growth of the standard of living of our people, the improvement of the environment, the eradication of disease, and the widening of educational prospects were the result of the full flowering of local government and democracy. The Secretary of State is destroying local government, and if he does not understand what this is doing to our people, he is even more ignorant than I thought he was.
9.13 pm
Mr. Gerald Malone: I am pleased to follow the hon. Member for Aberdeen, North (Mr. Hughes). I shall deal with one or two of his points later. I am grateful for his basic honesty in pointing out that hon. Members on both sides of the House have different objectives in public housing. There is no secret about that. I share the view of many of my colleagues that the provision of public housing in Scotland represents too high a percentage of the total housing stock.
I welcome the move to greater private ownership. In a sense, it is a difference in philosophy in this respect that divides the House. There can be no doubt that the direction

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of the Government's policy is a matter of balance. We have got out of balance in the way in which we finance our public housing. We have reached the stage when the burden on the taxpayer in general is too great. The contribution of those who benefit from public housing has become proportionately too small. This imbalance has developed over a substantial number of years, and, in my view, the Government are correctly taking steps to correct it.
My hon. Friend the Parliamentary Under-Secretary of State for Scotland says that in order to meet overall the targets for Scotland which he has set in these orders council house rents will, on average, have to go up by £1. The alternative way of dealing with the matter that was proposed by the hon. Member for Aberdeen, North would mean that in Aberdeen rents would have to be increased by more than £3. One is still referring, in the specific case of Aberdeen, even if it chooses simply to increase rents to meet these targets, to a rent that is lower than that which is to be found in many other parts of the United Kingdom. It is worth putting some of the figures on record.
In Scotland, council house rents take approximately 10 per cent. of a family's income, whereas in the remainder of the United Kingdom the average figure taken by council house rents is 16 per cent. I do not believe that we should attempt to reach parity, but when the Opposition speak in such emotional and excited terms I believe that it is worth trying to gain a sense of proportion and to bear these figures in mind.
Mr. Wallace: To apply an objective test to the argument of the hon. Member, can he tell us what will be the public subsidy to council house tenants after the orders are passed compared with the subsidy that is given in the form of tax relief on mortgages to the owner-occupier?
Mr. Malone: The answer is that it varies from authority to authority. It is important to bear that in mind. It is also important to bear in mind that when we encourage the sale of the stock of council houses there are many council house tenants who put themselves in the position of owner-occupiers. When one espouses the policy of encouraging private ownership, as do this Government, it is important to give some form of encouragement. I remind the hon. Member for Orkney and Shetland (Mr. Wallace) that, even within the context of those remarks, the assistance that is given by tax incentives of that kind has been reduced dramatically in real terms during the term of office of this Government. It has been brought into balance in line with the view of the Chancellor of the Exchequer that we should have a fairly neutral tax system. It cannot be done at once, but it is moving in that direction.
Mr. Craigen rose—
Mr. Malone: Perhaps I may be allowed to continue.
I should like to put one or two points about this matter to my hon. Friend the Minister in the hope that he will deal with them in his reply. I want to concentrate upon one or two matters. One relates to eligible expenditure, in particular interest charges. When assumptions are made in his calculations about the interest charges that should be met by local authorities, the Chancellor of the Exchequer fixes a rate that takes into account the potential of capital receipts from volume sales of council houses. I understand
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that he does this for the straightforward reason that it is within the power of local authorities to reduce their borrowing by adopting an enthusiastic policy of selling council houses. Is it, in my hon. Friend's view, fair that many local authorities enthusiastically adopt this policy and reduce their debt while many other local authorities do not do so? When these overall interest assumptions are made, are these matters taken into account?
Mr. Robert Hughes rose—
Mr. Malone: I shall give way to the hon. Member when I have finished making this point.
The hon. Gentleman mentioned the overall borrowing figure of Aberdeen district council and the substantial amount of money that has to go to service that. Aberdeen district council has chosen to sell 4·7 per cent. of its housing stock, well below the percentage of a large number of local authorities in Scotland. If it wants to reduce that item of relevant expenditure — interest charges — it has the solution in its hands. It could continue to sell council houses more enthusiastically than it does and so reduce that item of expenditure.
Mr. Hughes: The hon. Gentleman must address himself to the contradiction in what he and his hon. Friend the Under-Secretary of State are saying. His hon. Friend is saying that if the council sells council houses, money will be available to spend on repairs and maintenance and the eradication of damp. If it uses the money to try to reduce some of its capital indebtedness, it obviously cannot do what his hon. Friend suggests. If he imagines that the sale of council houses can extinguish the debt which he has mentioned, he must be aware that the only way to do that is to sell the lot.
Mr. Malone: There is nothing wrong with increasing substantially the number of council houses to be sold in Aberdeen. The hon. Gentleman has not managed to contradict the fact that it would give Aberdeen district council the chance to reduce what is an enormous on-cost from the eligible expenditure which it undertakes. There is no sense in which that can be reasonably denied.
There is another area in which many councils can reduce their expenditure. When we talk about management and maintenance and repair and maintenance—I concede that Aberdeen district council is extremely careful to differentiate between those two elements—a lot can be said for many Scottish local authorities reducing repair costs.
Before the hon. Member for Aberdeen, North tries to intervene again, let me put one point on the record. By and large, Aberdeen district council operates a relatively efficient repair and maintenance service. It is relatively cost-effective compared with many local authorities in Scotland. But I trust that my hon. Friend the Under-Secretary of State will be taking whatever steps he can to encourage local authorities to reduce even further the costs of repair and maintenance which vary so much throughout local authorities in Scotland and which in some areas are completely unreasonable and inefficient.
It is important to point out to local authorities, when they justifiably look at such matters with a great deal of anxiety, that part of the solution to the problems that they face in making their budget balance lies well within their own hands.
Some mention has been made during the debate of increases in capital expenditure on housing. I endorse what

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was said by my hon. Friend the Member for Dumfries (Sir H. Monro) in welcoming that. It is important that we devote as much as we possibly can in straitened circumstances to the improvement of the housing stock. However, it is also important that local authorities should take up many of the new initiatives that are available. It is important that if the private sector offers solutions to such problems they should be welcomed with open arms rather than rejected on a point of political dogma.
I hope that many Scottish local authorities will look to the scheme that is presently being operated by the South of Scotland Electricity Board, which is offering an integrated service for multi-storey buildings whereby they can be rendered free from damp. It also encourages the cost of the provision of electricity to be added to the rent. There is a system that can usefully go towards the eradication of what I concede, as is clear from the Select Committee report, is a problem of peculiar difficulty in Scotland.
We have already heard many words from the Opposition tonight about our policy being offensive. What I find to an extent offensive is some attempt to justify the recreation of a policy whereby public expenditure goes up on council and local authority housing when it is that policy of high expenditure with lack of proper control that has resulted in the housing stock with which we are having extreme difficulty today. It cannot be claimed that high public expenditure has been a success, otherwise we would not be faced with great difficulties with multi-storey buildings, dampness and all the rest of it which arose during a period of extremely high public expenditure. I do not pretend to accept the suggestion of the Opposition that what we are saying—that there should be an ordered balance away from central funding of local authority housing towards tenant funding—is offensive or wrong.
This is nothing more than a way of attempting to move marginally the balance of expenditure. I believe that it underlines the essential difference between the two sides of the House, but it does not undermine what I see genuinely as a common concern that we have a good housing stock and that a large number of houses paid for by public funds are not left derelict and empty because people do not want to occupy them. The fundamental difference between us is that we see the provision coming from a different source. I believe that it can best be provided by choice in the private sector and the increase in influence that the tenant will have. That, unfortunately, does not seem to be the motive of the Opposition. Their motive is to increase again the stranglehold that they and their followers had over the public housing stock. That is what they seek to achieve in opposing the order.
I have great pleasure in supporting the order. My hon. Friend has undertaken a difficult balancing task and he has done it exceptionally well.
9.26 pm
Mr. Gordon Wilson: I follow the hon. Member for Aberdeen, South (Mr. Malone) with considerable regret because I do not think he has done justice to his constituents with regard to housing. Of the two views that have emanated from Aberdeen in the debate I prefer that of the hon. Member for Aberdeen, North (Mr. Hughes). I have disagreed with the hon. Member for Aberdeen, North on many occasions, particularly on constitutional matters, but this evening our views coincide. He referred to the Secretary of State as a
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gauleiter. My German is limited, but I think that is the equivalent of a regional administrator. That is exactly the role that the Secretary of State occupies.
Earlier today when I met the delegations that had come down it was difficult to try to explain to them that, although I appreciated their position, the debate did not offer much to them, because the decisions that we are discussing were taken several years ago under the public expenditure White Paper. Those decisions were taken not by the Secretary of State for Scotland, whether he be a gauleiter, a colonial administrator or even a Cabinet Minister, but by the Cabinet as a whole under the aegis of the Treasury and the Prime Minister. Effectively, the decisions taken several years ago in regard to public expenditure on housing that we are implementing under the orders will be enforced upon the people of Scotland by an English majority, which will come pouring in to vote when the Division bells ring. That is what we must realise.
Furthermore, when we look at the White Paper that was published only yesterday we find that there is even greater room for worry about what might happen in the public housing sector in years to come. We find that the decline in public expenditure on the housing account is of the order of 10 to 15 per cent. spread over the three years to 1988. I suspect that in the next two or three years we shall have a considerable number of these debates when we see the amount of money being reduced steadily and when in our constituencies week by week or fortnight by fortnight we see the problems mounting as people demand repairs and cannot get them. That is where the Scottish Office is out of touch with what is happening. It was significant that the Under-Secretary of State referred to the English situation. The Scottish Office's policy seemed to be to bring Scotland into line with England, regardless of the methods used and the hardship caused. Indeed, great hardship will be occasioned.
I confess that the issues involved in the rate support grant and the housing support grant are so complex that I do not fully understand them. The Convention of Scottish Local Authorities has stated:
"The factors used to determine each Authority's eligibility or otherwise for HSG continue to ignore the actual position of housing authorities."
In other words, the Secretary of State's decision can be entirely arbitrary and it is difficult for those in the know to work out the reasons for it. However, it has been suggested to me that political motivation is involved. That possibility should not be ignored. After all, if the system cannot be explained clearly to people, the motivations of those who operate it, particularly when they provide insufficient funds, will be questioned. If they are providing more expenditure than people had expected, there is not the same criticism.
The whole system involved in local government reminds me of the comment that was made about the Schleswig-Holstein affair, to the effect that it was so complex that those who understood it were either dead, in a mental hospital — or perhaps in this case, in the Scottish Office. The system is certainly beyond my understanding. Year after year district councils have faced reductions in the resources available for the services that affect many of their citizens. In 1980–81, the rents in Scotland provided about 50 per cent. of housing costs. The figure for 1985–86 is likely to be about 80 per cent. if the Government's intentions are carried out.

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This year, the rent increases on average will be at least twice the prevailing rate of inflation. But that is only an average, as in many other areas the £1 suggested as the average will be considerably exceeded. I understand that if Dundee follows the lines laid down by the Minister, the rent increase could be double what he suggests as being the average.
It must be borne in mind that if the money has to be found from tenants, rate bills will rise, and so they will be hit twice. The Government do not seem to care that public sector housing in Scotland is in urgent need of repair and modernisation. Yet that is what happens when we do not spend money on property. It is bad business not to spend money on maintenance, because eventually the bills will become bigger. I should have thought that Ministers who sponsor, in particular, the private sector would be aware of the facts of domestic life.
We know that about 350,000 of our people still live in damp houses. However, capital expenditure on housing has been reduced by about 40 per cent. in real terms since 1980. In 1983, the number of housing starts and completions in the public sector was the lowest for decades. It is all very well for the Minister to say that that work can be taken up by the private sector. That may often be true with regard to general family housing, although there are shortages in certain types of family housing. But the private sector will not meet the demand, for example, for sheltered housing. Moreover, the increased expectations of elderly tenants cannot be met. A report was recently handed to me from the Scottish Council for Single Homeless, suggesting that the situation in Dundee is critical with regard to the provision of houses for single persons.
I shall show how the orders will affect Dundee. In the coming year the city will receive no housing support grant. Indeed, it has not received any for the past two years. To cushion the effects, the rate fund contribution to housing revenue in the city, which was £6·9 million in 1983–84, will now, as a result of the Secretary of State's powers, be reduced to £4·9 million. That will have a traumatic effect on the administration of the housing stock in the city. It will result in rents going up steeply on the one hand and in a drop in service on the other. If one takes the rate of modernisation, it would be a long period before the work could be done.
The housing authority has brought to my attention the problems that it has. Deterioration of the fabric of the housing stock is widespread, as are harling defects to flat roofs. Structural defects are apparent in non-traditional house types, types which the Scottish Office in previous generations wished upon local authorities at the time. Window replacement is needed on a large scale. I receive many complaints about this from my constituents. We talk about cold climate allowances and suchlike, but it would help if we had windows that kept out the draughts and mitigated the heat loss. Some 16,000 tenants in Dundee suffer to a lesser or greater degree from dampness. Over 3,000 houses have not been modernised since they were built 50 years ago. Houses built after the war are in need of modernisation.
Rewiring to a modern standard is required in 17,000 houses. One can make all sorts of adjustments in relation to repairs from time to time by doing spot repairs and deferring the problem to later years when one hopes that
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more cash will be available. I wish to impress upon the Government that deficient wiring is a safety risk and should have some priority. These are the problems that are affecting individual tenants in the city of Dundee. From the other delegations that I have met, I understand that their position is the same if not worse. A general problem is building up.
I have been impressed that the Government during the last year have managed to gel together a coalition of people of all parties in the district councils and the regional councils against their policies. Given the nature of the party loyalties and the differences of opinion that exist—the vigorous debate to which the hon. Member for Aberdeen, North referred — it is a remarkable achievement on the part of the Secretary of State and his Parliamentary Under-Secretary.
I have one suggestion for the attention of the Minister to which I hope he will give consideration. It has been put to me that under the present system, whereby allowances are announced at the last moment, housing authorities are not permitted to conduct a rolling programme where they are assured of a certain fairly high proportion of the money they require. Cost savings would be made if housing authorities were able to plan in advance, do things on longer contract or undertake larger jobs than they are at present able to carry out. I suggest that some kind of rolling three-year programme might be worthwhile considering from the point of view of the accountants in the Minister's Department if not those who work in the Treasury.
We are dealing with a fundamental political problem. The Government are not administering Scottish housing from a Scottish viewpoint; they do not need to take account of public opinion in Scotland; they do not need the majority support of Scottish Members of Parliament. From these constitutional facts of numbers stems our whole problem, in my view. The Minister said that he was giving as much as the nation could afford. I for one do not accept that distinction. Nor do I accept that the £12 billion that is going into the Treasury this year from our oil resources should not be deployed towards Scotland to meet our problems.
Mr. Albert McQuarrie: United Kingdom oil.
Mr. Wilson: If the hon. Gentleman disagrees, it draws a correct distinction between his attitude and mine and my willingness to see that Scottish money is put to the betterment of the Scottish people.
9.38 pm
Mr. Gavin Strang: Listening to the Under-Secretary of State when he opened the debate, one was aware of a huge chasm between what he was saying and the views of the vast majority of the elected councils in Scotland. What he said bore no relation to the resentment that exists in these councils. This resentment exists in Labour-controlled councils but to a significant extent also in councils where the Labour party is not in control. One wonders whether the Government appreciate the depth of resentment at their policies. I understand that the Secretary of State has refused to meet COSLA to discuss its important grievances.
We are witnessing a systematic attack on local authority housing. The Government are pursuing that attack

