Commons Sitting of 2 July 1985

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]

PRIVATE BUSINESS
ROYAL HOLLOWAY AND BEDFORD NEW COLLEGE BILL [Lords]
Read the Third time and passed, with amendments.
CLWYD COUNTY COUNCIL BILL [Lords]
Read a Second time, and committed.
BRITISH RAILWAYS (TROWSE BRIDGE) BILL (By Order)
YORKSHIRE WATER AUTHORITY BILL (By Order)
BERKSHIRE BILL [Lords] (By Order)
Orders for Second Reading read.
To be read a Second time upon Thursday 4 July.

Oral Answers to Questions
  DEFENCE

    Fleet Air Arm
    Mr. Randallasked the Secretary of State for Defence if he will make a statement concerning Fleet Air Arm manning.
    The Parlialnentary Under-Secretary of State for Defence Procurement (Mr. John Lee): Recruiting problems coupled with the duration of training have created shortages in some areas, but steps are being taken to overcome deficiencies.
    Mr. Randall: How much time will front-line air and ground crews spend with their families under the Government's lunatic cost-cutting programme, which is resulting in each of our aircraft carriers not being fully equipped with their own aircraft and manpower—[HON. MEMBERS: "Reading."]
    Mr. Speaker: Order. The hon. Gentleman is not reading; he is referring to his notes.
    Mr. Randall: I am not sure whether I should start again, Mr. Speaker.
    Is the Minister aware that a similar scheme was tried about 20 years ago, which resulted in a sharp increase in voluntary resignations? What level of manpower wastage does he expect from this policy, and what will it mean in money terms?
    Mr. Lee: We are operating a policy of having two carriers fully operational at any one time, and there will
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    be two air groups. We believe that position to be satisfactory. Overall, we have about 40 Sea Harriers in service or on order.
    Mr. O'Neill: But is it not the case that we have three aircraft carriers and two crews and are awaiting 23 aircraft to come on stream? Until that happens, there will be problems with the use of any back-up force and difficulties such as we saw during the Falklands war.
    Will the Minister assure us that the problems that confront that section of the Fleet Air Arm will be alleviated quickly so that morale does not plummet further?
    Mr. Lee: I assure the hon. Gentleman that the air groups are needed only on operational carriers. In times of tension, training and reserve personnel and aircraft will be fully utilised.
    If the hon. Gentleman looks back to the period of the last Labour Administration, he will see that during 1977–78 more than 50 per cent. of Fleet Air Arm pilots chose to leave mid-way through their trained service at their first opportunity, primarily on pay grounds.
    Mr. Viggers: Does my hon. Friend agree that Fleet Air Arm personnel are highly skilled and highly trained? Does it not take some years to build up those skills? Is it not an unfortunate experience to see the Opposition trying to leap on the bandwagon by claiming that the skills are not currently available?
    Mr. Lee: My hon. Friend is absolutely right. It takes about four years to train a Sea Harrier pilot, at a cost of about £2·8 million. We are taking a number of measures to improve the position. Recruiting to the Fleet Air Arm has been increased substantially, training capacity expanded, wastage reduced and the methods of pilot training are being studied.

    Exercise Lean Look
    Mr. Evennettasked the Secretary of State for Defence what representations his Department has received since the publication of Exercise Lean Look.
    The Minister of State for the Armed Forces (Mr. John Stanley): My Department has received two letters.
    Mr. Evennett: I thank my right hon. Friend for his response. Does he agree that taxpayers are delighted with the Exercise Lean Look approach, not only because it is a more efficient use of resources, but because it allows the armed forces to do the job that they are properly entitled to do?
    Mr. Stanley: I am grateful to my hon. Friend. We share his pleasure at the success of Exercise Lean Look. It is having the desirable effect of enabling the Army to make a transfer of some 4,000 men in the support area to the front line, with a significant increase in front-line operational capability as a result.
    Mr. Dickens: I am not certain whether I am qualified to ask a question on Exercise Lean Look. However, does my right hon. Friend agree that a soldier, whether he is serving in the cookhouse, or the transport or fire departments, is a trained soldier, and that if some of those jobs can be done by private enterprise it is sheer common sense to release those men so that they may be used for what they were trained for—to fight?
    Mr. Stanley: I am sure that my hon. Friend is fully qualified to ask questions on all subjects, not least Lean

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    Look. I assure him that we take the view that he does. It must be sensible to release the maximum number of trained service manpower to do the essential jobs which only they can do in the front line.

    Trident
    Mr. Tom Clarkeasked the Secretary of State for Defence what recent representations he has received from Scotland about future commitment to the Trident programme.
    Mr. Stanley: Since the beginning of 1985 the Government have received from Scotland on the general subject of Trident 23 letters, including one petition, and a number of postcards.
    Mr. Clarke: Will the Minister add to those the strong objections from my constituents at Glenboig, who do not want asbestos from Faslane dumped in their village? Will he consider also the important views recently expressed by Lord Carver, when he described the project as representing illusions of nuclear grandeur? Will the right hon. Gentleman therefore justify the Government's obsession with such a project?
    Mr. Stanley: We do not agree with Lord Carver on this subject. With regard to the hon. Gentleman's constituency point, I am sure that he has now received the letter which the Parliamentary Under-Secretary of State for the Environment, my hon. Friend the Member for Ealing, Acton (Sir G. Young), sent him a few days ago, in which he said that, as a result of further scientific evaluation of the asbestos problem at Faslane, it looks as if we shall now be able to avoid using the Glenboig tip in the hon. Gentleman's constituency.
    Sir Hector Monro: Has my right hon. Friend investigated the likely effects of a Labour party non-nuclear defence policy? Does he accept that about 50,000 jobs could be lost in Scotland if it were implemented?
    Mr. Stanley: My hon. Friend is entirely correct. Apart from the significant employment implication of the Labour party's defence policy, not least in relation to the Trident programme, there are the significant and wider defence implications. We feel that it would be wrong on both national and NATO grounds for this country to go down the path of one-sided disarmament, which is the Labour party's policy.
    Mr. Ron Brown: Is not the Trident programme unacceptable in this country by all normal standards, bearing in mind that it represents overkill, overprice and, shortly, it will be over here?
    Mr. Stanley: I do not understand why the hon. Gentleman thinks that it is an unacceptable policy. It is the continuation of a policy that was followed by successive Labour Governments whom he presumably supported.
    Mr. Bill Walker: Is my right hon. Friend aware that my hon. Friend the Member for Fife, North-East (Mr. Henderson) and I recently had a meeting with the shop stewards from Rosyth as well as from Babcock Power, all of whom stated clearly that their interest in the Trident programme is that it secures their jobs for a long period?
    Mr. Stanley: My hon. Friend is entirely correct. I know that it is very much welcomed in Scotland, not least in the Rosyth area, that we have made an undertaking for
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    the refitting of SSBNs to be continued in that dockyard. The ending of that cycle of major refitting work would have some profound implications in that locality.
    Mr. O'Neill: Is the Minister aware of the position in Rosyth dockyard, where the union has withdrawn cooperation because of its disgust at the way in which the privatisation scheme is being handled? Is he aware that the future of the dockyard is being jeopardised by the Government's hamfisted approach to consultation? Is he aware that the union wants the procedure extended?
    Mr. Stanley: There is absolutely no basis for saying that the future of that dockyard is being jeopardised by our proposal on dockyards. What would jeopardise it in no uncertain way would be the ending of the refitting work on the deterrent, which is likely to extend over 20 years and more.

    Moscow Missile Defence System
    Mr. Leighasked the Secretary of State for Defence what information he has on the upgrading of the Moscow missile defence system and if he will make a statement.
    The Secretary of State for Defence (Mr. Michael Heseltine): A programme to improve the Moscow antiballistic missile system has been under way since 1980. It is expected that when completed the new system will comprise an improved force of 100 launchers and associated radars for location, tracking and engagement of targets. This will provide a two-layer defence system for Moscow with long and short-range interceptor missiles to engage targets both outside and within the atmosphere.
    Mr. Leigh: Will my right hon. Friend confirm that notwithstanding the fact that the Soviet Union is upgrading the system with 100 accountable launchers and a new radar station at Pushkino, it still appears to be within the ABM treaty? Given Mr. Paul Nitze's remarks that it will have a ground-based launched laser this decade, the upgrading points to the urgent need for the USA to maintain research into SDI and a modernisation programme.
    Mr. Heseltine: My hon. Friend, who has studied the matter, is well-informed. It is obvious that the Soviet Union has been indulging for some years in the research of technologies associated with strategic defence. Therefore, it is wise for the Americans to be so involved. I also confirm that the updating of the ABM system around Moscow is within the ABM treaty. Of course, as my right hon. Friend the Prime Minister in her recent meeting with the President confirmed, both Governments believe that any future development within this critical area should be within the ABM treaty.
    Mr. Norman Atkinson: Does the Secretary of State agree that if the Moscow star wars policy enjoys the same success as the Reagan star wars policy has achieved, that will render Trident unviable?
    Mr. Heseltine: Our view is that within the lifetime foreseen for the Trident missile the defences of the Soviet Union will not be adequate to remove its deterrent capability.
    Mr. Wilkinson: Does my right hon. Friend agree that not only are the Soviets improving point defences around Moscow, but are increasing the offensive capability, notably with the deployment of the new ICBM SS25 and

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    the construction of new SS20 bases? Would it not therefore be prudent and right for the alliance to concert its efforts to provide a measure of defence against this awesome defensive capability?
    Mr. Heseltine: My hon. Friend, who understands the matter clearly, is right. However, the situation is even worse, because the Soviet Union is increasing its offensive capability on a nuclear, chemical and conventional scale.
    Mr. Denzil Davies: Does the Secretary of State agree with the recent speech of the Foreign Secretary when he expressed substantial reservations and criticisms of the star wars project, or does he agree with President Reagan that nuclear weapons should be made obsolete? Does he not agree that President Reagan's speech has turned upside down the whole theory on deterrence in Europe?
    Mr. Heseltine: The Labour party is always calling for wider debate. When it gets it, it seems to be equally dissatisfied. The President has raised fundamental issues about the development of weapons systems and their capabilities and the relationship of defensive and offensive systems. I would have thought that debate was healthy. The President has also made it clear that he believes that the development of any SDI programme would have to be within the framework of the ABM treaty. That is also our view.

    Trident
    Mr. Hirstasked the Secretary of State for Defence if he will estimate the value of work which will accrue to British contractors from the Trident programme; and if he will make a statement.
    The Minister of State for Defence Procurement (Mr. Adam Butler): Approximately 55 per cent., or over £5,100 million by value, of the latest estimated total cost of Trident will be spent in the United Kingdom. In addition, a number of British companies are competing for work on the United States Trident II programme. To date, 104 contracts, at a value of over $37 million, have been placed with 43 United Kingdom firms. Many of these subcontracts are for initial quantities, with the potential for follow-on orders.
    Mr. Hirst: I am grateful to my right hon. Friend for that reply. Does he agree that it confirms that, whatever one's views on nuclear weapons, the reality is that defence expenditure means lots of jobs for Britain and that those who seek to slash that expenditure would imperil not just national security but deny vital jobs in an industry that is crucial for Britain?
    Mr. Butler: I entirely agree with my hon. Friend. Perhaps I may add just one statistic to those that my right hon. Friend gave. In terms of direct and indirect jobs, the Trident programme will provide about 300,000 man years of work.
    Mr. Campbell-Savours: If work does accrue, what safeguards are there against overcharging by contractors, such as Aish and Company? Has the Minister been following that case, in which a Mr. Jim Smith was sacked when he revealed overcharging on defence contracts amounting to £400,000? Are not the Government indebted to men like him, who have laid themselves on the line on a point of principle?
    Mr. Butler: I am sure that the House would not wish me to comment on the case of the individual to whom the hon. Gentleman has referred. As to keeping costs under control, we have made very clear the effectiveness of our competition policy in keeping costs down and saving substantial sums of money. If that can be applied to the Trident programme, it will be.
    Mr. Hayes: As the Liberal party and the Social Democratic party are desperately trying to paper over their major divisions on defence policy, does my right hon. Friend agree that their recent proposal of a collaboration with the French on a nuclear deterrent would mean a loss of jobs for workers in this country?
    Mr. Butler: I find it difficult to discover exactly what the SDP and Liberal party actually do believe on this issue. When I listen to the right hon. Member for Plymouth, Devonport (Dr. Owen) and hear him advance the sort of proposals to which my hon. Friend has referred —indeed, suggesting that instead of Trident we should go for cruise missiles — I know that he is going for something that would be less effective and much more costly.
    Mr. Denzil Davies: Will not the agreement with the Americans to buy Trident be financially disastrous for Britain? We spend £4,500 million in the United States, yet the Americans spend a mere pittance in Britain. Why are the Government persevering — when they are so concerned with public expenditure — with this financial extravagance when they are cutting back on the Health Service, local government services and the welfare state?
    Mr. Butler: The right hon. Gentleman knows that the NHS has never been in better hands. We are spending very much more in real terms than any previous Government. The same applies to the defence programme. We are spending approximately one fifth more in real terms on defence than was spent under the previous Labour Government, and it is because of that that we are able to afford the systems to which the right hon. Gentleman has referred.

    Identification Friend or Foe
    Mr. McNamaraasked the Secretary of State for Defence what progress has been made towards harmonising the North Atlantic Treaty Organisation's identification friend or foe.
    Mr. Butler: The recently announced agreement between the United States and German authorities represents considerable progress towards a future NATO identification system. It is hoped that final agreement on outstanding points of technical detail will be reached by the autumn.
    Mr. McNamara: It is welcome news to know that we have made some progress in that direction. What proportion of any work on the new IFF will be done in the United Kingdom, and what will this contract mean in terms of the two-way street between Europe and America?
    Mr. Butler: I am not able to give the hon. Gentleman the details for which he has asked. However, I am glad that he welcomes this progress, because it is absolutely essential that we have a common system that operates throughout NATO, particularly in Europe. The progress that has now been made in this direction is most welcome.
    Mr. Alexander: Is not the problem with updating and standardising the IFF equipment the fact that the West Germans, the Americans and ourselves all believe that our own respective systems are the best? Would it not be possible to get experts from the NATO countries who are not so involved to come together to make an independent assessment of which is the best?
    Mr. Butler: The progress to which I have referred was important in that the Germans have now agreed to use the D-band, and that is where the difficulty arose. The exact details of that must now be worked out. If that can be done, we can go forward on the basis of a D-band plus radar mode.

    Chemical Warfare
    Mr. Douglasasked the Secretary of State for Defence if he will make a statement on the preparedness of United Kingdom forces within the North Atlantic Treaty Organisation to withstand chemical warfare attacks.
    Mr. Heseltine: In the light of the formidable Soviet offensive chemical weapon capability, we afford a high priority to protective and defensive measures for our armed forces against chemical attack, and to training service men in their use. We keep our defensive measures under review in the light of the threat. A new respirator, new protective clothing and new detection and warning equipment for our service men are being brought into service.
    Mr. Douglas: Does the Secretary of State not consider that the presence of Soviet chemical weapons and the fact that the United States seems to be gearing up with binary weapons reflects a situation of the most severe awareness and acuteness in terms of possible operations in the European theatre? What view does he take of the threat and of the fact that NATO seems to be mounting opposition in the most aggressive fashion? Can we not try to reach an agreement between NATO and the Warsaw pact countries for a complete ban on chemical weapons?
    Mr. Heseltine: The hon. Gentleman is supporting a policy which this Government have been energetically pursuing. The difficulty is that the Soviet Union has 300,000 tonnes of chemical agent, which is far in excess of any defensive capability that it needs. The Russians train aggressively with it, modernise it and keep it up to date. Whereas Britain has made a one-sided gesture by getting rid of its chemical capability, the Soviet Union has gone in precisely the other direction. We are still pursuing the primary objective of a negotiated arms control arrangement, but it takes two to reach such an agreement. The Soviet Union has been singularly unforthcoming.
    Mr. Wiggin: Is it not a fact that if the policy of deterrence, which the Conservative party unanimously supports, is carried to its logical conclusion we must, in order to deter the Russians from continuing to hold these disgusting chemical stocks, regretfully build up some of our own?
    Mr. Heseltine: There is logic in my hon. Friend's question, and it is this logic that has led to renewed interest in this debate in the United States of America. We are still trying to persuade the Soviet Union that the best possible way forward is by negotiation. However, one cannot go on for ever trying to negotiate with people who modernise their capabilities.
    Mr. Boyes: To reduce the likelihood of chemical warfare, does the Secretary of State agree that it would be better if the Government continued to oppose the deployment of the "Big Eye" bomb, the 155 mm chemical shell, or any other chemical weapon by the United States forces, or those of any NATO country? Is it not a fact that the United States already has chemical warfare facilities in Europe?
    Mr. Heseltine: The Americans have an aging capability. The question is whether they should allow that capability to become so out of date as to have no deterrent capability while the Soviets constantly modernise and increase their stocks. The intriguing question is from where the Opposition think the real threat to the peace and security of western Europe comes.
    Mr. Key: Is my right hon. Friend aware that all the items of our chemical defensive capability that he has listed are made at Porton Down in my constituency? Does he agree that a higher priority should be given to the provision of a defensive capability for our front-line troops?
    Mr. Heseltine: I hope my hon. Friend will accept that we are giving very high priority to the defensive capability. That is why I listed the systems that are being introduced. There is no question but that this is overdue and necessary and that we attach very great importance to it. The issue is whether one encourages and supports the United States over the potential modernisation of its aging capability. By far and away the best way forward is to reach an arms control arrangement whereby these weapons are removed. That is what we wish to happen, and that is what we are trying to do. My right hon. and learned Friend the Foreign Secretary and his colleagues have put great energy behind that endeavour. The question is how long one can go on trying to persuade the Soviet Union to reach arms control arrangements when it will not come to such arrangements but constantly increases its offensive capability.
    Mr. Flannery: Is it not a fact that the only nation to use chemical weapons on a massive scale has been America in Vietnam? It defoliated over one third of that country, and it has not recovered to this day from that defoliation. Can we not use our prestige to try to bring America and Russia together in some way? We should also tell the truth about America's use of chemical warfare in Vietnam.
    Mr. Heseltine: The hon. Gentleman must realise that the threat that this country faces comes from the existence of an increasing Soviet capability. That is the issue that a Secretary of State for Defence must address. It is no use saying that the Americans are behaving in some way reprehensibly, when they are not at the moment developing their offensive capability but are trying to secure arms control negotiations. The Opposition must address themselves to the point at which they are prepared to abdicate their responsibility as politicians potentially in government and risk the lives of those in the front line who might defend us.
    Mr. Neil Thorne: If it is proved that the wearing of nuclear and biological kit by our service men reduces their efficiency to no more than 40 per cent., does that mean

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    that we would require two and a half times the force level of the Soviet bloc if we were to take it on on equal terms, ignoring the benefit of the nuclear umbrella?
    Mr. Heseltine: My hon. Friend asks an interesting question. The follow-through, however, is unrealistic, because we have other means of deterrence to secure the peace. We cannot envisage a simple exchange on a nuclear level. The issue that we must address is clear — how we persuade the Soviets to reach arms control agreements with us that will avoid the development of a western chemical capability.
    Mr. McNamara: The first point of the Secretary of State's statement that our troops will have the best equipment available will be welcomed on both sides of the House. We support further research into that method of ensuring the safety of our troops. We also support the vigorous action that has been taken by Her Majesty's Government on a chemical warfare treaty, but upon which point of verification have those negotiations broken down? Was it not the Americans who drew back at the last minute?
    Mr. Heseltine: No, Mr. Speaker. The Americans have made one of the most generous and comprehensive offers of complete openness, which could provide a way forward. Both sides have not yet reached an agreement. We constantly try to put forward new initiatives. There is no question but that the Government are playing an energetic role. The problem will not go away. If we do not succeed in reaching such an agreement, there is then an obligation placed on those responsible for the freedom and defence of the west to address the fact that the Soviets are not just failing to negotiate, they are modernising and enhancing their aggressive capabilities.

    Defence Ministers (Meeting)
    Mr. Robert Atkinsasked the Secretary of State for Defence if he will make a statement on the outcome of the European Defence Ministers' meeting in London on 17 and 18 June.
    Mr. Heseltine: I and my ministerial colleagues from the independent European programme group met to review progress and to direct further action on the initiatives aimed at improving armaments co-operation which we launched in the Hague last November. Our talks were very constructive. I have placed a copy of our communiqué in the Library. In the margins of the IEPG meeting Defence Ministers concerned with the European fighter aircraft held further discussions to review progress.
    Mr. Atkins: I thank my right hon. Friend for that answer. Is he aware that there is an air of cautious optimism in the British aersopace industry over the likelihood of the European fighter aircraft going ahead? It is heartened by his firm stance in those discussions. Does he also recognise that a decision, preferably with the French, but, if necessary, without them, must be taken on 22 July if we are to ensure that that project goes ahead?
    Mr. Heseltine: I am most grateful to my hon. Friend for his helpful observations. From the beginning of the discussion, the view has clearly been that we needed to reach an early decision, and the energy of all Ministers involved at the moment is devoted to trying to reach a collaborative agreement involving five nations, but of course, there comes a time when decisions must be taken.
    Mr. Carter-Jones: Is the right hon. Gentleman aware that right hon. and hon. Members on both sides of the House have been raising that matter for over three years? Is he aware that there is anxiety in the country that delay in making decisions might mark him out as the Minister who failed to provide a proper, adequate fighter for the British people in 1990?
    Mr. Heseltine: I think that I understand why the hon. Gentleman feels it necessary to make that remark, but it does not accord with the advice given to me within the Ministry. There has been no pressure to reach an earlier decision on this matter. Production and loading programmes and employment prospects are, of course, as well known to the Government as they are to the Opposition. They are not prejudiced by the time scale upon which we are currently embarked.
    Mr. Stern: Is my right hon. Friend aware that the cautious optimism in his remarks regarding the European fighter aircraft will be very welcome in large parts of the British aerospace industry? Will he confirm that it is the view of the Government that a solution to this problem which involved French leadership in design and manufacture, and therefore French leadership of the future of the European fighter industry, would be unacceptable to him and to the Government?
    Mr. Heseltine: I am grateful to my hon. Friend, because all Ministers from the five countries are bound to be asked that very question in their own countries. The basis upon which we have sought to reach agreement is that there cannot be a winner and there cannot be a loser in any agreement that is reached. That is understood by all Ministers, who have very similar political problems to the ones that I have.
    Mr. Denzil Davies: In view of the delay that has taken place, can the Secretary of State at least give an assurance that a decision one way or the other will be taken on 22 July? If it is not possible, for all sorts of reasons, to reach agreement with the French, will he make it clear that we will go ahead as part of another consortium, without the French? If that is not possible, will he now, for the first time, make it clear to the other partners that Britain will build its own fighter, which is so important for the Royal Air Force and the defence industries in this country?
    Mr. Heseltine: The right hon. Gentleman can rest assured that I made that clear to my partners when I began these discussions nearly two years ago. Of course, everybody knows that there is a perfectly viable British alternative which we could pursue. We have made that absolutely clear. It was one of the first things stated when we opened the negotiations. But it is not my purpose to try to indicate a range of other alternatives while we are seeking agreement on the collaborative venture which is on the table.

    Cruise Missiles
    Mr. Nellistasked the Secretary of State for Defence how many cruise missiles are presently stationed on the British mainland.
    Mr. Stanley: I refer the hon. Member to paragraph 27 of volume I of the "Statement on the Defence Estimates 1985".
    Mr. Nellist: Has the Minister any idea of the number contained in the paragraph he has mentioned, the attendant

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    costs of those cruise missiles stationed on the British mainland and the feelings among this generation of young people — [Interruption.] — when, on the one hand, they see the amount of money that is spent on cruise missiles, while, on the other hand, they live in a country where millions are denied the right to work and in a world where hundreds of millions are denied the right to food? Is that not a clear indication of the crazy priorities of the capitalist system?
    Mr. Stanley: If the hon. Gentleman refers to the Statement on the Defence Estimates he will note that three flights of ground-launched cruise missiles have now been deployed in the United Kingdom—48 missiles. On his wider remarks, I remind him that the INF deployment by NATO is in response to a very serious offensive threat by the Soviet Union. By way of perspective on the figures I have just given him, I remind him that at the end of 1979 the number of SS20 warheads facing western Europe was 243 and by the end of last year it had risen to 729.
    Sir Anthony Grant: Is my right hon. Friend aware that, in view of the Soviet nuclear position on SS20s, the majority of this generation are very relieved that Her Majesty's Government have decided to locate cruise missiles in this country? Is he satisfied with the security of the location of these missiles, and in particular is he satisfied that the amenities of residents in the area will be properly safeguarded in view of the fact that some county councils, such as Cambridgeshire, where the Liberals are in control, seem to have lost their nerve on this issue?
    Mr. Stanley: I am not surprised that my hon. Friend says that Liberal councillors have lost their nerve, and Cambridgeshire is not the only place in which that has happened. As to security, all the normal security arrangements take place and people are very highly protected, particularly in the most secure areas. I entirely agree with the earlier remarks of my hon. Friend, which I am sure reflect the views of the great majority of people in the country.

    NATO (Manoeuvres)
    Mr. James Lamondasked the Secretary of State for Defence how many representatives of Warsaw pact states have attended as observers at North Atlantic Treaty Organisation manoeuvres since the signing of the Helsinki Final Act.
    Mr. Stanley: Invitations to attend exercises in accordance with the provisions of the Helsinki Final Act are issued on a bilateral basis, and consolidated information relating to all NATO countries is not available centrally.
    Mr. Lamond: As we have sent only three observers during the 10 years since the signing of the Helsinki Final Act and none at all since 1979, is there any point in causing problems and difficulties at the talks in Stockholm by insisting that these voluntary agreements should become mandatory?
    Mr. Stanley: The hon. Gentleman has raised a very interesting point. He asks why Britain and other nations have not sent more observers to the Warsaw pact exercises since 1979. Since 1980, NATO has carried out 15 major manoeuvres and has invited Warsaw pact observers to
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    every one. In contrast, the Warsaw pact has notified us of nine such manoeuvres and since 1979 has extended not one invitation to us.
    Mr. Wilkinson: Will my right hon. Friend tell the House how the British Forces Mission to Soviet forces in East Germany is operating? There have been disquieting reports of harassment of our military personnel in East Germany. Recently, one contingent was attacked in the course of its duties. My right hon. Fried will recall that some French officers were driven off the road and that Major Nicholson of the United States forces, who was in a similar position, was shot. Can my right hon. Friend tell me more about this matter?
    Mr. Stanley: I am familiar, of course, with the instance relating to the British Forces Mission to which my hon. Friend referred. As with the American case, we deplore any attempts to create harassment or worse for those members carrying out their mission responsibilities under the quadripartite agreement. We continue to ensure that our mission carries out its duties properly and responsibly.

    General Charles Dalton
    Mrs. Clwydasked the Secretary of State for Defence how many meetings he has had with General Charles Dalton, United States Chief of Staff, at SHAPE in the last 12 months.
    Mr. Heseltine: None, Sir.
    Mrs. Clwyd: Is the right hon. Gentleman aware of the threat made by General Dalton during a visit on 3 June to SHAPE headquarters by eight Members of Parliament, when he said that a future British Government would not be able to determine their own defence priorities without the threat of economic sanctions being imposed by a United States Government? How seriously does the right hon. Gentleman take this threat against our national sovereignty?
    Mr. Heseltine: These remarks are purported to have been made during a visit by the parliamentary Labour party defence committee. Confronted with that galére, any American general could be forgiven for almost any observation.