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viciously and decisively year after year. The figures in the Government's public expenditure plans for the next financial year show what has been happening in recent years. The Government are making massive cuts in housing expenditure in Scotland. In 1985–86, the Secretary of State intends to spend £598 million on housing in Scotland, compared with £734 million in 1979–80—a cut of 49 per cent. in real terms. In other words, the Government have halved public expenditure on housing in Scotland. No wonder so much damage is being done; no wonder the housing stock has deteriorated so much; no wonder there is massive unemployment among workers in the construction industry.
The Government are obsessed with encouraging the sale of council houses. It is reasonable to suggest that they are deliberately pushing up council house rents to try to force as many tenants as possible to buy their houses.
Opposition to the Government's policies comes not only from Labour-controlled councils. There is also opposition from Conservative councils which deeply resent the fact that they are ceasing to be autonomous councils and are becoming mere agents of the Government. The Government fix their expenditure, they have taken powers to fix their rates and they are even taking powers to fix the amount that councils can contribute to the housing revenue account from the rates. That means, in practice, that the Government are even fixing council house rents.
The Government are pre-determining all those decisions and are removing from elected councillors, whether Conservative, Labour or any other party, the opportunity to make a judgment on the extent to which housing should be supported from the rates or from rents.
Mrs. Anna McCurley: Does the hon. Gentleman believe that everything spent in local government should be rate borne? Is that his alternative?
Mr. Strang: No. I think that the hon. Lady understands what I am saying. If she is in any doubt, she should speak to some of the councillors, including Conservative councillors, who have come to Westminster to speak to us.
Edinburgh is experiencing the effects of a massive neglect of our housing stock. Anyone who knows anything about housing in the city — and the Under-Secretary must surely know something about that—knows of the enormous deterioration that has taken place because of the below average spending on repairs, maintenance and improvements by the city council when it was under Conservative control.
When the Select Committee on Scottish Affairs visited Edinburgh, hon. Members from west central Scotland were appalled and amazed at the situation that the Conservative council had allowed to develop on some of the city's housing estates. Only recently a tenant succeeded in taking the council to court and proving it guilty on the ground of not providing a house which was wind and water tight. The elected council had failed under landlord legislation to provide the basic necessities in the council house concerned and was not prepared to provide alternative housing. I could continue at length to bring out the enormity of the deterioration in Edinburgh's housing.
It is from that base that the newly elected Labour council in Edinburgh has taken control. I have not the slightest doubt that one of the reasons why the Labour
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party took control of Edinburgh for the first time—it was a remarkable and historic result — was the resentment among council house tenants and others throughout the city at the neglect and callous indifferences of successive Conservative administrations to public services, especially council housing.
To its credit, the new Labour Edinburgh city council has put forward a bold programme to tackle the years of housing neglect. In the time that is left to me I shall concentrate on the expenditure which it hopes to make through the housing revenue account. Its programme will be implemented over a period of years. It has been submitted to the Scottish Office and no doubt it is considering it. The expenditure which is budgeted in the housing revenue account for 1985–86 is £47·5 million. Where is the money to come from? A part of it will come from the rate fund contribution.
As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has said, the Government intend to limit Edinburgh's rate fund contribution for the housing revenue account to £2·8 million, which is roughly £49 per council house. That must be compared with £158 for Aberdeen, £159 for Glasgow and £125 for Dundee, an average of £105. How can the Government justify limiting Edinburgh's rate fund contribution to such a derisory figure?
The Minister has told us in the past and again this evening that he wants to see council house rents forced up to pay for the maintenance of council housing. Council house rents in Edinburgh are massively higher than rents in other Scottish cities. They are about £5 a week higher than rents in Aberdeen and Glasgow. They average about £14 compared with £10 in Glasgow and about £9 in Aberdeen and Dundee. There is no case for increasing rents any further. It would be unfair and unreasonable to expect council house tenants to pay higher rents to meet the programme which Edinburgh district council has put forward.
Edinburgh is in an impossible position. It has inherited huge neglect and it has submitted a programme to tackle it and the Government are specifically and explicitly denying the council the powers and opportunity to implement it. I hope that the Minister will reconsider Edinburgh's position. I hope that he will judge fairly the monstrous unfairness that faces Edinburgh. The council has a historical legacy of deterioration in its housing stock and yet it is faced with limitations and the imposition of a straitjacket.
I hope that the Government will think again. The Labour-controlled Edinburgh district council wants to tackle the housing problems and it has a mandate to do so. I hope that it will be allowed to go ahead and resolve the problems. Surely the sensible and statesmanlike approach would be for the Government to say that the Scottish Office and the city council should consider the council's proposed housing budget and programme and calculate how it can be implemented to improve the quality of Edinburgh's housing.
9.49 pm
Lord James Douglas-Hamilton: I listened with great interest to the hon. Member for Edinburgh, East (Mr. Strang) who criticised the sale of council houses. By last year about 3,500 council houses had been sold in Edinburgh, about 1,000 of them in my constituency. That is an example of the demand. The hon.

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Member for Edinburgh, East and I were present when the Select Committee on Scottish Affairs went to Edinburgh to examine the problems of dampness in council houses in west Pilton and Craigmillar, in our constituencies.
I should like to address myself to the problem of Orlit housing. This problem occurs in not only my constituency but many other parts of Scotland. Types of houses which are generally accepted to be defective in Scotland include Lindsay — in the Ayrshire council area — Blackburn Orlit, Boot, Dorran, Myton-Clyde, Orlit, Tarran, Tarran-Clyde, Tee beam, Unitroy, Whitson-Fairhurst and Winget. Those are examples of the widespread problem.
Now that the Housing Defects Act 1984 is on the statute book, it is obvious that, if funds are to be provided to do up a tenement in which some people own houses while the public owns others, they should be provided for the whole tenement. It is essential to have a co-ordinated and coherent approach combining the public and the private sectors so that the job is done efficiently and promptly.
Mr. Craigen: Does the hon. Gentleman regard the housing defects legislation as defective because it does not extend to public sector tenants?
Lord James Douglas-Hamilton: I followed up this matter vigorously. I can answer the hon. Gentleman by saying that on 20 December 1984 I tabled a question to the Secretary of State for Scotland asking him
"what allocation is being made to local authorities in respect of defective housing including Orlit housing and Blackburn Orlit housing."
The answer stated:
"in reaching decisions on individual authorities' provisional capital allocations on HRA block, the fullest consideration has been given to their statements of need in this regard, as contained in the forward capital programme which authorities have submitted. The increase of £43 million in next year's capital allocations on this block should allow scope for authorities to undertake realistically phased programmes of remedial work according to the priority they attach to this particular aspect of housing need."
The last paragraph was significant. It stated:
"The provisional allocations announced this week are not intended to cover authorities' financial liabilities under the Housing Defects Act 1984. The intention is to consult authorities during the course of 1985–86 with a view to issuing appropriate supplementary allocations." — [Official Report, 20 December 1984; Vol. 70, c. 329–30.]
I refer especially to the words "appropriate supplementary allocations". It would be helpful if the Minister said more about that supplementary allocation. It is essential for this matter to be dealt with effectively and to be seen through to a successful conclusion as soon as practicable. We know what will qualify in the private sector— any building designed before 1960 in the categories mentioned which have prefabricated, reinforced concrete load-bearing components. The Act came into effect on 1 December 1984 and remains operational for a 10-year period. The maximum grant will be £14,000. It is essential to ensure that the measures in this connection are undertaken as vigorously in the public sector as in the private sector. I should be grateful to the Minister for making a statement about that.
Housing authority waiting lists can be lessened by the housing associations. I know that my right hon. Friend the Secretary of State has made available £100 million this year. I hope that we will work towards a target of building houses. About 18 housing associations operate in my
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constituency, and all of them differ from each other. I believe that it would be invidious to mention them all, but I single out one that has made an especially outstanding contribution—the Margaret Blackwood Home for the Disabled. I believe that the hon. Member for Orkney and Shetland (Mr. Wallace) visited that home some time ago. Although the housing associations represent only 1 per cent. of the total housing stock in the public sector, they could make a substantial contribution to that sector. It is also fair to add that many of the housing associations in my constituency put up the houses concerned very recently.
I should be grateful if the Minister would check the figures given by the hon. Member for Edinburgh, East as my information is slightly different. According to the public expenditure White Paper, average rents in 1982–83 were £13·58 in England and Wales and £8·94 in Scotland. I understand that the effect of the orders before us would be an average increase of £1— about 10 per cent. —bringing rents in Scotland to about £11·50 compared with an average of £14 south of the border. Bearing in mind that the average weekly wage is slightly higher in Scotland than in England, that seems fair and reasonable in the circumstances. I hope, however, that the Government will take strong, decisive action in relation to Orlit houses.
9.56 pm
Mr. Allen Adams: I hope that the Minister will take a good look at me, because he sees before him an unrepentant dogmatist. I believe in dogma. Someone once said that truths become dogmas when they are disputed, although I appreciate that that may be above the Minister's head. It was dogma, philosophy and the belief in a better world that created a better world by knocking down the slums of the Gorbals, Macalpenn, Castlehead and Paisley. The belief and the vision must be there first. Only then can one carry things through.
The history of Scotland is very different from that of England. In the middle of the 19th century we had substantial immigration from Ireland. Central Scotland also had significant immigration from the highlands as well as minor immigration from Latvia and Lithuania. At the beginning of the 20th century there was also substantial immigration from Italy. Scotland was also one of the first industrialised nations. Like Lancashire, we were heavily involved with the textile industry. This resulted towards the end of the 19th century and the beginning of the 20th century in some of the worst housing in Europe. It was reckoned that in 1910 the slums of Glasgow were second only to those of Vienna. At the beginning of the first world war, as a direct result of extremely bad housing, my area had the highest death rate in Europe from tuberculosis.
That is why in the early 1920s, when the Labour party gained control of the Scottish local authorities, it embarked on a massive council housing programme. In 20 years my authority built 20,000 council houses. Even in the mid-1950s, when I was 13, I remember going along Canal street to Campbell high school and seeing the warrens, the turret staircases, the outside toilets and the single ends that still existed even then. Things had been even worse 20 or 30 years previously. One reads of people in the Gorbals and in the east end of Glasgow living three or four to a room and two to a bed.
Therefore, there was very good reason for council housing in Scotland, and it improved immeasurably the lot

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of many people. We should thank the men of vision who went before us who built those houses and made life so much better for so many people.
Unlike England, Scotland has, over the past 30 or 40 years, become used to the principle of council housing. It is probably not well known in England that Scotland has more council houses per head of population than the Soviet Union. To attack council housing, to blame council tenants and to suggest constantly that they are not paying enough rent is to attack not just a minor part of the population but 70 or 75 per cent. of it.
It being Ten o'clock, the debate stood adjourned.

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

Housing Support Grant (Scotland)
Question again proposed.
Mr. Adams: In Scotland, council housing amounts to some 70 per cent. of the housing stock. Conservative Members represent what is in Scotland only a minority view. It would be interesting to see what the result would be if only Scottish Members were allowed to vote tonight.
Not only on this issue but on many others, the Secretary of State for Scotland is looking more and more like a puppet of an English Government — not a United Kingdom Government—who are trying to impose their will on a people who are unwilling to be imposed upon.
What the Conservatives believe is that the council tenant in Scotland has paid far too little for too much for too long, and that their buddies have paid for it. Conservatives have a pathological hatred of council tenants. They believe that those who have a little more than most people have paid too much to subsidise the council tenant. That is the underlying attitude apparent in speech after speech.
I am an unrepentant dogmatist. If it was up to me, those people would pay a damn sight more. We hear the proprietors of superstores in the centres of Glasgow, Edinburgh, Aberdeen, Dundee and Paisley bleating about the terrible burden of rates. We should look at their profits. Lonrho and the House of Fraser could pay much more in rates. Furthermore, the very people who complain about their rates will turn up at my surgery the next week and complain that they cannot get grannie into an old folks' home. If they paid more in rates, we could build more old people's homes. They are hypocrites to a man.
Council housing has many faults. The Labour party has not done everything correctly. There is too much bureaucracy, and many council tenants are still dictated to as they should not be. When I served on the council, we were told that it was council policy that people must not paint their front doors in certain colours. They were not allowed to fix a light swithch to the wall. With the Scottish Special Housing Association, the situation became ludicrous. One had to make an application before one could bang a nail in the wall. Those faults have been admitted.
No one suggests that everything is perfect. None the less, council housing in Scotland achieved the termination of the single end and the outside toilet, the end of rickets, dysentery and — in my own constituency — of
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tuberculosis. The slums and warrens built by mill owners in my constituency towards the end of the 19th century were still in existence in my lifetime, and they were appalling. They cost many lives and much misery. They were not conducive to nice or comfortable living. The Labour party did away with them and made life much better for many people.
It might be argued that things could have been done differently and that we might have built houses for sale 60 or 70 years ago, but none of us can rewrite history. We made housing better and it is perhaps best left alone, for we are now merely selling off the best of the stock. Houses in the worst areas of my constituency such as Furgusly Park and Shortway, which are known to same Conservative Members, will never be sold. All we are doing is denying the people who live there the right to move to a better house because the better stock has been sold.
My local council has asked me to make some comments about grants. It suggests that most councils in Scotland are trying to channel money into specific areas such as the adaptation of houses for the elderly and the disabled. As the former chairman of Strathclyde social services committee, I know that much money is needed to adapt houses for the disabled and the chronically sick.
Many councils in Scotland are now saying that they would like to preserve their town centres to keep the character of Scottish towns and cities. That involves money to bring the buildings up to standard. Such money has not been made available in sufficient quantities until now. If we do not make more money available, we shall lose much of our heritage. I am worried about that because it is possible to walk through high streets from Elgin to Lands End and see a sameness creeping into our towns and cities. I should like money to be made available to stop that.
Ultimately, it comes down to spending £1 now to save having to spend £2 in 10 years. Not spending money now is a false economy. As Harry Truman said, "Save a buck and sacrifice the people." No doubt the Minister will come out with facts and figures when he winds up, so I should like to mention a few now. When the housing support grant was initiated, it gave Renfrew district council £6·5 million. Renfrew now receives nothing. In anybody's language that is a drop of £6·5 million. Housing support grant in Scotland for 1979–80 was £228 million—it has dropped to £48 million in 1985–86. In plain language, that is a substantial drop. I calculate it to be a decrease of 79 per cent. and yet, over the same period, the retail price index rose by 75 per cent. The housing stock of 38,000 homes in my area will deteriorate rapidly as a result. Indeed, it already has. I ask the Government to reconsider and to make more money available.
10.8 pm
Mr. Charles Kennedy: It will come as no great surprise to the House, least of all to the hon. Member for Paisley, North (Mr. Adams), if I say that my principal raison d'être for being in politics is to oppose completely the type of dogmatism of which he spoke. Nevertheless, I go along with much of what the hon. Gentleman said.
It is fair to argue that the policy of selling council houses, which I support, leaves local authorities with an increasing residue of houses, especially in urban areas but also in rural areas, that are less likely ever to be disposed

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of, and certainly not without vast sums of public money being spent on them first. It is therefore ridiculous that the Government should cut public investment when there is rising unemployment in Scotland and when the construction industry could put many people back to work quickly.
Despite the contributions from Conservative Members and despite the Minister's attempt at an ebullient speech, we need only look at a report in The Scotsman of 12 December for proof that difficulties exist. In a report entitled, "Housing hopes undermined", Mr. Donald MacLennan, director of the Scottish Federation of Housing Associations, is quoted as saying that the associations' initiatives are being "stifled completely" by the Government's present decision. It involves a cut of more than 40 per cent. on the figure which the associations were awarded for 1983–84. Mr. MacLennan is reported as saying:
"The plan we put to the Minister and which is being looked at by the Housing Corporation is now almost stillborn."
Among other things, the plan focuses on the expansion of housing association programmes in Scotland to at least 7,000 units per year. Given the waiting list figures and the social service figures, of which the Under-Secretary of State with responsibility for health will be aware, and the problems which both those sets of figures highlight, it is extremely surprising that the Under-Secretary of State with responsibility for housing should turn a blind eye and deaf ear to the housing associations' genuine arguments. That underlines what many hon. Members see at constituency level, which is, a continuing erosion of housing stock and its quality, and of local government responsibility, local power and democracy.
I find it a little difficult to agree with all the comments made by the Labour party spokesman, especially when he defends to the end the role of COSLA. I do not criticise COSLA, but it seemed from his speech that the Labour party had never attempted to restrain local spending, which more recent political experience shows not to be the case. Some of the criticisms from the Labour Front Bench do not stand up to full, vigorous, political scrutiny.
I wish to address myself to the anomalies in the system of housing support. That is a cautionary expression to use for such support from the Government to Scottish local authorities. Local democracy is highlighted by the confrontation which both Front Benches predicted. It is a shame that both Front Benches are willing to make such a great issue of, and to score points from each other about, that. I subscribe to the type of approach described by the hon. Member for Glasgow, Provan (Mr. Brown). He said that there was more merit in making sensible points based on the merits of a case than in making blanket statements, which do not ease the position.
It is like the teachers' dispute. It may be easy for the Scottish Office to attack the Opposition, and for the Labour party to strike back, but at the end of the day it is children's education that will suffer. The Secretary of State nods in agreement. In exactly the same way, the confrontation which his policies are leading to, and to which the Labour party, although apparently not the Labour party spokesman, tonight is willing to give measured support will do no one any good, least of all the tenants. It would be only sensible for the Government to have the common sense and, indeed, the political humility
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once in a while to modify and improve their policies so as to reduce the possibility of local authorities breaking the law or entering into activities which the Scottish Office and perhaps the bulk of Scottish opinion would find unacceptable. The fact that the Minister was apparently unwilling to do so tonight will not make it easy for the Secretary of State, if the legal confrontations build up in the months ahead, to lay all the blame at the feet of local authorities. He should remember that the legislation which gives rise to the problem was initiated by him, or at least in his name by St. Andrew's house in Edinburgh.
Once again, those at the lowest end of the income scale, be that state income or remunerative income through employment, must bear the brunt of the Government's policies. The Minister said that housing benefit should not be overlooked, but he must acknowledge, as did the former Minister of Social Security—the hon. Member for Brent, North (Dr. Boyson)—especially in relation to England and Wales but also to Scotland, that the housing benefits system is a complete shambles. During the past eight to 12 months especially, all hon. Members will have heard of elderly constituents—people who have never been in debt and who consider it utterly unacceptable to be in debt — being placed in a position of apparent indebtedness to local authorities because of foul-ups in the housing benefit system. The Minister cannot rely on what has been shown, and admitted by the DHSS, to be a deficient system to try to justify the increases in rent which council house tenants must face.
There are still many anomalies in the system. My hon. Friend the Member for Orkney and Shetland (Mr. Wallace) intervened in the Minister's speech to mention such anomalies in Shetland and Orkney? That example typifies a problem that is common to other parts of Scotland. The local authority in Shetland has had much-needed capital expenditure of £3·4 million consented to this year and about £4 million next year, which will lead to an increase in debt charges of £650,000. That is the equivalent of an increase of £4·80 a week in rents. The Government cannot have taken that into account when they fixed the housing support grant for the area, despite what is claimed in the order, for it appears to drive a horse and cart through the regulations that they are setting up elsewhere.
We have discovered exactly the same problem on Skye. I appreciate that Skye and Lochalsh district council is one of the few in Scotland whose budget this year is increasing in real terms. The problem there is that if the authority levied the assumed rate fund contribution, which was estimated by the Minister, it would be open to penalty under the other provisions of the regulations.
Obvious difficulties remain. Like the hon. Member for Dumfries (Sir H. Monro), I have a specific inquiry about the variation order which I hope that the Minister will answer. It results from representations that I have received from the Skye and Lochalsh district council about some distinct problems that it is facing. It has done comparatively well with capital allocation and with improvement and repair grants, but the increased level of capital allocation—an increase from £1·06 million to £1·5 million—means that the council faces a greater burden in loan charges. The recent increase in interest rates is bound to complicate and add to the problems.
The increase is liable to be about £22,000 a year, and for Skye and Lochalsh district council, that is the equivalent of a rents increase of 50p a week. Will the

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Minister say whether the variation order will take account of that, and will specifically make up for that differential? If that is not the case, the maintenance and repair budget will have to be further cut to meet the additional demands that the £22,000 will put on the council. That £22,000 must seem a ridiculously low figure to many hon. Members in comparison with their local authorities, but for Skye and Lochalsh, which already meets the low stock rating of having under 3,000 local authority houses, it is a significant figure. The council is still grappling with the cuts to which it was subjected last year. I should appreciate any answer that the Minister can give on this.
This problem highlights the difficulties of time lag and updating in the system of regulations. As the chief executive of the district council said to me in a recent letter before the debate about loan charges:
"it seems surprising that SDD did not take the trouble to check their own information on Capital Allocations being issued when preparing the grant distribution calculations."
There is an of administrative difficulty, which has been causing my local authority, and I suspect, others, some difficulties.
The Minister's package is not satisfactory. He must know, from his own constituency as much from the pleas that he hears from every part of Scotland, that this is not
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a realistic policy to pursue at a time of rising unemployment, particularly in the construction industry, and of increasing waiting lists for council houses. The right to buy may be a great system to argue for, and may be a laudable system for which to aim, but it cannot be pursued at the expense of the majority who will continue to be dependent on local authority housing.
It is insufficient and inadequate to say that the better end of housing stock should be sold off, as it will be snapped up into the private sector first. That will leave diminished and depleted resources with which the council has to grapple with increasing problems as a result of Government policy leading to higher unemployment and greater levels of deprivation. Increasing problems confront local authorities, particularly in housing programmes. I have asked the Minister some specific constituency questions. My right hon. and hon. Friends and I do not support these orders, and the Government will not have our vote for these thoroughly discriminatory measures.
Mr. Speaker: Order. I understand that the Opposition Front Bench speaker wishes to speak at 11 o'clock. I hope that it will be possible to call all of those hon. Members who wish to speak in the time that is available before 11 o'clock.
10.25 pm
Mrs. Anna McCurley: As a former history teacher I was absolutely fascinated by the history lesson that was given to the House this evening by the hon. Member for Paisley, North (Mr. Adams). If we had to follow his dogma, it would mean that we should have to vote either for the Greens party or the Blues party from ancient Rome, because we should be grateful to the Romans for giving us central heating. It is that kind of belief that pervades the attitude of the Labour party towards council house tenants in Scotland: that they should be eternally grateful to the Labour party for what it has done for them.
What amazes me in any debate on Scottish housing is that a certain amount of amnesia overtakes the Opposition. If the Opposition had reliable memories, they would be more inclined to congratulate the Government upon their housing policy rather than to castigate them. We should compare the position in Scotland before the Conservative party introduced enhanced housing improvement grants with the dramatic change for the better by the improvement of tens of thousands of properties since then. The problem is that success does not always bring its own reward. The Opposition, whose record on housing is still an ugly legacy in Scotland, is urging the Government to do more of what the Opposition never did or, indeed, could do.
Mr. Lambie: The Minister said that at the beginning of our debate.
Mrs. McCurley: I shall deal with the point made by the hon. Member if he cares in a minute or two to make an intervention from a standing position.
Mr. Lambie: I have been listening to the debate since it began. The hon. Member has just come into the House to speak.
Mrs. McCurley: I have been listening to the debate for a substantial amount of time. I feel that had I not removed myself for but a few minutes in order to partake of a meal — [Laughter] — I should not be in such fine and aggressive fettle as I am in now. Part of the reason for the Opposition's failure lies in their rigid determination to keep council house rents at an uneconomic level and, through rates and taxes, to make others pay for what in the end amounts to a guaranteed share of the vote at any election.
Many council tenants are in the lower income bracket. Because we fully understand this, the Government, through housing benefits, are continuing to provide reasonable accommodation at a price those tenants can afford. We have discussed many times how few people, particularly in parts of the west of Scotland, contribute at all to the cost of living in local authority accommodation.
Mr. Kennedy rose—
Mrs. McCurley: I shall give way in a moment. Equally, there are those living on the financial margins in the private sector, either in private rented accommodation or in owner-occupation, who find the burden of high rents, taxation and rates well-nigh intolerable and who are supporting those in local authority households with higher incomes or multiple incomes that are much higher than
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those they command. They also have fewer outgoings and enjoy the security that comes from knowing that repairs are not necessarily going to cost them anything.
At a time when we are faced with the choice either of soaring inflation, as in the 1970s, under a Labour Government or of the prudent management of finance in the public sector to keep inflation down to the minimum, it is only right that the Government should exercise a restraining influence upon local authorities who over-spend. If there is likely to be a rent increase that is more dramatic than the expected average, the reason is generally because rents were calculated to be too low in the first place.
In all the increases that are proposed—and they are minimal—Scottish tenants will still have a better deal than their English and Welsh counterparts. Average rents in England and Wales have consistently been higher than those in Scotland; as well, the average weekly wage in Scotland is slightly higher than the figure for England and Wales. Thus, for the current year the £1 increase will bring average rents in Scotland to about £11·50 compared with an average of £14 south of the border. In percentage terms this means that rents will represent roughly 7 per cent. of average earnings in Scotland compared with 10 per cent. in England and Wales.
However, as my right hon. and hon. Friends know, it is never my policy when I speak in the House only to give bouquets but occasionally to throw a few brickbats. I wish to take up two points with the Minister. As he is well aware, one of the major problems is the maintenance of local authority properties. Although I have a great desire to see additional sales of local authority housing and still think that some Scottish local authorities are obstructive and have been dragging their heels on assisting people to buy their own houses, I do not wish to penalise householders who choose to remain in the public sector. I do not think that anything in the Government's housing policy would support that, but I do not want local authority housing stock to be regarded as second rate or the tenants to be regarded as second rate citizens.
While I applaud the Government's specific increase of £43 million for the current year for construction, modernisation and repair—and I hope that construction will be not just in the regular housing sector but in the specialist sector—the additional £16 million set aside specifically to deal with dampness is disappointing. This may be the time to tackle dampness on a greater scale, especially when there is a recession in the trades that would be involved. The figure of £500 million that is quoted frequently is not realistic and cannot be justified as a total for curing the problem of dampness in council houses in Scotland.
Simple and cheap remedies which have been mentioned by the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) in the Scottish Grand Committee might be used by a local authority which, with flair and imagination, could identify cases where more radical treatment was necessary. A total of £16 million represents less than £750,000 to authorities such as mine in Inverclyde where a massive effort is required to deal with the problems of dampness. Proper maintenance of the housing stock is as much in the Government's interest as it is in the interest of local authorities.
Can the Minister tell us why for the second year running Inverclyde district has been hit so badly in relation to comparable authorities such as Dumbarton, Stirling and

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Dundee? We have been told that the average rent increase in Scotland will be £1·22 or 12 per cent. on 1984–85. According to calculations Inverclyde tenants will be asked to pay an increase approximating to £3·04p or 33 per cent. This seems to be a dramatic increase in comparison with comparable local authorities and it requires some public explanation. I have no doubt, that the Minister will give a proper justification for the increase. But whether it satisfies Inverclyde is another matter.
10.35 pm
Dr. Norman A. Godman: It is always interesting to speak after the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley), when she has made one of her speeches about Inverclyde. I am sure that she will agree that there are many more housing problems in Greenock and Port Glasgow than in Kilmacolm and Gourock. However, I agree with her that we need a proper explanation from the Minister about what she termed a dramatic increase in council house rents in Inverclyde.
The Minister's speech was smothered with figures, but he did not detail the extent of housing need in Scotland. I should like him to give some of those facts tonight. For example, how many people are on the waiting lists in Scotland? How many elderly people are waiting for sheltered housing in Scotland? How many people are living in overcrowded conditions, or in damp houses? I derive no satisfaction from the debate, because it will not improve by one jot the lot of council house tenants in my constituency. Many of them live in difficult and miserable conditions. Many of them also live in badly designed houses that are submerged in large and ugly schemes. Many of them too have had to suffer for decades because their houses were designed by architects who lacked both imagination and ingenuity, and apparently sympathy and compassion as well. Those architects regard the local authorities rather than the council house tenants as their clients.
Today thousands of citizens live in houses that are barely adequate. Often others live in houses that are grossly inadequate and hence make life a misery.
Mr. Michael Forsyth: Will the hon. Gentleman give way?
Dr. Godman: No. It is much too serious an occasion for that. However, I would have given way if the hon. Gentleman had been in the Chamber for as long as I have.
Nowhere is this dismal state of affairs more evident than in Inverclyde. I have to add that I am primarily talking about council houses in Greenock and Port Glasgow, rather than those in Gourock and Kilmacolm. In Inverclyde 6,000 houses are infected with dampness. That figure shows a slight reduction over the past few years, due to the remedial work undertaken by the Inverclyde district council. But the Government and that council must do much more.
The scale of the problem and its attendant misery cannot be radically reduced in the near future without more help from the Scottish Office. It is amidst those dismal circumstances that council house tenants in Inverclyde have been advised that they may well have to pay a good deal more in rent. It seems that Inverclyde is being singled out for severe treatment by the Secretary of State. Why are we witnessing such apparent vindictive treatment? I have
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been told by his hon. Friends that vindictiveness is not part of his personality. Is he angry with the Inverclyde administration? I can assure him that I believe that that august and austere publication Militant would affix the label "moderate" to the present Labour administration of Inverclyde.
Inverclyde district council has been instructed to reduce its present deficit per house from £220·20 to £125. Other district councils, while suffering, are not suffering to that extent. Inverclyde council tenants face a much higher rent increase than tenants elsewhere. In addition, the Inverclyde district council faces the withdrawal of housing support grant amounting to £51·36, giving a total increase of £148, that is, and increase of approximately £3 per week. Therefore, the circumstances in Inverclyde will be much worse than elsewhere in that tenants will face rent increases of about £3 per week more than the tenants of other authorities.
I believe that the Secretary of State received a letter earlier this week from the chief executive of the district council, Mr. Ian Wilson. In an earlier letter to the Secretary of State, the chief executive pointed out—and I am sure that he will not mind my quoting from the letter:
"Now that the details of the Housing Support Grant for 1985/86 are known, it is confirmed that our tenants face an average increase in excess of £3 per week. The Council views those level of increase as quite unreasonable and in view of the fact that it does not in any way affect central financing of our expenditure asks the Secretary of State most urgently to reconsider this matter."
I ask the Secretary of State on behalf of the Inverclyde council house tenants to exercise his discretion so that the rent increase that those tenants will have to pay will not be nearly as high as now envisaged. I believe that he has discretion vis-à-vis the rate fund contribution limitation figure. I ask him to do this in the interests of the tenants of Inverclyde district council.
10.47 pm
Mr. Willie W. Hamilton: At this late hour there is not much point in going into detailed arguments even on a constituency basis, so I will satisfy myself with one or two generalities.
The first generality is the undeniable fact that in the last five years public expenditure on housing, which is the most important social service that we have, has been slashed by the Government more than any other single service.
The second generality is that any Scottish Member of Parliament who met the representatives of the local housing authorities yesterday of all political persuasions will agree with me from my long experience in the House that never has there been a bigger deputation and never has there been a more unanimous one. The representatives were unanimous in their condemnation of the Government's refusal to face the realities of the housing problems in Scotland.
There is a yawning gulf of understanding between the local authorities at the sharp end of the problem and the Government in their ivory towers, whether they are in Whitehall or in St. Andrew's house. It is a staggering gulf that has to be bridged. It could be, but the Government obviously have no intention of bridging it. Their philosophy is a simple one that has been expressed by other hon. Members. They simply do not believe that it is any part of the Government's responsibility to finance in any way the housing requirements of any single family in