    Westland Helicopters
    Mr. Heathcoat-Amoryasked the Secretary of State for Defence if there is any delay in the purchase of Westland plc helicopters by the forces.
    Mr. Butler: No, Sir. In the last three months we have placed new helicopter orders with the company against identified requirements for nine Sea Kings and five Lynx worth a total of about £35 million.
    Mr. Heathcoat-Amory: Is my right hon. Friend aware that the British Army's sudden conversion to using a larger helicopter places it out of step with the rest of the world's armies? My right hon. Friend must be worried that this delay will mean that we shall be ordering these helicopters from abroad rather than backing our domestic helicopter manufacturer, Westland, which has an excellent potential for development?
    Mr. Butler: We have demonstrated the extent to which we have backed our indigenous helicopter capability. The

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    Army has placed no order for a W30. A staff target was identified for which the W30 might have been suitable. Since then, the Army has been reviewing its requirements. I hope that, within a few months, it will decide what it wants.
    Mr. Carter Jones: Is it true that the modification of the AST404 has been the factor that has put Westland in difficulties?
    Mr. Butler: Most certainly not. If AST404 had settled for a helicopter the size of the W30, and if resources had been made available for that staff target, we would have needed a competition and it would have been months or even years before the target could be fulfilled. Moreover, the W30 now available does not meet the requirements of the staff target.
    Mr. Jim Spicer: Does my hon. Friend accept that a large number of overseas orders are hanging in the balance because other countries will not purchase British helicopters until they see the British Government showing confidence in the product? That is what is at stake. Is he aware that the future of the only British helicopter manufacturer is also at stake?
    Mr. Butler: There are a number of potential orders. The main one, for India, is for a civil aircraft, so any demonstration of support for the military variety does not immediately impinge on that.

  PRIME MINISTER

    Engagements
    Ql. Mr. Boyesasked the Prime Minister if she will list her official engagements for Tuesday 2 July.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today. This evening I shall be attending a dinner given by the United States ambassador to mark the 200th anniversary of diplomatic relations between our two countries.
    Mr. Boyes: During her busy day will the Prime Minister reflect on the fact that at least two people have committed suicide since the Government introduced new and punishing board and lodging regulations? Will she take into account the fact that the Minister for Social Security admitted to the House last week that the regulations were fatally flawed? How many people have to die before she will withdraw these evil and ill thought-out regulations?
    The Prime Minister: The regulations that my right hon. Friend the Secretary of State for Social Services brought before the House are reasonable. Action had to be taken because expenditure had risen from £100 million in 1980 to nearly £600 million in 1984. My right hon. Friend has issued extended exemptions and I understand that many of the cases to which reference has been made fall within existing exemptions.
    Mr. Lord: Bearing in mind the current debate on standards in education, will my right hon. Friend try to find time today to remind all headmasters of their legal obligation to hold morning assembly and to insist that they carry on this vital part of school life?
    The Prime Minister: I know that the suggestion that morning assembly should be dropped has caused great concern both among Conservative Members and among many parents. I remind headmasters that it is part of the Education Act 1944 and must continue.
    Mr. Kinnock: Does the Prime Minister realise that as well as turning thousands of young unemployed people into vagrants the changes in board and lodging allowances mean that thousands of old and chronically sick people may be denied care in residential homes, or even evicted from charitable and private homes that may have to close? As the results of the regulations are so obvious and horrific, will the right hon. Lady have the plain decency to reverse the policy so that old and sick people, who are among the weakest and most defenceless members of society, can have the care that they need?
    The Prime Minister: As I said in reply to an earlier supplementary question, I believe that the steps that we have taken are reasonable. Expenditure had risen from less than £100 million in 1980 to nearly £600 million in 1984 and there was considerable evidence of waste and abuse in the system of supplementary benefit board and lodging payments. With regard to the effect on people in residential care and nursing homes, the new limits should allow reasonable charges to be met in homes satisfying the registration requirements.
    Mr. Kinnock: I hope that the Prime Minister will reconsider that. How can the changes be reasonable when they may lead to the closure of many homes run by charitable organisations and, in the view of responsible people in those organisations, may result in the denial of homes to people who need them? How can the changes be reasonable when disabled people may have to find a further £90 a week, which they do not have, to pay for reasonable standards of care in private and charitable homes? Will she please reconsider the whole policy, as plainly it is neither rational nor reasonable to treat old and sick people in this way?
    The Prime Minister: The new limits should allow reasonable charges to be met in satisfying the registration requirements. The right hon. Gentleman will be aware that the limit is £110 a week plus the attendance allowance. For handicapped children the limit can go up to £170 a week. Existing claimants are protected by the transitional arrangements introduced by my right hon. Friend. We shall review the new limits within 12 months of their coming into operation.
    Mr. Nicholas Baker: Does my right hon. Friend consider that the energies of football hooligans, which are extraordinary but misdirected, suggest that a move towards a form of national community service would be constructive?
    The Prime Minister: We have to deal with football hooligans in a different way and take all action that we possibly can to prevent their activity on football grounds and outside. The problem would not necessarily be solved by the kind of action suggested by my hon. Friend, although I understand the point behind his question.
    Dr. Owen: Would the Prime Minister like to vote in the political fund ballot for the General, Municipal, Boilermakers and Allied Trades Union on 5 July? If so, I can offer her a ballot form. Indeed, Mr. Speaker, you may like to have a ballot form. The ballot forms are freely

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    available in Liverpool at the place of work, despite the fact that at that place of work there are only two members of the trade union. Is that not disgraceful? It demonstrates——
    Mr. Speaker: Order. The same rules apply to everyone. The Prime Minister can answer only questions for which she has responsibility. She does not have a vote, and neither do I.
    Dr. Owen: I am offering you the opportunity to vote — [Interruption.]
    Mr. Speaker: Order. I am trying to hear the right hon. Gentleman's rephrased question.
    Dr. Owen: Under legislation which the House passed only a year ago workplace ballots are allowed. They are a rotten farce, as is demonstrated by the free availability of ballot forms. Will the Prime Minister change that legislation to make workplace ballots the exception and postal ballots the norm?
    The Prime Minister: I am grateful to the right hon. Gentleman for what he said. If his facts are correct, it would certainly be a great abuse, and a matter for the union to consider. Regarding legislation, the right hon. Gentleman knows that, whether it is a workplace or a postal ballot, it must be a secret ballot. If it is not, it is up to those affected to take action before the courts.
    Mr. Fatchettasked the Prime Minister if she will list her official engagements for Tuesday 2 July.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Fatchett: Will the Prime Minister today explain why the Conservative candidate in Brecon and Radnor has made no reference to her in his official election address? Does she—
    Mr. Speaker: Order. The same rules must apply to all. Again, that is not the Prime Minister's responsibility.
    Mr. Fatchett: Does the Prime Minister share the view held by many people that the fact that her Government's candidate does not mention her name is a sign of the Government's weakness, and means that in future the Government cannot carry out their policies, or does she hold the view, shared by many people in Brecon and Radnor, that the Conservative candidate is merely trying to bring himself closer to the electorate?
    The Prime Minister: I shall be glad to welcome him here as the new hon. Member for Brecon and Radnor.
    Sir Peter Hordern: As First Lord of the Treasury, will my right hon. Friend consider increasing public expenditure so as to give more money to the Leader of the Opposition's Private Office, since Mr. Ron Todd has said that the Labour party's economic policy is unacceptable, Mr. Scargill tells the right hon. Gentleman what to do and the parliamentary Labour party is for the most part, apparently, on holiday? Is it not time that the right hon. Gentleman recruited some new people, went back to the drawing board and started again?
    The Prime Minister: It is rare to hear my hon. Friend asking for increased expenditure, but for such a good cause I shall give his request my most earnest attention.
    Mr. Canavanasked the Prime Minister if she will list her official engagements for Tuesday 2 July.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Canavan: When the Prime Minister has dinner tonight with the American ambassador, will she express the general feeling of relief and welcome that is felt on both sides of the House and throughout the country on the release of the American airline hostages after their long ordeal? Since President Reagan stated yesterday that he is committed to combating terrorism whenever and wherever it occurs, would not his fine words seem a bit more genuine if he were to stop aiding and abetting the terrorists who are trying to overthrow the democratically elected Government of Nicaragua?
    The Prime Minister: I have already sent a message to President Reagan saying that we share his joy and relief at the release of the hostages, and I am sure that the entire House will join in that. As for the second part of the hon. Gentleman's supplementary question, I point out to him that sometimes the stance of the Labour party on terrorism would be better if it voted for the prevention of terrorism legislation.
    Mr. Foxasked the Prime Minister if she will list her official engagements for Tuesday 2 July.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Fox: Has my right hon. Friend seen reports in today's press of Mr. Scargill's address to the National Union of Mineworkers? If so, does she agree with me that the only reason for Scargillism being defeated during the long strike was that the Government had the strength to withstand it? Is it not a fact that that is the only way of combating Scargillism?
    The Prime Minister: Yes. If a Labour Government ever took office led by the present Leader of the Opposition, he would be an absolute pushover for the leadership of the NUM.
    Mr. Ashley: Is the Prime Minister aware that what we desperately needed after the long coal strike was statesmanship from the Government and understanding from the National Coal Board? Instead, we have had bombast from Ministers, including the Prime Minister, and arrogance from the coal board, including its chairman. Is she aware that this has created such deep bitterness in the coal industry that it will damage if not destroy the mining industry and the chairman of the board?
    The Prime Minister: No. I believe that we need to give great understanding to the difficulties of the working miners and ensure that we give them all the help and assistance that they need. We must turn the coal industry into a profitable industry so that people, especially young people, can be sure of its future. We must follow the colliery review procedure and ensure that, when pits have to be closed, the National Coal Board enterprise agency moves in after the closures to help those who need assistance to find other jobs in their areas.

    United States of America (President)
    Mr. Lathamasked the Prime Minister when she next expects to meet the President of the United States of America.
    The Prime Minister: I have no plans to meet President Reagan in the near future, but I expect to meet Vice-President Bush during his visit to London tomorrow.
    Mr. Latham: While we can rejoice with President Reagan that the American hostages have been freed, will my right hon. Friend recall that one of them was brutally murdered by the terrorists and that many people see this whole affair as a partial victory for terrorists? Will she join President Reagan in banning Middle Eastern Airlines until Lebanon, and Beirut in particular, ceases to be a haunt of terrorists and killers?
    The Prime Minister: I agree that it is intolerable that Beirut airport should be used to launch terrorist attacks outside the Lebanon, and we have not forgotten the United States Marine who was so brutally murdered on that flight. Until the Lebanese Government can guarantee security at Beirut airport it may be necessary for the international community to suspend all services to Beirut. I hope that such action, which we will certainly support, will have the widest international backing. I shall be discussing this matter with Vice-President Bush tomorrow.
    Mr. Douglas: How can the international community have any efficacy in the control of terrorism when it does not observe the conventions which already exist for the control of terrorism? I refer to the Hague convention, the Tokyo convention and the Montreal convention. How can we believe that we can control terrorism through more conventions if we cannot adhere to existing international legislation?
    The Prime Minister: As the hon. Gentleman is aware, we adhere to existing international legislation. I think that the hon. Gentleman is referring to the Montreal hijacking agreement, which was originally the Bonn hijacking agreement and was reaffirmed at Montebello. It has sometimes been difficult to get all nations to adhere to that. I agree that it is of vital importance in stopping hijacking, that everybody accepts that convention.
    Mrs. Clwyd: On a point of order, Mr. Speaker.
    Mr. Speaker: Does it arise out of questions?
    Mrs. Clwyd: Yes, Mr. Speaker. Is it in order for the Secretary of State for Defence to refuse to answer a serious question on our national sovereignty, something that should concern every hon. Member? That sovereignty has been threatened by a senior military man at SHAPE headquarters and——
    Mr. Speaker: Order. I think that the hon. Lady is trying to carry on Defence Question Time, and in particular her question 12. I have no responsibility for ministeral answers.
    Mr. Tom Clarke: Further to that point of order, Mr. Speaker. Was it in order for the Secretary of State for Defence to attack hon. Members — including myself, incidentally, as I was on the delegation — who found that the——
    Mr. Speaker: Order. The House knows that we have a busy day ahead of us, and an Opposition day at that. We cannot carry on Question Time. I am not responsible for what the Secretary of State says, and I cannot be responsible for the attacks made across the Chamber. That is what the system is about.
    Mr. Boyes rose——
    Mr. Speaker: Order. Is this another point of order? If it is an attempt to carry on Question Time, I shall not hear it. If it is a fresh point of order, I will.
    Mr. Boyes: I am looking to you for guidance, assistance and help, Mr. Speaker. A senior four-star American general threatened this country——
    Mr. Speaker: Order. I think that the hon. Gentleman will have to find other ways to draw attention to this senior four-star general. There will be other opportunities.
    Mr. Boyes rose——
    Mr. Speaker: Order. I cannot give the hon. Gentleman any guidance. Long ago the House agreed that when we have Question Time we end it at the prescribed moment. We cannot continue afterwards.

European Council (Milan)
3.34 pm
The Prime Minister (Mrs. Margaret Thatcher): With permission Mr. Speaker, I should like to make a statement on the European Council on 28–29 June, which my right hon. and learned Friend the Foreign and Commonwealth Secretary and I attended.
Some time in advance of the European Council, the United Kingdom had circulated specific proposals for the development of the Community, covering completion of the internal market, strengthening political co-operation and improvements in decision making. Texts of these have been placed in the Library of the House together with the proposal we made at the European Council on exploitation in the market of advances in technology.
The meeting offered the opportunity for action over a broad range of these proposals and a number of important decisions were taken. The European Council decided that, in making progress towards achieving the single internal market for goods and services in the Community by 1992, priority should be given to the removal of physical and technical barriers to the movement of goods to a free market in financial services, a free market for transport, the liberation of capital movements and full freedom of establishment for the professions. These are the United Kingdom's own priorities.
On political co-operation, the European Council decided to set in hand the work necessary to reach agreement on the lines proposed by the United Kingdom, taking account also of a subsequent Franco-German text which was very similar. Such an agreement would allow the Community together to wield more influence in world affairs.
On technology, the European Council expressed its determination to use the large Community market so as to strengthen technological co-operation in Europe in the face of the American and Japanese challange. As an incentive to manufacturers, we proposed that products resulting from collaboration should have a guarantee of genuine access to public purchasing throughout the Community.
By contrast, when it came to procedures for decision making, a majority of the European Council preferred to postpone action and to put the issues to an intergovernmental conference to be convened under article 236 of the Treaty of Rome.
The United Kingdom's view was that some positive improvements in the Community's decision-making could have been decided in Milan and did not require any treaty amendment. We regret this unnecessary delay but will naturally attend any such conference and shall continue to press for practical steps to improve decision-making which do not impair our ability to safeguard our national interests.
As the House will recall, any changes to the treaty would of course require unanimity and would have to be approved by each sovereign Parliament.
On the economic and social situation, the Commission is preparing a detailed report which will compare the Community's economic structure and performance with other major industrialised countries. It will concentrate on strategies to improve growth and employment.
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The Commission also reported on the steps being taken to give effect to the British initiative on deregulation at the last European Council.
The European Council generally endorsed the report of the Committee on the People's Europe, which itself recommends cutting the burden of Community legislation and proposes easier access to medical care abroad.
The European Council agreed on the need for Japan to increase significantly its imports of manufactures and processed food products and to liberalise its financial markets. This unanimous view will be emphasised to the Prime Minister of Japan during his forthcoming visit to Europe.
I raised the need for further measures to combat terrorism and hijacking, with particular emphasis on the security of airports and air travel.
Finally, the European Council discussed famine in Africa. Two thirds of the cereals food aid agreed at Dublin last December has already reached the countries concerned or is en route. We now intend to work out a co-ordinated programme against the effects of drought in the Third world and give priority to helping developing countries themselves to achieve greater security in their food supplies.
By agreeing steps to remove barriers to trade and to strengthen high technology, the Milan European Council contributed to the Community's economic strength and to the creation of wealth and new jobs. It is regrettable, however, that the opportunity available to the Council to strengthen foreign policy co-operation and to improve decision-taking was not taken. These issues will now have to be discussed in a further conference. The United Kingdom will be present and will make a constructive contribution on the basis of practical proposals rather than vague aspirations.
Mr. Neil Kinnock: I listened carefully to the Prime Minister's statement, but try as I might I could not find any adequate explanation of why she got the whole approach to the Milan summit so spectacularly wrong. Ten days ago the Government's position, as expressed to the House, was that they and a substantial number of other member Governments did not see any necessity for an intergovernmental conference such as is proposed. What substantial number of other Governments took the same view as the British Government? What number were the Prime Minister and her Ministers thinking of in view of the fact that in Milan last weekend they were outvoted by seven countries to three?
Is it not the case that, as a consequence of the Prime Minister's clumsy failure in Milan and before Milan, we are not in a position to promote the changes in the Common Market that our country needs nor effectively to protect Britain's interests?
Mr. Nicholas Budgen: Tell us what changes.
Mr. Kinnock: She got us into this; she is going to have to get us out of it — [Interruption.]
Mr. Speaker: Order.
Mr. Kinnock: The Government have now been sucked into an intergovernmental conference that the Prime Minister said would never take place and which she plainly does not want. I have to ask her whether she will attend that conference herself. Is the "we" to which she referred

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regal or national when referring to our country? Is it not important that the British Prime Minister actually does attend such a conference, in view of the plain fact that other countries can make changes in procedure without altering——
Mr. Budgen: What changes?
Mr. Kinnock: — without altering the treaty of Rome — [Interruption.] I understand the embarrassment of the Conservative anti-marketeers, but shouting will not cover their tracks. [AN HON. MEMBER: "You have got to cover yours."] I repeat: in view of the very plain fact that other countries can make changes in procedure at that conference without altering the treaty of Rome, and thereby by a majority vote enable themselves to determine vital future interests of the British people, is it not essential that the Prime Minister goes to that intergovernmental conference?
The communiqué and the Prime Minister's statement referred to the Committee on the People's Europe. Before that enterprise goes any further, will the Prime Minister accept the fact that the people of Britain—and, indeed, the other countries of the Common Market — are not impressed by European flags and stamps and anthems; they want investment and growth and, above all, jobs.
On the latter subject, I note from the statement that there is to be a detailed report comparing the Communities's structure and performance with other industrial countries. Are we supposed to be satisfied by such a statement? Are we supposed to be satisfied that 10 leaders of some of the strongest nations of the world got together over the weekend and all that they can offer to the 15·5 million unemployed in the Common Market is the prospect of yet another study to report in December? Would it not have been fitting for the British Prime Minister, who has the largest number of unemployed, to take the initiative at the summit to try to bring down unemployment?
In the wake of Milan, is it not absolutely plain — [Interruption.] I know that Conservative Members do not like it, Mr. Speaker — [Interruption.]
Mr. Speaker: Order. I do not need help from either side of the House.
Mr. Kinnock: Thank you, Mr. Speaker. Hooliganism is one thing that the Conservative party could teach Europe.
In the wake of Milan, is it not absolutely plain yet again that six years of bluster from the right hon. Lady has not succeeded in winning one tangible, positive advantage or in protecting British interests or the British people?
Faced with that reality, is it the case that the Prime Minister is vexed, or has she "but one emotion—fury", as her Mr. Bernard Ingham told us? Is it the case, as he said, that
"The Richter scale ceases to operate when it applies to her. It is not irritation to the Prime Minister. It is total volcanic eruption. Krakatoa has nothing on it."?
How soon will the right hon. Lady join that extinct volcano?
The Prime Minister: I refer to the right hon. Gentleman's first point, on an intergovernmental conference. I do not think that an intergovernmental conference is necessary. We could have agreed great improvements in decision-making on the matters that were
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on the table, and that we had circulated well before the meeting. Some of us wished to; others wanted to go further than that, and they called an intergovernmental conference under article 236. That is a limited one. It must be initiated by proposals to amend the treaty, and the only ones before us on that occasion were article 57(2), which is an amendment on the qualifications and right of establishment, as well as article 100, which requires a unanimous vote for directives, which we happen to think is extremely important. No other article for amendment was suggested to go before that conference save one put up by the Commission, on the harmonisation of tax — article 99—which, fortunately, the Germans knocked down pretty quickly, and which we agreed should not be considered.
The right hon. Gentleman said that the decision can be taken by majority vote. That is not quite right. One can call an intergovernmental conference by majority vote. Any recommendations that it makes to change the treaty would have to be done by unanimous vote and would also have to come before each Parliament. It would have to be by unanimous vote — [Interruption.] If the right hon. Gentleman would listen, he might learn a thing or two.
With regard to some of the other things, there is a very large report before us, put up by our own Commissioner, on the internal market. It is absolutely vital that the European Council decides what priorities in that report be pursued first. It is not necessary, in our view, for it to take action on tax harmonisation. That can be put aside and considered by Ecofin, because it would cause difficulties for all of us. Therefore, we set out the priorities. They were set out on the first day. They were the ones that were adopted by that Council and put out in the communiqué.
If the internal market is completed, it will provide more jobs for this country, in both financial services and insurance. At the moment it is disgraceful, so long after the treaty of Rome was signed, that there are still quotas on lorries, to our great disadvantage, and that we still cannot have shipping business from other ports in Europe on the same basis as they can from us. We still do not have a free market in air fares. All those things are extremely important in getting more jobs.
With regard to the report on unemployment, the best report, if the right hon. Gentleman would like to read it, was submitted to the Dublin Council in December. Many of its proposals still hold true. Mr. Delors is proposing to put forward a new report along the lines that I have outlined. With regard to the right hon. Gentleman's final point on bluster and fury, I could not hold a candle to him in the emission of hot air.
Mr. Geoffrey Rippon: May I congratulate my right hon. Friend on the consistent effort that she has made to promote European progress on the basis of firm, practical action, while at the same time regrettably some of our European partners seem correspondingly reluctant to make practical decisions on a day-to-day basis, preferring apparently to kick the ball into the long grass? I welcome the fact that we are to attend the new constitutional conference, but can my right hon. Friend suggest any ways in which we can help to undo the damage that was done to the cause of European unity in Milan by some of our European partners?
The Prime Minister: That intergovernmental conference, as my right hon. and learned Friend knows, is normally the General Affairs Council of Foreign

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Ministers. I doubt whether it would take long, because there appear to be only those two matters before it. It would then have to report back to the European Council. As I have said, if it were to propose any changes in the Treaty, that could be taken through only by unanimous support. I saw nothing before us that would require an amendment to the treaty. We should not be too depressed. We have had setbacks in the Community before. Nevertheless, we have been able to carry out enlargement and make decisions on own resources, which mean that we shall pay less now than we would have paid otherwise. I think it is a temporary setback which I hope will be fully redeemed at Luxembourg, and all our efforts will be bent in that direction.
Mr. Roy Jenkins: Can the right hon. Lady explain why she was apparently so incensed that the Franco-German paper took over so many of the ideas of the British Government? Surely if one wants to make progress in a negotiation, it is generally highly desirable that other parties should put forward one's own ideas, believing them to be theirs?
The Prime Minister: It seems strange, since they are on the table already, to duplicate them.
Mr. Julian Amery: Is my right hon. Friend aware that most of us on this side of the House, and I suspect on the other side and in the country, strongly support her pragmatic approach to European co-operation? Is she also aware that it is very difficult to proceed by gentleman's agreement unless one is dealing with gentlemen? Is she further aware that she was absolutely right in the context of the Milan meeting to agree that we should participate in the October meeting? If we are to make progress with Lord Cockfield's proposals for the internal markets and with my right hon. Friend's own proposals for foreign policy, counterterrorism and other matters, we may have to embark on a system of rather tighter regulation than we would have preferred. Let us be in on it this time and not out of it, as we were when the Messina agreement was approved.
The Prime Minister: I do not believe that the internal market matters will be dealt with without that intergovernmental conference, although it would be relevant in the sense that the large number of directives that would need to be issued to complete that internal market would now have to be decided upon by unanimity. One of those proposed treaty amendments at the intergovernmental conference would change the unanimity rule, and I think most of us—I certainly—would wish to keep the unanimity rule on directives which could be quite vital to many of our industries. That is a matter that will be dealt with at the intergovernmental conference and I thought that our proposals, which would not have required treaty amendment, would be better. It is important that the internal market be completed, but I think it can be completed keeping the unanimity rule.
Mr. Nigel Spearing: Can the Prime Minister be a little more specific about the timetable for the proposals under article 236 that she mentioned? Can she assure the House that any proposals emanating from the Council of the EC will be published and will be debated in this House under the usual arrangements before the actual conference takes place?
The Prime Minister: There are at present, as I said, only two proposals for treaty amendment and the hon. Gentleman, who is very familiar with the articles of the treaty, knows that that article has to be invoked first by a particular proposal for an amendment. European Assembly opinion on it has to be obtained and then the European Council has to decide what course to recommend. If, of course, it were to recommend any amendments in the treaty, then of course we should have to have a full debate in this Parliament, if the European Council itself decided to go ahead with those recommendations, but first the European Council, which will meet at Luxembourg at the beginning of December, would, I believe, decide whether it wished to go ahead with any recommendations from that previous conference.
Mr. Teddy Taylor: In welcoming very much my right hon. Friend's firm refusal to support the proposals for European union, may I ask her whether she will not close her mind to the desirability, in the event of the breakdown of the next conference, of allowing the original Six to go ahead with a European union treaty for themselves, if they wish? In regard to what she has said about harmonisation, may we have a firm assurance that there is no question of Her Majesty's Government agreeing to the Commission's plans for the internal market if that involves harmonising VAT and charging VAT on food, electricity and gas?
The Prime Minister: My hon. Friend asked about European union. It is a term that is used very loosely. It causes great confusion. Its meaning is not precise. It means something different here from what it means in the Community. We had two proposals before us in Milan, one from ourselves for a treaty on political co-operation and a Franco-German proposal that was almost identical save in regard to three minor points, entitled "A Treaty on European Union". It was not that at all but an agreement on political co-operation. I usually ask my colleagues not to use this phrase because it causes confusion here.
With regard to harmonisation of taxation, I do not believe that is necessary for completion of the internal market. Of course, we should resist it with all the power and strength at our command.
Mr. Tom Clarke: In view of the right hon. Lady's reference to jobs, can she confirm that she took the opportunity to inform the Community that we in Britain have made enough concessions on steel? Will she therefore confirm today a corporate plan that ensures that we shall have five major plants in Britain, including Llanwern and Ravenscraig?
The Prime Minister: I have no statement to make today about the steel corporate plan. We will let the House know as soon as a decison has been taken.
Mr. Dennis Walters: Was my right hon. Friend able to discuss with her colleagues King Hussein's peace initiatives in the middle east and to ensure that every possible support will be given to him to make some progress in that area?
The Prime Minister: Heads of Government had only a brief discussion about the middle east. As my hon. Friend is aware, we warmly support King Hussein's peace initiative and hope that it will succeed and result in direct