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the country. The result is that the subsidy in the form of tax concessions to the private owner-occupier goes into hundreds of millions of pounds a year while year by year the subsidy to the generally poorer people in council houses has diminished to nil in many local authorities in Scotland. The present situation is that the local housing authorities simply cannot cope with the problems.
The Under-Secretary will recall that in the recent debate on acid rain, I said that people in houses, hospitals or schools with lead piping were being poisoned day by day. I asked what the Minister was doing about it. The hon. Gentleman said that he would write to me. I am still waiting for the reply. What progress is being made on lead, on condensation and on asbestos? Every local authority knows about those problems. The Government must know about them, but they are doing damn all about them.
Virtually everyone who took part in yesterday's lobby—Tories, Liberals, ratepayers and all the others—said that there would be a great temptation for them to defy the law, because they could not obey the law and carry out the mandates given to them by their electors.
The Under-Secretary made great play of the rule of law. It is an important matter, but we need no lessons from Conservatives about the importance of obeying the law. That highly respectable organ of the press, The Sunday Times, said in a recent article:
"Financial fraud has taken place on a staggering scale in the London insurance market. But the Director of Public Prosecutions has yet to bring a single case before court. White collar criminals are laughing at the law. While the DP dithers, the financial fraudsters are sunning themselves on the Marbella beaches"—
wherever they are—
"Investors have been cheated of up to $500 million."
The Government know that; the Law Officers know that, but they are more interested in chasing humble, democratically elected Labour councillors, and Tories, throughout Scotland.
Hundreds of thousands of companies—I guess that Conservative Members are directors or great shareholders in them — are defying the law. Two of every five companies in Britain are disobeying the law by not presenting their annual reports or accounts according to the law. What are the Government doing about that? Precisely nothing. Even the Prime Minister's son was caught at that. It was only when the Sunday press got hold of him that he quickly sorted himself out. God knows where he is now.
The Government have a different approach to council house tenants. Lady Tweedsmuir and Tom Galbraith called them second-class citizens and shiftless council tenants. Conservatives regard council tenants as worthless and believe that they should stand on their own feet. When we say that rents will go up by more than £1 a week, Ministers say that 60 to 70 per cent. of council tenants receive rent rebates or housing benefits. But those benefits are paid for out of the public purse, so that what the Government save in one area goes out in another.
All this is part of a redistribution of the national wealth. We shall see it again in the Budget. The exercise is designed to take from people who have too little to give handouts in the Budget to those who already have too much. That is what it is all about. I agree with those who take the view that there is a fundamental cleavage in philosophy on these matters. The Opposition regard
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housing as something of fundamental importance to so many that it cannot be left exclusively to the laws of the market. There must be Government intervention and public financing. I venture to prophesy that by the end of the Parliament there will not be one local housing authority in Scotland that will be receiving one penny piece of public money for its housing programme.
I am aware that my hon. Friend the Member for Falkirk, West (Mr. Canavan) might want to participate in the debate, but I shall mention the Kirkcaldy find. The Under-Secretary of State spoke to me in the Corridor the other day. He said, "Willie, I am doing awfully well. I have found a few pennies in the kitty for the Kirkcaldy district council." That money will not give the council's houses a coat of paint. Let me thank the Minister for nothing. The council will have its representatives running around to find a few houses on which to spend the small amount that has been found in the kitty. The council wants tens of millions of pounds and its problems are small compared with those of other local authorities in Scotland.
Mr. Ancram rose—
Mr. Hamilton: No, I shall not give way. I am just getting into my stride. If the local authorities break the law, I hope that they will do so together without exception. If the Government continue to behave in such a dictatorial manner and continue to show such lack of understanding, there will come a time when the authorities will have no alternative but to do so. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) says that the answer lies with the Government and that they must face the problems more realistically. He argued that if they do so there will be no confrontation. The responsibility is theirs.
A White Paper was published yesterday setting out public expenditure over the next two or three years. It sets out a wonderful prospect. After five years of "successful" Tory Government rents, rates, gas prices, electricity prices, coal prices and school meal charges are increasing. Every price that can be mentioned is increasing as a direct consequence of the Government's policies. This is what the press is saying, and it has analysed the White Paper. At the same time, unemployment is increasing remorselessly and is exceeding 4 million. How can the unemployed attempt to meet the problems of housing and education, for example, with their increasingly worthless incomes? I hope that the Minister will see reality.
The Government can find more cash. I think of the 1,200 folks on the Falkland Islands who are about 8,000 miles away. We are to spend £2,000 million on them in the next three years, but to what end? There are 5 million folks in Scotland. If we shifted them out to the Falklands, we would get their problems solved. Prefabs are being built on the Falklands at a cost of £30,000 each. The money' and resources are available and only the will is lacking to direct them to the right areas.
10.54 pm
Mr. Albert McQuarrie: In view of Mr. Speaker's request, I shall endeavour to keep my remarks short.
Mr. Dennis Canavan: Get off your knees.
Mr. McQuarrie: I shall ignore that comment.
I take issue with the hon. Member for Edinburgh, East (Mr. Strang) for whom I have the greatest respect. He said

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that the Conservatives were forcing up council house rents to compel tenants to purchase their council house. That is a lot of rubbish. Hansard of 22 November 1984, c. 273–5, clearly shows that the percentage of council houses sold between 1 April 1975 and 30 September 1984 is less than one would have expected. For example, Strathclyde with 460,000 public sector houses in stock at 30 September 1979 sold only about 11,000 houses — 2·5 per cent. Sales of public sector houses have seldom reached double figures in local authority areas generally.
Hon. Members have referred to the state of council houses and their period of disrepair. The hon. Member for Greenock and Port Glasgow (Dr. Godman), who is not in the Chamber—
Mr. Wallace: He has been here all night.
Mr. McQuarrie: I am merely commenting. If the hon. Member for Greenock and Port Glasgow had examined council house construction under successive Governments, he would have found that the houses were approved by the central Government of the day according to the Parker Morris standard. The houses are now defective because they were not properly constructed in the first place by the architects. The houses became defective because the Parker Morris standard did not reach the building standard suitable for Scotland's climatic conditions.
We can see the shamble of houses in Glasgow which for many years did not receive proper attention. That happened under Labour Administrations even when councils received housing support grant. Councils did not use that grant properly. We should remember the houses that were demolished.
Dr. M. S. Miller: What would the hon. Gentleman know about it?
Mr. McQuarrie: I remember this well enough to know all about it. Houses were demolished by a Labour department. The cost of building those houses was three times what it would have cost for the private sector to do the job. The standard of workmanship was such that some of the management had to be dispensed with. That is why many of the houses in Scotland are in a state of disrepair. The first of these public houses were constructed in 1945 after the second world war. They were constructed badly and were never maintained. I conjoin management and maintenance. Most of the council estates—whatever the political colour of the local authority—are overmanaged and undermaintained. That is one of the greatest problems. No one at the top will take the decision to remove the unnecessary people. There are far too many top brass and not enough workers doing the job. That is why so many construction workers are unemployed.
To Glasgow's credit, during the past two or three years scaffolding has been put up. An excellent job is being done to refurbish many of the tenements. Glasgow is effectively and efficiently using the money the Government have given through housing support grant. [Interruption.] The hon. Member for Falkirk, West (Mr. Canavan), who is laughing, has probably never set foot in the parts of Glasgow that are being refurbished. The Glasgow council is doing an excellent job, but Glasgow city council and other local authorities should continue to do that job.
I agree entirely that the Government should take action to alleviate dampness. It is nonsense to say that £60 million
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is sufficient even to start curing the dampness problem. I go so far as to say that my hon. Friend the Member for Renfrew, West and Inverclyde (Mrs. McCurley) was wrong to say that it would not take £500 million. Having been in the business for many years and as a member of the relevant Select Committee I believe that for the whole of Scotland it will certainly take £500 million to cure the dampness problem.
I commend the orders to the House.
11 pm
Mr. Jim Craigen: I am glad to know that the hon. Member for Banff and Buchan (Mr. McQuarrie) is something of a firebrand when it comes to curing dampness in Scotland, because the Government are doing precious little about the problems facing local authorities and the suffering of their tenants.
I thought that one reason why the Secretary of State did not open the debate might be that the provost of Kyle and Carrick had suggested that he should not, but my hon. Friend the Member for Cunninghame, South (Mr. Lambie) has pointed out that since he erred in his election campaign for the provostship he is no longer chairman of the Ayr Conservative association and has indeed been expelled from the party because of his concern about rents and local services.
These three orders amount to an abysmal prospect for Scottish tenants in 1985. The housing support grant of £48·2 million is a mere one sixth of that available in 1980–81. That means that two thirds of local authority housing stock is now outwith Government financial aid and the majority of Scottish authorities now receive no direct Government aid towards housing problems compared with the situation five years ago when all 56 Scottish authorities qualified for housing support grant.
The variation order for 1984–85 has already been overtaken by events. The Chancellor of the Exchequer has imposed a minimum lending rate of 12 per cent. That means that for the remainder of the current financial year those local authorities that still receive housing support grant could be out of pocket to the tune of about £16 million. Edinburgh district council pointed out today that since the rate fund contribution limit was fixed interest rates have risen to the extent that its housing account costs may increase by about £2·1 million. The variation order reflects the increase in interest rates last summer, but there have been two substantial increases in recent weeks.
The final straw is the new rate fund contribution order limiting to £90 million the general rate fund contribution to those authorities that choose to have one. As the contribution was running at about £120 million in 1984–85, that means a real cut of about £30 million in housing resources.
The Secretary of State is taking all the power that he needs effectively to fix rent levels in Scotland, and behind the skirts of the local authorities because he refuses to introduce a national rent level. He is manipulating HSG, the rate fund contribution and all his other powers in order to make the local authorities do what St. Andrew's house wants.
The hon. Member for Dundee, East (Mr. Wilson) referred to the complexity of the orders. I believe that the complexity is largely deliberate. It is hoped that we will find it difficult to understand how little the authorities are

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to receive. Only in algebra and in the twisted minds of Tory Scottish Ministers does a combination of minuses result in a plus.
The three orders present decay and disaster for Scottish housing in the foreseeable future. The housing support grant is mean-minded, the variation order is already inadequate and the rate fund contribution limitation order can only be described as vindictive. Decay and deterioration lie ahead for more housing in Scotland as a result of the orders.
The orders also show the disdain with which Tory Scottish Ministers view Scotland's 850,000 council tenants. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) talked about the possibility of the ghetto. The Government seem determined to pincer the local authority housing sector into a ghetto, and the council tenants with it. At a time when the Scottish building industry is in despair about the lack of work, and thousands of building workers are idle, it seems shortsighted in the extreme that the Government do not do more to generate employment and business opportunities within Scotland's construction industry.
Last Friday I met the Scottish construction industry group. I discussed with representatives of both sides of the building industry some of their anxieties about the prospects for the next 12 months. We are not yet seeing the full effects of the changes made in October 1983 reducing grants for home improvements from 90 per cent. to 50 per cent. There is a lead time before the effects of such changes are seen.
We have heard about capital allocations and the £16 million for dealing with dampness. That money is not being handed out to the local authorities. They are being given permission to borrow it, and are expected to earmark £16 million for the eradication of dampness.
Ministers at the Scottish Office do not last long in housing. In March 1983 the Minister's predecessor with that responsibility, the hon. Member for Eastwood (Mr. Stewart), said in a press release:
"Glasgow…gets an extra £5 million in the next financial year…This should enable the District Council to cover in full the cost of carrying through its entire programme for the eradication of dampness and condensation in one year if it so chooses."
That was said before the Select Committee chaired by my hon. Friend the Member for Cunninghame, South reported and certainly before the Scottish Development Department produced its own memorandum to that Committee, which admitted that about £150 million would be required in Scotland in the foreseeable future. It is an interesting introduction of hypothecation from a Minister who constantly told us, during discussions on clause 8 of the Rating and Valuation (Amendment) (Scotland) Act 1984, that he did not want hypothecation and that no one else wanted it. He now thinks it worth while to introduce it.
I listened with rapt attention to the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) talking about the Housing Defects Act. It seems that the Scottish Office wants to earmark £3 million. Edinburgh district council says that the full potential cost of buy-back or repair to be met through an authority's responsibilities under the Housing Defects Act 1984 to those who bought their homes will amount to £3 million, but that it will cost £17 million to repair the remaining homes in the public sector. As the hon. Member for Edinburgh, West said,
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numerous council tenants live cheek by jowl with those who have bought their homes. It is difficult, if not impossible, to isolate work that must be done for those who have rights under the Housing Defects Act 1984 from those who were excluded and lack parity.
The Government are determined to raise rents to an extent that I can only regard as excessive and unreasonable. The hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) might well be satisfied that her local authority is one of six that will have to raise rents by £3 per week, but my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) made it clear that he does not share her view. There might be a larger proportion of their Lordships in Scotland than in England and it is difficult to draw comparisons on wage levels between England and Wales and Scotland. I suspect that there are sharper divides in incomes in Scotland and that the average is blunted because of the way in which averages are calculated.
The Secretary of State for Scotland (Mr. George Younger): Come on!
Mr. Craigen: The Secretary of State asks me to come on—if only he would come on for Scotland's tenants. That is what we are asking for. We want him to look after the interests of tenants in Scotland. He must have handed out a few briefs to his Back Bench colleagues. I exclude the hon. Member for Banff and Buchan because I know that he would tear up any ministerial brief. The trouble is that some of the Secretary of State's colleagues read only the good bits in the brief. They ignored the bits that will sting the tenants whom they represent.
The hon. Member for Aberdeen, South (Mr. Malone) said that it is all a matter of balance and talked about housing finance. I do not think that he knows that many local authorities, and the money they spend, help the private sector as well as council house tenants. If he wants Scotland to be on all fours with England and Wales, he should consider why we need a Scottish Minister with responsibility for housing. Come to think of it, we could do better without this one. Public expenditure on interest relief is a form of negative public expenditure. Now that it is running at £2·75 billion in the United Kingdom I suggest that we have an open-ended subsidy irrespective of a person's income. The more he borrows, the more interest relief and tax that he does not have to pay. It is time for a reappraisal of the top end of the income scale.
We had representations this week from the Scottish Council for the Single Homeless. Some of the things going on up and down the country are a moral outrage. Young people are being driven from their homes. The orders make provision for hostel and lodging accommodation. It would be interesting if the Minister would comment on that aspect, because it tends to be ignored.
The hon. Member for Fife, North-East (Mr. Henderson) thinks that everything would be hunky-dory if we were all on housing benefit. Forty-five per cent. of households in Scotland are on housing benefit, compared with 35 per cent. in England and Wales. There is a disparity there. It should not be overlooked that housing benefit relates to individuals and is not a subsidy to a housing authority.
The orders represent higher rents, reduced maintenance and repair of Scotland's housing stock, longer waiting lists and greater homelessness. They also mean more

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joblessness in the construction industry and more bankruptcies among wee builders. These orders paint a prospect for 1985 of despair, decay and disaster in many sections of Scotland's housing stock.
11.16 pm
Mr. Ancram: I have listened to the hon. Member for Glasgow, Maryhill (Mr. Craigen) on many occasions, but his speech tonight gave me the impression that his heart was not in it. Until the end of his speech, when he mentioned the percentage of people in council houses in Scotland receiving housing benefit, it bore so little relation to reality that there was little on it for me to answer. I am not surprised about that. When he compares the Labour Government's record on housing with this Government's achievements since 1979, it is not surprising that he lacks the confidence to make a stronger case.
I remind the House that between December 1975 and March 1979, when the Labour party was in Government, the reduction in the number of below tolerable standard houses was 24 per cent. Between March 1979 and March 1984, when the Conservative party was in office, it was 44 per cent. We are proud of that record.
Unlike the hon. Member for Glasgow, Garscadden (Mr. Dewar), the hon. Member for Maryhill mentioned the number of people on housing benefit. He knows, even if his hon. Friend does not, that money spent on housing benefit goes into housing, as much as any other money for housing does. Since 1979–80, that figure has increased from £32·4 million to £70·4 million in the current year.
Mr. Robert Hughes: That is disgraceful. The Minister should be black affronted by what he has just said. The sum spent on housing benefit since the Tory Government have been in power is a shame and a disaster, and shows the poverty that he has inflicted on the Scottish people.
Mr. Ancram: The hon. Gentleman has shown precisely what the difference is between the Labour party's policy and ours. We believe in subsidising people in need, not in subsidising every council house and tenant. That is precisely what the orders are about.
In the short time remaining to me, I shall try to deal with some of the specific points raised in the debate. The speech of the hon. Member for Garscadden was, understandably, general, and I covered many of his points during my opening speech. He mentioned the action being taken by Glasgow district council against my right hon. Friend. Although I do not wish to say too much about it now—he will understand that it would not be proper for me to do so—I must tell him that I am surprised by the terms of Glasgow's court action. Needless to say, my right hon. Friend rejects completely the suggestion that his actions were ultra vires. My right hon. Friend made a full and careful consideration of all the factors mentioned in Glasgow district council's letters of 21 and 30 November and 28 December when reaching his decision not to increase the rate fund contribution limit for Glasgow district council—
Mr. Norman Buchan: On a point of order. Mr. Deputy Speaker. We have listened to a long extract from a letter from the Secretary of State for Scotland, who happens to be in the Chamber. Can he not stand up and speak for himself?
Mr. Deputy Speaker: The hon. Gentleman knows that that is not a point of order.
Mr. Ancram: The hon. Gentleman did not attend the whole debate, and he may not wish to hear the answers to some of the relevant questions that were asked.
The hon. Member for Garscadden also mentioned Glasgow's rent increase. In considering the rent increase that Glasgow proposes, one must take account of the fact, as we did—the hon. Gentleman obviously did not—that Glasgow imposed a rent freeze for the current year, and is planning to increase expenditure on management and maintenance by considerably more than the rate of inflation. This explains the disparity in our views.
I was a little disappointed by what the hon. Member for Glasgow, Provan (Mr. Brown) said about housing associations, and I was amazed to hear the allegation made by the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy), because within the total allocation this year my right hon. Friend has preserved, and increased marginally, the proportion to the housing associations in recognition of the value that we place on their work. For the hon. Member for Ross, Cromarty and Skye to say that their allocations had been cut by 40 per cent. defies explanation, because for the third year running, housing associations will have more than £100 million to spend. That is a considerable sum.
The hon. Member for Provan asked me whether I would consider sympathetically par value co-operative proposals in Glasgow. I am sympathetic to those imaginative proposals, provided that they are likely to lead to a real and lasting transfer of ownership and control from the district council to the tenants. Several problems remain to be considered, but in general I am sympathetic.
My hon. Friend the Member for Dumfries (Sir H. Monro) asked about interest rates. I said that we shall consider bringing forward a variation order for an increase or decrease in housing support grant as appropriate in due course. He asked about timing. He must appreciate that the variation orders are not there to react to every movement in interest rates. They are there to correct the position once it becomes apparent that the original estimates are wrong. My hon. Friend also asked whether the rate fund contribution limits were set arbitrarily. The formula of asking authorities to reduce rate fund contributions by 10 per cent. from last year's limits, or to hold to their budgeted figure, if that is lower, was discussed in principle with COSLA, which was unable to suggest an alternative approach. In fairness, I should say that it did not like the outcome of this formula. The fairness of the formula is manifested by the fact that the rent increase assumed within it is on a par with that assumed in this housing support grant order.
My hon. Friend the Member for Edinburgh, South—[Interruption.] I was always very proud of my ability to play my own trumpet, but on that occasion it was not deliberate. My hon. Friend the Member for Aberdeen, South (Mr. Malone) asked whether, in setting allocations for authorities, we take account of the varying enthusiasms for council house sales. The answer is yes, because we assume that authorities will generate receipts from sales within an average of seven months, and those that complete within that time have stronger allocations than those who do not.
The hon. Member for Dundee, East (Mr. Wilson) made a number of points, and I was rather suprised to hear him of all people talk about cash for the HRAs, because we have given Dundee district council a provisional gross allocation on the HRAs for this year of £7·8 million. This

1091
represents a 19 per cent. increase in the council's allocation for the current year, and meets 82 per cent. of Dundee's bids for HRA resources on that block. I would have hoped, in the light of constraint on expenditure, that he would at least be prepared to accept that that was a major allocation.
The hon. Member for Edinburgh, East (Mr. Strang) made a number of points about the situation in Edinburgh, but, as I spoke earlier about Edinburgh, I do not want to say too much about it now. There are a number of things in what he and the council have said that we find puzzling. It is clear from Edinburgh's capital programme, which has been made available to us, that it plans to spread expenditure evenly. Planned expenditure on condensation and dampness in 1985 totals only £1·93 million in the plan. Our earmarked allocation of £4·7 million should enable Edinburgh to accelerate measures to tackle this problem over and above what it had already decided to do.
My hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) asked a number of questions, in particular whether I could give him the figures of rent and wage comparisons between England and Scotland. The average Scottish local authority rent is £10·46 a week, and the average Scottish earnings for a full-time manual male worker aged 21 and over is £156·20. In England, the equivalent figures are £14·71 and £152·40.
Mr. Canavan rose—
Mr. Ancram: I am not giving way.
Mr. Canavan rose—
Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Member for Falkirk, West (Mr. Canavan) can see that the Minister is not giving way.
Mr. Ancram: My hon. Friend also asked some questions about the Housing Defects Act. We have advised councils that in setting provisional capital allocations, we have taken no account of expenditure that will be incurred through this Act, but we have made provision at a later stage, when the council is better able to assess the need, to make supplementary allocations should that need arise.
My hon. Friend the Member for Fife, North-East (Mr. Henderson) put his finger on the nub of the debate. When we examine what the Opposition's case has been, it becomes clear that their policy does not hold together. Many of the speeches that have been made tonight were saying that we should subsidise house rents whether the tenants need that subsidy or not, at the expense of dealing with problems such as dampness and condensation.
The Opposition's first argument is that subsidy should be paid regardless. That is why they oppose the HSG order, which is based on the calculation of need. Subsidy for everyone, whatever the cost is their policy, and it can be justified only by short-term political expediency. Who should pay for these subsidies, according to the Labour speeches that we have heard? In opposing the rate fund contribution limits, it is clear that they believe that the ratepayers should pay to these general subsidies to council housing. In our debate tomorrow I believe that we should remember well who it was who tonight tried to protect the interests of ratepayers and who it was who tried—
Mr. Canavan rose—
Mr. Deputy Speaker: Order. The Minister is obviously not giving way.
Mr. Ancram: The question remains as to how they will achieve it. We have had no answer tonight from the Opposition about breaches of the law. The effects of these orders together, alongside the announcements we have made on provisional allocations, bring a balance to Scottish housing that is needed. They ensure that within the available resources money is being spent where it is most needed. Those who need help are getting it and ratepayers are not being asked to bear an undue burden. With confidence I commend these orders to the House.
Question put:—
The House divided: Ayes 317, Noes 190.

Division No. 76]

[11.30 pm

AYES

Adley, Robert

Corrie, John

Aitken, Jonathan

Couchman, James

Alexander, Richard

Cranborne, Viscount

Alison, Rt Hon Michael

Critchley, Julian

Amery, Rt Hon Julian

Crouch, David

Amess, David

Currie, Mrs Edwina

Ancram, Michael

Dorrell, Stephen

Arnold, Tom

Douglas-Hamilton, Lord J.

Ashby, David

Dover, Den

Aspinwall, Jack

du Cann, Rt Hon Sir Edward

Atkins, Rt Hon Sir H.

Durant, Tony

Atkins, Robert (South Ribble)

Dykes, Hugh

Atkinson, David (B'm'th E)

Edwards, Rt Hon N. (P'broke)

Baker, Nicholas (N Dorset)

Eggar, Tim

Baldry, Tony

Emery, Sir Peter

Batiste, Spencer

Evennett, David

Beaumont-Dark, Anthony

Eyre, Sir Reginald

Bellingham, Henry

Fairbairn, Nicholas

Bendall, Vivian

Fallon, Michael

Bennett, Rt Hon Sir Frederic

Farr, Sir John

Benyon, William

Finsberg, Sir Geoffrey

Bevan, David Gilroy

Fletcher, Alexander

Biffen, Rt Hon John

Fookes, Miss Janet

Biggs-Davison, Sir John

Forman, Nigel

Blackburn, John

Forsyth, Michael (Stirling)

Blaker, Rt Hon Sir Peter

Forth, Eric

Body, Richard

Fowler, Rt Hon Norman

Bonsor, Sir Nicholas

Fox, Marcus

.Bottomley, Peter

Franks, Cecil

Bottomley, Mrs Virginia

Fraser, Peter (Angus East)

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

Freeman, Roger

Bowden, Gerald (Dulwich)

Fry, Peter

Brandon-Bravo, Martin

Gale, Roger

Bright, Graham

Galley, Roy

Brinton, Tim

Gardiner, George (Reigate)

Brooke, Hon Peter

Gardner, Sir Edward (Fylde)

Browne, John

Garel-Jones, Tristan

Bruinvels, Peter

Glyn, Dr Alan

Bryan, Sir Paul

Goodlad, Alastair

Bulmer, Esmond

Gorst, John

Butcher, John

Gow, Ian

Butler, Hon Adam

Gower, Sir Raymond

Carlisle, Kenneth (Lincoln)

Grant, Sir Anthony

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

Greenway, Harry

Carttiss, Michael

Gregory, Conal

Cash, William

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

Channon, Rt Hon Paul

Griffiths, Peter (Portsm'th N)

Chapman, Sydney

Grist, Ian

Chope, Christopher

Ground, Patrick

Churchill, W. S.

Grylls, Michael

Clark, Sir W. (Croydon S)

Gummer, John Selwyn

Clarke, Rt Hon K. (Rushcliffe)

Hamilton, Hon A. (Epsom)

Cockeram, Eric

Hamilton, Neil (Tatton)

Colvin, Michael

Hampson, Dr Keith

Conway, Derek

Hanley, Jeremy

Coombs, Simon

Hannam, John

Cope, John

Hargreaves, Kenneth

1093

Harris, David

Mayhew, Sir Patrick

Harvey, Robert

Mellor, David

Haselhurst, Alan

Merchant, Piers

Havers, Rt Hon Sir Michael

Meyer, Sir Anthony

Hawkins, Sir Paul (SW N'folk)

Miller, Hal (B'grove)

Hawksley, Warren

Mills, lain (Meriden)

Hayes. J.

Mills, Sir Peter (West Devon)

Hayhoe, Barney

Miscampbell, Norman

Hayward, Robert

Moate, Roger

Heathcoat-Amory, David

Monro, Sir Hector

Heddle, John

Montgomery, Sir Fergus

Henderson, Barry

Moore, John

Heseltine, Rt Hon Michael

Morris, M. (N'hampton, S)

Hickmet, Richard

Morrison, Hon C. (Devizes)

Higgins, Rt Hon Terence L.

Morrison, Hon P. (Chester)

Hill, James

Mudd, David

Hind, Kenneth

Murphy, Christopher

Hogg, Hon Douglas (Gr'th'm)

Neale, Gerrard

Hordern, Peter

Needham, Richard

Howard, Michael

Nelson, Anthony

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

Neubert, Michael

Howell, Rt Hon D. (G'ldford)

Newton, Tony

Howell, Ralph (N Norfolk)

Nicholls, Patrick

Hubbard-Miles, Peter

Norris, Steven

Hunt, David (Wirral)

Onslow, Cranley

Hunt, John (Ravensbourne)

Oppenheim, Phillip

Hunter, Andrew

Oppenheim, Rt Hon Mrs S.