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negotiations between King Hussein's delegation and Israel. I believe that is the view held by a number of other countries in the Community.
Mr. Eric Deakins: Will the right hon. Lady oppose at the inter-governmental conference any amendments to the Treaty of Rome?
The Prime Minister: We must go to that intergovernmental conference and consider what is put before us. The statement I made at the European Council was on the matters before us. I saw no reason for amendment of the treaty.
Sir Anthony Kershaw: Is it not obvious that insisting on constitutional reform before practical changes may risk those practical changes becoming either more difficult or even impossible? Is it not a pity that at this time we should hear fom the Leader of the Opposition nothing but wind, bluster and ignorance?
The Prime Minister: I agree with my hon. Friend. We needed practical changes and we have done a great deal at previous European Councils to make fundamental decisions without changes in the treaty. I thought that the South German News put it rather well this morning when it said that Milan showed the gulf in the Community between wishful thinking and reality. We were on the side of reality.
Mr. John David Taylor: In view of the unanimity requirement of the inter-governmental conference and the advance notice given by several member nations that they are opposed to the items on the agenda, what decisions does the Prime Minister anticipate from that conference that were not already available at Milan, if the opportunity had been taken?
The Prime Minister: I believe that the decisions were available at Milan. They should and could have been taken there. I believe that they will have to come back to Luxembourg to be reconsidered.
Mr. George Walden: Will my right hon. Friend welcome the remarks by the Leader of the Opposition in so far as they seem to imply that we should work for improvement of the Community from within and that this at least is progress since until recently he did not seem to know whether we should be in or out?
The Prime Minister: In so far as my hon. Friend concluded that that was the import of the right hon. Gentleman's statement, I accept that it is welcome.
Mr. Ron Leighton: May I commiserate with the Prime Minister on her humiliating treatment in Milan? Does she accept that the foolish headlines in the press last week about Britain taking over the leadership of the Common Market were just another illusory product of the European dream factory? Is not the Common Market largely a Franco-German benefit society in which our role is to soak up surplus manufactures and dear food? In view of that, should we not draw the appropriate and realistic conclusions?
The Prime Minister: If the hon. Gentleman looks at the documents that are available, he will find that the proposals on the internal market, and the priorities which the European Council decided upon, were those that we put forward to the European Council and which it accepted. He will find that the proposals for closer
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political co-operation are proposals that we put forward and circulated. Those are the proposals which, together with minor modifications by France and Germany, are likely to be accepted. That is really not a bad start. With regard to what else he said about Milan, I do not need to feel humiliated at all. I noticed that Le Monde this morning said:
"The stubbornness of the federalist plan has left a divided Community. They have chosen the very moment when Britain feels itself more European to block her."
Mr. Tony Marlow: Does my right hon. Friend agree that while the Germans and the Italians were federating in the last century, some of the smaller nations of Europe were looking towards setting up a federal Europe. We in Britain are not. Will she confirm that on no account during her premiership will we surrender the British right to the veto?
The Prime Minister: We have fought for the British right to a veto. Where we have unanimity in the treaty, it is inbuilt in the unanimity rules. Otherwise, we still fight for the Luxembourg compromise with one modification only: that when it is used the reason for which it is used, the right of vital national interests, should be clearly expressed. I agree wholly with my hon. Friend that there is no question of a federal Europe.
Mr. Michael J. Martin: The right hon. Lady will be aware that in my constituency 1,400 jobs are to go in the railway workshops. I can go to streets in my constituency where people have not had a decent job in years. Many of my constituents are living in damp houses. Will the right hon. Lady explain how the European Community will help constituencies such as mine?
The Prime Minister: The hon. Gentleman is aware that there has had to be rationalisation of the railway workshops because the carriages in use are of a different design, last very much longer and do not require the same maintenance. As the hon. Gentleman is aware, there is unemployment throughout the European Community, and, in parts of it, it is higher than here. Elsewhere it is lower, although they have factors such as conscription which help their young people considerably. There will be a full report upon that. We are in the middle of technological changes which in themselves cause dislocation in society, and we have to do everything we can to mitigate the effect of those changes on the people who have to endure them.
Sir Anthony Meyer: Is it not now clear to my right hon. Friend that the anti-Europeans want a European union from which Britain is absent, and they are not prepared to pay any price to achieve a common market? Were they to achieve their objectives, would that not bring about the twin political and economic disasters which successive Governments have sought to avoid for 20 years.
The Prime Minister: As my hon. Friend is aware, I believe it is in Britain's interest to be in the Common Market to secure the full working of the treaty, particularly with regard to the internal market and the free movement of transport. It will be to Britain's advantage, not only on the trading side. It will also enhance the influence of Europe throughout the world. I work for both of those things.
Mrs. Anne Clwyd: Did the Prime Minister have the opportunity to investigate the loss of £76

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million from the regional and social funds, money which could have been spent on roads, industrial development and jobs? Her answer will be of particular interest to Brecon and Radnor, because the county in which it is situated receives not one penny from the social fund. Is it because of bureaucratic bungling in Whitehall or in Brussels?
The Prime Minister: The hon. Lady is aware that I have already written about the social fund and some of the applications that have been made from the areas of Wales which she mentions to support those applications.
Mr. Anthony Beaumont-Dark: Does my right hon. Friend agree that if it were not for the strangeness of a by-election on Thursday, the Opposition, who were castigating the Prime Minister today, would be praising her for defending Britain's national integrity and our right to put our country first? Is it not a fact that my right hon. Friend suggested only that we would carry out practical and sensible changes to the working of the Community instead of wasting aeons of time, money and talk on changing the treaty of Rome in a way that we all know will never come about because we will not be federalist? There will not be a change in the veto.
The Prime Minister: I agree with my hon. Friend. The Opposition's temporary conversion to the cause of Europe might be affected because they know the amount of inward investment into Wales by virtue of Britain being a member of the Common Market.
Mr. Bryan Gould: Even though she voted against it, does the Prime Minister propose to attend the conference?
The Prime Minister: It is not a conference of Heads of Government, as I am sure the hon. Gentleman realises. It is a conference of the General Affairs Council which would normally consist of Foreign Ministers. Only at the European Council are there Heads of Government.
Sir John Biggs-Davison: Despite the proposals for a treaty of union, is it not clear that no major Community country is prepared to relinquish its national sovereignty to a federation? Therefore, is it not the case that much Continental criticism of my right hon. Friend and the United Kingdom is hypocritical? Is my right hon. Friend aware of the very great support she has in this country for the practical proposals she has put forward and for her steady advocacy of British and, indeed, European interests?
The Prime Minister: I thank my hon. Friend. Sometimes a lot of the rhetoric spoken about Europe gets in the way of practical proposals. It does not matter which country is involved, when things come up in Europe in which a vital national interest is affected, all countries, in practice, act in the same way as did Germany recently over the price of cereals.
Sir Russell Johnston: Is the Prime Minister aware that her references to a majority of the European Council postponing a decision on decision-making actions is really doublespeak? Will she not accept that the recommendations of the Dooge committee, to which we entered so unnecessary a
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reservation, were not about doing away with the veto but about confining its use to genuinely vital national interests? That is not something like cereal prices. Difficult job as it is, the best way of achieving this is through an inter-governmental conference, as my right hon. Friends urged her to do in an early-day motion in April. How can she assure us that she will go to the conference in a constructive frame of mind when she has already said on BBC radio that it will fail? If it fails, it will be because she has made it fail. We shall be further isolated and will not achieve either budgetary discipline or the reform of the internal market. To say that only the Danes, the Greeks and ourselves understand reality is absurd.
The Prime Minister: The Luxembourg compromise is not part of the treaty and never has been. We were proposing changes in the Luxembourg compromise, not in its veto power, but that if that veto power were used the reasons should be set out clearly. The Luxembourg compromise has never been a part of the treaty and we do not need an inter-governmental conference to modify, to keep or to change it. The hon. Gentleman has got it quite right.
Mr. Hugh Dykes: Does my right hon. Friend agree that she has substantial support in other member states for her approach of practical steps? Despite the difficulties, this is a developing and robust community with social, political and economic objectives, and we should play our full part in that and resist the temptation to isolate ourselves as we have always done in the postwar years. We should make sure that we join in fully and avoid the dangers and risks now after the very exhausting struggle over the United Kingdom budget contribution. We should avoid yet another debilitating struggle between "us and them" on taking the Community further forward on structural developments.
The Prime Minister: I agree that we need a step-by-step approach, but if my hon. Friend looks at the documents he will find that that is exactly what we had. We also had a balanced approach. We made proposals on completion of the internal market. We got the priorities right. That was the economic side, and that will help with jobs. We made proposals on political co-operation. That is a modest description, but it was political co-operation. That got a good deal of support, and it was a pity that we did not go through those proposals clause by clause and complete them. They do not require a change in the treaty, and they do not need to go to an intergovernmental conference. We also made proposals on how to make decisions better without changing the treaty. Therefore, we have the economic side, the political side and the institutional side. It was a very balanced package, and many people regret that it was not fully accepted.
Mr. Dennis Skinner: Does the right hon. Lady accept that ever since she became Prime Minister she has preached to the House and the nation about the need to save money? At the weekend when she was interviewed on television and radio, and when it was said that she was in a fury, she said that the intergovernmental conference was a complete waste of time. Does she accept that if local councillors went to a conference which, beforehand, had been announced as a complete and utter waste of time, they would be wasting ratepayers' money? If this

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intergovernmental conference is a waste of time—to use her words— why is she sending someone? Who will foot the bill? Surely it is time that the Prime Minister added up the total of all these conferences. Four years ago she said that coal production in the Common Market would be doubled, but ever since pits have been shut in nearly every country. Surely to God it is time that the right hon. Lady reckoned up the total cost of this Common Market catastrophe? Instead of wittering on, should not we be coming out altogether?
The Prime Minister: I am afraid that fury is the only emotion that I am allowed by the press. It is rarely true, and I should be utterly exhausted if it was heard half as often as they say. We were disappointed, but that is hardly fury. I do think that the intergovernmental conference is not necessary. After all, that is exactly what I have said the whole time. We could have reached decisions at Milan, and the hon. Gentleman should address his remarks not to me but to my colleagues.
Mr. Ivan Lawrence: While the imminent possibility of a visit to this country by a joint Jordanian-Palestinian delegation will be most welcome to all of us who care about peace between Israel and its Arab neighbours, will my right hon. Friend make sure that it does not include any representatives of the Palestine Liberation Organisation, otherwise the impression might get about that, for us, terrorism is respectable and can sometimes be rewarded?
The Prime Minister: My hon. Friend knows my views on terrorism. He will also be aware that at present on the West Bank there are people who, although members of the PLO, have roundly and strongly condemned terrorism. For example, several of the mayors of some of those cities have strongly condemned terrorism, and we must try to strengthen the hand of those people.
Mr. Andrew Faulds: Instead of having a tiny tantrum after her failure in Milan, as the Prime Minister appears to have done, would not it be better for Britain if the Government were to commit this country to a European future by attending the intergovernmental conference at the highest level and by accepting whatever amendments to the treaty may be necessary to get European agreement? Otherwise does not the right hon. Lady understand that Britain will become increasingly insignificant in Europe and will end up as a minor country in the second or third tier rank of the Community?
The Prime Minister: No. I would have thought that the hon. Gentleman would have had more regard than that for Britain's interests. There are 10 partners in the Community and there will shortly be 12. To get on best together in the Community as a whole, we must each respect the interests of others and go forward by trying to blend those interests together rather than disregarding them.
Mr. William Cash: I congratulate my right hon. Friend on her pragmatic and balanced approach to the Milan conference. Lest the voters of Brecon and Radnor have not taken note of it, does she accept that the alliance is indeed in significant disarray over the use of the veto in Europe in that the right hon. Member for Plymouth, Devonport (Dr. Owen) insists upon the use of the veto
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even to the point of amendments to the treaty, whereas the leader of the Liberal party is pressing continuously for a federal Europe?
The Prime Minister: They always seem to be in disarray and say what suits their needs at the time.
Mr. Clive Soley: Did the Prime Minister raise the question of the extradition of the Italian terrorists? If not, what will she do about it? Did not she get into difficulties in Europe because she wanted some economic integration whereas the others wanted political unity? Is she trying to pretend that economic integration does not ultimately lead to political federation?
The Prime Minister: No, the extradition of Italians did not come up in a Community context. I have made it perfectly clear that I am absolutely against a federal Europe, and so, I believe, are the overwhelming majority of our partners in Europe. There is no question of it.
Mr. Nigel Forman: As it is likely to be 35 years after the signing of the treaty of Rome before the Community eventually achieves the objective of a fully free and internal market, does my right hon. Friend recognise that there are powerful arguments for putting our maximum weight behind the initiative of Lord Cockfield and others? In that context, will she consider moving towards full British participation in the European monetary system?
The Prime Minister: It is important to get the internal market complete. We have quite a programme and have set a date of 1992. I do not believe that it would be advisable for this country to join the exchange rate mechanism of the European monetary system at present, but we belong to the European monetary system.
Dr. Norman A. Godman: What role will be assigned to Spain and Portugal at this conference? If they are to participate passively or actively, what is the likelihood of the Gibraltar issue being raised informally with the right hon. Lady?
The Prime Minister: I see no reason why the Gibraltar issue should be raised in that context at all, and I do not believe that it will be. If the hon. Gentleman looks at the article under which the intergovernmental conference is called, he will see that the conference will consider only the specific amendments to the treaty that have been proposed. As I have said, only two have been proposed, and they were proposed by the Commission. The position of Spain and Portugal is for the presidency during the coming six months, but it was indicated that Spain and Portugal would attend that intergovernmental conference, as any recommendations that came out would affect them. They will probably be at the next European Council, as they were present at this one, as observers.
Mr. Eric Forth: In adding my support to those who have welcomed the Prime Minister's vote against this unnecessary conference, may I ask my right hon. Friend, nevertheless, to say whether the terms of reference of the conference are those set out in the Dooge report, which was the main vehicle in recommending the conference—in other words, that the mere holding of such a conference would in itself be the first step towards so-called European union?
The Prime Minister: No. We spent a long time on the amendments that were to go to an intergovernmental conference. Only two amendments have been proposed, one on equivalence of qualifications and the other relating to the unanimity rule on directives. Germany disagreed that a third commission proposal on tax harmonisation should even go to the conference, and, had Germany not disagreed, we would have raised the matter as well. Therefore, this conference will have a very limited agenda. I am not sure whether the presidency, which for the next six months is held by Luxembourg, will then admit proposed amendments from either member Governments or the European Assembly. That will be a matter for the presidency.
Mr. Robert Maclennan: If the Prime Minister put forward her proposals for improvement of decision-making in the belief that they were practical rather than vague aspirations, will she take the same view about them if they are proposed as treaty amendments and not merely resist, because other countries would prefer to see these practical proposals embodied in a revision to the treaty?
The Prime Minister: They do not need or require an amendment of the treaty. There would be a considerable advance in practice, which would mean considerable progress in the Community. None of them needs an amendment of the treaty.
Mr. Harry Greenway: Does my right hon. Friend accept that the announcement that there is to be intergovernmental co-operation against terrorism is unanimously welcomed? Can she say how soon the new measures will be in place and, if possible, what they are likely to be and whether Greece will accept them?
The Prime Minister: Co-operation against terrorism goes far wider than the Community. It includes the economic summit nations but goes wider than that, and includes the Council of Europe. We did not discuss widely what those measures are. However, I can assure my hon. Friend that we co-operate and that we are trying to step up the safeguards, particularly at airports, for aircraft in flight and at the airports where those aircraft call. It is best to say no more than that.
Mr. John Stokes: Is my right hon. Friend aware that although in recent months I have increasingly had serious doubts about the European Community, I differ from those of my hon. Friends who criticise the European Community because I am bound to ask myself whether I should do any better in my right hon. Friend's seat, or whether they would do any better, or whether any other hon. Member would do better. I think not.
Hon. Members: Hear, hear.
The Prime Minister indicated assent.
Mr. Tim Yeo: Can my right hon. Friend say whether, during the weekend in Milan, any of her European counterparts sought her advice about those policies that have led to Britain enjoying a faster rate of economic growth than any other member of the Community?
The Prime Minister: I cannot say that we spent a very long time discussing that matter. Nevertheless, one of the reasons for completing the internal market and
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technological co-operation is that it can lead to increased growth, an increased standard of living and an increase in the number of jobs. That is a matter that affects greatly all Community states.
Mr. Henry Bellingham: When my right hon. Friend was in Milan did she have an opportunity to ask about the European Commission proposal that payments should be made to certain officials to take early retirement because of the accession of Spain and Portugal to the Community? Is she aware that those payments might cost more than £70 million a year? Why should the British taxpayer pamper these spoiled Eurocrats?
The Prime Minister: The proposals are still under consideration. My hon. Friend will not be surprised if I say that we wish to keep these payments as low as possible.
Mr. Jonathan Aitken: Now that my right hon. Friend has faced the reality in Milan of her European partners' disappointing response to the British initiative, does she not think that the time has come for this country to adopt for the first time a constructive approach to President Mitterrand's proposals for a two-speed Europe? Quite apart from the practical advantage of looking at the options of such a policy, has my right hon. Friend considered that at Brecon and Radnor and in many other contests the slogan "Going Slower in Europe" might be popular?
The Prime Minister: I am afraid that I must disagree with my hon. Friend. I do not believe that there should be a two-speed Europe, nor do I believe a great deal of the rhetoric that sometimes emerges from these meetings. The reason is that when we look at specific examples and specific cases most countries take into account their own interests and their accountability to their sovereign Parliaments. In reality I do not think that there is anything like so much difference between us as sometimes appears at the end of these meetings. I pointed out to some of my colleagues in the Council that this country's record in obeying the laws of Europe before the European Court is one of the best. For example, in the European Court Italy faced six times as many actions for infringing the law as the United Kingdom, that is 76 actions. France faced about four times as many infraction proceedings as the United Kingdom, 45. Belgium faced three times as many, 37. Only Denmark faced fewer cases than the United Kindgom. Denmark and the United Kingdom have been best, and Denmark and the United Kingdom stuck together at Milan.
Mr. Budgen: Is not the extension of the practice of majority voting at least a small step towards a federal Europe?
The Prime Minister: No, Sir. As my hon. Friend is aware, majority voting is already provided for in the treaty. There are occasions when that suits us, and obviously there are occasions when it does not, but we have not suggested a change in the treaty.
Mr. Neil Hamilton: Has the Prime Minister noticed that the right hon. Member for Islwyn (Mr. Kinnock) failed to come up to his usual standard in his question this afternoon? Is that because his minder, the hon. Member for Livingston (Mr. Cook), is not here to tell him what to say? In view of my right hon. Friend's

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welcome commitment to oppose moves towards European federalism, what does she have to say about the statement on page 33 of the Dooge report, that
"a conference of heads of state or Government to negotiate a draft European treaty would represent the initial act of European union"?
The Prime Minister: That was the majority view of the Dooge committee, not ours. Once again it comes down to the use of the phrase "European union", which to this country means European federation; but it does not mean that in Europe. They are as much against a federal Europe as we are. I wish that we could drop the phrase "European union".
Mr. Richard Hickmet: Does my right hon. Friend agree that one of the most serious international trading issues facing the European Community is the current trade imbalance with Japan, which is running, I believe, at £10 billion this year? What discussions did she have with her colleagues at the summit? Is there any prospect of action being taken to reduce the imbalance in bilateral trade between Europe and Japan to deal with Japan's international trading tactics? If the representations to Mr. Nakasone are ignored yet again, what will be done?
The Prime Minister: Mr. Nakasone is making a visit to Europe and also to the European Commission. It was suggested at the European Council that Japan should adopt a specific target for imports to ensure that there is some means of examining how well she is doing in practice in making reductions in her balance of trade surplus and should revalue the yen so that it alters her competitive position with other countries. We shall have to consider whether to put up barriers to Japanese goods if she is not prepared to open her market to our goods, as we are prepared to open our markets to hers.

European Council (Milan)

  WELSH AFFAIRS
  Ordered,
  That the matter of Education and Training in Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for their consideration.—[Mr. Neubert.]

  STATUTORY INSTRUMENTS, &C.
  Ordered,
  That the Fish Producers' Organisation (Formation Grants) (Amendment) Scheme 1985, be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Neubert.]

Heathrow (Jokes)
4.27 pm
Mr. Ian Lloyd: On a point of order, Mr. Speaker. I seek your guidance. Nobody will be more aware than you of this House's jealous regard for its prerogative and privilege to consider, pass and monitor the administration of the laws of the United Kingdom. Therefore, it was a matter of the gravest concern to many hon. Members to discover that a comparatively minor official could apparently make a statement over the weekend declaring it to be an offence and a crime in the United Kingdom to make a joke at Heathrow and that within 24 hours two courts, one at Aberdeen and the other at Uxbridge, could impose fines of £1,500 and £150. Is not this a matter that the House should consider at once?
Mr. Speaker: Order. It is not a matter for me. In this country, we live under the rule of law.

Education (Cost of School Transport)
4.28 pm
Mr. Patrick Nicholls: I beg to move,
That leave be given to bring in a Bill to require a local authority to meet the travel costs of a child attending a school where the parents have nominated a school other than that chosen by the authority providing the necessary criteria are met as regards the age of the child and the distance to be travelled and subject to certain limitations or distance.
The Bill would make certain provisions for local education authorities to provide free school transport for those children whose parents had exercised their right under section 6 of the Education Act 1980 to nominate a school of their preference. This would be subject to two conditions being met. First, the present criteria of the age of the child and the distance of the child's home from the school would have to be satisfied. Secondly, the school chosen by the parents would have to be within the area of either their own or an adjacent local education authority.
The law relating to the provision of school transport is far from clear. For some time past there has been considerable speculation about precisely what is the obligation of local education authorities towards school transport.
The commonly accepted position is that the combined effect of section 56(1) and (2) and section 39 of the Education Act 1944 is that a local education authority is under a duty to provide free school transport for children who live beyond walking distance to attend the nearest suitable school. "Suitable" in that context is taken to mean suitable in terms of age, aptitude and, where appropriate, sex and religious denomination. Walking distance for a child of eight or under is two miles and, for a child above that age, three miles.
The significance of free transport can be readily seen in the context of Devon, the third largest shire in England. Third only to north Yorkshire and Cumbria, it covers about 2,500 square miles and has about 8,125 miles of roads, twice the mileage of any other county.
Before the passing of the Education Act 1980, disputes in Devon about the circumstances in which free transport should be available could have presented themselves only where the parents were of a specific religious denomination. The passing of the Education Act 1980 changed all that. Section 6 gave parents the right, subject to some safeguards, to have their children educated at a state school of their choice. The question that immediately arises is whether, when all the other conditions are met, the local authority can be compelled to meet the cost of school transport for those who exercise their rights under the Act.
There is an argument in logic, though not in reality, that the state should not have to provide free school transport. Although a parent has a choice about where he wishes to live, this country has had compulsory state education for well over a century, and no reasonable person would seriously question the state's obligation to provide free school transport in appropriate cases. A citizen's ability to exercise his right is therefore dependent upon his having the financial resources to do so, and that cannot be right.
The problem was not unforeseen. In one of their proposals for what eventually became the Education Act 1980, the Government tried to change the law to provide what in their view would have been a fairer system. Under those proposals the local authorities would have been able

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to arrange school transport and charge for it at a flat rate, while offering it free where there was genuine financial hardship. It is a matter of history now that those proposals were defeated in another place. I doubt whether the ramifications of what was done would have been fully appreciated at the time.
In a statement of guidance issued on 15 December 1981, the Department of Education and Science pointed out that the law relating to the provision of school transport and the payment of travel expenses had not been changed, although the Secretary of State asked LEAs to consider offering free or concessionary transport, or to pay travelling expenses for children whose parents succeeded in obtaining a place for them in a school not considered to be the nearest appropriate one to their home, provided that the distance requirements were satisfied. In so far as one can generalise, LEAs were apparently appalled by that suggestion.
The present position can no longer be tolerated. Section 55(1) of the Education Act 1944 imposed a duty on LEAs to make such arrangements for the provision of transport "as they consider necessary". Are we now to have two classes of school — those considered by the local authority to be necessary and those chosen by parents in the exercise of their statutory rights under section 6 which are in some way considered to be unnecessary? To put it another way, LEAs are under an obligation to provide transport to the nearest appropriate school, and normally that would mean that the LEA had arranged for the student to attend what it would regard as being the nearest appropriate school. Are we now saying that if a parent is successful at first instance or on appeal in nominating a school under section 6, that is not to be considered as appropriate? That is the way in which the law is being interpreted at present. Devon county council regards the appropriate school as being the one that it chooses, and that position has been echoed by other LEAs.
A number of LEAs have emphasised that a lack of free transport to other than the nearest appropriate school—as decided by them—was a factor that should weigh heavily with parents when stating their preferences.
Inevitably, in a completely unsatisfactory position anomalies abound. It would be possible for a parent to choose a school that was nearer than that chosen by the
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authority, so that at first sight the local authority would make a saving, only to find that the local authority would make a far bigger saving because it would not contribute. It would be equally possible for a parent, who lives just inside the border of his own LEA, to choose a school that was just the other side of the border, still sufficiently far away, apparently, to qualify for free transport, and to find that it would, nevertheless, be nearer than the nearest appropriate school within his own LEA area.
Hon. Members will be aware that the case of Rogers v Essex County Council is presently under appeal. That case is of course sub judice. In any event, it deals with a far narrower point — the considerations that may be taken into account in deciding the length of the route to the appropriate school. The Bill, while modest in its intentions, is more radical than that. It would ensure that in a matter of fundamental interest to us all no child is deprived of his rights merely because his parents cannot afford to exercise them.
I have no pride in authorship. There will be matters that hon. Members will wish to consider in Committee. Hon. Members might want to qualify the reference to an adjacent LEA by reference to a prescribed distance within that LEA. Important though that is, it would be a point of detail.
I have presented a measure that commands support from the two principal Opposition parties. It is a Bill that would remedy an injustice which, if not widespread, is significant. For that reason, I ask that I be given leave to introduce my Bill today.
Question put and agreed to.
Bill ordered to be brought in by Mr. Patrick Nicholls, Mr. Roger Gale, Mr. Richard Hickmet, Mr. Gerald Bermingham, Mr. Alex Carlile and Mr. Tony Speller.