Hurd, Rt Hon Douglas

Ottaway, Richard

Irving, Charles

Page, Sir John (Harrow W)

Jenkin, Rt Hon Patrick

Page, Richard (Herts SW)

Jessel, Toby

Parkinson, Rt Hon Cecil

Johnson Smith, Sir Geoffrey

Parris, Matthew

Jones, Gwilym (Cardiff N)

Patten, Christopher (Bath)

Jones, Robert (W Herts)

Patten, John (Oxford)

Jopling, Rt Hon Michael

Pattie, Geoffrey

Joseph, Rt Hon Sir Keith

Pawsey, James

Kellett-Bowman, Mrs Elaine

Peacock, Mrs Elizabeth

Key, Robert

Percival, Rt Hon Sir Ian

King, Rt Hon Tom

Pollock, Alexander

Knight, Gregory (Derby N)

Porter, Barry

Knight, Mrs Jill (Edgbaston)

Portillo, Michael

Knowles, Michael

Powell, William (Corby)

Knox, David

Prentice, Rt Hon Reg

Lamont, Norman

Price, Sir David

Latham, Michael

Prior, Rt Hon James

Lawrence, Ivan

Raffan, Keith

Lawson, Rt Hon Nigel

Raison, Rt Hon Timothy

Lee, John (Pendle)

Rathbone, Tim

Leigh, Edward (Gainsbor'gh)

Rees, Rt Hon Peter (Dover)

Lennox-Boyd, Hon Mark

Renton, Tim

Lester, Jim

Rhodes James, Robert

Lewis, Sir Kenneth (Stamf'd)

Rhys Williams, Sir Brandon

Lightbown, David

Ridley, Rt Hon Nicholas

Lilley, Peter

Rifkind, Malcolm

Lloyd, Ian (Havant)

Roberts, Wyn (Conwy)

Lloyd, Peter, (Fareham)

Robinson, Mark (N'port W)

Lord, Michael

Rost, Peter

Luce, Richard

Rowe, Andrew

Lyell, Nicholas

Rumbold, Mrs Angela

McCrindle, Robert

Ryder, Richard

McCurley, Mrs Anna

Sackville, Hon Thomas

Macfarlane, Neil

Sayeed, Jonathan

MacGregor, John

Shaw, Giles (Pudsey)

MacKay, Andrew (Berkshire)

Shaw, Sir Michael (Scarb')

MacKay, John (Argyll & Bute)

Shelton, William (Streatham)

Maclean, David John

Shepherd, Colin (Hereford)

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

Shepherd, Richard (Aldridge)

McQuarrie, Albert

Shersby, Michael

Madel, David

Sims, Roger

Major, John

Skeet, T. H. H.

Malins, Humfrey

Smith, Sir Dudley (Warwick)

Malone, Gerald

Smith, Tim (Beaconsfield)

Maples, John

Soames, Hon Nicholas

Marland, Paul

Speed, Keith

Marshall, Michael (Arundel)

Spence, John

Mates, Michael

Spencer, Derek

Mather, Carol

Spicer, Jim (W Dorset)

Maude, Hon Francis

Spicer, Michael (S Worcs)

Mawhinney, Dr Brian

Stanbrook, Ivor

Maxwell-Hyslop, Robin

Stanley, John

1094

Steen, Anthony

Waddington, David

Stern, Michael

Waldegrave, Hon William

Stevens, Lewis (Nuneaton)

Walden, George

Stewart, Andrew (Sherwood)

Ward, John

Stewart, Ian (N Hertf'dshire)

Wardle, C. (Bexhill)

Stokes, John

Watson, John

Stradling Thomas, J.

Watts, John

Taylor, John (Solihull)

Wells, Bowen (Hertford)

Taylor, Teddy (S'end E)

Wells, Sir John (Maidstone)

Terlezki, Stefan

Wheeler, John

Thomas, Rt Hon Peter

Whitfield, John

Thompson, Donald (Calder V)

Whitney, Raymond

Thompson, Patrick (N'ich N)

Wiggin, Jerry

Thorne, Neil (Ilford S)

Winterton, Mrs Ann

Thornton, Malcolm

Wolfson, Mark

Thurnham, Peter

Wood, Timothy

Townend, John (Bridlington)

Woodcock, Michael

Townsend, Cyril D, (B'heath)

Yeo, Tim

Tracey, Richard

Younger, Rt Hon George

Trippier, David

Trotter, Neville

Tellers for the Ayes:

Twinn, Dr Ian

Mr. Robert Boscawen and

van Straubenzee, Sir W.

Mr. Ian Lang.

Vaughan, Sir Gerard

NOES

Adams, Allen (Paisley N)

Deakins, Eric

Alton, David

Dewar, Donald

Anderson, Donald

Dixon, Donald

Archer, Rt Hon Peter

Dobson, Frank

Ashdown, Paddy

Dormand, Jack

Ashton, Joe

Douglas, Dick

Atkinson, N. (Tottenham)

Dubs, Alfred

Barnett, Guy

Dunwoody, Hon Mrs G.

Barron, Kevin

Eastham, Ken

Beckett, Mrs Margaret

Evans, John (St. Helens N)

Beith, A. J.

Ewing, Harry

Bell, Stuart

Fatchett, Derek

Benn, Tony

Faulds, Andrew

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

Field, Frank (Birkenhead)

Bermingham, Gerald

Fields, T. (L'pool Broad Gn)

Bidwell, Sydney

Fisher, Mark

Blair, Anthony

Flannery, Martin

Boothroyd, Miss Betty

Foot, Rt Hon Michael

Boyes, Roland

Forrester, John

Bray, Dr Jeremy

Foster, Derek

Brown, Gordon (D'f'mline E)

Foulkes, George

Brown, Hugh D. (Provan)

Fraser, J. (Norwood)

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

Freeson, Rt Hon Reginald

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

Freud, Clement

Brown, Ron (E'burgh, Leith)

Garrett, W. E.

Bruce, Malcolm

George, Bruce

Buchan, Norman

Godman, Dr Norman

Caborn, Richard

Golding, John

Callaghan, Jim (Heyw'd & M)

Gould, Bryan

Campbell, Ian

Gourlay, Harry

Campbell-Savours, Dale

Hamilton, James (M'well N)

Canavan, Dennis

Hamilton, W. W. (Central Fife)

Carlile, Alexander (Montg'y)

Hardy, Peter

Carter-Jones, Lewis

Harrison, Rt Hon Walter

Cartwright, John

Hart, Rt Hon Dame Judith

Clark, Dr David (S Shields)

Hattersley, Rt Hon Roy

Clarke, Thomas

Haynes, Frank

Clay, Robert

Healey, Rt Hon Denis

Clwyd, Mrs Ann

Hogg, N. (C'nauld & Kilsyth)

Cocks, Rt Hon M. (Bristol S.)

Holland, Stuart (Vauxhall)

Cohen, Harry

Home Robertson, John

Coleman, Donald

Hoyle, Douglas

Concannon, Rt Hon J. D.

Hughes, Robert (Aberdeen N)

Cook, Frank (Stockton North)

Hughes, Roy (Newport East)

Cook, Robin F. (Livingston)

Janner, Hon Greville

Corbett, Robin

John, Brynmor

Cowans, Harry

Johnston, Russell

Cox, Thomas (Tooting)

Jones, Barry (Alyn & Deeside)

Craigen, J. M.

Kaufman, Rt Hon Gerald

Crowther, Stan

Kennedy, Charles

Dalyell, Tarn

Kinnock, Rt Hon Neil

Davies, Rt Hon Denzil (L'lli)

Kirkwood, Archy

Davies, Ronald (Caerphilly)

Lambie, David

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

Lamond, James

1095

Leadbitter, Ted

Rees, Rt Hon M. (Leeds S)

Leighton, Ronald

Roberts, Allan (Bootle)

Lewis, Ron (Carlisle)

Roberts, Ernest (Hackney N)

Lewis, Terence (Worsley)

Robertson, George

Litherland, Robert

Robinson, G. (Coventry NW)

Lloyd, Tony (Stretford)

Ross, Stephen (Isle of Wight)

Lofthouse, Geoffrey

Rowlands, Ted

Loyden, Edward

Ryman, John

McCartney, Hugh

Sedgemore, Brian

McDonald, Dr Oonagh

Sheerman, Barry

McGuire, Michael

Sheldon, Rt Hon R.

McKelvey, William

Shore, Rt Hon Peter

McNamara, Kevin

Short, Ms Clare (Ladywood)

Madden, Max

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

Marek, Dr John

Silkin, Rt Hon J.

Marshall, David (Shettleston)

Skinner, Dennis

Maynard, Miss Joan

Smith, Cyril (Rochdale)

Meacher, Michael

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

Meadowcroft, Michael

Soley, Clive

Michie, William

Spearing, Nigel

Mikardo, Ian

Steel, Rt Hon David

Millan, Rt Hon Bruce

Stewart, Rt Hon D. (W Isles)

Miller, Dr M. S. (E Kilbride)

Strang, Gavin

Mitchell, Austin (G't Grimsby)

Thompson, J. (Wansbeck)

Morris, Rt Hon A. (W'shawe)

Thorne, Stan (Preston)

Morris, Rt Hon J. (Aberavon)

Tinn, James

Nellist, David

Torney, Tom

Oakes, Rt Hon Gordon

Wainwright, R.

O'Brien, William

Wallace, James

O'Neill, Martin

Wardell, Gareth (Gower)

Orme, Rt Hon Stanley

Wareing, Robert

Park, George

White, James

Parry, Robert

Wigley, Dafydd

Patchett, Terry

Williams, Rt Hon A.

Pavitt, Laurie

Wilson, Gordon

Pendry, Tom

Winnick, David

Penhaligon, David

Woodall, Alec

Pike, Peter

Wrigglesworth, Ian

Powell, Raymond (Ogmore)

Young, David (Bolton SE)

Prescott, John

Radice, Giles

Tellers for the Noes:

Randall, Stuart

Mr. John Maxton and

Redmond, M.

Mr. John McWilliam.

Question accordingly agreed to.
Resolved,
That the draft Housing Support Grant (Scotland) Order 1985, which was laid before this House on 11th January, be approved.

Housing Support Grant (Scotland)

  HOUSING SUPPORT GRANT (SCOTLAND)
  Resolved,
  That the draft Housing Support Grant (Scotland) Variation Order 1985, which was laid before this House on 11th January, be approved.—[Mr. Ancram.]

Orders of the Day

  Consolidated Fund (No. 2) Bill
  Order for Second Reading read.
  Question, That the Bill be now read a Second time, put forthwith pursuant to Standing Order No. 113 (Consolidated Fund Bills), and agreed to.
  Bill accordingly read a Second time.
  Question, That the Bill be now read the Third time, put and agreed to.
  Bill accordingly read the Third time, and passed.
  11.44 pm
  Mr. Nigel Spearing: On a point of order, Mr. Deputy Speaker. Can you confirm that while, of course, Standing Order 113(1) permits the procedure we have just been through, Standing Order 113(2) would permit, if the Government so wished, a motion for the Adjournment to be moved to enable us to debate any matter which any hon. Member wished to raise? This is the first time, as I understand it, that the Consolidated Fund Bill has been used in respect of a Supplementary Estimate. Can you confirm that in this instance it is likely that the Adjournment will not be moved so that if the Procedure Committee reconsiders the procedure for Supply and wishes to consider this precedent which separates the Consolidated Fund Bill from any discussion it can do so? Can you confirm, Mr. Deputy Speaker, that my interpretation of the Standing Order is correct?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): The hon. Gentleman is quite correct, and I am grateful to him for giving me notice that he would raise a point of order.

  Opposition Parties (Financial Assistance)
  11.45 pm
  The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,
  That the Resolution of the House of 20th March 1975 shall have effect from 1st January 1985 with the substitution of the following paragraphs for paragraphs 2 and 7 of that Resolution:
  '(2) That for the purpose of determining the annual maxima of such assistance the following formula shall apply:
  £1,500 for each seat won by the party concerned plus £3 for every 200 votes cast for it at the preceding General Election, provided that the maximum payable to any party shall not exceed £450,000.'; and
  '(7) That claims under these arrangements shall be made monthly, and that the annual maxima shall be applicable to claims made in respect of expenses incurred during any one calendar year.'.
  I think it is appropriate if I open this debate by briefly reminding hon. Members of the background to these proposals.
  This scheme, was first introduced in 1975 by Mr. Edward Short, now Lord Glenamara. It was deliberately strictly limited in its scope. It was, and is, related solely to financial support for the parliamentary work of the Opposition parties here at Westminster. Historically, it has been mainly used towards the costs of running the offices of the leaders of the Opposition parties and also research support for Opposition spokesmen.
  There are, I suppose, two well-defined views on state financial aid for political parties. A number of hon. Members are opposed to any such assistance, whether it be for activities at Westminster or beyond. On the other hand the opposing view was expressed by the majority of the Committee set up by the Government in 1975 under the chairmanship of Lord Houghton. This view argued that the state aid to political parties should extend widely, and include general activities at and between general elections, as well as work at Westminster.
  The proposals now before the House are a compromise between the positions I have indicated. As I have said essentially it is confined to activity at Westminster, and to Opposition parties.
  The House will wish to know a little more about the financial structure of the proposals in the motion. The formula used has always been based on a combination of seats won by the party at the preceding general election plus a sum for every 200 votes then cast for it. The entitlement has, from the beginning, rested on a minimum qualification of a party having had one Member of Parliament elected at the preceding general election and having secured at least 150,000 votes: and there has always been a maximum payment, which was originally £150,000 a year.
  The sums and the maxima used in the formula have, however, been raised three times since the scheme was first introduced. Since 1 January 1983 the maximum has been £323,000 and the formula has been £1,080 for each seat plus £2·16 for every 200 votes. The present proposal would, if approved, raise the sums payable under the formula to £1,500 per seat and £3 for every 200 votes: subject to an annual maximum of £450,000. It is intended that those figures should apply for at least the remainder of this Parliament.
  The Labour party would accordingly receive, under the proposed new formula of £1,500 a seat plus £3 for every
  1098
  200 votes, just over £440,000; the Liberal party about £88,000; the SDP about £62,000; and the remaining smaller parties about £40,000 between them. This means that each party will receive the same proportionate increase in the amount of assistance that it receives.
  A further, minor, change proposed is that, in future, claims by the parties for amounts due under these arrangements should be made monthly, rather than quarterly as at present. This is primarily a matter of administrative convenience.
  These increases are substantial; almost 39 per cent. greater than the amounts that have been payable since January 1983. I can assure the House, however that the proposals result from a consideration of the current present costs of the services which the scheme is meant to cover. Furthermore, the new levels are meant to last at least for the duration of the present Parliament.
  The House will recognise that the cost of other aspects of support services has also increased very considerably in recent years. For example, if these arrangements are approved, the maximum amount of financial assistance given to the Opposition parties will have risen threefold since 1975. During the same period the operating costs of the House of Commons Library increased fivefold.
  Moreover, the amount paid to hon. Members in secretarial and research allowances over the same period has increased by eight times. I do not think, therefore, that the proposals can be said to represent a significant increase in the patronage available to the Opposition parties.
  Nevertheless, it is essential that this important parliamentary issue, involving, as it does, an aspect of a significant political principle, should stand and be decided on its own merits. This present motion does at least enable this to be done.
  My personal view is that it is right to treat any increase in state aid for political parties with the utmost caution. But I do not believe that the proposed increases depart from this tradition of measured agnosticism.
  In the final analysis, however, it is not for Ministers alone to lay down what is a proper level of support for Opposition parties. The amounts in question are presented to the House for an open and explicit expression of opinion.
  I have accordingly merely attempted to set out the general background. It is now for the House to decide.
  11.51 pm
  Mr. Peter Shore: The Leader of the House was right to remind us of the background of these proposals, and we are all indebted to him for his very clear exposition.
  The motion is concerned only with the continuity of those arrangements first made in March 1975 and which have been endorsed and re-endorsed in 1978, 1980 and 1983. Tonight, as on all previous occasions, the aim of the motion is to update the cash formula to take account of increased costs, principally the earnings and numbers of those employed by the Opposition parties, to assist them in the performance of their parliamentary duties.
  As the Leader of the House has reminded us, there are, of course, those who believe that there should be no state funding whatever for parliamentary Opposition parties, and there are those who are convinced that, if Opposition parties are to be both more effective and less dependent

  1099
  on their institutional backers, then state financing should be greatly extended. But neither of these viewpoints is reflected in the motion before us tonight.
  It is, as I say, simply an updating of the original proposal of 20 March 1975 which, as the then Leader of the House said,
  "is concerned solely with the question of whether a measure of financial assistance should be made available to Opposition parties to assist them in their parliamentary work here at Westminster".—[Official Report, 20 March 1975; Vol. 888, c. 1869–70.]
  The House decided then that such financial assistance should be made available, and it was, of course, the Conservative party, then in Opposition, which was the principal beneficiary.
  There is no reason to believe that assistance with parliamentary work is required less in 1985 than it was a decade ago. Indeed, most would accept that the volume and complexity of business coming before Parliament and the pressures upon Parliament from outside are all still increasing.
  The need for the Leader of the Opposition to have an office and a staff, the need for the parliamentary party collectively to have a small staff to service its meetings and its various committees and the need for shadow Ministers to have some assistance in their continued scrutiny of ministerial measures—these needs are not, I think, seriously challenged. Nor, although it is outside the terms of the motion, is the need for Back-Bench Members of Parliament to have a measure of research assistance too.
  What is open to question is the adequacy of the cash amount that is to be made available. In the 1983 Top Salaries Review Board No. 20, the Plowden committee concluded:
  "Although the adequacy of the financial assistance involved under the 1975 arrangements is a matter for the House and Government to decide, we believe that it should be based on a realistic assessment of need; and the sums involved should be regularly up-dated".
  The Plowden committee did not lay down what was a realistic assessment of need, but it is at least relevant to draw attention to the findings of the management consultants whom the Plowden committee employed that a full-time research assistant, which, in their view, all shadow Ministers required, would need to be paid about £10,600 per annum at November 1982 prices. I assure the House that nothing like that sum has been made available to shadow Ministers and the present increase, helpful as it is, will have only a small effect.
  We also have to note the words of the Leader of the House that the new levels are meant to last at least for the rest of this Parliament. Nevertheless, I welcome the motion and commend it to the House.
  11.55 pm
  Mr. Ivor Stanbrook: If we are to save the Labour party from its impending demise—I speak out of a concern for the future of the party—we must assist it to retain its place as a major political party. Therefore, we must find the best way by which the Labour party can raise funds for itself and its cause. Clearly the best way would be to raise money from its individual members and thereby enable those who support the party to demonstrate that fact by their subscriptions, and give them an interest in what happens to their money after they have contributed it.
  1100
  It could be said that the existing system, under which the Labour party depends on assistance from trade union funds, is satisfactory for it, but it seems from recent history that it is proving unsatisfactory. I commend a more democratic system, based on the principle of one man, one vote.
  Mr. Eric Forth: Does my hon. Friend agree that if political parties drew their primary financial support from their supporters in the country the alliance parties would be able to expect a large amount of financial assistance from the support that they claim to have in the country? That would strengthen my hon. Friend's argument that parties should provide their finances from that direction.
  Mr. Stanbrook: I will not go down that path. because the principle applies to every political party. It could be said that the Conservative party derives too low a proportion of its funds from individual membership subscriptions and too much from donations. We should all learn that a democratic party, functioning well, should, as far as possible, raise funds from individual members through donations and subscriptions. Best of all, the money should be raised through personal contact on the doorstep between members of the party—even up to the level of Members of Parliament—and those who give the money.
  The one way of financing political parties that should not be encouraged is financing by the taxpayers. There are great dangers in that system.
  Mr. David Winnick: As the hon. Gentleman says that Opposition parties should not be financed in the way proposed, do I take it that he opposed and voted against the original proposal in 1975, which resulted in his party being financed in that way?
  Mr. Stanbrook: It is a cheap argument to ask someone who proposes an argument on its merits, "What did you do when the scheme was brought into existence?" I do not think that there is much to be said about the consistency argument. If we are to judge an issue on its merits, we must allow for the fact that sometimes our knowledge and experience increases, which leads us to change our opinions. There is nothing wrong in changing one's opinions. It so happens that I have always been opposed to the public funding of political parties.
  Mr. Biffen: My hon. Friend voted against the proposition when it was last before the House.
  Mr. Stanbrook: I am obliged to my right hon. Friend. To raise funds for political parties through the financial support of individual members of the parties is the healthiest way of proceeding. Unless political parties at least have that as their objective, we should not consider any means of assistance such as that which is before us. I am talking about all parties. I am not confining my remarks to Opposition parties.
  All Opposition parties are labouring under considerable financial difficulties, especially in financing their research work in this House. I understand that that is the basis of the compromise settlement which has passed successfully through the House in the past few years. I accept that there is a stronger argument for providing assistance to the research offices of the parliamentary parties and for providing assistance for the staffing of the leadership of the parties. That assistance provides a service to Parliament

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  itself because it enables us all the better to perform our functions as members of parties rather than as individual Members. Although I am against the principle of public funding of political parties, I recognise that there is a stronger argument for servicing the party leaderships' offices in this place by public funds.
  It is undesirable that by passing a motion of the sort that is before us every so often we should get into the habit of agreeing that public funds should be used to finance political parties. It is with that in view that I make my contribution to the debate. If we fail to look forward to the time when all political parties can rely on the support of their members, we shall be travelling in the opposite direction and the parties will become dependent upon public funds.
  Mr. Jack Dormand: I am grateful to the hon. Gentleman for giving way for the third time in what I hoped would be a short speech. It seems that the premise of his argument is wrong. We are not talking primarily about funding political parties. The logic of the hon. Gentleman's argument is that the Government should run the country's business on what the Tory party can raise as a political party. Surely that is a total misconception. We are discussing the Opposition parties in constitutional terms and not as political parties. If the hon. Gentleman is advancing the narrow argument that I understand, he must apply it to the Government of the day. The Government of the day are a Tory Government and, according to the hon. Gentleman's argument, the Tory party should raise the Government's money. That is clearly preposterous. The Government of the day have millions of pounds at their disposal, and rightly so. Surely it is incorrect to say that the Opposition should be limited to what the individual parties can raise.
  Mr. Stanbrook: I do not accept that argument. The party that provides the Government of the day is in a different and separate constitutional position from the parties that make up the rest of the House. It is not possible to say that when a Government are in power—they are vested with executive responsibility for the government of the nation—they should rely upon sources that are privately available to them. That would be wrong. The power to tax all the people is one that is vested in the party which wins a general election, and only because of that, under our democratic system. It follows that the parties that do not have the endorsement of a parliamentary election so as to obtain a majority of the seats in the House are in a different position. They do not have responsibility for the government of the country but they have a responsibility to provide good and effective opposition. If the word "constitutional" were changed to "parliamentary" relating to the functions of a political party in the House, there would be an argument. I would disagree with that argument, because I believe that there is a dangerous tendency to rely on public funds. Those who are strongly opposed to support for political parties other than their own strongly object to providing money from their pockets through taxation to support political parties. What an individual does by way of donation is a matter for him.
  I suppose that there is an argument for saying that individual taxpayers may, if they wish, agree to be taxed at the rate of 1p above the normal standard rate and that the revenue received should be devoted to the party of their choice, endorsed in their income tax return. I believe that that solution has been adopted in some countries.
  1102
  I used to be connected with Nigeria which found itself in difficulties when it had regional self-government in the 1950s.
  Mr. John McWilliam: On a point of order, Mr. Deputy Speaker. Where do the points now raised by the hon. Member for Orpington (Mr. Stanbrook) arise in the context of this debate? The debate is about funding Opposition parties, not funding of political parties.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): The hon. Member for Orpington (Mr. Stanbrook) is not out of order. I shall tell him if he is out of order.
  Mr. Stanbrook: I thought that the House might be interested in this point because it is relevant. This will be my last point.
  When people in Nigeria began political parties for the purposes of regional self-government, they found it difficult to raise funds. As members of the various assemblies were elected, they were obliged to contribute 10 per cent. of their salaries to the national party funds. For some years, political parties in Nigeria were financed in that way. The money came ultimately from the taxpayer, and therefore I believe that scheme was highly objectionable.
  That system is understandable in a young, new democracy with a Government and Opposition starting from scratch, but we are not in that position. Britain is a mature democracy which believes in one man, one vote.
  Mrs. Gwyneth Dunwoody: One person.
  Mr. Stanbrook: It believes in one person, one vote. I am obliged to the hon. Lady. That means that we should all try to raise political funds for political parties —including for their parliamentary activities — from individual subscriptions from the membership of the party.
  I do not oppose the motion, but we should bear in mind that the objective should be to do without this money from public funds and to rely upon individual subscription.
  12.8 am
  Mr. A. J. Beith: I feel that I am in a reasonably comfortable position to rebut In a few sentences some of the points made by the hon. Member for Orpington (Mr. Stanbrook). My party has to raise most of its funds from individual donations and has sought to contest much of the institutional funding of British politics which is carried out without the consent of trade union members or shareholders. I agree with the direction of support for political parties which the hon. Gentleman seeks, but I do not agree with him in opposing any kind of state assistance. That is not the issue for debate tonight. We are discussing whether the parliamentary activities of parties represented in the House should continue to be supported and whether that support should take account of increasing costs in recent years. That is all we are about.
  I was reminded of the late Keith Wickenden who, when a Member, did not merely oppose the funds we are discussing but said that the Conservative party should repay the £615,000 which it had extracted from those funds while an Opposition party. He admitted that that was the logic of the case and that if the Conservative party changed its mind it would have to give the money back.
  I was also intrigued to hear the hon. Member for Orpington advocating the Militant Tendency policy of

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  political activists tithing their incomes to support their parties. Supporters of the Militant Tendency have clearly found a new friend in that respect.
  We are debating whether reasonable cost increases should be made in the amounts paid under the formula originally devised by Lord Glenamara, then Mr. Short, to assist parties in this House. It is not, of course, the only form of assistance. The official Opposition have long had other forms of direct support—civil servants employed in the Opposition Whips office, for example, the salaries of some of its members, and so on—which do not apply to other Opposition parties. This is the one aspect of assistance that is applied to all the Opposition parties according to a formula.
  As Lord Glenamara said when he introduced the formula, the burdens on Opposition funds are not in direct proportion to the number of Members that they have in the House. They are more likely to reflect the number of votes that they have in the country, which is why that factor was included in the formula.
  Each Opposition party may set out its own claim for an alternative system, but the fact remains that costs have risen and staff have to be considered. We are talking about the salaries of people who work in this place alongside other staff whose salaries are protected by other arrangements, whether by increases in Members' allowances or by Civil Service linked salaries as in the case of Clerks and other staff of the House. Those who work for the parties represented here deserve some recognition of their needs. The object of the increase is to provide for that end and for other cost increases to be met through one increase which is meant to serve for several years.
  I welcome the Government's proposal. I think that it is reasonable and I hope that it will be supported not just by Opposition Members but by the whole House in a spirit of recognition that the democratic process depends upon the work of the parties in this House.
  Question put and agreed to.
  Resolved,
  That the Resolution of the House of 20th March 1975 shall have effect from 1st January 1985 with the substitution of the following paragraphs for paragraphs 2 and 7 of that Resolution:
  '(2) That for the purpose of determining the annual maxima of such assistance the following formula shall apply:
  £1,500 for each seat won by the party concerned plus £3 for every 200 votes cast for it at the preceding General Election, provided that the maximum payable to any party shall not exceed £450,000.'; and
  '(7) That claims under these arrangements shall be made monthly, and that the annual maxima shall be applicable to claims made in respect of expenses incurred during that one calendar year.'.

  Mr. D. T. W. Forsyth (Compensation Claim)
  Question proposed, That this House do now adjourn. —[Mr. Peter Lloyd.]
  12.12 am
  Sir Geoffrey Johnson Smith: I hope that my hon. Friend the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs will shortly appear. The House never ceases to surprise me with its moods and the swiftness with which it sometimes disposes of its business. In the meantime, I am grateful to my right hon. Friend the Leader of the House for returning to the Front Bench.
  The complex subject of this debate originates as long ago as 1957 when the then Government made their ill-fated attack on Egypt. The immediate effect on British residents in Egypt was summary expulsion and confiscation of all their property and assets. Many of those people, including the Forsyth family, the head of which lives in my constituency and on whose behalf I speak, had settled in Egypt, working for British companies and responsible for sales and other matters in an important market for British goods and services. The Forsyths acted for such top companies as British Leyland, Rolls-Royce, Daimler and BSA.
  I see that my hon. Friend the Parliamentary Under-Secretary of State is now present. He and I share many interests, not just in matters of political philosophy. We are both Sussex Members and my hon. Friend's constituency now includes East Grinstead which I represented for many years. He comes new to his appointment and this is the first time that I have been in a position to welcome him to the responsible position that he now holds in the Foreign Office.
  In saying that, I ask my hon. Friend to remember that I do not take up causes lightly. One does not often take up an Adjournment debate of this kind or question the veracity, strength or skill of important services of the Crown or those whom it employs. Tonight I am questioning not the veracity of the Foreign Office but its determination, and the manner in which it has conducted its business through its agents. My hon. Friend the Minister comes new to his responsibilities. I ask him to bear those comments in mind.
  Sudden deportation and confiscation of property had a catastrophic effect on the livelihood of the Britishers. A system of compensation was set up in acknowledgment of that fact. Happy relations now exist between this country and Egypt, a country which, both before and after the Nasser regime, has always been considered to be a good friend of ours. Good relations were restored with the 1959 agreement, signed by to two Governments, which was meant to restore law and order, and fairness, with regard to compensation, for those British nationals who had been affected as a consequence of the Suez affair.
  The trouble stems from the 1959 agreement, however, and more particularly from the interpretation and implementation of its terms. The Forsyth family appreciate the fact that rights are not conveyed to individual citizens by agreements between states. However, the Government entered into the treaty to safeguard the property interests of the British citizens upon