Education (Cost of School Transport)
  EDUCATION (COST OF SCHOOL TRANSPORT)
  MR. PATRICK NICHOLLS accordingly presented a Bill to require a local authority to meet the travel costs of a child attending a school where the parents have nominated a school other than that chosen by the authority providing the necessary criteria are met as regards the age of the child and the distance to be travelled and subject to certain limitations on distance: And the same was read the First time; and ordered to be read a Second time upon Friday 5 July and to be printed. [Bill 178.]
Opposition Day
[I8TH ALLOTTED DAY] [FIRST PART]
Opposition Day

  National Health Service
  Mr. Speaker: I must announce that I have selected the amendment in the name of the Prime Minister.
  4.36 pm
  Mr. Michael Meacher: I beg to move,
  That this House condemns the net reduction of 13,000 hospital beds in the National Health Service since 1979; anticipates with alarm a further loss of beds, especially in view of the inadequate provision for the elderly, the chronically sick and the mentally ill; deplores the Government's insistence that the nurses' pay award be funded at the expense of health service jobs or with cuts in services to patients; considers that these policies, together with the huge rise in unemployment, the cuts in housing investment, the weakening of health and safety controls and reductions in research funding are undermining the health and well-being of the nation whilst being neither efficient nor compassionate; and calls upon the Government to halt its policies of privatisation, promotion of private health care schemes and cuts in provision in order to provide patients and medical, nursing and ancillary staff in the Health Service with the means of gaining and administering improved treatment more quickly.
  Those who 37 years ago this week founded the National Health Service—the greatest monument to Socialism, which is enduringly prized and valued by the overwhelming majority of British people, like most doctors today, let alone most patients — are deeply disturbed by the almost unrelieved catalogue of cuts that has been the history of the NHS for the past few years.
  Mr. Sydney Chapman rose——
  Mr. Meacher: The hon. Gentleman should contain himself until he hears the trend of my speech.
  It is not just money that is involved. I agree with the Government that the criterion for judging the Health Service is not and should not be the level of expenditure alone. I stress the word "alone". It is the adequacy and quality of medical care, in the widest sense, and its distribution strictly according to need without barrier of income, class or geography. On those criteria, the Government claim that the NHS is safe in their hands. They even issued a leaflet in January of this year entitled "The Health Service in England" to prove it. That leaflet was misnamed. It should have been entitled "Selective Fibs and Fowler's Howlers".
  The flagship of the Government's defence in that leaflet —no doubt it will be repeated today by the Minister for Health—was that there had been a 12 per cent. increase from 1978 to 1983 in the number of in-patient cases. For misleading propaganda, that takes the biscuit. First, that may merely reflect the fact that more people are ill under this Government, as a result—[Laughter.] Before hon. Gentlemen laugh, perhaps they will listen to the consequences of their actions — of the trebling of unemployment, the halving of housing investment, the doubling of poverty, the weakening of controls over health and safety at work, and the huge extra burden placed on women forced involuntarily by the Government to care, unpaid and unsupported, for ill or elderly relatives under the fiction of community care.
  204
  Secondly, it involves no credit, even if true, to the Government. It simply is an index of overworked nurses, ancillary workers and doctors. But, thirdly, it is not even true. It is a measure not of more in-patient cases but of episodes—the number of discharges from hospital added to the number of deaths in hospital. Indeed, if more people die in hospital or more people have to be readmitted twice or more in the same year, that is scarcely an indication of greater medical progress.
  The leaflet says that 35 new hospitals have been built. What it does not say is that 220 hospitals have been closed. The leaflet says that 11,000 new beds have been brought into service. What it does not say is that the overall average number of available beds in the National Health Service has decreased by 12,900. The leaflet says that waiting lists have been reduced since 1979 by 8 per cent. What it does not say is that every other comparison made in the leaflet is with 1978, and that on that basis waiting lists have increased by 15 per cent.
  The leaflet says that there are more nurses and midwives working in the National Health Service. What it does not say is that most of that is accounted for by the reduction in the working week which automatically increases the number of whole-time equivalents in post and the rest of the increase, given that the birth rate has increased by about 5 per cent. over these same years, is no more than necessary simply to keep pace with extra demand and so on. Far from the National Health Service being safe in Tory hands, not even National Health Service statistics are now safe in Tory hands.
  Mr. Chapman: Anxious as I am sure the hon. Gentleman is that there should be a constructive debate on the National Health Service, will he recognise that under this Government resources in the National Health Service have increased by 20·5 per cent. in real terms, measured against the retail price index? Is he saying that, had a Labour Government been in power, the resources would have increased beyond that point?
  Mr. Meacher: Will the hon. Gentleman also take note that the RPI is an extremely inappropriate indicator of the growth of National Health Service resources, as the Minister of State will be the first to admit, because National Health Service pay and prices increase faster than the RPI? When that is taken into account, and 1 per cent. extra resources are needed each year over and above inflation because of the greater number of elderly people, plus an extra 0·5 per cent. over and above inflation for the costs of medical technology, he will realise that the increase, if it exists at all, is almost nothing. But that is the past, with which I will deal later.
  One does not have to be a statistician to know that things are going badly in the National Health Service. Just ask anybody in the street. Ask the 3·5 million people living in north and west London, Hertfordshire and Bedfordshire, where more than 2,000 beds and nearly 5,000 Health Service jobs are to go in the next 10 years in order to cut no less than £47 million from the budget of the north-west Thames area. Ask the 180 patients on Guy's hospital waiting list for open heart surgery who were told that the quota for operations was already overshot so they would have to wait until the end of a financial year. I know that they were reprieved at the last moment by a private donation from America, but the National Health Service should not have to depend on private philanthropy from

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  wealthy foreigners. If the Government are so keen on private charity, why do they not cut defence expenditure in the way that they have cut expenditure on the National Health Service and introduce instead some flag days for Trident?
  Mr. Patrick Nicholls: Does the hon. Gentleman not realise that the picture which he is painting was completely contradicted last year by a publication called "Cost containment in health care"? It is clear from that publication that the picture which the hon. Gentleman is painting of increased queues and cuts is completely wrong. That publication was not written by a Tory supporter but by Professor Abel-Smith, a former special adviser to two Labour Secretaries of State. Is the hon. Gentleman going to address that sort of evidence as well?
  Mr. Meacher: I suggest that the hon. Gentleman should ask members of the public what they feel about the state of the National Health Service. He should ask them whether they feel that the National Health Service in their area is expanding or contracting. I do this regularly and each experience leads me to believe that there has been a continual catalogue of cuts, that 220 hospitals have been closed, that the number of beds — even taking into account the extra beds that have certainly been created —is decreasing and that the National Health Service is in decline. That is the national view, and it is correct.
  Mr. Dennis Skinner: Will my hon. Friend remind the Tories, when they talk about facts in the National Health Service, that 1,000 people died last year because they could not get a kidney machine in this starved Health Service? They did not get a reprieve. Two thousand people died of cervical cancer. They did not get a reprieve. Five thousand people died of breast cancer. They did not get a reprieve. Those are facts that have been brought about because the Government are prepared to spend more money on Trident, cruise missiles and so on than they are on the National Health Service. Those are the real facts.
  Mr. Meacher: My hon. Friend is absolutely correct. Indeed, he anticipates much of my speech. I therefore suggest that Conservative Members might ask the views —this is precisely the point my hon. Friend has been making—of the 1,000 women who, as my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) has very tellingly revealed, die needlessly each year because the Government have lamentably failed to establish a national comprehensive call and recall system for cervical cancer screening, or ask the views of those patients, often in pain and discomfort, who have to wait for more than a year to get treatment. According to the College of Health, there is no less than 75 per cent. of patients needing orthopaedic treatment in Southampton today, 62 per cent. of patients needing gynaecological treatment in Northamptonshire, 71 per cent. of patients needing ENT treatment in Grimsby. They should ask the views of patients who die of old age before they can get to the top of the hip replacement waiting list.
  Mr. Kenneth Hind rose— —
  Mr. Meacher: I am suggesting—[Interruption.]
  Mr. Hind rose— —
  Mr. Deputy Speaker (Mr. Harold Walker): Order. It is quite clear that the hon. Member for Oldham, West (Mr. Meacher) is not giving way.
  Mr. Meacher: I am suggesting the number of persons whom right hon. and hon. Conservative Members might find it profitable to consult about their attitudes towards the National Health Service today, because their attitudes are very clear. The Minister might like to ask for the views of the parents of some of the 6,000 premature babies born each year who need intensive care to survive, but who are turned away because financial cuts prevent the employment of sufficient nurses to look after them; or, as my hon. Friend, the Member for Bolsover (Mr. Skinner) rightly said, the 1,500 kidney patients who each year have their death warrant signed when they are denied access to the kidney dialysis machines that they need to keep alive.
  Mr. Douglas Hogg rose——
  Mr. Meacher: These people are denied assistance on the ground that insufficient money is available to provide all the machines which are needed, while at the same time the Government are spending £13 billion on the Trident nuclear weapons system. I could go on with examples, because the list of cuts and those affected is indeed a long one.
  Mr. Hogg: Will the hon. Gentleman give way?
  Mr. Meacher: The hon. Gentleman is not normally seen as one with much experience of the NHS but, as he is pressing me, I shall give way.
  Mr. Gregor MacKenzie: On a point of order, Mr. Deputy Speaker. Would you remind hon. Members that it is the normal convention and courtesy of the House to listen to other hon. Members who are speaking? If hon. Members choose to intervene, as the hon. Member for Grantham (Mr. Hogg) is doing, they should be present at the beginning of the debate. That is a convention of which most of us approve, and we should like hon. Members to be reminded of it.
  Mr. Deputy Speaker: I do not know how hon. Members regard the conventions of the House. The hon. Member for Oldham, West (Mr. Meacher) did give way to the hon. Member for Grantham (Mr. Hogg).
  Mr. Hogg: Why does the hon. Member for Oldham, West (Mr. Meacher) spend such a long time grumbling about expanding waiting lists when he supported the strikes that contributed to their expansion?
  Mr. Meacher: The Government should recognise that £50 a week is a disgracefully and unacceptably low wage for any person when the average wage is £160 or £170 a week. The hon. Gentleman should recognise that we are defending a principle of minimum pay. If he has any decency, he would regard that as a sum that other people deserve to have.
  Mr. Jeremy Corbyn: Is my hon. Friend aware that many NHS workers, despite being the lowest paid workers in the public service, have sought first and foremost in every dispute that they have had with their employers to defend the NHS and its service, despite the Government's efforts to split health workers from the NHS and from the patients that they are there to look after?
  Mr. Meacher: I must make progress with my speech. I shall confine myself to one point. For all the reasons that

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  I have given, we insist, in contrast to the Government, that, although better value for money is desirable and should be striven for, it is not and never can be a substitute for adequate funding. The Government have preferred to lavish huge increases in real expenditure on defence and law and order, even if it means starving the NHS.
  The Government like to pretend that they have safeguarded the NHS, but their figures show that they have not. According to the Government, between 1978–79 and 1984–85 real input volume expenditure — which is a relevant measure—on hospital and community health services grew by 5·7 per cent. The Government have estimated that, over the same period, demographic changes increased the demand for hospital and community health services by 4·7 per cent. and that the implications of technological advances involved a further 3 per cent. increase in expenditure — a total of 7·7 per cent. Because hospital and community health services expenditure has not been increased over the past six years to keep up with the dual demographic and technological pressures, we are right to insist that NHS spending has been cut in real terms since 1979. That is all according to the Government's data.
  The figures given to me three weeks ago on 7 June by the Minister of State revealed that, in five of the six years under this Government, real expenditure in terms of NHS pay and prices has declined in comparison with demographic and technological demands. I hope that Conservative Members note those facts, because they are the Government's case.
  Sir Peter Hordern: The public expenditure White Paper contained a series of measurements of efficiency and output in the NHS. There are 24 separate measurements of activity in the NHS. Can the hon. Gentleman mention a single one in which the record is not substantially better than it was in 1978?
  Mr. Meacher: Certainly — the one that I was quoting, which is table I from the DHSS's evidence to the Select Committee on Social Services whose fourth report for 1983–84 was entitled, "Public Expenditure on the Social Services".
  That is the past, but the future is bleaker still. The Government's public expenditure White Paper reveals that the proportion of the nation's resources spent on health will decrease over the next few years. By 1987, the Government may well be spending not even the present inadequate 5·7 per cent. of GDP—which compares with 8 per cent. for France and Germany and 9·5 per cent. for America—but probably less than 5 per cent. That is the measure of the shortfall in expenditure on the NHS under this Government, when each 1 per cent. of GDP amounts to £3·4 billion. If we instead spend the same proportion of national resources on health as the United States, there would be an extra £14 billion in the Health Service budget this year. I am not saying that that can be done immediately, but it is a measure of the shortfall and puts into perspective some of the Government's niggardly penny-pinching on the NHS.
  The Government have one more shot left in their locker. They like to insist that efficiency savings—or cost improvement programmes, as I think they are now equally euphemistically called—have added considerably to the resources available for health care. Last year, that amounted to £100 million, which is 0·5 per cent. of
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  the total NHS budget. What is so specious about that argument is that these so-called savings are often achieved at the expense of reductions in maintenance and repair work, land sales and the postponement of new projects. In other words, savings are secured today but only at the expense of storing up greater problems tomorrow. That is especially serious for the NHS which, unlike industrial corporations, makes no budgetary provision for capital depreciation. The need to replace buildings and equipment as they wear out is becoming an increasing burden on the same budget that pays for new developments.
  We are witnessing what operation candle-ends has brought us. Morale among staff has plummeted. Last week, the Nursing Mirror published a stress survey which stated:
  "The replies came thick and fast showing many nurses feel overtired, inadequately trained and unsupported in the current climate of NHS cutbacks."
  It reported that, in the past year—[Interruption.] I hope that Conservative Members will pay attention to what nurses feel, because they are the backbone of the NHS. The Nursing Mirror reported that, in the past year, two out of every five qualified staff had often reported to a senior member of staff that resources or staffing were dangerously low. It reported also that one in every three learners said that they often had been left in charge of a ward with no qualified staff present. That is intolerable.
  An equally serious consequence of operation candle-ends is that no, or virtually no, new funding is ever made available for the whole range of new needs that are steadily uncovered—for research and treatment to counter AIDS, for well women's clinics, for the build-up of a genuine community care network of services, for preventing fresh outbreaks of legionnaire's disease, for a proper cervical screening recall scheme, for strengthening primary health care where it is needed in the inner urban areas, for containing and treating the spread of hard drugs, for reducing class differentials in infant mortality which are still far too wide, and so on.
  Dr. Brian Mawhinney: I am grateful to the hon. Gentleman for giving way. He knows that I always listen carefully to what he has to say. The hon. Gentleman has produced what he believes to be a compelling catalogue of alleged cuts in services and a catalogue of areas in which he believes that the Government are guilty of not providing resources. How many of those things would he intend to put right if he became a Minister and how much extra money would he plan to spend on doing so?
  Mr. Meacher: The Opposition have made it clear that we would not have increased defence expenditure by 3 per cent. in real terms for the past six years. If that money had gone to the Health Service, there would have been about £3 billion extra health provision. We would redistribute from the rich to provide public services for all citizens. We are also committed to reducing the dole queue by at least 1 million within a five-year period. That would release a further £7 billion to £10 billion.
  A candle-end philosophy gives no leeway for redressing long-standing grievances such as the unduly low pay of nurses and ancillary workers without drastic redistributary consequences for the rest of the Health Service, which is already stretched to breaking point. It is moral blackmail to insist that a 5·6 per cent. pay award to nurses, inadequate though it is, shall be funded in as much as it

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  exceeds 3 per cent. either by cuts in nurses' jobs or by cuts in services to patients. For most district health authorities this will mean a budget reduction next year of between £1 million and £1·5 million. That cannot be achieved without a significant and damaging reduction in services to the public.
  In Brecon, such a reduction would have led to the closure of St. David's geriatric hospital, but this hospital was mysteriously reprieved three weeks ago. It appears that a by-election is the only device known to man which offers protection against closures by the Government—a by-election which the Tories look like losing. I hope that the electorate is aware of that.
  It is no accident that the Government have adopted this candle-end policy towards the NHS. Such a policy deliberately opens the way for the Government to hive off the Health Service bit by bit to the private sector and to create a two-tier service. That is the whole purpose of Toryism. Such a policy allows the Government to commercialise the NHS and to appoint bankers as general managers, as the Secretary of State did in West Sussex; to appoint business men instead of general practitioners as chairmen of family practitioner committees, as the Secretary of State did in Newcastle; to flood health authorities with Tory party hacks, as the Secretary of State has done almost everywhere; and to appoint as chairman of the new NHS management supervisory board Mr. Victor Paige who, at his first press conference, said that he and his family never used the NHS because they had private health insurance. When Mr. Paige was asked what he knew of NHS management, he replied that he had been chairman of the National Freight Corporation and the Port of London Authority.
  The Government's policy is ugly and has ugly consequences for the NHS. Widespread corruption in private medicine has been revealed by the Comptroller and Auditor General, and standards have been skimped in many privatised services. There is profiteering by Tory Members from consultancies or directorships in companies now making lucrative pickings in the Health Service market. Indeed, the list of those with a place on the privatisation gravy train reads like a roll call of the modern parliamentary Tory party. We despise such a philosophy.
  Mr. Keith Best rose——
  Mr. Meacher: The Government are soft on private medicine. They have built up the private sector so that it now undermines the National Health Service. Our commitment is wholeheartedly and unequivocally to support a Health Service which provides the best possible medical care for all citizens, not just a privileged and pampered few. The Government are obsessed with cost cutting and with greater managerial efficiency even if the patient dies. Our commitment is to a new, wider vision of health care with more emphasis on prevention and public education. The Government have ruthlessly deployed patronage to destroy democracy in the National Health Service and they have centralised decision making in Whitehall. Our commitment is to a new democratic structure which will make local management and local services directly accountable to the local electorate.
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  The Government have done their best to dismantle the NHS. Our commitment is to making it once again the provider of the best possible medical care in the western world—and that is what we shall be voting for tonight.
  5.5 pm
  The Minister for Health (Mr. Kenneth Clarke): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  'applauds the improved levels of service to patients achieved by the National Health Service and its staff under this Government; congratulates the Government on making this possible through its record of increasing expenditure on the Service; welcomes the fact that improved levels of service have been achieved while the pay of nurses has been raised by 23 per cent. in real terms; and supports the Government's determination to ensure, through improved management and greater efficiency, that maximum benefit is derived for patients from the resources available to the Service.'
  I am sorry that the hon. Member for Oldham, West (Mr. Meacher) gets such a rough ride when understandably he is in a rather more subdued mood than on previous occasions. It should be obvious to him that he is causing increasing annoyance by wheeling out the same speech and the same motion so regularly. I suspect that he is also causing increasing tedium among the Opposition. The motion has such a familiar air that in my view it comes close to being an abuse of this House.
  The motion is a travesty of the facts. It is based on the fiction, constantly and persistently repeated by the Opposition, that the Government have been making cuts in the National Health Service. I realise that the Opposition believe that there is political value to be gained from repeating that fiction and no doubt the hon. Gentleman believes that he has created a mood that is receptive to that in some parts of the country. However, the Opposition should reflect on the fact that their continued assertion and ingenious use of statistics to support their claim actually lowers the morale of staff who are achieving a great deal and causes dismay, anxiety and considerable fear among the public.
  I shall use the kind of statistics that Governments have always used to show that the National Health Service has greatly improved in recent years, that it has expanded its services to the public under the Conservative Government and that services continue to develop and improve.
  Mr. Robert Hughes: I shall give two simple facts to the Minister, which are not statistics and can be easily checked. Is the Minister aware that an eminent doctor arrived in Aberdeen recently to take up a post and was shocked to discover that in the Aberdeen hospital cleaning was done daily whereas the hospital in England which he had left was lucky if there was enough money to have it swept once a week?
  Secondly, will the Minister comment on the situation at the Royal Free hospital where the kitchens are in a disgusting state and infested with cockroaches? The hospital administrators say that they cannot improve the kitchens because there is no money available. How can the Minister say that the Government have a commitment to the Health Service in those circumstances?
  Mr. Clarke: The Opposition are scraping the barrel by resorting to an anecdote about the report of a man in Aberdeen to substantiate what is meant to be an Opposition Supply day motion. The deplorable state of affairs in which cockroaches infested a kitchen arose from a low

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  standard of hygiene. The Opposition must be desperate to try to make politics out of cockroaches. Plainly kitchens where cockroaches occur need to be cleaned with more care and efficiency.
  The hon. Member for Oldham, West did not merely resort to anecdote. He continually strives to produce factual support for his assertions. He uses strange statistics, which must be read with the greatest care to discover the footnotes which surround them, and he goes in for partisan descriptions of particular local circumstances. I can tell when a debate such as today's is about to take place because written parliamentary questions begin to flow in to my Department while the hon. Gentleman tries to find his version of the figures. He and his research assistant occasionally make errors because sometimes I am asked the same question twice. I then have to refer him to the earlier answer. The subject matter of the question is a guide to the hon. Gentleman's intentions.
  The hon. Gentleman always stipulates his measure of inflation, relies on particular notional figures for demand, for which he wishes measurements, and concentrates heavily, as in this motion, on beds and the number of bed closures. His motion glides over the fact that the Labour Government closed 15,000 beds as part of their rationalisation and modernisation of the service. The number of beds in the NHS is affected by changing medical practice. Historically and nationally, individual patients stay in hospital for shorter periods. Moreover, there is more day surgery. Therefore, more patients are treated with fewer beds.
  We are not concerned with hospital furniture, spurious notional statistics or solely with money, as even the hon. Gentleman said. His pages and pages of Hansard questions and speeches try to get round a few incontrovertible facts about spending. He must face the fact that there has been an increase in NHS spending as a whole of 20 per cent. above the general level of inflation since the Conservative Government came to office. If spending is compared with the general level of inflation —the GDP deflator—it shows that we are spending one fifth as much again as the Labour Government were in 1979. The nearest that the hon. Gentleman got to conceding that that was the bedrock behind his arguments which he could not shift was to say that the increase in spending was "almost nothing". We are spending one fifth as much again as the Labour Government, and all his wriggling will not enable him to get round that fact.
  Mr. Cyril Smith: Does the Minister understand that some hon. Members are greatly concerned not about mathematical proportions, but about whether or not sufficient money is being put into the NHS? He has just rejected the argument about furniture. I regret that rejection because in the Rochdale health authority 54 beds must be closed in acute specialties, in addition to the 56 which were closed last year. Further, 82 members of staff must be made redundant in the next 10 months, if the north-west regional manpower statistic is to be achieved. Whether or not the Government have increased expenditure on the Health Service, is it not a fact that there is insufficient money in the NHS to deal with present needs?
  Mr. Clarke: I agree with the hon. Gentleman that we should be discussing whether sufficient resources are
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  going into the NHS and, like the hon. Gentleman, I refute the absurd statistical maze into which the hon. Member for Oldham, West keeps leading us.
  Mr. Meacher rose——
  Mr. Clarke: I must finish with one intervention before I listen to another.
  Reductions in beds have taken place continually under successive Governments as surplus facilities in a locality are closed, either because modern medicine can deal with the same number of patients faster or because those facilities are being replaced. That is inevitable, if the service is to change, evolve and keep up with modern medicine.
  Regarding staff, our manpower targets for all regional health authorities are being undershot because greater efficiency and productivity is in some places producing staff savings and in others greater deployment of staff, especially nurses. The north-western manpower figure is far above the figure in post at present, and I assume that any reductions in Rochdale result from the better deployment of manpower. The Government's manpower targets are not below the present number of people employed by health authorities but above it. We want reductions in unnecessary staff, and administrative and clerical staff. We are glad about the continuing increase in the number of nursing, professional and technical staff in the service.
  The best answer to the hon. Member for Rochdale (Mr. Smith) about how we should measure whether adequate resources are being made available, which is what matters everywhere, is not to argue about beds and notional levels of demand, but to examine patient services in England. Yet the hon. Member for Oldham, West never asks me about patient services. Patients are irrelevant to his written questions. I shall show the hon. Gentleman our success by comparing the 1978 and 1983 figures. Today, he made a ludicrous attempt to get round them to support his case about so-called cuts.
  There are 650,000 more inpatient cases in our hospitals now than five years ago. The hon. Gentleman tried to knock that fact down by saying first that perhaps more people were ill, which is a preposterous proposition, and secondly that the measurement used was of deaths and discharges, which, as he well knows, is always used for the number of inpatient episodes and cases. There is no other measurement of the number of patients in hospitals. Most patients are discharged, but a few, unfortunately, die. The two figures are added together to establish the number of inpatient cases. Both the Labour and Conservative Governments have done this calculation. If the number of patients who die is ignored, the measurement will be different, but it will not measure hospital activity. It is absurd to try to escape the fact that 650,000 more patient cases are now treated in hospital each year and to say that the service is being cut.
  Similarly, there are 250,000 more day cases each year than when the Labour Government were in power. There are 2·5 million more outpatient attendances than under the Labour Government. Heart bypass operations — a priority operation which the hon. Gentleman often cites —have trebled since we came to power. In 1978 the figure was 3,191, whereas in 1983 it was 9,443. Hip replacements— an operation which is waited for with impatience — have increased by 30 per cent. in five

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  years. New renal patients admitted for treatment have increased by more than 60 per cent. In 1984, kidney transplants totalled 1,470, which was an increase of 35 per cent. over the previous year alone, and is the highest figure in western Europe. Regarding service in the community, health visitors and home nurses visited and treated 650,000 more people each year, 250,000 of whom were elderly, than under the Labour Government.
  It is preposterous in the light of those figures to assert that we are cutting the services because plainly we are increasing the volume of services to patients. My hon. Friend the Member for Horsham (Sir P. Hordern) intervened, and I join him in challenging the hon. Gentleman or the hon. Member for Holborn and St. Pancras (Mr. Dobson) to find a significant part of the service where the quantity of service has diminished. They know that they cannot. The challenge mounted by the Opposition depends on ignoring those national figures, which show a substantial growth in the national service, and on resorting to anecdotes about a kitchen here, a ward there, a man in Aberdeen and ear, nose and throat cases in Grimsby. That is all held together with placards and banners of support for the NHS, and the assertion that a rapidly expanding service is being cut.
  Mr. Frank Dobson: Is it an anecdote or an official DHSS figure that the hospital waiting list in the Bloomsbury health authority, part of which I represent, is 12,697 people long, while his Department urges that health authority to reduce its acute beds by 150?
  Mr. Clarke: I shall come to the question of Bloomsbury after I have dealt with London generally. The Opposition must face the policy of regional allocation of resources, which they started and which the Government have continued. The problem of the surplus of acute beds in London, identified under the Labour Government and this Government, cannot be dealt with simply by cutting patient services. We must follow the logic of the policy and alter the allocation of services, especially in London. The hon. Member for Holborn and St. Pancras—as a London Member — constantly challenges the regional allocation of resources and the policies of successive Governments in seeking to achieve a fairer distribution.
  If we are to have a reasonable debate, the Opposition parties must decide what their position is on the RAWP formula. It was introduced by the right hon. Member for Plymouth, Devonport (Dr. Owen) when he was Minister for Health in the Labour Government. It has usually been supported in general terms by the spokesmen of both Opposition parties. The distribution of resources should be based on an all-party approach. I regret to say that most Labour spokesmen tend to be in favour of fairer allocation of resources when they speak in the north of England and against it when they come down to London. The hon. Member for Holborn and St. Pancras has a special interest in resisting its implications.
  Mr. Andrew Rowe: Those of us who represent the Medway towns are especially grateful for the way in which the allocation procedures are working. For the first time for many years we are beginning to see the necessary improvement in the services that is consonant
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  with our growth in population. That has been achieved because London has been persuaded to disgorge some of its surplus.
  Mr. Clarke: I am grateful to my hon. Friend. My hon. Friend's constituents are benefiting from a policy started under the Labour Government but pursued with more vigour and consistency by the successor Government. It is still supported by the alliance as far as I am aware. The all-party consent on that policy has produced a fairer distribution of resources between the south-west and the north and, as my hon. Friend the Member for Mid-Kent (Mr. Rowe) rightly pointed out, between London and the rest of the south-east where there is an unfair distribution.
  Contrary to the allegations of The London Standard and Labour Members, the policy is producing a change in the way in which services are provided to the inhabitants of the home counties and not a cut in patient services. If we are to have RAWP—I challenge anyone to say that they will abandon RAWP or some equivalent, and certainly I challenge him to say that in Bolton, Wigan or Sheffield —we must face the logic of the policy. If it is pursued, there will be a change in the pattern of services in London.
  London services have improved under the Conservative Government. The number of inpatients treated in London hospitals is up 10 per cent. The number of day cases is up 70 per cent. Since 1979 the number of outpatient attendances in London is up by 250,000. But we shall not continue to provide the same services that were provided in over-resourced inner London.
  We must preserve London hospitals, especially the teaching hospitals, as centres of excellence. The country looks to centres such as St. Thomas's, Guys and Westminster as examples for national services. London hospitals should also provide local services to central London constituents who are on waiting lists which they share with others from all over the country who are diverted for treatment to London hospitals. Routine services should no longer be provided in central London for these other patients. They should be provided in new hospitals that the release of resources enables us to provide in the home counties. The people of the home counties would prefer to have their services closer to hand and would rather not use the southern electric or other train services to central London, as long as they are satisfied that the right service of the same quality is available near their homes. That was the logic of the policy that the Opposition introduced when in government and the logic of the studies that they carried out. Our studies show a surplus of acute beds in central London and a need to redistribute. Now that we carry out the policy, the Opposition make shallow party political capital and cite anecdotal evidence about changes in Bloomsbury which have inevitably followed the more sensible redistribution.
  The surplus of acute beds can be reduced because we have restored the capital programme. We are providing the new district general hospitals needed to deliver services where the patients live. The Labour Government cut the capital programme by one third. They caused huge delays to the hospital building programme throughout the country. We have restored the capital programme and we are building hospitals all over the country, especially round London.
  Some of the hospitals that we have started and opened as a result of the restoration of the capital programme are in London and the home counties. I will cite some of the

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  hospitals and major schemes that have been carried out under this Government since 1979. Apart from all the places in the north and elsewhere, we have carried out major schemes at Hemel Hempstead, Watford, Colchester and Homerton in Hackney. I include in my list the new phase 1 of the Newham hospital. Other major schemes include Lewisham district general hospital, Maidstone district general hospital, Orpington, the new Mayday hospital at Croydon and the two blocks at St. George's hospital at Tooting.
  The capital programme has provided spanking new high-quality district general hospitals in parts of the home counties from which previously patients had to go to Guys, St. Thomas's and Barts. Inevitably that has enabled us to rationalise the service in central London and has enabled Bloomsbury and others to release money for the home counties and for the community services, which the inhabitants of Holborn and St. Pancras also desperately require.
  Mr. Dobson: Will the Minister tell us when the average capital spending of this Government per year is expected to reach the average capital spending per year of the previous Labour Government?
  Mr. Clarke: The hon. Gentleman is learning quickly from his hon. Friend the Member for Oldham, West. He has chosen to ask me about a marvellous statistic. He knows that the Labour Government inherited a high-spending capital programme from the Conservative Administration who preceded them. The level was rising in 1975 and 1976 as the Heath Government's programme came on flow. However, the Labour Government cut that programme by a third in 1976 in real terms and it never recovered until 1979.
  Mr. Dobson: What was the average?
  Mr. Clarke: The hon. Gentleman wants me to produce the average between the high level of the programme initially and the level to which it dropped. The present Government inherited a low-spending Labour programme——
  Mr. Dobson: The level of the programme went down first when the Conservative Government took office.
  Mr. Clarke: The pipeline was showing a decrease. I accept that at first the level of the programme went down. Since then, as the hon. Gentleman knows, it has steadily gone back to what it was. The pattern of capital spending is a high capital programme cut by the Labour party and a low capital programme increased by the Conservative party, with a Labour trough in the middle. And what does the hon. Gentleman want to know? He wants to know the average.
  Mr. Humfrey Matins rose——
  Mr. Hind rose——
  Mr. Clarke: Minuscule fractions are involved but the average is almost the same.
  Mr. Robert Hughes: I wish to inquire why the hon. Members for Croydon, North-West (Mr. Matins) and for Lancashire. West (Mr. Hind) are standing and holding up their hands. Will the Minister tell them that they may leave the Chamber if they wish to do so?
  Mr. Clarke: I prefer that intervention to anecdotes about a man in Aberdeen.
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  I return to the capital programme, which has benefited London and the rest of the country. It cannot be denied that capital spending is vastly higher now than it was after the Labour Government's cuts in 1976. We have started major schemes on site during this year alone at Bridlington, Goole, Staincliffe, Stoke, Walsall and Oldham. Phase 1 of the new district general hospital is about to start at Oldham after the programme had been delayed by the Labour Government. We have 15 more schemes for the remainder of the year. I believe that I am entitled to assert that against that background it is nonsensical to claim that cuts are being made. It is unscrupulous nonsense for the Opposition to continue asserting it, using such fancy figures and denying the plain evidence of growth in patient services and the construction of new buildings to make a better service for the future.
  Not all the money is going to new services. Some is going to pay, and particularly nurses' pay, which the hon. Member for Oldham, West chooses to make a cause of complaint in his motion. The Government can be proud of the way in which they have dealt with the nurses. The creation of the review body arrangements for them will be one of the major achievements of the Government in this sector, and a lasting achievement. When the nurses look back at the history of their pay settlements, they look to Halsbury, the benefits of which were entirely eroded after it was implemented during the period of Labour Government, when the real income of nurses fell extremely sharply, to 1979 and Clegg, although the nurses did not benefit so much from that.
  Both those settlements were pre-election exercises implemented shortly post-election. Neither gave the nurses a lasting resolution of their problem. They now have an objective system. The Government have made it available to them, because we recognise their abstention from industrial action and the fact that the country, the Government, and the patients in particular owe them a great obligation. It is irrefutable that it is good news for nurses to have major pay increases, in the second instalment, particularly for the staff nurses and the ward sisters. It is irrefutable that it is a major advance for the nursing profession to have a lasting system.
  There has been argument about how this award is to be paid for. I can give the English figures, which show that the cost of the entire settlement is £240 million in 1985–86. Health authority allocations in England alone have an increase in cash of over £500 million. The cost improvement programmes that we are achieving from greater efficiency—an object that the hon. Member for Oldham, West supports in theory but the products of which he derides in practice—will release at least £150 million in the estimation of the health authorities.
  We paid the review body award in two instalments because that was our calculation, after some discussion with those in the field, of what could be afforded in this year out of the large budgets that we have given health authorities. It is obvious, apart from anecdotal evidence that the Opposition have produced from a few places, that pay for nurses and improving the services can go hand in hand if one continues to improve the way that the service is delivered, as the Government have.
  Mr. George Park: The right hon. and learned Gentleman referred to the nurses' award being in two stages. Does he deny that using this method

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  will cost a staff nurse £300 and a sister £700? He lauds nurses for the fact that they do not take industrial action. I am suprised that they do not.
  Mr. Clarke: If the hon. Gentleman is encouraging nurses to take industrial action, that is even worse than the activities of his party in recent years. The settlement for the nurses this year means that all of them will immediately get 5 per cent. or up to 5 per cent. if their award is less. When the second instalment is paid in February, staff nurses will get an increase of more than 11 per cent. on last year's pay and a ward sister will get up to a 14 per cent. increase. Those are substantial pay awards, and it is ludicrous for Labour Members to suggest that that is an unsatisfactory settlement. That is not the view of nurses.
  Mr. Charles Kennedy: The Minister keeps dismissing any criticism as being purely anecdotal. I appreciate that the figures that he has given are for England only, but the principle at stake is the same throughout the country. My health authority has told me that it is particularly worried about the potentially more serious financial problems for it because of
  "the lack of knowledge about the Government's plans for funding the costs of these awards in 1986–87."
  What will the Minister do by the autumn to fund those awards, because what he is claiming is a real increase now will shortly turn into a real cut?
  Mr. Clarke: Health authorities will say things like that because they are firing the preliminary shot in this year's public spending round. They do not know what the total allocations will be in 1986–87, and never have known such figures. Under no Government have firm allocations for future years been announced in advance. The published plans in last year's White Paper show the Government planning to increase spending on the NHS by £2 billion over the next three years. This year's budget spending round in the autumn will settle the allocation to health authorities next year, and it is then that the Government will have to take into account everything, including the nurses' pay settlement.
  It is no novelty when people do not know what their firm allocations will be. Each year, it is true of the entire public service that we have to say that next year's problems will have to be addressed when the Government address the question of public spending and produce the public expenditure White Paper.
  One important aspect of service should be dealt with amidst all these statistics. I have concentrated on the volume of service that we are delivering and have tried to show how the changing pattern in service is taking place. I have concentrated on geography, but I shall also touch on the way in which we are trying to deliver a more modern pattern of service all the time. We are concerned about preventive medicine as well as curative medicine, and in particular about female cancers, a subject upon which the hon. Member for Oldham, West touched.
  The hon. Member for Holborn and St. Pancras has run a great campaign about cervical cytology. He has used great skill, and he has done extremely well to make any political mileage out of an essentially non-political subject. As he knows, screening was introduced in 1966,
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  since when there has been a national screening policy, which has been based at the national centre at Southport more or less ever since.
  As far as I can see, during the period of the last Labour Government, no move of any kind was made on cervical cytology. No improvement was made in the screening or treatment services. One reason why this country is backward compared with many others is that 1974 to 1979 was a period of benign neglect of the subject. It was not tackled until 1981, when we had a look at the national screening system and replaced it with a local screening system.
  The mileage that the hon. Member for Holborn and St. Pancras has made out of the subject comes about because, by careful research, he has shown that a number of health authorities were not following the Government's policy or the efficient care and the guidelines that we laid down two years ago. Every time we produce improvements in those guidelines or accelerate the process of computerisation or the introduction of call and recall schemes, the hon. Gentleman tries to turn that to his advantage by finding places where they are not yet up to the standards on which the Government are insisting and that we are about to begin achieving in practice.
  Mr. Dobson: Will the right hon. and learned Gentleman confirm that the committee on gynaecological cytology advised the Government to set up call and recall schemes in every part of the country and that the Government ignored the word "call" and did not mention it either in the House or in the circular? The failure to get health authorities to establish call and recall systems has condemned more than 1,000 women to death each year simply because the Government did not accept the principal part of the committee's recommendations.
  Mr. Clarke: The Government concentrated on local recall schemes to replace the national recall system at Southport. At the same time, we introduced the computerisation of patient registers, and age-sex registers, which are essential before one can have a call and a recall system. The hon. Gentleman is aware that a substantial number of family practitioner committees now have such systems and he knows that our policy is to have such systems in all FPCs.
  I agree that there are 2,000 avoidable deaths, but numbers are coming down, although I should like them to come down more quickly. It is tasteless to pluck out of the air the figure of 1,000 people whom the hon. Gentleman claims are dying needlessly because of neglect by us. We are introducing a system into an area in which the Labour party when it was in office showed monumental inactivity and disinterest. The hon. Gentleman has latched on to two tragic cases in Oxfordshire to get greater publicity for his views.
  Mr. Meacher: Cheap.
  Mr. Clarke: With the greatest respect, Opposition Members cannot start cheerily talking about 1,000 needless deaths — using the language of the hon. Member for Bolsover (Mr. Skinner)—and then say it is cheap when I accuse them of making political capital out of tragic cases.
  Breast cancer is another area where we must take action to protect women against a serious health hazard. The problem is not, as the hon. Member for Bolsover seems

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  to believe, one of neglect on our part. The trouble lies in finding a reliable method of screening for breast cancer to protect women. There have always been scientific doubts about the effectiveness of the various screening methods. Therefore, the Government have been financing a multi-centre United Kingdom trial as part of the search for a worthwhile screening method. But events have overtaken us. The recently-published findings of a study carried out in Sweden have removed many of the doubts previously attached to the value of mammographic screening for breast cancer, especially for women over 50.
  Therefore, in accordance with our policy of keeping services up with modern technological developments, we have to take practical steps to formulate a policy. We have therefore asked Professor Pat Forrest, regius professor of clinical surgery at the university of Edinburgh, to chair a working group which will examine the information available in support of breast cancer screening by mammography. I have asked the group to consider the extent to which policy changes are needed towards the provision of mammographic facilities.
  The group has also been asked to suggest a range of policy options and to assess the service planning the manpower and the financial implications associated with these options. I have asked Professor Forrest to let me have a report as soon as possible. We are issuing today the precise terms of reference and membership of the working group.
  This should be the sort of issue which unites the House. We should, as the hon. Member for Rochdale says, be anxious to know whether we are spending enough on the Health Service and not get lost in a maze of figures. We should examine what is produced for the patients and consider whether we are catching up with the needs and expectations of the people. We should also be ready to change, and should not be defending old workhouses such as Thornton View, which the staff occupied for a time to try to stop the patients being moved to better accommodation. We should not defend every vested interest of the National Union of Public Employees, the National Association of Local Government Officers or some local interest group. We should be trying to get a better and more up-to-date service that can cope with the big demands such as the rising number of old people or the demands of changing modern technology.
  Our concern is for a better and more modern welfare state. This Government are a reforming Administration in the best sense of the word. We are bringing to the National Health Service the qualities of better management, cost-effectiveness and clear decision-taking. These qualities are needed to support the efforts of doctors, nurses and all staff.
  Our efforts, coupled with all the extra cash that we, on the taxpayer's behalf, are putting into the service, are producing a Health Service which supports our amendment and utterly refutes this ridiculous attack which has been mounted yet again, but probably for the last time on behalf of his party, by the hon. Member for Oldham, West.
  5.43 pm
  Mrs. Renée Short(Wolverhampton, North-East): I take a dim view of the Minister's attitude—he is not willing to listen to criticism from this side of the House.
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  If he accepted that we are just as enthusiastic as I hope he is that the Health Service should be improved, we might make more progress.
  When he says that nurses have left the service, he ought to be aware that 3,000 nurses left the service between March 1983 and March 1984. That is quite a large number. If he were to look at the reports that were produced by the Royal College of Nursing, for example, he would see why nurses have left the service.
  The research commissioned for the Royal College of Nursing commission on nursing education gave clear evidence of the manpower crisis that will occur in nursing in the early 1990s unless something is done. The college has written:
  "We believe that the inadequacy of the education and training of nurses is one major contributory factor to the high wastage rates among nurses."
  Another survey, carried out by Nursing Mirror, said that many nurses leave because they feel too tired or stressed to work, but carry on anyway until they have to leave. More than 50 per cent. of respondents admitted that they had taken time off sick when they were not really ill. They felt that they could not carry on, as they were too fatigued and stressed to work.
  Those are important contributory factors to nurses leaving the service. The Minister ought to find out why he cannot offer better salaries to nurses and recruit more nurses so that the burden and stress are reduced. Until that is done, the crisis in the nursing profession will continue. That crisis has a considerable and damaging effect on patients.
  Mr. Laurie Pavitt: In regard to the Royal College of Nursing report, does my hon. Friend remember the recent statement: in Nursing Standard that nurses are getting tired of the privatisation of auxiliary services as, in addition to their nursing duties, they are having to clean wards?
  Mrs. Short: That is clearly not a nurse's job, and the Minister should do something about it.
  The Minister criticises us for pressing for more resources in the NHS, but expenditure on health care continues to rise in all Western countries. If our expenditure is rising, we are not unusual. We are certainly not the leaders, as we are well below the OECD average and only Greece, which is much less wealthy than we are., spends less on the health service. That is a sobering comparison.
  Dr. Mawhinney: The hon. Lady occupies an important position in the House. With the knowledge that she has accumulated in that position, can she tell us how much, in extra resources, should be devoted to the Health Service to meet the demands that she has in mind?
  Mrs. Short: I shall not be led down that path because so many considerations must be taken into account. We are not the Government at the moment. I hope that, after the next general election, we will be, and that we shall be able to devote a greater proportion of gross national product to the Health Service.
  Medical research has made massive and exciting progress in the past 50 years. As a result, many of the diseases that were killers have been eliminated or can be controlled. Tuberculosis, pneumonia and diabetes can all be controlled. However, because of this development, many people live much longer and greater demands are put

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  on the Health Service. Cost effectiveness has therefore become more important than cost benefit. In this decade, cost utility analysis, or the assessment of how modern treatment affects the length and quality of life, is more important, so of course the Minister has to be prepared to spend more on the greater number of patients who are living to 80 or beyond.
  I am sure that the Minister is conversant with the Nottingham health profile, which is used to assess patients' progress and reactions to their condition. The method was used to assess women's health during pregnancy. Similar methods have been used in America to assess new methods of treating rheumatoid arthritis with oral gold preparations, for example. More recently, the method has been used to evaluate heart transplants at Harefield and at Papworth, as well as coronary artery bypass patients. The results of those assessments will be interesting.
  When asked, women are found to be most anxious about the lack of adequate screening for breast and cervical cancer, to which my hon. Friend the Member for Oldham, West (Mr. Meacher) has referred, when safe and sure techniques to detect both serious conditions early enough for successful surgery have been well known for years. This is not a new development, yet more than 2,000 women die each year from cervical cancer, including—and this is alarming—an increasing number of younger women. More than 20,000 women die from breast cancer each year. Yet proper screening and recall systems are not available. Why not?
  Many thousands of people suffer from smoking-related diseases such as lung cancer, bronchitis, coronary heart disease and so on. The facilities for diagnosis and treatment are grossly inadequate. The Government are unwilling to forgo the money they receive from cigarette manufacturers—tobacco tax boosted by sales resulting from constant and specious advertising. I find it unacceptable and disgusting that the Government are willing to rely on funds from tobacco firms to supplement, for example, resources for the arts. The Government should take on board the question of tobacco advertising. Singers and dancers should not smoke, but many of them would be out of work were it not for the conscience money paid by tobacco firms to opera and ballet companies. It is difficult to reconcile that.
  I hope that the Minister will respond positively to those serious matters. I hope that he will tell us what proposals he has to extend cancer screening for women, whether through general practitioners, well women's clinics, the Women's National Cancer Control Campaign, or the financing of a national call and recall system. Other than that, will he provide more resources for those organisations working within the community to provide a measure of screening for women?
  The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Patten): The hon. Lady was listening as carefully as I was to the remarks of my right hon. and learned Friend about cancer screening. He outlined clearly our women's health policy. I am sure that she will agree that one of the problems is not the provision of services but trying to persuade women of all ages—especially elderly women—to make use of the services. I hope that there will be bipartisan agreement
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  across the Chamber this afternoon that we must all do more to ensure that women make use of the services. Any advice that the hon. Lady can give us about that will be very welcome.
  Mrs. Short: It is all very well to say that we must persuade women to use the services, but unless facilities are available they cannot be persuaded. I am closely related with the Women's National Cancer Control Campaign. When our caravans go around the country, we do not find that we are short of women coming forward for screening. The Minister should look rather more carefully at that point and not assume that it is the fault of women for not coming forward, when resources and services are not available.
  Screening is very much cheaper than treating a patient for deep, invasive carcinoma of the cervix or for breast cancer. The Minister should bear that in mind because it is cost-effective. The Select Committee's 11 members are closely watching the expenditure of the Department and the results of that expenditure in the NHS week after week, year after year. Over the years it has provided the Secretary of State with much more valuable ammunition to use in his battles with the Chancellor of the Exchequer for more resources for the care and treatment of patients. We would like some sign that that ammunition is being used.
  Let us consider the problem of babies who die from serious handicap each year, many of whom need not die. Thousands survive serious handicaps that could be prevented. The rates in 1980 were a disgrace, when 9,000 to 10,000 babies died, but one third to one half of those deaths could have been prevented. Most of those babies were born to mothers in the lowest socio-economic groups and many to mothers in the ethnic minority groups. Poor nutrition, unwanted pregnancies, smoking and drinking alcohol were identified as causes.
  In June 1984, the Select Committee published its first monitoring report on perinatal mortality. The rate has fallen — three cheers for that — but it has not fallen enough. The Government must do better — [Interruption.] I am telling them that they cannot sit back because there has been a decline and say that they have solved the problem — they must do better. We must provide the resources needed for the acceptance and provision of minimum standards of nurse staffing in the specialist intensive care units.
  The Government must stop the enticement of nurses trained by the NHS away from intensive care units to private hospitals. That leaves NHS consultants with no alternative but to close some of their intensive care cots. That is scandalous. It means that they have to refuse to accept ill babies recommended by obstetricians in the peripheral hospitals. In other words, the Government should pay nurses decent salaries and generously recognise additional skills in specialised areas of the NHS. The Government are not doing that. Because the private sector offers higher rates, the nurses are enticed away.
  Interesting proposals for the training of nurses have been made. The Judge report and the report of the English National Board for Nursing, Midwifery and Health Visiting show the need for reform and for a closer relationship between nursing education and higher education. Unless urgent steps are taken to improve nursing training, we shall face a serious crisis by the early

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  1990s. The present high wastage among nurses appears to be closely related to dissatisfaction with their training, their working conditions and their career prospects.
  If higher education were to embrace education for nursing, as the reports propose, the pessimistic view of the Secretary of State for Education and Science about the decline in applications for higher education in the 1990s would prove unjustified. More women would be brought into the higher education system and the general level of training for the nursing profession would be greatly enhanced.
  The Select Committee's report dealing with medical education and the career structure which was published in 1981 highlighted serious shortages in certain specialties of medical practice. It recommended a considerable increase in the number of consultants and a reduction in the number of juniors. I am glad to say that there was some improvement between 1980 and 1984, when the number of consultants throughout the country rose by 1,148. However, the British Medical Association said that that was not enough, and the Select Committee wanted progress to be made more rapidly.
  Pathology is related to the problem of cervical cancer and breast cancer screening because specimens have to be examined by pathologists. The Select Committee identified that area as a shortage specialty in 1981, yet it still has a low rate of expansion—6·3 per cent. overall. There is still a shortage of those specialist scientists in the NHS to carry out the work that would accrue if more women were screened.
  Obstetrics and gynaecology levels increased by 8·1 per cent., and both Royal Colleges recently expressed concern to the Select Committee about the slow rate of progress in those areas. In psychiatry, radiology and anaesthetics, expansion has been better—between 13 per cent. and 16 per cent. Therefore, there is a considerable difference between the specialties, with some making better progress than others. There still needs to be an increase in the number of consultants and a reduction in the number of juniors—then, the career imbalance will be rectified and we can realise the savings that will be made when many more patients are treated by fully trained doctors. We have reiterated that on many occasions, but I am not sure whether the Minister has taken that point on board. The savings in outpatient departments will be seen readily—with considerable relief to patients as well as relief to the expenditure of the hospital—when the Government fully implement the Select Committee's proposals.
  Few junior posts have been closed or replaced by consultant posts following a loss of recognition for training purposes. Will the Minister now act on what we in the Select Committee said in 1981, and freeze all new senior house officer posts in England and Wales? Although he supported that proposal in the House of Commons 82/4 paper the number of SHO's rose by 5·1 per cent. between 1980 and 1984, contrary to what the Committee recommended, and contrary to what he said he would accept. Only between September 1983 and September 1984 has there been a tiny fall of fewer than 16 posts out of a total of 10,000. Clearly, there is a long way to go.
  What is the Minister proposing to do now, in the light of our monitoring report, to bring about changes that will give better service and better value for money in the Health Service as a whole, and to individual patients who will be treated better by fully trained doctors?
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  What does the Minister intend to do to recognise alternative medicine — for example, chiropractic and homeopathic medicine — which has made so much progress in treating many difficult cases that orthodox medicine seems unable to treat? I refer particularly to all sorts of back conditions and back pain which result in millions of lost working days per annum and cost the Health Service a great deal of money. General practitioners are not able to deal with those patients adequately.
  Sir John Wells: Before the hon. Lady leaves the subject of homeopathic and alternative medicine, I should like to ask my right hon. and learned Friend the Minister for Health whether he will pay particular attention to providing the same level of financial support, and perhaps increasing financial support, to homeopathy within the Health Service in view of the great consumer demand for that treatment. The hon. Lady has mentioned the need to review some hospital doctor posts. That is particularly important within homeopathy, where there is a grave danger of a decline in the number of hospital posts in that specialty. The hon. Member for Holborn and St. Pancras (Mr. Dobson) touched upon some giggly points about the Bloomsbury health district in an earlier intervention, but my right hon. and learned Friend will be aware that the Royal London Homeopathic hospital is within the Bloomsbury health district. The failure of that health district to give clear support to that specialty is a grave problem at present.
  Mrs. Short: The hon. Gentleman has made his point very clearly and very well. I hope that the Minister was listening.
  Mr. William Cash rose——
  Mr. Deputy Speaker: Order. Many hon. Members are still waiting to speak, and interventions are made only at the expense of other hon. Members' speeches.
  Mrs. Short: I shall stick to your ruling, Mr. Deputy Speaker, and not give way to the hon. Gentleman.
  It has been estimated that back pain alone costs £156 million each year to treat, and it is not being treated successfully within the Health Service at present. I hope that the Minister will give more consideration to recognising homeopathic medicine, a matter referred to by the hon. Member for Maidstone (Sir J. Wells), and chiropractic medicine for treatment within the National Health Service.
  I am glad that the Minister has taken steps to reduce the number of overseas doctors who have been brought into this country simply as pairs of hands who are being used particularly in the Cinderella specialties. We want to bring those doctors to Britain for postgraduate training, particularly in the specialties that their own people need. We must not exploit them here.
  I hope that the Minister will show that there are ways in which we can save the existing resources that are spent on the National Health Service. I believe that we can give better treatment to patients if we listen to the good advice that comes from the Opposition and to the joint voice that comes from the Select Committee. Two of the members of that Committee are now in the Chamber.
  Several Hon. Members rose——
  Mr. Deputy Speaker: Order. This is a short debate. Short speeches will reduce the number of disappointments.
  6.4 pm
  Mr. Michael McNair-Wilson: Anybody listening to a debate that is ostensibly about Government cuts in the National Health Service would expect the Opposition to prove conclusively that there was a forced reduction by the Government either in the financial support that they were providing or in the physical structure of the service in terms of fewer doctors, surgeons and nursing staff. In fact, exactly the opposite has been proven. Therefore, in those terms alone it seems that the Opposition motion fails.
  The description by the hon. Member for Oldham, West (Mr. Meacher) of the National Health Service is very different from the one that looks after me three times a week. His description and his speech failed to deal with the real question, which is the continuing and evolving nature of the Health Service and what resources will be required as that evolution continues. The hon. Member for Oldham, West will probably remember the words of the annual report for the Health Service in England for 1984 that
  "Needs will always be running ahead of what can be generally available and the pattern and organisation of care will always be evolving".
  Because the Health Service is not a static service, we will continuously have to recognise that more and more resources will be required. We shall have to find ways of finding those resources other than by simply saying that the Government will spend more.
  The advances in medical care — many have been referred to already in the debate, and I am the recipient of one of those advances — are expensive in terms of capital costs and the trained personnel needed to operate them. But they are all-important to the particular sufferers from the particular diseases. It is a brave man who will choose his priorities as to which disease should take pride of place when money is allocated.
  I think that the House knows that I am personally involved in the treatment of kidney failure, having been on dialysis for the past 18 months. I am fortunate in being looked after in the Oxfordshire health authority area at the Churchill hospital. I am particularly fortunate in coming under the able leadership of Dr. Desmond Oliver. He has demonstrated that dialysis can be successfully given to children and through all age groups, even to those over 70. His example should be an example to all regional authorities of what can be achieved.
  I am one of the lucky ones. I get dialysis. But, as we know, in many regional authorities, somebody of my age —I am now 54—would be refused dialysis, not because the Government said so, but because the regional health authority has chosen to allocate its resources in other directions. Now we are insisting that regional health authorities should treat 40 kidney patients per million on dialysis. The real figure should be 100, but to get there many more resources will be required, and if they are to be found they will have to come either from services already being provided or by more money going into the Health Service in that direction.
  Put in those terms, can anyone say what the total sum is that should be spent on the NHS to achieve all the objectives that are worthy of support? The hon. Member for Oldham, West did not attempt to answer that. He did a bypass operation, and talked about other things that he would not spend money on. The fact of the matter is—and he knows it as well as I do—that this Government
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  are spending more that his Government spent on health care. He knows as well as I do that if there is a shortfall in dialysis, it is not because this Government have decided to deny resources to kidney dialysis; it is because Governments of each party decided that resources had to be spread widely over a whole range of projects, so certain resources that were required did not necessarily go in the direction of any one treatment. I do not think that anyone would argue that that should be so.
  So the question of resources seems to me to be the real argument in the Health Service, and to some extent it should not be a party political argument, for where is the gain? I have been treated by the National Health Service, as I have said, for the past 18 months. I spent at least eight of those months in hospital. I can only say to the hon. Gentleman that I have not noticed the cuts that he talks about. I have been in general wards. I have been having the same treatment as anybody else, and I can tell him only that there was no sense of scarcity of resources, of care, of consideration or of medical staff. I can speak only from my experience which I know is limited but which must be worth something, perhaps something more than the annecdotal evidence that we have heard in this debate.
  Just the same, I agree with my right hon. and learned Friend the Minister for Health when he says that what is required is the channelling of resources towards patient care and away from administration. In the Oxfordshire health authority 36 per cent. of expenditure goes on administrative services. Overall in England the figure is 45 per cent. Anyone might argue that those figures are too high, that we should try to reduce that national figure of 45 per cent. to the 36 per cent. that Oxford achieves. In fact, Oxford might be able to reduce its figure still further.
  Mr. Meacher indicated dissent.
  Mr. McNair-Wilson: The hon. Gentleman shakes his head. I suggest he looks at the annual report for the Health Service in England and he will see, I hope, that what I have just told him is borne out by the facts. If I believe that administration is still taking too big a share of resources — and when I say "administration" I mean anything other than jobs done by consultants, doctors, nurses, physiotherapists, radiographers and scientists — I also believe that we ought to consider the nursing staff in the words of the hon. Member for Wolverhampton, North-East (Mr. Short). I am thinking in terms of raising the levels of that profession by recognising that qualifications should bring higher salaries and thus give nurses the incentive to obtain those qualifications and therefore greater skill.
  We must consider the nurses' pay settlement because whereas we may say that an average of 8·6 per cent. is higher than anything that one can think of in the public sector to date, in fact it is 5·6 per cent. between April 1985 and February 1986. If the city editor of The Times is to be believed in the article he wrote on Saturday, inflation looks like turning out at 7 per cent. for the year. In those terms I find it difficult to see how nurses pay will stay abreast of inflation, which is surely a minimum requirement.
  Mr. Lewis Carter-Jones: Will the hon. Gentleman, in considering nurses, also please link—because he has experience of it—the technical people and the paramedical professions who have to undergo long

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  training periods and who start with minimum standards? I hope he will agree that they at all times should be linked to nurses' pay. Does the hon. Gentleman agree?
  Mr. McNair-Wilson: I shall leave that question to one side. I do not know enough about their pay scales to talk with any objectivity. If I may, I will just stay with the nurses for the moment at least and refer to extra duty payments. There is uncertainty in the nursing profession about whether these payments will continue, whether they are going to be increased in line with inflation or whether there is any danger of them disappearing. Nurses wonder why there are payments made to doctors for what are called distinction awards when the same money is not made available to them. If one looks at the criteria governing the committee which makes these awards, it is difficult to see why nurses have been excluded from benefiting from the £52 million annually which is spent on these awards. I would ask my right hon. Friend to consider that point.
  Before I leave nurses' pay, may I point out to him that district nursing officers, senior nurses, senior nursing officers and sisters, all earn less, according to the pay scales supplied to me by the Oxfordshire health authority, than the three level administrators: the district administrator, the principal administration assistant and the general administration assistant. As a patient I know which of those groups matters most to me and I suggest to my right hon. Friend that something might be done to bring nurses' grades more into line with those of the administration staff.
  I should like to see my right hon. Friend's policy of channelling resources to patient care carried as far as it can go. I know there is controversy about privatisation most of which is spurious. Two of the hospitals I have been in have been privatised while I have been in them. I can only say as a patient that I have noticed no variation in the service provided. The service will be as good as the motivation of those providing it, not as good as the employer. If the motivation is there, the patient will benefit. If it is not, he or she will suffer.
  Because I believe that the future funding of the NHS is such a key question, I want to refer to a personal experience within the last six weeks when I entered the Radcliffe infirmary in Oxford for two further operations. When I came to the admittance office I was asked whether I wanted to be treated on the NHS or as a private patient. I am a member of a private medical insurance scheme. I replied that I wished to be treated on the National Health Service. My answer was prompted partly by my admiration of the service, for it is a superb service, as I have said many times, but also because of that insidious propaganda which the Labour party has managed to convey, that to be treated as a private patient is to do something which is anti-social. It is to seek a privilege denied to lesser mortals, and, as a representative of the people, I should share the same treatment as the poorest of my constituents. During the weeks I lay in hospital I had time to reflect on my decision and I now realise that I made the wrong decision, not because I would have been treated better as a private patient—as it happens I would have been treated in the same ward in the same way—but because, by selecting the NHS rather than the private scheme, I denied the NHS the resources it would have derived from the private scheme, resources that could have
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  gone towards treating somebody else. I believe that that denial of funds in my own terms was to me at least a turning point in my thinking about the funding of the NHS.
  Recently I was reading some remarks by Mr. Bob Graham, the chief executive of BUPA. He said:
  "Where locally there are NHS waiting lists and also spare capacity in private hospitals it is surely right, in order to relieve suffering, to bring the supply and demand together. It also makes sense for each sector to concentrate on what it can do best. The NHS does many things superbly well which the private sector could not hope to emulate, but which the NHS alone must do —casualty and emergency services for instance. But on the other hand a quarter of all hip replacements in Britain are now carried out privately, and the proportion is increasing. The stimulating combination of co-operation and competition between the two sectors is in my view a most practical step towards solving some of the health care problems in Britain … If a political party wants to provide the best health care for the electorate it must now take into account the growing resources and potential of the independent sector in its overall planning … Not to do so would be to defy logic, to frustrate freedom of choice, and would be a futile attempt to stem the tide of consumerism."
  I find myself wholly in agreement with those remarks and I hope from now onwards we will not draw this artificial line, this line of animosity between the private and the public sector, but see one as complimentary to the other and both about the care of the patient.
  6.19 pm
  Mr. Charles Kennedy: Whatever the feelings of hon. Members on the issue, there can be no doubt about the respect with which the hon. Member for Newbury (Mr. McNair-Wilson) was listened to, given his personal experience. We all wish him good health and a continuing recovery from his illness. I will follow in a moment his theme—the general question, almost the philosophical question, of funding for the NHS.
  It is worth reflecting first on some of the things that the NHS has had to grapple with in just the two years since the last election. In July 1983 the Chancellor announced the manpower and resources cut that caused great difficulty. A tier was abolished and we had the Griffiths report with all its implications and at times the controversy to which it has given rise. There has been rate capping, with its effect on joint funding of projects, particularly in the care and community programme.
  Community care itself is now partially referred to in the social security reviews and will be used partly as a pump-priming exercise. We have had the limited list controversy, the privatisation of ancillary services and the recent decision on the pay review boards. I can understand the Secretary of State being anxious to bring forward another Green Paper on the reorganisation of primary care before the House rises for the summer recess.
  That is an immense catalogue of things for any service, particularly one as fundamental and as complex as the National Health Service, to assimilate and carry through in the course of two years. Without doubt it is a mark of what the Minister was talking about, which is the radical approach that the Government have taken.
  There are many sensible ideas incorporated in all those changes. This is very much a man-in-the-street opinion bin I wonder if so many changes in such a short period can in the end be productive. With further changes and radical departures being promised, and indeed heralded by the Minister this afternoon, one wonders if health care will benefit.