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  whom Egyptian wrath and revenge had understandably fallen in reprisal for the use of military force against Egypt by the then British Government.
  The Government have obligations and a strong moral duty towards the British subjects involved. Regrettably, I do not think that the Government have fulfilled their responsibilities adequately. Too often, in reassuring correspondence with me, the Department has shown the face of Dr. Jekyll. Those more personally affected have seen the face of Mr. Hyde.
  The first move of the Foreign Office was to introduce a private company to conduct the necessary procedures in Egypt. The company was called Toplis and Harding. It sounds like a television serial. The Government were well aware that that company, destined to handle the property of absent owners at a total value running into tens of millions of pounds, was newly formed and had a capital of only £500. Throughout the resulting chaos the Government remained detached, although deeming it necessary to provide public funds to sustain the company in circumstances that one can only call deplorable.
  The financial support continued despite the fact that the company itself was sequestrated by the Egyptian authorities because of financial irregularities in the conduct of its affairs. I do not want to seek parliamentary privilege, but I could go further and describe those financial irregularities in more graphic terms. As losses mounted to the clients of the creature created by the Foreign Office, there was no Government intervention. Indeed, dismayed Britishers were advised to seek redress, by their own means, through the Egyptian courts.
  The principal bone of contention is the former home near Cairo of the Forsyth family, a property having a substantial value in Egypt. I see that my hon. Friend's advisers have just taken up their positions. I choose my words advisedly. The company was a creature set up by the Foreign Office as an agent designed to do what the British Government had agreed to do as a result of the agreement with the Egyptian Government, and the Foreign Office walked away from its responsibilities. The company was subject to a degree of financial irregularity that the Foreign Office should have spotted much sooner.
  After the official Egyptian confiscation of the Forsyth property it was taken over by Egyptian military forces—here we see how life is lived in other countries—and later provided as a residence for an Egyptian High Court judge. The influence of that judge was great, because his brother was Vice President of Egypt, and head of the Egyptian armed forces, General Hakim Amer. The judge died in 1972 and General Amer died in circumstances similar to those in which Field Marshal Rommel died. The family of the judge remain in occupation of the Forsyth property until now but ceased to pay any rent as from 1966. Instead, they laid claim to outright possession of the property using forged documents. They put forward a further claim to ownership on the grounds of so-called "prescriptive rights."
  These events have been the subject of litigation in Cairo for the past 10 years. I do not want to make a mockery of the debate—Forsyth is Forsyth, but there is a "Forsyth Saga." That is the scale of my correspondence, let alone that of my constituent, Mr. Forsyth, who has carried on at great expense to himself and with much pain and agony to his family. Some 50 court hearings have been postponed or adjourned in that time. The delays have caused repeated
  1106
  representations by Ministers to their Egyptian counterparts. The astonishing fact is that representations have been made three times at the level of Her Majesty's Secretary of State for Foreign and Commonwealth Affairs—by my noble Friend Lord Carrington, by my right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym), and by the present Foreign Secretary. On other occasions, representations have been made by my right hon. Friend, our distinguished Leader of the House, but the Egyptians have failed so far to respond in a fitting or satisfactory way.
  What has gone wrong? It seems that there has been a conspicuous failure on the part of the Government to adhere to the terms and conditions of the 1959 agreement in a straightforward manner and to ensure that Egypt, as co-signatory, does likewise. Egyptians have sought to exploit and to benefit by holding on to property to which they are not entitled. They even held on to money that was unjustifiably been extracted by the Egyptian fiscal administration from the family's private bank account to the tune of £35,000. That is the behaviour of ordinary individuals in Egypt.
  The Forsyth family took advice from solicitors and it was argued, inter alia, that the Government were entitled, under the terms of the 1959 agreement, to insist on the property being restored to the Forsyth family with vacant possession. The Government, by their failure to insist on their rights under the agreement, have deprived the Forsyth family of the right to live in their own home. Instead of facing up to this argument, the Foreign Office has sought to hide behind a form of renunciation which had been signed by my constituent's father, who is now deceased, when a compensation payment had been negotiated through the Foreign Compensation Commission.
  I should like to go into some detail as it is important. It is a legal matter. I refer to the claim by the Forsyth family that, when the late Mr. Forsyth was invited to sign the form of renunciation, it was not represented to him by his solicitor that, in signing the form, it was the intention that he would thereby exonerate the Government from discharging their obligations to recover vacant possession of the villa, according to the terms of the agreement. On 2 October 1965, the late Mr. Forsyth signed a form of renunciation stating, inter alia:
  "I hereby renounce and surrender all claims by me arising out of the measures of Egyptianisation and sequestration so far as they have affected my interests in the property set out in Schedule A to the renunciation."
  Schedule A defines the late Mr. Forsyth's interest as
  "capital depreciation of a villa at"—
  it then gives the address. His son's submission is that that letter of renunciation did not effectively deprive him, or his late father, of the right to require the Government to enforce the 1959 agreement made between the Government of the United Arab Republic and the Government of the United Kingdom in so far as that agreement provided for the return of all sequestrated British-owned property to its owners.
  In other words, in so far as the compensation included the payment of capital depreciation, it was understood to mean compensation for irrecoverable loss of value resulting from the sequestration measures. There is a loss of value to the property because it is occupied by a tenant. As far as the late Mr. Forsyth could see, that could have gone on for years. How was he to know?

  1107
  The Foreign Office should recognise that there was no provision in the 1959 agreement for the payment of monetary compensation where the loss could be made good by the return of the property or, in lieu, of vacant possession. Even if it could be said that the form of renunciation effectively extinguished such a right in favour of the Forsyth family, the late Mr. Forsyth was not advised of that before he signed the renunciation form, nor did he intend that he would thereby prejudice his right. Why should that be?
  Perhaps the advice that the late Mr. Forsyth was given was faulty. He was represented by solicitors, who had on their staff a person who, before he joined them, had been a member of the Foreign and Commonwealth Office, and the FCO'S legal adviser in Egypt. It is suggested that that person created the concept of compensation, without any legal foundation, but as a formula agreed with the Foreign Compensation Commission. A man cannot go from being a legal adviser in the Foreign Office to advising an independent citizen, because he is bound to be in favour of the interpretation of the Foreign Office. I do not make a charge of dishonesty, but my constituent should be independent of the Foreign Office, as should have been Toplis and Harding.
  It is not totally incomprehensible why my constituent has fought his case for many years. I sympathise with his view that the Foreign Office should not appear to hide behind a form of renunciation of claims in such circumstances. It is no good saying that it is a matter for the Egyptian courts. We are concerned about an agreement between the British and Egyptian Government which was signed in 1959. The Foreign Office should insist that the Egyptian Government fulfil their obligations by arranging for the property to be handed over to Mr. Forsyth immediately.
  The action was not justiciable in the English court. My constituent cannot take the Foreign Office to court. There are no means of judging which legal interpretation is correct, whether that of the Foreign Office or of my constituent. The Minister will be advised by his legal advisers, whom I have heard say to his predecessors that they are right. However, others disagree profoundly with the interpretation of the Foreign Office.
  How can my constituent get justice? The matter has been allowed to continue for too long. If a public inquiry could be held I would ask it to look into Toplis and Harding, which handled my constituent's case and which was in reality a creature of the Foreign Office, and to examine how well the Foreign Office behaved. Was it too distant? Toplis and Harding's record was appalling, and the FCO should not have tolerated its inefficiencies and practices. As I mentioned, subsequently it was accused of dishonest practices.
  An inquiry would reveal how difficult it is for citizens to obtain redress in such matters. The Parliamentary Commissioner cannot deal with it. So prolonged were the activities of Toplis and Harding that by the time my constituent could sue, he had run out of time. He is right, therefore, to feel frustrated.
  The Government are dealing with a country with which we are now on friendly terms. It is a recipient of British financial help in many areas, including trade, culture and defence. Why cannot the same care and understanding of Egypt's special needs be extended to my constituent,
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  whose family was a victim of hostilities initiated by his own country? I beg my hon. Friend to assure me that the Government will make full representations along the lines I have suggested.
  12.29 am
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton): I understand the deep concern of my hon. Friend and neighbour in Sussex the Member for Wealden (Sir G. Johnson-Smith) for the cares of his constituent. After all, I inherited many of them from him at the last election in East Grinstead. They still speak with great affection of the way in which he looked after them. Therefore, I fully understand that it is because of his strong passion for the worries of Mr. Douglas Forsyth that he has raised this matter on an Adjournment debate. He spoke passionately about the problems which his constituent, Mr. Douglas Forsyth, and his late father have faced in securing redress and compensation for property losses in Egypt, and I have much sympathy with what he said. But I must tell him, as he knows well, that there has been voluminous correspondence on this subject over the years. My hon. Friend's constituent has been assiduous in keeping his problems and concerns before us, and my hon. Friend has been equally assiduous.
  We have much sympathy for Mr. Forsyth, and we acknowledge that he has encountered great difficulty in securing repossession of the villa which he owns in Heliopolis outside Cairo. But I hope to demonstrate that there is much common ground between the Government and my hon. Friend on this matter.
  The Forsyth family were not alone in the losses which they suffered in 1956. Most of the British community in Egypt suffered similar misfortune following the conflict of that year. Many British people were expelled from Egypt and had their property sequestrated. It was against that background that the Government reached an agreement with the Egyptian authorities in 1959, which provided for the payment of compensation and the return of British property to its former owners.
  The villa owned by Mr. Douglas Forsyth's father was, as my hon. Friend said, sequestrated in 1956. It was then let by the Egyptian Sequestrator General on 1 May 1957 at a low rate on an agreement which provided for 15 days' notice of termination on either side. The villa was desequestrated by the Egyptian authorities on 1 March 1960, under the terms of the 1959 agreement, but the Sequestrator General did not give the tenant notice to quit at that time. As a result, the tenant remains in occupation to this day. As my hon. Friend is aware, tenants have considerable legal protection in Egypt, and it is extremely difficult to secure their eviction.
  As to the effects of the form of renunciation, I assure my hon. Friend that we do not rely on that form in deciding what representations to make. We have made many representations irrespective of the effect of the form of renunciation that was signed by Mr. Forsyth's father.
  I must place it on record that the Forsyth family has not been ungenerously treated in the matter of compensation. Mr. Forsyth submitted several claims to the Foreign Compensation Commission under the provisions of the Orders in Council relating to the distribution of the compensation that had been received from the Egyptian Government. A total of £79,914 was awarded to him as a result and accepted by him in full settlement of his

  1109
  claims. We do not defend Toplis and Harding. We reached a settlement with Mr. Forsyth in part because of the failure of Toplis and Harding to act properly.
  Included in the total was a payment of more than £3,000 in settlement of a claim for loss in value of his villa resulting from the fact that it had been returned to him with a sitting tenant. The total of nearly £80,000 compensation was a considerable sum 20 years ago. and I should mention that Mr. Forsyth's late father also received a grant of ?30,000 from the Egyptian Grants Committee for the comparative hardship he suffered as a refugee from Egypt.
  The correspondence that the Foreign and Commonwealth Office has received from my hon. Friend's constituent shows that there has been some misunderstanding of the position of the Foreign Compensation Commission. I take this opportunity to clarify this. The FCC was established under the Foreign Compensation Act 1950 with two principal functions. The first is the administrative function of registering claims. The second is the judicial and administrative functions involved in awarding and distributing payments of lump sum compensation received by Her Majesty's Government from other Governments.
  In exercising the latter function, the Commission has the task of inviting claims to participate in such compensation, judicially determining these claims, deciding which are admissible and which are to be rejected, and finally distributing the moneys among the successful claimants. Although the Secretary of State for Foreign and Commonwealth Affairs retains some responsibility for its work and funding, the commission is wholly independent of the Government when it acts in its judicial capacity in determining claims.
  The members of the commission and its staff have always tackled the difficult tasks assigned to them with dedication and conscientiousness. In connection with these Egyptian affairs, they received no fewer than 9,000 claims, made 15,000 adjudications and determinations and distributed to claimants sums in excess of £31 million. This was no small achievement and it must be said that most claimants were very grateful for their work.
  My hon. Friend touched on the interpretation of the 1959 agreement. My hon. Friend's constituent and his lawyers contend that the Egyptian Government are in breach of the 1959 agreement because the sitting tenant was not removed before the family's villa was returned to them. As my hon. Friend is aware, I have received different advice on this particular point. The two view points have been set out fully in the correspondence that has taken place. It has not proved possible to harmonise these views, and I do not think it would serve any useful purpose on this occasion to re-state the different positions. Nevertheless, I emphasise that this difference of view has not lessened in the slightest degree the pressure that we have exerted on the Egyptian Government on behalf of Mr. Forsyth.
  My hon. Friend has understandably referred to the expense and frustration that his constituent has suffered, both as a result of not having possession of his villa, and as a result of the court action in Egypt. I sympathise with much of what my hon. Friend said. In the court case for full possession of the villa, his constituent has been engaged in a legal action that has lasted over 10 years. We are all familiar with the law's delays, but this delay is undoubtedly too long.
  1110
  My hon. Friend referred to the Forsyth saga, but in reading this file I was reminded more of Charles Dickens' "Bleak House" and the problems in the last century of getting cases through Chancery.
  We have told the Egyptian authorities of our feelings on this point and have asked them to do what they can to encourage those responsible for the administration of their courts to speed matters up.
  There is, however, a strict limit to what any Egyptian Government can do to help us or our citizens in the case of an action that is before the courts. The courts in Egypt are as proud and jealous of their independence from the executive arm of Government as our own courts are.
  Sir Geoffrey Johnson Smith: My submission is that we should not leave this matter to the courts. Is this not a matter that, under the agreement of 1959, should be dealt with on a Government-to-Government basis?
  Mr. Renton: That brings us back to the interpretation of that agreement, on which there is a difference of opinion. It is not appropriate to go into that further now.
  I leave it to my hon. Friend to imagine what the reaction of a court in this country would be were we as a Government to seek to interfere in anycase before them that involved a foreign national. I suggest that the reaction of the court would be robust, and rightly so.
  It is also important to remember that the court case initiated by my hon. Friend's constituent is not without its complications. His constituent's father did not himself take any court action in this connection. It was only five years after his father's death in 1969 and some 14 years after the official desequestration of the villa that his constituent started the court action. That itself was quite a delay. As I understand it, the case has been complicated by counter-actions on the part of the tenant which had to be disposed of before the case of my hon. Friend's constituent could be resolved.
  In the event, despite the delays, some progress has been made. Mr. Forsyth's ownership of the property was reaffirmed by the courts in October 1981. The courts have appointed a legal expert to help them unravel the facts of this case. In October of last year the court assessed the rent which the tenant should pay for the villa from 1 December 1969 to 31 December 1984. These are small but important gains. There is now a prospect that the legal expert who inspected the villa on 5 January—two weeks ago—will submit his report in the immediate future and that the case itself may be settled during the course of this year.
  The Government are doing all they can to help my hon. Friend's constituent in this matter. We shall continue to do so. We believe that the best method of helping is through diplomatic representations. We hope they will prove effective.
  As I have already indicated, we have made many representations to the Egyptian authorities on behalf of my hon. Friend's constituent. His case has been mentioned during the course of the most recent ministerial visits to Egypt. For example, my right hon. and learned Friend the Secretary of State mentioned it when he saw the Egyptian Foreign Minister in January 1984. The British embassy in Cairo are in constant touch with Mr. Forsyth's legal adviser about the progress of both court cases. We have done, and will continue to do, everything we can to help him.
  If my hon. Friend would like to bring Mr. Forsyth to meet me to talk about this matter, I should be ready to see

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  my hon. Friend and to meet Mr. Forsyth at the same time, but on that occasion I do not believe that it would be profitable to have a debate about the strictly legal issues which are at present before the Egyptian courts. I hope that my hon. Friend will accept this point.
  The Government have been very active on Mr. Forsyth's behalf. We have brought his concerns to the attention of the Egyptian Government on many occasions, but it is, alas, neither within our gift nor that of the Egyptian Government to settle the matter of full
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  repossession and control of his villa. That case is before the Egyptian courts and it will be determined there, but we have made it very clear to the Egyptian Government that we feel there have been too many delays in reaching a decision—
  The Question having been proposed after Ten o'clock on Wednesday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at eighteen minutes to One o'clock.