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  On the question of funding the Health Service and the cuts that it is experiencing, I think the House would be at one with the Minister when he says that there is infinitely rising demand, by definition, because of demographic changes, particularly with the growing number of elderly people, and because of the excellent but nonetheless straining pace of the growth of medical technology. People have greater aspirations and therefore make more demands on the system. Because of the ability of the Health Service to provide more sophistication in curing, new avenues of health provision are opened up.
  All those things place demands on the system which any Government would find it difficult to meet. I know that the Labour Opposition do not agree with this, but I have said before that their promises about funding are not to be taken even at face value, far less with any seriousness. It is reasonable for any Government to try to set a target of 1·5 per cent. real growth per annum—in other words, to keep pace with the demands of the system and to try to find a bit extra to expand the frontier zone.
  The Minister is also on reasonable ground to argue, as he does, that cuts in the number of beds do not always mean that there are cuts in health care. That is a blinkered approach that the Labour Front Bench would like us to believe. I would, not deny for a moment that if a hospital ward can be organised more efficiently or if health provision can be made in such a way that, for example, geriatric beds are no longer occupied because people are being cared for in the community, that is a welcome development. On the geriatric front, I find it hard to believe that of the 10,000 beds that have been cut since 1979 — these are 1984 figures — every one of those signifies in the locality where the reduction has taken place a welcome corresponding provision in the community. The facts do not bear that out.
  In relation to that, I was grateful that the Minister mentioned the resource allocation working party formula. He was right to point out that the RAWPing approach continued to command support. The figures are worth considering.
  Mr. Dobson: That was introduced by the right hon. Member for Plymouth, Devonport (Dr. Owen).
  Mr. Kennedy: I am glad that we have been reminded that it was my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) who introduced it. Let us look at the figures to see what has been achieved. In 1979–80, the poorest health region was 9 per cent. below its RAWP target and the richest 13 per cent. above. That is a major disparity. By 1984–85, the range was 5 per cent. below to 9 per cent. above. The disparity is still there but the Minister is to be credited for continuing the implementation of a policy that is slowly bringing closer together within a narrower spectrum the disadvantaged and the more advantaged areas.
  Mr. Dobson rose——
  Mr. Kennedy: The hon. Gentleman will be replying to the debate and he can pick up the point then.
  The RAWP formula was carried through before the International Monetary Fund crisis. At that point it was dependent on and envisaged economic growth. Clearly, in times of recession or economic stagnation, such as we
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  have at the moment, it will cause the more advantaged areas not just to help disburse their above average quota but to suffer in the process. That is one of the reasons why the Minister spent some time defending his policy in regard to London.
  In the longer term, as we move into the post-RAWP period there is a need to decentralise the Health Service further and to move towards an equalisation pool for funding so that we do not just use the RAWP formula as it stands but leave the way open for perhaps democratically elected health authorities themselves to consider ways of raising revenue locally on top of what would be available centrally.
  Two other points have arisen on the motion and the amendment and on the topical issues under consideration. First, in regard to the pay award for nurses, midwives and health visitors, I appreciate that the Scottish health Minister is not present—I am not criticising him for that — but perhaps my remarks will be communicated to him. The principle involved is typical elsewhere in the country.
  The Highlands health board has issued a consultative document which envisages major cuts in a variety of services, particularly maternity services, and also affects two hospitals. One geriatric hospital is to be closed down and another general needs hospital in my constituency is to be downgraded, because two new hospitals are being opened, one in Inverness and one in Wick. However, they are not receiving a penny extra from the Scottish Home and Health Department to provide the revenue costs to run the new buildings. Therefore, the revenue savings have to be found in other aspects of health care to run the hospitals that are coming on stream. We all want to see improved medical technology and welcome it without qualification but it is a "Yes, Minister" state of affairs to find that we can run new hospitals only by axing other facilities that are needed elsewhere in the community. That is unsatisfactory. It is similar in principle to the problem that my hon. Friend the Member for Rochdale (Mr. Smith) has been experiencing locally as well.
  The problems faced by the health board in my constituency are likely to be accentuated because of the uncertainty of the nurses' pay award and its future funding, particularly in 1985–86. It is not enough for the Minister to say that this has always been the case, because it has not always been the case in the past that independent pay body awards have been thrown entirely on to the backs of health authorities and health boards — in other words, that a welcome and much-needed increase justly deserved by some sectors of the Health Service should be funded by cuts at the expense of patients and that health authorities should be left with unpalatable decisions. I do not think that the Minister can take responsibility on the one hand and then shrug it off on the other.
  Looking to the Green Paper which we are expecting, it is surely unacceptable that the Government would ever consider moving towards privatisation of a general practitioner, family-based service. It is the backbone not just of the Health Service but in many ways of the whole structure of the family within the community. Although there may be a strong case to be made for some private health care, given the commitment which is at least expressed— I assume sincerely—on both sides of the House towards the National Health Service, free at the

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  point of use and funded out of general taxation, I cannot see, in the medium term at least, any more than marginal room for private health provision.
  Therefore, in many respects the Government are to be held guilty for their handling of the Health Service, and the nurses, midwives and health visitors' pay award proves it. They are doing good things and they are doing some radical things and are to be congratulated on that, but on balance they are not showing sufficient responsiveness or understanding of the needs and the lack of resources in the Health Service. On that basis, along with my hon. and right hon. Friends, I will be voting for the motion this evening.
  6.31 pm
  Dame Jill Knight: I find this motion extraordinary. After the case put forward from the Opposition Front Bench—I devoutly hope that the hon. Member for Oldham, West (Mr. Meacher) stays in that position — the call that faces the House in this motion must come under the head of special pleading, because it mentions cuts in funding, when all the Government do is pour more and more money into the Health Service. The hon. Member for Oldham, West said that the Government had put a bit more in, but said it was almost nothing — £10,000 million per annum almost nothing!
  The motion mentions reductions in hospital beds, yet there are apparently more new hospitals being designed and built than at any time in the history of the NHS. The motion says that the nation's health is being undermined, but more patients are being treated and getting much more advanced and complicated treatment than ever before. Reflecting on this extraordinary catalogue of claims, it seems to me there can be little doubt that the Opposition are suffering from paranoia, schizophrenia, deafness or blindness. Whichever it is, they certainly need more money to be spent on the NHS for their own purposes.
  The record of improvements in the NHS is far too long to go into in a short speech, so I want to mention just two things. The waiting lists are coming down, and this is a matter of great satisfaction, but may I suggest that my right hon. and learned Friend looks into the possibility of using more computers in waiting lists? I know that, in Birmingham, there are vacancies at once for some types of treatment for which patients in other hospitals are waiting needlessly. I should be pleased if he could look at that.
  Then I should like to ask my right hon. and learned Friend to look at a matter which has been touched on in several speeches this evening — the question of spending. Every penny we spend in the NHS should be spent as wisely and as sensibly as possible. Would he therefore look again at what has perhaps been an unpopular policy in some parts of this House—the possibility of bringing in hotel charges for those who can afford them in National Health Service hospitals? I find as I go round the hospitals that many people warmly recommend these charges. They could be quite modest and I would not wish them to fall on people who could not afford them. They would have to pay for the cost of their food if they were still at home.
  Other countries certainly use the system of hotel charges. I have some details about France but I will not weary the House with them now. Other countries have found great savings there. If there are 6 million patients
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  a year, even if we charge five pounds a week, which wound be a most modest amount of money, we should surely get more than £1,000 million a year from that alone. I know it has been said there are difficulties with administration, but I am simply asking my right hon. and learned Friend to look at it again. Many people in the Health Service want money spent wisely, and feel that there are savings to be made there.
  6.35 pm
  Mr. Jeremy Corbyn: I shall be brief because this is a short debate. It is regrettably short and I should say at the outset that my interests in the debate are the interests of someone who represents an inner city constituency suffering badly from cuts in the National Health Service expenditure and also as someone sponsored in this House by the National Union of Public Employees. I make no apology for that and it would be nice if all Conservative Members with shareholdings in private cleaning and catering companies also declared their interests during the debate.
  The Minister mentioned the way that the RAWP formula operates. What he fails to understand is that the formula operates in London and the south-east to create a continual outflow of essential capital and revenue from the inner city areas to the suburban and outer suburban areas in the home counties. When Conservative Members mention that new hospitals are being built in the home counties, nobody wishes to detract from that, because we are all glad if health services are improving in those areas. But they should consider what is happening to an area such as mine which will suffer a 15 per cent. cut in real terms over the next decade in Health Service expenditure. Every few years another hospital is up for closure, and we are now going through the process of closure of the acute wards of the Royal Northern hospital after the Minister's predecessor assured us that the hospital's acute services would be preserved, despite the closure of the accident and emergency department.
  We see a continual erosion of health care in the area and that, compounded with the closure of the Friern Barnet psychiatric hospital outside my constituency, means there is greater and greater pressure on the centralised Whittington hospital, which in the long run will have fewer beds and longer waiting lists for local people. The pattern there is not very different from that in all the other inner London health areas. If the Minister examines the length of the waiting lists and the long-term provision of acute and geriatric and psycho-geriatric beds in those areas, he will have to concede that the major point I am making is absolutely true. We are seeing a long-term decline in Health Service prospects in those areas.
  I should like briefly to mention the nurses' pay award and the pay awards of all Health Service workers. I am a former organiser for the National Union of Public Employees in the Health Service and a former member of an area health authority. I know therefore that when health workers are accused by the Government of being greedy, grasping people trying to take as much money as they can out of the Health Service, when they are already among the lowest paid public sector workers anywhere in the country, they find it offensive in the extreme. They also resent the way that Health Service budgets are so made up that the wage claims of health workers are falsely set against the service that may or may not he provided to patients.

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  The Government are attacking the lowest paid people in the Health Service instead of looking at the overall levels of expenditure or, indeed, the profits that are made out of the Health Service by private contractors, by drug companies or by others. Recently I received a letter from a constituent who wrote:
  "I am fortunate in that as a Senior Clinical Nurse I am not one of the lowest paid members of the nursing staff. I do, however, continue to work weekends and Bank Holidays, having total responsibility for all medically ill and elderly patients at all times and spend the majority of my working day as the sole nurse responsible for care throughout the hospital. After 12 years' experience I consider that my take-home pay of little more than £100 per week as totally inadequate."
  He is doing a major and very responsible job for that kind of money and that is typical of how nurses are now being treated. NUPE, my union, told the pay review board meeting:
  "The Government defrauded nurses to the tune of £109 million. The PRB's recommendations were costed at £283 million but the Government's insistence on staging means the award is now worth £173 million.
  The Government has compounded this deceit by its dishonest claims that the award amounts to an increase of 9%. With nurses held to a 5% rise for ten months, and the balance of the full rates applying for just two months, the real increase over the year will be on average 5·6%."
  Nurses are being very badly treated and undervalued, as are other health workers.
  Because of the merit awards system for consultants announced in the last couple of months the NHS is about to spend £42 million on such awards to a very small number of Health Service consultants. I question a sense of priorities which gives that amount of money to consultants but which treats nurses and ancillary workers so badly.
  My union recently surveyed the way in which contract cleaning has been introduced into hospitals. It also looked at the terms and conditions of the workers. It concluded:
  "Widespread use of part timers below the 16-hour threshold for national insurance contributions and benefits was found. One cleaning contractor—Reckitts Cleaning Services—lists all its 9,500 part time staff as working below this level. This represents a saving of employers' National Insurance Contributions as well as taking away from employees their employment protection rights. Virtually none of the contractors offered any improvement on the statutory provision for maternity leave, pensions and sick pay."
  It goes on to list a category of disasters, bad employment practices and the abuse of low-paid cleaning workers in the NHS. The Government are handing a large part of the NHS over to the lowest form of profit motive in private cleaning and catering companies. The motive of profit making by contractors within the NHS cannot be reconciled with the basic motive of the NHS, which is to provide the best standards of health care for all people irrespective of their wealth or ability to pay. I want to see a return to the basic principles of the NHS, not its continuing destruction in which this Government are taking part.
  6.41 pm
  Mr. Frank Dobson: Anyone who listened to the Minister will have concluded that we were living in some sort of medical demi-paradise. Whatever the Minister may say, or whatever the odd friendly news editor may say on his behalf, people around the country know from what is happening in their localities that what the Minister is saying is not true.
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  It is not just people in the Labour party who are saying that. The right hon. and learned Gentleman must remember that the British Medical Association, most of the royal colleges, all the trade unions involved, the Royal College of Nursing and the community health councils throughout the country are all saying that the Government are cutting and damaging services that are vital to local people.
  Ministers claim that they are putting more money into the NHS. In fact, they are not keeping up with the combined effects of inflation, the extra costs of medical technology and the increased health needs of the growing number of older people, the unemployed and the impoverished. That is obvious to people living in practically every part of the country.
  In an inner-city area such as my own the Government's response to a hospital waiting list of no less than 12,697 is to call for the closure of 150 acute beds. In a rural area such as Powys, the health authority is meeting on the day of the Brecon and Radnor by-election to consider cuts of more than £1 million to help pay for the nurses' pay award. In Birmingham, where the Minister lives, and part of which is represented by the Secretary of State, 23,662 people are awaiting operations, and the figure is increasing.
  In Hereford, which provides a district hospital service for people from Brecon and Radnor, the waiting list totals nearly 3,000, yet the Hereford district is proposing to pay for part of the nurses' wage increase by postponing the opening of a unit that has cost £2·5 million to build.
  In Milton Keynes, the new district hospital had not been open for a year before beds were closed because there were not enough nurses to staff them, and patients, including injured children, were diverted to hospitals elsewhere.
  The story is the same around the country. There are cuts for patients and demoralisation for staff. To save money, health authorities are rejigging work rosters to cut money that they pay to the better trained and more senior staff. The result is that at nights and weekends more and more of the burden of work and responsibility is being borne by the most junior staff. The recent Nursing Mirror survey showed that 92 per cent. of learner nurses had been left in charge of a ward with no qualified staff present. Most instances related to late shifts, nights or weekends. A total of 70 per cent. of nurses said that they were tearful because of the stress to which these new regimes subject them. To hear Ministers, including the Prime Minister, crowing about the output of these overworked, underpaid, overstressed, tearful but still dedicated nurses, is sickening in the extreme.
  The position is no better for senior nurses. They feel responsibility for what is happening to their staff, but they do not have the power to do anything about it. What influence they had in the past is being eroded by Griffiths' general managers who are downgrading nursing. Unlike Ministers, nurses are not fooled by grandiose management titles such as "director of patient relations and quality assurance", which is a title used in Wirral. They would be happier just to be called "chief nurse" if they were assured that proper weight would be given to their professional advice and that they would have the resources to do the job. The same applies to many other dedicated people who have devoted their lives to the NHS. They are being downgraded and degraded by the Government's priorities.
  When the Oxford regional health authority issues a document that lists "front line functions" as

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  "strategic planning, personnel management, finance, information and estate management",
  the people who work in the Health Service do not think that it was the one they joined. They wonder what happened to the Government's earlier motto, "Patients First".
  They see the ill effects of privatisation at first hand. At Addenbrookes hospital in Cambridge, they know that a contractor's employee recently had to be sacked for selling booze to patients suffering from alcohol-related diseases. They also know that, according to the health authority, cleaning standards in acute surgical wards and operating theatres at that hospital sank to 63 per cent. of the required level in June this year. They are also aware that post-operative infection cases have increased nationally by 14 per cent. under this Government.
  They wonder at the priority of Ministers. Who can blame them when they know that some 50 DHSS staff are involved in promoting privatisation? They also know that, when the Bromley health authority terminated a contract with the Care Services Group because of repeated poor performance, representations from Richard Clements, a former DHSS employee, and the hon. Member for Shipley (Mr. Fox) were so effective that within 24 hours every district health authority was telephoned and told not to terminate such contracts without first consulting the DHSS. They contrast that with the five days that elapsed before the DHSS sent letters to remind health authorities about measures to guard against legionnaire's disease after the Department was told of the suspect water system at Stafford hospital.
  It goes wider than that. The Government's general policies are making our people sick. That is why the numbers of people visiting their doctor or being treated in hospital are at record levels, without any substantial reduction in waiting lists. We all know that people's health will suffer if they are impoverished, under-nourished, badly clothed, badly housed and unemployed. Previous Governments recognised that and improved the nation's health by better living standards, better housing, better food and less unemployment.
  Under this Government, all that progress has not just been halted, but reversed. Record levels of homelessness have been matched by record levels of failure to build new houses. The school meals service, described by The Lancet as the sheet anchor of child nutrition, used to provide a meal for two thirds of our children. It now provides a meal for only half of them. If the Secretary of State has his way, free school meals will be available only to the children of parents who are on supplementary benefit. When the Secretary of State talks of targeting, can he think of any more accurate or effective way of filling the belly of a hungry child than by giving that child a meal, because I cannot?
  For a long time the Government denied that unemployment leads to ill health. They cannot deny it any longer. Reputable surveys show that general practitioners face higher demands for primary health care from people who are out of work, that school leavers are more likely to suffer psychological strain if they are on the dole, that death rates among unemployed men can be over 20 per cent., that para-suicide is nine times more likely among the unemployed and that unemployment affects their families, too. Above all, it undermines the health of their children. They are underfed, badly housed, ill-clothed, provided with no new toys and have no holidays. All this
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  affects children whose parents feel humiliated and whose love for one another and their children is soured by the feeling that they have failed. That characterises the life of the child who lives in a home where unemployment reigns.
  But it is not the parents who have failed. It is the rich, the greedy and the powerful who have failed. It is this Government of the rich and the greedy who have failed. Because they are powerful, they visit the consequences of their failure upon others, but they will not get away with it. Those who create a hungry generation will find that it treads them down. The Government believe that they can succeed for ever in their appeal to greed and selfishness. They are wrong. Given the chance, the vast majority of the British people will work together to help to sustain one another in sickness, adversity and old age.
  The British people believe that the best kind of health service should be made available to everybody and that all of us have a responsibility to bring that about. The Labour party founded the National Health Service and treasures it. It believes in a National Health Service and a society which will make people healthier.
  6.51 pm
  The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Patten): When the hon. Member for Oldham, West (Mr. Meacher) got up to start his speech, the Leader of the Opposition left his place. There were six hon. Members sitting behind the hon. Gentleman—some improvement on the three hon. Members who were behind him last week when he began his speech on child benefit.
  The speech last week on child benefit of the hon. Member for Oldham, West was characterised by contradiction after contradiction. First, tax relief on mortgages was going to taken away; then it was not. Secondly, child benefit was going to be taxed; then it was not. At one moment we were told that it was official Labour party policy; then we were told that it was only a Labour party Green Paper. At one moment we were told that it had been accepted by the Shadow Cabinet; then we were told that it had been rejected. There have been exactly the same contradictions in the hon. Gentleman's speech this afternoon.
  First, the hon. Gentleman admitted that there had been a small increase in expenditure under this Government. He said later that there had been cuts. What does he mean? Has there been an increase in expenditure, or have there been cuts in expenditure? At one stage he said that the Labour party would increase expenditure. A sum of £3 billion was whistled out of the air and then rapidly put back into the locker. He produced no costed plans of future expenditure. My hon. Friend the Member for Birmingham, Edgbaston (Dame J. Knight) does not often indulge in wishful thinking, but when she said that she hoped that the hon. Member for Oldham, West would for ever lead for the Labour party on social services. I am afraid that she was indulging in wishful thinking. In the first world war there was a song:
  "We don't want to lose you,
  But we think you ought to go."
  Amidst all the rumours about reshuffles in the Labour party, the hon. Gentleman's monument when he leaves his position, as surely he will this autumn, will be that he made his predecessor as spokeswoman on social services,

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  the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), seem by comparison to be an intellectual giant and prodigy.
  At least the hon. Member for Holborn and St. Pancras (Mr. Dobson) who wound up for the Opposition has the merit of consistency. He is utterly consistent in his total and blanket condemnation of everything that this Government have done about the National Health Service. During the two years that I have sat opposite him, I have never heard the hon. Gentleman admit that there has been any improvement whatsoever in any part of the NHS. His attitude contrasts very much with that of the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy), who takes a much more balanced view. I hope that the Social Democratic party and the Liberal party will not go into the Lobby tonight to support this absurd motion.
  The hon. Member for Oldham, West is absolutely consistent in his condemnation of the ways in which this Government are setting about trying to improve patient care and getting waiting lists down and better value for money. We are saving a substantial sum of money—about £13 million a year—on competitive tendering. That money can be spent upon patient care. What is the hon. Gentleman's policy? Will he go to a hospital like the St. Helier hospital, which is under the Merton and Sutton regional health authority, and say, "I understand that you have saved £800,000 through improved cleaning services carried out by a private company. If we came to power we should ask you to take that money away from patient care and spend it again upon inefficient and over-expensive cleaning services." Is that Labour party policy? Is that what ought to happen in the drive towards greater efficiency? That seems to be the Labour party's way of attempting to improve patient care.
  Mr. Corbyn rose——
  Mr. Patten: I should very much like to give way to the hon. Gentleman but I have very little time in which to reply to the debate.
  I very much welcome the contribution of my valiant hon. Friend the Member for Newbury (Mr. McNair-Wilson). He made a constructive speech about competitive tendering. It was based upon his personal experience of cooperation with the private sector. I welcome the speech of the hon. Member for Ross, Cromarty and Skye. He supported our resource allocation working party proposals. I hope that his compliment to the Government will keep him out of the Labour party Lobby.
  I welcome also what my hon. Friend the Member for Edgbaston said about the need to experiment with computerised forms of care so that patients can go from one part of the country to another for the operations they need. After some local opposition—even, surprisingly, from the West Midlands regional health authority, to which the Government had given money—a bed bank experiment is taking place. It is examining exactly this problem.
  We hear a great deal about waiting lists. My right hon. Friend the Secretary of State for Social Services and my right hon. and learned Friend the Minister for Health receive many letters from the hon. Member for Oldham, West. His last letter dealt with waiting lists. First, he asked us to validate the waiting lists, which we are doing.
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  Secondly, he asked us once every six months to publish the results of waiting lists and to set out what patients are being treated, and where. We are doing that.
  The hon. Gentleman then asked us to set maximum levels for waiting lists. The maximum waiting lists in this country were to be found in March 1979, when 752,000 people were waiting for operations. Waiting lists went up by 250,000 under the last Labour Government. If waiting lists had continued to increase at the rate at which the last Labour Government—of which the hon. Member for Oldham, West was a member—left them, they would now stand at more than 1·5 million. In the event, waiting lists are going down and waiting times are going down. That is one measure of the success of the National Health Service under this Government.
  At a time of great medical advances and an increasingly elderly population the NHS is dealing triumphantly with the care of the British people. The quality and the style of medical care has greatly increased. My right hon. and learned Friend the Minister for Health referred to this. We are improving the quality of life for the elderly and the way in which they are looked after. To do so when medical costs are increasing and the number of people being treated is increasing is a major achievement. This Government's achievements since 1979 have wiped out the dereliction in the National Health Service with which the Labour party left us.
  The Government's record on the NHS stands on its own feet. We have nothing to say about the Labour party's record except that it failed, as was shown by the way it left the NHS in 1979. I invite my right hon. and hon. Friends to vote firmly against the motion.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 135, Noes 235.

  Division No. 254]

  [7.00 pm

  AYES

  Abse, Leo

  Conlan, Bernard

  Alton, David

  Cook, Frank (Stockton North)

  Anderson, Donald

  Corbyn, Jeremy

  Archer, Rt Hon Peter

  Cowans, Harry

  Ashdown, Paddy

  Craigen, J. M.

  Ashley, Rt Hon Jack

  Crowther, Stan

  Ashton, Joe

  Dewar, Donald

  Atkinson, N. (Tottenham)

  Dixon, Donald

  Banks, Tony (Newham NW)

  Dobson, Frank

  Barnett, Guy

  Dormand, Jack

  Beckett, Mrs Margaret

  Douglas, Dick

  Beggs, Roy

  Dubs, Alfred

  Bell, Stuart

  Duffy, A. E. P.

  Benn, Tony

  Dunwoody, Hon Mrs G.

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

  Ewing, Harry

  Bidwell, Sydney

  Fatchett, Derek

  Boothroyd, Miss Betty

  Faulds, Andrew

  Boyes, Roland

  Flannery, Martin

  Bray, Dr Jeremy

  Forrester, John

  Brown, Hugh D. (Provan)

  Foster, Derek

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

  Freeson, Rt Hon Reginald

  Brown, Ron (E'burgh, Leith)

  Gilbert, Rt Hon Dr John

  Bruce, Malcolm

  Godman, Dr Norman

  Campbell, Ian

  Golding, John

  Campbell-Savours, Dale

  Gourlay, Harry

  Canavan, Dennis

  Hamilton, W. W. (Central Fife)

  Carter-Jones, Lewis

  Harrison, Rt Hon Walter

  Cartwright, John

  Healey, Rt Hon Denis

  Clark, Dr David (S Shields)

  Hogg, N. (C'nauld & Kilsyth)

  Clarke, Thomas

  Holland, Stuart (Vauxhall)

  Clay, Robert

  Hughes, Robert (Aberdeen N)

  Clwyd, Mrs Ann

  Hughes, Roy (Newport East)

  Cocks, Rt Hon M. (Bristol S.)

  Hume, John

  Cohen, Harry

  Janner, Hon Greville

  239

  Jenkins, Rt Hon Roy (Hillh'd)

  Pavitt, Laurie

  John, Brynmor

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

  Johnston, Sir Russell

  Prescott, John

  Kaufman, Rt Hon Gerald

  Randall, Stuart

  Kennedy, Charles

  Rees, Rt Hon M. (Leeds S)

  Kilroy-Silk, Robert

  Richardson, Ms Jo

  Kinnock, Rt Hon Neil

  Roberts, Allan (Bootle)

  Kirkwood, Archy

  Roberts, Ernest (Hackney N)

  Lambie, David

  Robertson, George

  Lamond, James

  Ross, Stephen (Isle of Wight)

  Leighton, Ronald

  Ross, Wm. (Londonderry)

  Lewis, Ron (Carlisle)

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

  McCartney, Hugh

  Skinner, Dennis

  McDonald, Dr Oonagh

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

  McKelvey, William

  Smith, Cyril (Rochdale)

  MacKenzie, Rt Hon Gregor

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

  Maclennan, Robert

  Soley, Clive

  McNamara, Kevin

  Spearing, Nigel

  McTaggart, Robert

  Stott, Roger

  Madden, Max

  Strang, Gavin

  Marek, Dr John

  Taylor, Rt Hon John David

  Martin, Michael

  Thomas, Dr R. (Carmarthen)

  Mason, Rt Hon Roy

  Thompson, J. (Wansbeck)

  Maxton, John

  Tinn, James

  Maynard, Miss Joan

  Wainwright, R.

  Meacher, Michael

  Walker, Cecil (Belfast N)

  Michie, William

  Wallace, James

  Mikardo, Ian

  White, James

  Mitchell, Austin (G't Grimsby)

  Wigley, Dafydd

  Molyneaux, Rt Hon James

  Williams, Rt Hon A.

  Morris, Rt Hon A. (W'shawe)

  Wilson, Gordon

  Nellist, David

  Nicholson, J.

  Tellers for the Ayes:

  Orme, Rt Hon Stanley

  Mr. James Hamilton and

  Park, George

  Mr. Ray Powell.

  Patchett, Terry

  NOES

  Adley, Robert

  Farr, Sir John

  Amery, Rt Hon Julian

  Fletcher, Alexander

  Ancram, Michael

  Forman, Nigel

  Atkins, Rt Hon Sir H.

  Forsyth, Michael (Stirling)

  Atkins, Robert (South Ribble)

  Forth, Eric

  Baker, Nicholas (N Dorset)

  Fox, Marcus

  Banks, Robert (Harrogate)

  Franks, Cecil

  Beaumont-Dark, Anthony

  Fraser, Peter (Angus East)

  Best, Keith

  Freeman, Roger

  Biggs-Davison, Sir John

  Gale, Roger

  Body, Richard

  Galley, Roy

  Bonsor, Sir Nicholas

  Gardiner, George (Reigate)

  Boscawen, Hon Robert

  Garel-Jones, Tristan

  Bottomley, Peter

  Gilmour, Rt Hon Sir Ian

  Bottomley, Mrs Virginia

  Glyn, Dr Alan

  Braine, Rt Hon Sir Bernard

  Gorst, John

  Brandon-Bravo, Martin

  Gow, Ian

  Bright, Graham

  Greenway, Harry

  Brittan, Rt Hon Leon

  Gregory, Conal

  Bruinvels, Peter

  Griffiths, Sir Eldon

  Buchanan-Smith, Rt Hon A.

  Griffiths, Peter (Portsm'th N)

  Budgen, Nick

  Ground, Patrick

  Carlisle, John (N Luton)

  Grylls, Michael

  Carlisle, Kenneth (Lincoln)

  Hamilton, Hon A. (Epsom)

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

  Hamilton, Neil (Tatton)

  Cash, William

  Hannam, John

  Chapman, Sydney

  Harris, David

  Clark, Sir W. (Croydon S)

  Harvey, Robert

  Clarke, Rt Hon K. (Rushcliffe)

  Haselhurst, Alan

  Clegg, Sir Walter

  Havers, Rt Hon Sir Michael

  Colvin, Michael

  Hayes, J.

  Coombs, Simon

  Hayhoe, Rt Hon Barney

  Cope, John

  Hayward, Robert

  Couchman, James

  Heathcoat-Amory, David

  Crouch, David

  Heddle, John

  Currie, Mrs Edwina

  Henderson, Barry

  Dicks, Terry

  Heseltine, Rt Hon Michael

  Dorrell, Stephen

  Hickmet, Richard

  Douglas-Hamilton, Lord J.

  Hicks, Robert

  Durant, Tony

  Higgins, Rt Hon Terence L.

  Dykes, Hugh

  Hind, Kenneth

  Emery, Sir Peter

  Hirst, Michael

  240

  Hogg, Hon Douglas (Gr'th'm)

  Portillo, Michael

  Holland, Sir Philip (Gedling)

  Powell, William (Corby)

  Howard, Michael

  Powley, John

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

  Price, Sir David

  Howarth, Gerald (Cannock)

  Proctor, K. Harvey

  Howell, Ralph (N Norfolk)

  Rathbone, Tim

  Hubbard-Miles, Peter

  Renton, Tim

  Hunt, David (Wirral)

  Rhodes James, Robert

  Hunt, John (Ravensbourne)

  Rhys Williams, Sir Brandon

  Hunter, Andrew

  Ridsdale, Sir Julian

  Irving, Charles

  Rippon, Rt Hon Geoffrey

  Jessel, Toby

  Roberts, Wyn (Conwy)

  Jones, Robert (W Herts)

  Roe, Mrs Marion

  Kellett-Bowman, Mrs Elaine

  Rossi, Sir Hugh

  Key, Robert

  Rost, Peter

  King, Rt Hon Tom

  Rowe, Andrew

  Knight, Greg (Derby N)

  Rumbold, Mrs Angela

  Knight, Dame Jill (Edgbaston)

  Ryder, Richard

  Knowles, Michael

  Sackville, Hon Thomas

  Knox, David

  Sainsbury, Hon Timothy

  Lamont, Norman

  Sayeed, Jonathan

  Latham, Michael

  Shaw, Sir Michael (Scarb')

  Lawrence, Ivan

  Shelton, William (Streatham)

  Lee, John (Pendle)

  Shepherd, Colin (Hereford)

  Leigh, Edward (Gainsbor'gh)

  Silvester, Fred

  Lennox-Boyd, Hon Mark

  Sims, Roger

  Lester, Jim

  Skeet, T. H. H.

  Lord, Michael

  Smith, Tim (Beaconsfield)

  Lyell, Nicholas

  Soames, Hon Nicholas

  McCurley, Mrs Anna

  Speed, Keith

  Macfarlane, Neil

  Speller, Tony

  MacKay, Andrew (Berkshire)

  Spencer, Derek

  Maclean, David John

  Spicer, Jim (W Dorset)

  McNair-Wilson, M. (N'bury)

  Squire, Robin

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

  Stanbrook, Ivor

  McQuarrie, Albert

  Stanley, John

  Madel, David

  Steen, Anthony

  Major, John

  Stern, Michael

  Malins, Humfrey

  Stevens, Lewis (Nuneaton)

  Malone, Gerald

  Stokes, John

  Maples, John

  Stradling Thomas, J.

  Marlow, Antony

  Sumberg, David

  Mates, Michael

  Taylor, John (Solihull)

  Maude, Hon Francis

  Taylor, Teddy (S'end E)

  Mawhinney, Dr Brian

  Temple-Morris, Peter

  Mayhew, Sir Patrick

  Thomas, Rt Hon Peter

  Mellor, David

  Thompson, Donald (Calder V)

  Merchant, Piers

  Thompson, Patrick (N'ich N)

  Meyer, Sir Anthony

  Townend, John (Bridlington)

  Mills, Iain (Meriden)

  Townsend, Cyril D. (B'heath)

  Mills, Sir Peter (West Devon)

  Trippier, David

  Mitchell, David (NW Hants)

  Trotter, Neville

  Moate, Roger

  Twinn, Dr Ian

  Monro, Sir Hector

  van Straubenzee, Sir W.

  Montgomery, Sir Fergus

  Waddington, David

  Moore, John

  Wakeham, Rt Hon John

  Morrison, Hon C. (Devizes)

  Waldegrave, Hon William

  Morrison, Hon P. (Chester)

  Walden, George

  Moynihan, Hon C.

  Walker, Bill (T'side N)

  Neale, Gerrard

  Waller, Gary

  Needham, Richard

  Walters, Dennis

  Nelson, Anthony

  Ward, John

  Neubert, Michael

  Wardle, C. (Bexhill)

  Newton, Tony

  Watson, John

  Nicholls, Patrick

  Wells, Bowen (Hertford)

  Normanton, Tom

  Wells, Sir John (Maidstone)

  Norris, Steven

  Whitfield, John

  Onslow, Cranley

  Whitney, Raymond

  Oppenheim, Phillip

  Wiggin, Jerry

  Osborn, Sir John

  Wilkinson, John

  Ottaway, Richard

  Wolfson, Mark

  Page, Richard (Herts SW)

  Wood, Timothy

  Parkinson, Rt Hon Cecil

  Yeo, Tim

  Patten, J. (Oxf W & Abdgn)

  Pawsey, James

  Tellers for the Noes:

  Peacock, Mrs Elizabeth

  Mr. Ian Lang

  Percival, Rt Hon Sir Ian

  Mr. Peter Lloyd

  Pollock, Alexander

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No.33 (Questions on amendments), and agreed to.
  Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  'That this House applauds the improved levels of service to patients achieved by the National Health Service and its staff under this Government; congratulates the Government on making this possible through its record of increasing expenditure on the Service; welcomes the fact that improved levels of service have been achieved while the pay of nurses has been raised by 23 per cent. in real terms; and supports the Government's determination to ensure, through improved management and greater efficiency, that maximum benefit is derived for patients from the resources available to the Service.'.

  British Steel Corporation (Borrowing Powers)
  7.12 pm
  The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): I beg to move,
  That the draft British Steel Corporation (Borrowing Powers) Order 1985, which was laid before this House on 20th June, be approved.
  The subject of the draft order is the British Steel Corporation's statutory borrowing limit. All the corporation's borrowing, whether from the Government or from other sources, together with payments of public dividend capital from the Government, count towards the limit. The Iron and Steel Act 1982, the principal statute governing the BSC, provides that the limit shall be within the range £2,500 million to £4,500 million and provides that the limit may be varied by order, subject to an affirmative resolution of the House. The limit presently stands at £3,500 million, having been set at that level in July last year by the British Steel Corporation (Borrowing Powers) Order 1984.
  The draft order proposes that the present limit be raised by £700 million to £4,200 million. It is important to emphasise that, as with all such orders, it is permissive only. It does not, of course, commit the Government to providing that sum to the corporation, and the future funding of the corporation will be subject, as always, to external financing limits and to the procedures of the House.
  In the debate on the previous order in 1984, I said that as a result of the dispute in the coal industry there was a possibility that a further order might be necessary earlier than the two-year period normally elapsing between orders. That in this case has proved to be true. The direct financing impact of the miners' strike upon the BSC was about £180 million. This enormous unnecessary additional cost, together with the BSC's final external financing limit of £343 million, more than absorbed the £500 million increase in the corporation's borrowing limit approved by the House last July. The EFL for the present financial year of £360 million will push the BSC through its current borrowing ceiling.
  At the end of March, the BSC's actual and potential borrowings stood at £3,390 million against the present limit of £3,500 million. Now that the strike is behind it, the BSC's cash needs so far in 1985–86 have been relatively modest, but an increase in the borrowings limit will certainly become necessary some time after the end of July. The BSC's forward cash needs are at present subject to uncertainty for a number of reasons. However, it is clear that, whatever decisions are taken, the BSC will continue to need outside funding for a few more years.
  With the miners' strike behind it, the BSC is now trading profitably. To cater for these needs, we have set an EFL of £360 million for 1985–86, which is well below the £523 million of external finance provided for last year. The best estimate that we can make at present for external funding in the period after 1985–86 is that it will continue to diminish from year to year, but that slightly more than a further £300 million will be needed over the following two years taken together, and public expenditure projections are currently on that basis. The figure of £700 million should, therefore, be able to cover the requirements for up to three years and to give us a degree

  243
  of flexibility to deal with current uncertainties. But it remains our firm policy to end the BSC's dependence on the taxpayer as quickly as possible, and decisions over the period covered by the order will be taken very much with a view to reducing the BSC's external funding needs as quickly as possible.
  I should like to comment briefly upon the corporation's performance during the last financial year, and then to consider the future. The year 1984–85 was, of course, very much dominated by the miners' strike. The BSC was set a demanding target of breaking even before interest. It must therefore have been particularly galling for the management and the work force to see the attainment of that target frustrated by the employees of an industry which was the second largest customer of the BSC. Opposition Members, many of whom represent steel constituencies, might reflect upon the much stronger position in which the BSC would find itself today but for that disruption.
  I pay the warmest tribute to the management of the BSC for its ingenuity in keeping plants operating and, of course, to the workers for their courage and common sense in perceiving their long-term interest and that it could in no way be served by adding to the disruption.
  The BSC's annual accounts are expected to show that, but for the intervention of the miners' strike, the corporation would have made a small profit after interest. This represents the best operating result for 10 years, and exceeded the Government's target for the year of break-even before interest.
  The corporation has entered the current year at a trading profit and, if expectations are borne out, this year will see the first accounting profit since 1974–75. This very encouraging performance, which is masked by the cost of the strike, has been achieved in conditions of intense competition in Europe and elsewhere. It is a measure of the great improvements in productivity and quality which BSC has made in recent years. I should perhaps underline to the House that in the past five years the BSC's selling prices have risen by half the rate of its input costs. Against this background, I think that the improvement in its operating results is all the more remarkable.
  During the past year the BSC has continued to pursue another target set by the Government, that of privatising those areas which overlap with the private sector and those activities which are outside the main stream of the BSC's steel business. Two major disposals took place. First, 75 per cent. of the shares of Stanton and Staveley were sold to Pont à Mousson and RGC Offshore plc was sold to the Trafalgar House Group. A number of smaller disposals also occurred, most notably Pipework Engineering to Babcock Power Ltd. and Coated Electrodes Ltd. where a management buy-out was completed.
  During the year, two important joint ventures were established with the private sector. I draw the attention of the House to United Merchant Bar Ltd., which was created with Caparo Industries plc which holds a 75 per cent. interest in the new company which was formed to roll flats and light sections.
  Mr. Don Dixon: The hon. Gentleman talks about small issues. Does he realise that 500 men at Jarrow and Warrington will lose their jobs? That is not a "small" issue to them.
  Mr. Lamont: If the hon. Gentleman wants to make a speech about the steel industry in his constituency, I am
  244
  sure that he will do so. He knows that measures and decisions about particular plants are matters for the BSC'. There has been an enormous contraction in the industry's labour force.
  Mr. Dixon: The Minister referred to a small issue.
  Mr. Lamont: It is not a small issue. I did not say that the closure of plants or the shedding of labour were small issues. But that has happened throughout the Western world and Europe.
  Mr. Michael Grylls: I am sure that the House has followed with great interest what my hon. Friend said about disposals during the past year. What further disposals does he expect during the year ahead? How much money is that likely to bring in to the BSC to relieve the burden on the taxpayer?
  Mr. Lamont: It is extremely difficult to answer those points, because we are a long way from the time when the BSC's basic steelmaking business will reach a state of enduring viability that would make it capable of being privatised. As Opposition Members who take an interest in these matters know, Phoenix 2 — the engineering steels—was an area where we very much hoped that privatisation could occur. That is one of the most important areas of overlap between the public and the private sectors. It is closely linked with a number of other decisions that must be taken within the corporation
  I wish to emphasise how much privatisation has already occurred. Since 1980, the total book value of assets disposed of has been £349 million, which is 16 per cent. of the total book value of the BSC's assets in 1980. Land and property sales have realised £78 million. Since 1980, 14,000 BSC employees have been transferred to companies that were set up or disposed of as part of privatisation policy. I hope that my hon. Friend the Member for Surrey, North-West (Mr. Grylls) agrees that much has already happened in this direction.
  Mr. James Hamilton: Does the hon. Gentleman realise that there is tube manufacturing in my constituency? Many rumours have been circulating for a long time on this matter. I and my hon. Friend the Member for Motherwell, South (Dr. Bray) have met the management at the BSC's premises at the Clydesdale works. The management did riot deny that, if a suitable offer were made, privatisation would occur. Do the Government intend moving in that direction?
  Mr. Lamont: It is the Government's intention that as much of the corporation as possible should be privatised and that, to a large extent, it should be done through joint ventures with the private sector. That is the way that is likely to be most practicable in the areas of overlap with the private sector.
  Does the right hon. and learned Member for Monklands, East (Mr. Smith) wish to intervene?
  Mr. John Smith: Ministers do not often invite me to intervene, but the hon. Gentleman has kindly asked me to do so. He has just said that joint ventures will be a method of privatisation. Does that mean that Phoenix 2 is not a joint venture but a method of privatising?
  Mr. Lamont: Phoenix 2 is a project on which decisions have not yet been made. I must emphasise that decisions on Phoenix 2 must be related to other decisions about the

  245
  corporation. Phoenix 2 would be likely to be a joint venture. In my terminology, a "joint venture" could also be called a measure of privatisation. I hope that that makes the position clear to the right hon. and learned Member for Monklands, East. I invited him to intervene because, as some of my colleagues were talking, I was not sure that I had answered the question addressed to me by the hon. Member for Motherwell, North (Mr. Hamilton).
  Mr. Richard Hickmet: I refer to transferring part of the BSC to the private sector and also to Phoenix 1 and Allied Steel and Wire. Is it not a fact that ASW is now highly competitive and highly profitable? If we are concerned about the steel industry's stability and future, should we not look at ASW which has proved that, if the steel industry operates in the private sector, it will operate more effectively and efficiently and its long-term future will be secured?
  Mr. Lamont: I entirely agree with my hon. Friend. ASW has demonstrated that a privatised company can operate successfully and can offer greater job security. Above all, because it is a privatised company decisions about the steel industry are made on a commercial basis and are not wrapped up in political considerations which, despite all the current controversies, do not serve the long term interests of the industry or of those who work in it.
  Another important feature of the past year was the decision taken by the BSC with its overseas partners to terminate an arrangement for the supply of iron ore which had become uneconomic. This decision resulted in the closure of the Firelake mine in Canada and the subsequent repayment of loans used to finance the mine at a total cost of £130 million. The BSC's external financing limit was increased by £70 million on this account. The remaining £60 million was provided from the BSC's own resources. This transaction will result in a saving to the BSC of £40 million each year.
  It is clearly not possible to view the BSC's performance in the United Kingdom context alone. The European and world steel markets need to be taken into account. I think that every hon. Member would agree that the corporation's anti-crisis measures have continued to stabilise the steel market. This has resulted in improvements in prices in the second half of 1984 and in 1985, although in real terms steel prices are still well below 1979 levels. These anti-crisis measures are designed to support the Community market while excess capacity is removed and to pave the way for the ending of steel aids by the end of 1985. This is a policy that the United Kingdom Government have supported, and our industry has been in the forefront of those implementing it.
  It must be emphasised, as the Government have emphasised before in these debates, that the restructuring of the industry was necessary irrespective of the European regime. Although we started the process earlier than some other Community countries, the current steel aids code requires other member states to play their full part in the restructuring process as well.
  Mr. Alec Woodall: Does the Minister have recent information about whether there will be pressure from other EC countries to keep state aid in existence beyond the present closing date? There are rumours to that effect.
  Mr. Lamont: I am afraid that I cannot anticipate that. At the last Steel Council, the decision to end steel aids at the end of 1985 was accepted by all members. There will be a further meeting of the Steel Council on 26 July to consider the quota regime and what will happen after 1985. The ending of state aids does not mean that it will be impossible for Governments to make investment or loan capital available to their steel industries in certain circumstances. Further discussions will have to take place on 26 July about the whole apparatus—not just of the steel aids but of the quota regime that goes with it.
  Dr. Jeremy Bray: Does the Minister intend to press on 26 July for a continuation of some aspects of the quota and price regime?
  Mr. Lamont: Our view tends to be that a sudden removal of the quota regime might have extremely drastic consequences. Representations to that effect have been made to us by the BSC and the British Independent Steel Producers Association. Our final position has still to be determined. I believe that we should look at the possibility of a phased withdrawal or gradual reduction. Our position will depend a little on what other Governments do and their position on state aids.
  Dr. Bray: Will the Minister consider an extension of two or three years?
  Mr. Lamont: That must be considered on July 26. No decision has been reached about how long the system will remain in existence. That is a decision not simply for us to take, but for all other member states.
  Mr. Hickmet rose——
  Mr. Lamont: I do not wish to prolong this short debate, so I shall not give way again.
  All member states will achieve at least the reductions in steel capacity that they have promised for the end of 1985. Between 1980 and 1985 at least 28·4 million tonnes of capacity will have been shut in the Community as a whole. The final figure could well reach 30 million tonnes. The United Kingdom's promised share is 4·5 million tonnes, but our final figure will be rather higher.
  Despite the additional difficulties in cost imposed on the BSC by the coal strike, the corporation's continuing efforts to improve efficiency and reduce costs will be seen to have paid off not only in the past year but in future years. The BSC now ranks among Europe's most competitive steel suppliers. Since 1979 the United Kingdom's productivity in tonnes of steel per worker has doubled and is now on a par with the best comparable levels prevailing in Europe. The BSC started from a very much worse position and we cannot assume that its competitors will stand still, but clearly the BSC is now in a much stronger position to face the future than would have been thought possible by those who doubted the resolve of the BSC and the Government in recent years.
  Mr. Clarke: Sir Robert Haslam has said that the corporate plan will be published at the end of July. Will the Minister confirm that?
  Mr. Lamont: The corporate plan will be received by the Government at the end of July. We have no intention to publish that plan. It has not been published in the past.
  The BSC's progress results from a determined effort by management to respond to market demands and competitive pressures and from the Government's

  247
  acceptance of the need to back the corporation's effort. It results also from the skill and determination of the work force. The world does not stand still and the Government must look to the BSC to make further progress in the future.
  I acknowledge the point made by the hon. Member for Motherwell, South (Dr. Bray). The Government have accepted the EC system of quota and price controls, although it has imposed limitations on market initiatives by producers, because it is necessary to allow time to eliminate the need for subsidies. The other major European producers have recognised the need to make this regime work to bring some stability to the market. If a further extension of the quota system is proposed, our willingness to accept it will depend, as on previous occasions, on our judgment as to whether it is in the best interests of the United Kingdom steel industry. Any proposals will need to recognise the substantial improvements in our performance over the past few years both in absolute terms and relative to the rest of the industry in Europe.
  Unfortunately, the improved performance in both the United Kingdom and the EC steel industries does not mean that the problem of overcapacity has been solved for all time. The Commission has recently produced a report on Community steel industry output up to 1990, which says that output in 1990 is unlikely to be significantly higher than in 1984, and may well be lower. Despite the substantial progress that has been made in removing excess capacity in the past few years, the Commission estimates that further substantial capacity closures will be needed in Europe. Only then will the industry return to levels of capacity utilisation consistent with profitability.
  All member states are committed to ending state aids by the end of 1985. This was reaffirmed at the Industry Council on 26 March. The BSC will continue to need state finance, borrowings and capital after 1985, but I believe that no subsidy element will be needed after that date.
  That is the background against which the BSC and the Government have to consider the corporate plan. It has proved a difficult task for the BSC to develop its view of the situation in the wake of the coal strike. The BSC chairman said in evidence to the Select Committee that a dialogue on planning matters had resumed between the BSC and the Government and that it was hoped that matters would be clear enough for a submission to be made by the end of July.
  It would not be right for me to speculate on what the BSC may propose either in respect of any particular works or more generally, nor on what view the Government may take of the plan. The plan will need to show that the BSC is on the path to full commercial viability. That is necessary to show not just that further investment of capital in the BSC is an investment on commercial terms and not a state subsidy, but to satisfy the Government that the BSC's main operations will in due course be capable of being returned to the private sector.
  The BSC has made progress in the privatisation of many of its activities. To make it possible to return the core activities to private ownership is a further challenge that the Government and the BSC do not underestimate. World prospects and existing levels of overcapacity suggest that it cannot be achieved overnight, but it is the Government's objective, which is fully consistent with the EC agreement to create a viable and secure steel industry.
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  This draft order will enable further funds to be provided to support the encouraging process of recovery of the BSC and will ultimately facilitate privatisation. I commend the order to the House.
  7.35 pm
  Mr. John Smith: The Opposition do not oppose the order and we do not expect a Division, but it provides a timely opportunity to discuss the British steel industry and the Government's handling of their policy towards that crucial industry.
  It is remarkable that the Minister of State can come to the House in the light of recent controversy over the future of the steel industry and not mention Ravenscraig or Llanwern. The Minister knows the deep concern throughout the industry about recent speculation by the chairman and chief executive of the British Steel Corporation in evidence to the Select Committee. It is not satisfactory for the Minister to say that he cannot speculate on the future of any plan within the corporation before he receives the corporate plan. We always seem to be awaiting a plan from the British Steel Corporation.
  If the Minister cannot speculate on the future of Llanwern and Ravenscraig, how is it possible for the Secretary of State for Wales to speculate about Llanwern and for the Secretary of State for Scotland to speculate about Ravenscraig? In recent weeks, the Secretary of State for Wales has assured us that he will fight like hell to save Llanwern, but against whom? Is he fighting the Secretary of State for Trade and Industry or the Minister of State? Most people should fight as hard as possible against what they have in mind. I do not know what the Secretary of State for Wales has in mind, but the Secretary of State for Scotland has not been behindhand in telling us that he is committed to Ravenscraig. Indeed, he and other Conservative Members turn up at meetings in Scotland to tell us that they are solidly behind the future of Ravenscraig.
  How can the Secretaries of State for Scotland and Wales tell us that everything is all right when the Minister of State says that he is unable to speculate? I believe that he is able but unwilling to speculate—I give him credit for competence. It is the duty of the Secretary of State for Trade and Industry to come to the Dispatch Box and to repeat what his colleagues have said—that the future of Llanwern and Ravenscraig is assured. Nothing less will do.
  Mr. Roy Hughes: I am interested in my right hon. and learned Friend's remarks. Does he, like me, fail to understand how the chairman of BSC, Sir Robert Haslam, could tell the Select Committee on Trade and Industry that the BSC and the Government were actively discussing the possible closure of either Ravenscraig or Llanwern? That was widely quoted in the media.
  Mr. Smith: My hon. Friend keeps a close watch on what is said about Llanwern. His deep concern is shared throughout Wales, where the matter is of great importance to a much wider community than that which he so ably and tenaciously represents. He makes the valid point that, in evidence to a Select Committee, BSC officials speculated about cutting losses, and the one extra plant. That has been a feature of the evidence given every time that the matter has come before the Select Committee. Yet, when we

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  confront the Ministers responsible, they blandly evade the matter by saying that they are not willing to speculate. As the Minister knows, there is deep anxiety in the industry and the communities that are most directly affected by the future of both Llanwern and Ravenscraig, because the chairman of BSC keeps telling them—he does not even hint—that if BSC is to meet the Government's targets, especially privatisation, both plants cannot remain open. That is not good enough.
  Mr. Hickmet rose——
  Mr. Smith: Perhaps the hon. Gentleman will give me the assurance that his Front Bench will not give, in which case I welcome his intervention.
  Mr. Hickmet: I shall give the right hon. and learned Gentleman that assurance when I speak from the Dispatch Box, which I do not expect to do soon. Does he accept the Government's injunction to BSC to achieve viability, and the injunction of the European Commission to end state aid by 1985? If so, what are his comments on Llanwern and Ravenscraig?
  Mr. Smith: I do not accept Government injunctions to BSC, even if I knew more clearly what they were.
  Mr. Hickmet: What would the hon. and learned Gentleman's injunctions be?
  Mr. Smith: I hope that the hon. Gentleman will allow me to develop my argument. He wants answers from me, although the Minister does not answer questions. The Minister certainly does not give the Opposition answers. The Opposition oppose the regime which the Government wish to put on BSC because it is based not so much on viability as on moving towards privatisation. When in an important part of his speech the Minister said that the plan must move towards full commercial viability, he meant towards a level of profitability which would ease the sale of coal, iron and steel making to the private sector. While that remains part of the Government's policy for BSC, we shall resolutely oppose it.
  According to the Minister, at present BSC is trading profitably. In that case, the only reason to close either Ravenscraig or Llanwern is to assist the move towards privatisation. Therefore, the threat to those steel plants comes from one quarter alone—the Government who wish to privatise our steel industry. There is no pressure from any other quarter, and there cannot be pressure to move towards viability, if the corporation is already trading profitably, as the Minister said.
  The Government talk about privatisation as if every privatisation exercise in which they indulge were intrinsically creditable. It is as if every Minister must produce a report card at the end of term to tell the Prime Minister what he has privatised. I am sure that the Minister of State will not be behindhand in saying how much he privatised last year. It is as if the Government's only purpose in their stewardship of the steel industry is to move the industry as fast as possible and on any terms into the private sector. It is not difficult to sell public assets. Indeed, it is easy to make a success of doing so, especially if they are sold below their value, as was the case with British Telecom. If assets are sold cheaply, the sale will obviously be a success.
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  We are fearful for the future of the steel industry, because the parts which become capable of making substantial profits will be sold, while the other parts, which are necessary for the breadth of support that we must give our manufacturing industry, and which are loss making, will be kept in the public sector. All the loss-making parts will remain in the public sector and the profit-making parts will be sold to the private sector. The Government's relentless pursuit of that policy in the steel industry and in other areas does not benefit taxpayers because they are selling the profitable element, which would benefit taxpayers, and continually saddling taxpayers with loss-making elements.
  My hon. Friend the Member for Motherwell, North (Mr. Hamilton) was right to mention the anxiety of workers in areas such as the tube works at Clydesdale in his constituency, which is an extremely efficient operation. They are worried that if they co-operate in making the enterprise successful, they will assist the process of privatisation, to which they are deeply and firmly opposed, as I hope both the Government and the corporation know.
  The truth is that the worrying rumours about Llanwern and Ravenscraig, which includes the Gartcosh complex, will continue. They are not healthy for the industry or the communities dependent on it, and the Government could put them to rest immediately. There is nothing to stop the Minister coming to the Dispatch Box and telling us that those two plants are secure, and that the Government do not intend to assist in any proposal from BSC to close them.
  I challenge the Minister to give us a specific answer to that question before tonight's debate finishes. He did not do so in his introduction. The people of Wales and Scotland deserve a clear answer, especially as the respective territorial Secretaries of State have not been behindhand in issuing those assurances. Those assurances need to be corroborated by the Minister responsible, who is present tonight. I am happy to sit down at any stage if the Minister is willing to answer our direct and specific questions about the future of Ravenscraig and Llanwern. His failure to answer them directly is sad. I assure him that the fight to maintain those works will continue as relentlessly and effectively as it has since the threat to their future was first raised.
  Mr. Norman Lamont: I should like to ask the right hon. and learned Gentleman a question. Would he make a decision about BSC, regardless of the views of its management?
  Mr. Smith: I would find it awkward to avoid expressing an opinion when senior colleagues in the Government—two Cabinet Ministers—felt free and able to do so. I would believe that the Government's integrity was so much in question that, before I saw the details of the corporate plan, I would make it crystal clear that, whatever it contained, there would be no question about the closure of either plant. I am willing to say that clearly and specifically.
  The Minister's desire to ask me that question shows that there is some doubt in his mind. Will he rise to his feet now and tell us whether those plants will remain open? Why cannot he do that? I am willing to give way. I have answered his question. Will he now answer mine? I answered the Minister by saying that I would anticipate the

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  corporate plan by giving assurances that Llanwern and Ravenscraig would not close. That is a decision for the Government, and they should make it clear that the parameters within which BSC should operate are those that keep the major steel plants open. I hope that the Government's silence, reluctance and evasion will not pass unmarked in the areas which depend on those plants.
  Mr. Lamont: My question was not whether the Government would be involved in the decision, but whether the right hon. and learned Gentleman would make the decision regardless of the advice of BSC management.
  Mr. Smith: The Minister must come to terms with reality. We know that the British Steel management, as the chairman has made clear, would like to close one of the plants. That is the only construction that we can put on the evidence given to the Select Committee.
  It is no secret in the steel industry that there is a desire, on the part of at least some of the management, to eliminate — I use the word carefully — one of the strip mill plants. The Minister is not so naive that he does not know of the struggle that took place a while ago, which resulted in the decision that neither plant would close. He knows also that the issue has re-emerged because of evidence given to a Committee of the House by senior management of the British Steel Corporation.
  The question returns, as it always must, to the lap of the Government. The Government must make up their minds whether Ravenscraig and Llanwern will remain as permanent features of the British steel scene for the foreseeable future. That assurance has been given by the Secretaries of State for Scotland and Wales. Why can the assurance not be given by the Minister of State whose direct responsibility it is? Perhaps the Minister can tell us why he cannot give the same assurance as his colleagues.
  Mr. Lamont: I wish only to repeat my question. Does not the view of the BSC management count?
  Mr. Smith: As the ultimate owner of the corporation, the Government should of course listen to what the management has to say. But the Minister knows perfectly well what the management said to the Select Committee. We have listened to the evidence also and we know where it leads and recognise its import. The Government must not listen to any recommendation from the management to close Ravenscraig and Llanwern. The Minister must not quibble about words. It is clear that the Government have responsibility. If the Minister will not say that Llanwern and Ravenscraig will remain open, we are entitled to cast doubt upon the integrity of the Secretaries of State for Scotland and Wales, who gave emphatic commitments which the Minister is unwilling to endorse.
  Mr. Hickmet rose——
  Mr. Smith: The Minister will have to fight his own corner without help from the hon. Gentleman. The Minister with responsibility for these matters is unwilling to agree with senior colleagues who airily gave assurances — it seems as though they were airily given — to the communities and counties which they represent that the works would remain open. My hon. Friends and I live in these areas and know what goes on in the communities. The Minister must know that some of his hon. Friends, who significantly are not here tonight, have attended conferences organised by the Scottish Trades Union Congress. We have been told that Scottish Conservative
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  Members will fight. The hon. Member for Banff and Buchan (Mr. McQuarrie) said at a meeting on a different matter that he would fight vigorously to maintain Ravenscraig. The hon. Member for Strathkelvin and Bearsden (Mr. Hirst) told us how vigorously he would fight for the future of Ravenscraig. Where are they tonight?
  Where are the Secretaries of State for Scotland and Wales? They are conveniently absent in case their remarks would be brought home to roost. We have the undignified picture of a junior Minister from the Department of Trade and Industry wriggling because he cannot answer simple questions put to him by the Opposition. He cannot confirm that the Secretaries of State for Scotland and Wales are to be believed. We shall draw our own conclusions. There is doubt, uncertainty and confusion in the areas affected by Llanwern and Ravenscraig. It is time that they were put to rest.
  The Minister knows that it is not enough to say that there will not be a closure. Ravenscraig needs investment in the coke ovens if it is to be kept up to date as a first-class plant. Llanwern needs investment in concast production methods. I hope that the Minister, when he replies, will make a definite commitment instead of the evasions to which we have been subjected.
  The underlying problem, which the Minister fails to recognise, that has faced the British steel industry over past years is the collapse of manufacturing industry. Because of that collapse, there has been a collapse in the demand for steel. When the Government took office, production was 20 million tonnes. Production has not exceeded 15·5 million tonnes since that time.
  The reason for this drop in demand is the catastrophic decline in manufacturing industry. There are gloomy predictions about the future of the industry because of the catastrophic predictions for the future of manufacturing industry. British Steel documents show a continuing level line for manufacture and production. The corporation is contracting its capacity to meet the bottom curve of a dip in demand. If we expand our manufacturing industry — that will be the intention of the next Labour Government — we shall find ourselves, perhaps, without the steel capacity that will be necessary to provide the raw materials for manufacturing industry. The present Government will then be exposed to the serious charge of neglect. They continue to cut and they show no concern for the future of manufacturing industry.
  Mr. Norman Lamont rose——
  Mr. Smith: Yes, I shall give way to the Minister. Unlike him, I am willing to answer directly important questions about the steel industry.
  Mr. Lamont: Are the comments of the right hon. and learned Gentleman about steel production borne out by the fact that, in 1984 and 1983, United Kingdom steel production was higher than in 1981 as a proportion of demand in the EEC?
  Mr. Smith: I am not interested in the selective presentation of statistics. I am interested in a simple fact, which is that much less steel is produced now than in the years when the Labour Government were in office. The reason for that is the great decline in manufacturing industry since the days of the Labour Government. The Minister can wriggle this way or that but that is a fact from which he cannot escape.
  Dr. Bray: The Minister of State knows perfectly well the answer to his question. In 1981, steel production in the United Kingdom was severely affected by the steel strike, from which the industry had not recovered. The Minister is an inveterate distorter of statistics.
  Mr. Smith: I am grateful to my hon. Friend for setting the record straight. It might stop the Minister seeking to mislead others in future. At least, my hon. Friend's intervention should have that effect but I do not know whether it will.
  Mr. James Hamilton: My right hon. and learned Friend is right in saying that there has been a serious drop in steel production, and that is the result of the Government's policies. Steel consumption industries — I worked in one before I became a Member of this place — are in a worse state than they have ever been since the 1920s. We need new bridges, schools, hospitals and other items of infrastructure, and if such projects were implemented the demand for steel would be considerably greater.
  Mr. Smith: My hon. Friend advances the argument compellingly. The steel industry is dependent on manufacturing industry, and some sectors of the steel industry are especially dependent upon the construction industry. If the market is removed, which the Government have been so careless in allowing by their neglect of the manufacturing sector, it is no surprise that the steel industry finds difficulty in securing markets for its products. The best tonic that we can give the British steel industry is to revive manufacturing industry. That is at the heart of the economic policies that are advocated by the Opposition, which will be implemented by the next Labour Government.
  It would be wrong not to mention Tinsley Park, another matter which the Minister failed signally to mention. He knows that the proposal to close Tinsley Park was made by the BSC. The workers have fought a vigorous campaign to seek to persuade the corporation to abandon its proposals, but it seems that they have been forced, reluctantly, to accept the closure proposals. It is sad that another important plant is to be closed.
  The latest information that I have suggests that the work force is likely to accept the plant's closure. It is a sorry day when these plants go out of existence. I compliment those who have worked so hard to try to persuade the corporation to change its mind. As the Minister knows, there is a great deal of suspicion because it was elicited in December 1983 in the Select Committee on Trade and Industry that the closure of Tinsley Park was included in the Phoenix 2 proposal. That hardly squares with the constant assurances which the corporation gave that it was a self-standing decision that had nothing to do with the Phoenix 2 proposal.
  When I asked the Minister whether a joint venture was the road to privatisation, he more or less admitted that it was. That was a revealing part of his speech. It appears that joint ventures are an exercise in the privatisation option. We have always suspected that. They are a particularly bad exercise of the privatisation option because they usually involve a large amount of public sector resources and capital and a small amount of private sector capital and resources, but both private and public sectors share the profits equally. Once again, there is a
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  large contribution by the taxpayer and a disproportionate benefit going to the private sector. That is the pattern of the Government's approach to the British steel industry.
  I am sorry to say at this stage in the debate that, without the assurances that we have sought from the Minister, we must remain deeply dissatisfied about the Government's conduct and their policy towards this crucial and important industry. That is, first, because our manufacturing industry continues to languish, and, secondly, because important plants are left in the doubt, uncertainty and confusion that it would be easy for the Government to resolve but which, for their own reasons, they curiously refuse to do.
  8 pm
  Sir John Osborn: I listened to the speeches of my hon. Friend the Minister and of the right hon. and learned Member for Monkslands, East (Mr. Smith) with interest. The debate gives hon. Members a chance to obtain the Government's view on what is happening in the steel industry. I shall make a few observations about steel in general, a few more about special steels and engineering steels in particular and specifically I shall touch on the scene in Sheffield, involving Sheffield Forgemasters and Phoenix 1 and 2, and including Aldwarke and Stocksbridge, as well as the Tinsley works.
  As hon. Members will know, I have been involved in the steel industry all my life. There is no need for me to declare an interest now other than that of my constituents. I welcome the observations made by my hon. Friend about hiving off, and the growth of the private sector. Those in the private sector of the steel industry who have survived in Sheffield are looking forward to the future in the private sector with optimism. It is a pleasure to see the vigour coming back to the few who have survived.
  I read with mixed feelings that the order extends the borrowing powers to £4·2 billion. After this debate, I shall have even more mixed feelings because the nation is faced with a £700 million increase in the extent to which taxpayers must divert their funds from other priorities to sustain disastrous decisions taken 18 to 20 years ago.
  Earlier today, my right hon. and learned Friend the Minister for Health had to defend the Government's decision to expand the Health Service but not to provide as much taxpayers' funds as they would wish. If there is a need to provide taxpayers' funds for the steel industry, as has been done consistently for 20 years, that must mean that other priorities have to fit in with the priority of sustaining an industry that has made a series of disastrous decisions which have been mainly under Government pressure and from which it is now pulling out. I thank my hon. Friend the Minister for his optimistic forecast for the steel industry.
  It had been my intention to use the annual accounts of the British steel industry for the current year. However, I have only the accounts for the last year. Therefore, I will have to deduce how well the steel industry is doing. I have attended the Select Committee that heard from Sir Robert Haslam, Mr. Scholey, Mr. Stambrook, Mr. Evans and others. They say clearly that, but for the coal strike, the BSC had hoped to break even this year. I welcome the fact that it is running profitably now and I welcome the optimistic forecast of requiring less and less money, as put forward my hon. Friend the Minister.

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  The BSC's leaders speak to all-party committees as well as to the Select Committee. Last year's accounts show that the BSC has written down a huge amount of taxpayers' money in the past 20 years. Assets of £2·6 billion in the steel corporation are thin compared to the required borrowing power of £4·2 billion. I welcome the sales to the private sector that my hon. Friend the Minister has been able to suggest, and the fact that they are worth about £349 million. I welcome the joint ventures. I shall not say too much about Sheffield Forgemasters but, as the Conservative Member in Sheffield, I wish that project well. Sheffield Forgemasters has grown in spite of trade union opposition and opposition from the city council, and therefore the task of the management has been that much more difficult.
  I hope that Phoenix 2 will materialise. I understand that it could involve Brymbo, Aldwarke and Stocksbridge. From what I heard in the evidence given to the Select Committee, the closure of Tinsley Park could be part of the package that will go with Phoenix 2. I hope that when the project is launched, it will be adequately funded. The coal strike has been a great tragedy. It has cost the British steel industry £180 million.
  The science and technology committee of the Council of Europe inspired the sixth scientific and parliamentary conference in Tokyo early in June. Scientists and politicians from all over the world, particularly from the OECD countries, were there. Because of my interest in new technology, the Japanese car and steel industries and robotics, we went to the Nippon Ohgishima steelworks, or the Keihin works. That factory is on an artificial island 5 by 3 kilometres, which has been built and decided upon in the past 10 years. Ships can bring in iron ore at one dock on the island and coal at another. The capacity of 6 million tonnes a year, with bar, plate and strip, includes a pipe-making plant. I sensed an optimism at this new site that I wish I could sense in Britain and many sites elsewhere in Europe. It has been possible in other parts of the world to construct something which gives courage.
  The Sheffield steel industry grew up on the fact that 30 or 40 years ago it could rely on electricity from coal-fired power stations at highly competitive prices. Now, that electricity is far too costly compared to the prices charged for electricity to Sheffield's competitors throughout the world. Those with a nuclear or hydroelectric capacity are able to provide electricity more cheaply to these vital works. Therefore, I shall be pressing my hon. Friend the Minister in due course for an examination of the electricity costs in Sheffield.
  Turning to the Tinsley Park works, I am reported in a Conservative newsletter, with a history of involvement in the steel industry behind me, as pledged "to oppose closure". That is not accurate. I deplore the fact that so much has happened but I am asking why it is necessary, and so is the Select Committee. I note that the Iron and Steel Trades Confederation has threatened to take court action and that it has been looking at a blueprint for a four-day week in Sheffield. I cannot ask my hon. Friend the Minister to answer all these questions now, but I am having meetings, as far as the BSC management will allow me, as a Back-Bench Member of Parliament, to have them, to find out the options, and the reasons for any decision.
  A Member of Parliament cannot run a private sector steelworks or claim to have inside knowledge of that or a public sector works. Management must have authority to
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  manage but, as consultation is announced in the case of what is happening at Tinsley, Stocksbridge and Aldwarke, I very much hope that it will be extended to Conservative Members of Parliament. As I understand that my hon. Friend the Minister will be making an announcement to the Select Committee on Tinsley this week, I will not pursue the matter further.
  I can only conclude, after listening to this debate, that, if Opposition Members had their way, they would keep uneconomic steelworks in operation, taxpayers would have to dig even deeper in their pockets and other priorities—the Health Service and education—would suffer. The figure which the Minister has gauged is about right.
  I listened from these Benches to the decision to set up Llanwern and Ravenscraig. It is tragic that they are loss makers. In view of the current market for home and overseas contracts, it is hopeless to run a plant on too few shifts. It is much better to have fewer plants running full shifts so that costs can come down and steel can be competitive. Surely it is up to the BSC to decide to do that. If my hon. Friend the Minister is drawn into making a decision, I wotrld suggest that he does not have the information at his fingertips to take the right decision. I hope that he will not be tempted by the right hon. and learned Member for Monklands, East (Mr. Smith).
  8.12 pm
  Mr. Stan Crowther: No doubt the hon. Member for Sheffield, Hallam (Sir J. Osborn) will forgive me if I do not comment directly on his speech but, in truth, I do not think there was much meat in his speech.
  I am pleased to hear the Minister refer to the fact that the productivity of the British Steel Corporation is now comparable to the best prevailing in Europe. That is not the average but the best. It is against that background that I want to urge certain courses of action upon him. I wish to make a brief reference, as my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) did at greater length, to the wide strip mills. I appreciate that my hon. Friend the Member for Motherwell, South (Dr. Bray) will no doubt have a lot more to say on the question of Ravenscraig, should he catch your eye, Mr. Deputy Speaker. The British Steel Corporation still wishes to close one of the three and I do not think there is any doubt that Ravenscraig is its favourite candidate for closure. The Minister was repeatedly putting to my right hon. Friend a hypothetical question because he asked whether my right hon. and learned Friend would make a decision regardless of the views of the BSC. I think I can help him on this matter, because a former Secretary of State, the right hon. Member for Wanstead and Woodford (Mr. Jenkin), did precisely that.
  In 1982 the right hon. Gentleman did not wait for the corporate plan to come into his office. He merely told BSC, in advance, that he would not accept a corporate plan which did not keep open all the five integrated plants which, of course, includes the three wide strip mills. Therefore, if the Minister is looking for a precedent he has got one. The Minister has told us that he cannot speculate or comment until he has seen the corporate plan. Yet there was a Secretary of State who made a sound political decision, understanding the social consequences of closure and he told BSC what it had to do. He showed who was the boss.
  My first appeal tonight is that the present Secretary of State will show the same courage. After all, the

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  Government, as representatives of the taxpayer, are the owners of BSC. It does not belong to Sir Robert Haslam and Mr. Bob Scholey. It belongs to the public, and the Government, as representatives of the public, must take into account the public interest. The previous Secretary of State's decision has been amply justified by events. He told the House that he had instructed BSC in that way because:
  "it would be wrong to take a decision to close one of the plants on the basis of forecasts made in the trough of a recession and before the European Communities state aids regime had had a chance to have a significant impact on excess capacity elsewhere in Europe".
  In our recommendations to the Government, the Select Committee on Trade and Industry said in March 1984:
  "now is not the time to close a strip mill. We also recommend that BSC should retain as many options as possible in its approach to the freer market of 1986."
  I cannot anticipate what will be in our report which comes out later this week, but that was our view then and nobody can argue that, in the middle of 1985, things have changed so much that we ought now to start closing options before 1986. I thought that I would remind the Minister of those points in case he is looking for an element of consistency in Government policy. I do not know whether he is, but it is sometimes helpful.
  Mr. Scholey told the Select Committee that he would rather have two wide strip mills operating at full capacity than three operating at two thirds capacity. It does not take a mathematical genius to calculate that a plant operating at full capacity is incapable of taking any more orders. He wants to close capacity to the point at which any significant increase in demand cannot be met in the United Kingdom. That would necessarily increase imports.
  Mr. Hickmet: I do not wish to comment on Ravenscraig, but does the hon. Gentleman believe that capacity at the two strip mills that would remain if Ravenscraig were to close would not be sufficient to absorb present demand or any reasonable anticipated increase in demand? Is not the problem the fact that there is massive overcapacity in the home market?
  Mr. Crowther: I have quoted what Mr. Bob Scholey told the Select Committee. It is a mathematical fact, is it not, that two plants operating at full capacity are equivalent to three operating at two thirds capacity? He said that he would prefer to have two operating fully. That must mean that they could not take a substantial increase in demand. I cannot quite see the hon. Gentleman's point.
  Mr. Hickmet rose——
  Mr. Crowther: The hon. Gentleman might have a chance to make his own speech.
  The case that was previously accepted in regard to wide strip mills should be accepted now in that sector of the industry and also apply to the engineering steels sector. In that sector, British Steel's special steels group represents 82 per cent. of present capacity—the rest is represented by the only remaining private sector company, GKN Brymbo. BSC has announced that it wants to close the Tinsley Park works, which is in the constituency of my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy), although I understand that at least half of the work force are my constituents.
  BSC has described that plant as Europe's premier producer of quality special steels, and yet it wants to close
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  it. There seems a certain illogicality in that, to say the least. As with the strip mills, now is not the time to close a special steels plant. We are told that there is still excess capacity in the special steel sector. Looking at existing demand, I do not doubt that that is true, but will the present low level of demand exist for ever? Are we to accept the notion that British manufacturing will for ever be in the doldrums and that we shall never have a revival of manufacturing? Are we to accept that we shall never again produce enough wealth to maintain a reasonable standard of living for all of our people? That is what the Minister would be saying if he accepted BSC's view. Of course, he has carefully avoided telling us whether he accepts that view. That would be a doctrine of despair. If it is true — and I hope that it is not — this country will never again be able to produce wealth at the level we need to pay for the services that should be provided for the sick, the elderly and the handicapped, to provide better education, to house the homeless and to provide money for the arts and so on—all the things that a country needs to do if it is to be called civilised, but which we cannot do if we are for ever committed to the present low level of manufacturing output. That is something that I cannot accept. If there is to be an improvement — and as my right hon. and learned Friend said, the next Labour Government will ensure that there is — we are now in serious danger of reducing steelmaking capacity to the point where it cannot accept any substantial increase in orders.
  Some hon. Members are aware that I am a student and, indeed, from time to time a performer of folk songs and similar works. The tragedy of Tinsley Park irresistibly reminds me of a song that I have known for many years about a nice young man called William Brown:
  "Who worked for a wage in a northern town.
  He worked from six till eight at night,
  Turning a wheel from the left to the right."
  I appreciate that it would be out of order for me to sing that song, but it may be appropriate to remind the House of the gist of it. The song tells us:
  "One day the boss to William came,
  He said, 'Look here, young whatsyername,
  We are not content with what you do,
  So work a little harder or out you go.'
  So William turned and he made her run
  Three times round in the place of one.
  He turned so hard that he soon was made
  Lord high turner of the trade.
  The nation heard the wondrous tale,
  The news appeared in the Sketch and the Mail.
  The railways ran excursions down and all to see young William Brown.
  But sad the sequel is to tell,
  He turned out more than the boss could sell.
  The market slumped, the price went down,
  Seven more days and they sacked young Brown."
  That is precisely the story of Tinsley Park.
  We have been told time and time again by the Minister that, as long as British industry gets rid of its surplus manpower and becomes more efficient and competitive, everything will be fine. The BSC got rid of two thirds of its work force. Tinsley Park has achieved the almost incredible productivity increase of 73 per cent. since the beginning of 1982. Now the BSC has decided to close it with a net loss of 800 jobs. Like the unfortunate William Brown, the workers turned out more than the boss could sell. Where is the incentive for people to become more productive if all that happens is that they are sacked? I do

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  not know what more people could do to carry out the Government's recommendations for productivity than what has been done by the people at Tinsley Park.
  The BSC says that it will save £12 million a year by closing Tinsley Park, and that is its only concern. But surely the Government's concern must go further—they must consider the social costs that will go very deep, quite apart from the obvious cost of redundancies. Those 800 people will be permanently out of work, and, as there are 21,000 on the dole in Rotherham and Mexborough travel-to-work area, there is not much hope of those 800 people finding employment. That will be a continuing cost of £5 million a year. Sheffield city council will lose £3 million a year in contributions to the rates, and the other ratepayers will have to meet that because the closure of Tinsley Park does not reduce the need for the services that the council has to provide.
  Many small contracting firms in Rotherham and Sheffield will face severe problems because they work for the BSC at Tinsley Park. They are the very small firms that the Prime Minister continually says she wants to help. She will put them out of business by closing Tinsley Park. There will be many other ripples throughout society in that area.
  The Prime Minister tells us twice a week that recovery has come, that everything is working out better and that in no time at all we will be round the corner and everything will be fine. Despite what my right hon. and learned Friend said — and he was right — about manufacturing industry still operating at a much lower level than in 1979, it is nevertheless improving. Steel output is rising — in the first five months of this year, it was 4·7 per cent. higher than in the first five months of last year. Lest anyone suggest that the coal strike was a factor in this, I remind the House that the coal strike similarly affected both the periods under comparison.
  In a recent report, the Select Committee drew attention to the decline of manufacturing and, in effect, asked what we should live on when the oil ran out if we had no manufacturing industry. It urged the Government to take the necessary steps to sustain and revive manufacturing industry. Recently I heard further sad news of the decline in manufacturing industry. I understand that Philips, the multinational, is to close its factory making washing machines in Halifax in the Yorkshire and Humberside region, with the loss of 660 jobs. It is transferring that production to Naples — not because of any problems with industrial relations or quality, but apparently because it has reached an agreement with the Italian Government. Our Government should be looking seriously at that because we cannot afford to keep losing such jobs.
  If there is a reverse in the fortunes of manufacturing industry as a result of policy changes by either this Government or the next, we must have a steel industry that is adequate to meet any substantial increase in orders. I calculate that if the automotive industry were able to recapture just half of the market share that it has lost since 1970, that would increase the demand for engineering steels equivalent to the total capacity at the Tinsley Park works. Are we to abandon hope of ever getting our manufacturing industry back on its feet in that way? I hope not. Do Ministers really mean it when they talk about the need for our industries to become more competitive, to defeat imports and to get out and export their goods
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  throughout the world? If they do, they must not throw away the tools to achieve that, and the most essential tool is the steel industry.
  8.27 pm
  Mr. Richard Hickmet: In considering the order to increase the borrowing powers of the BSC, it is legitimate to examine its performance during the past 12 months and before. When the right hon. and learned Member for Monklands, East (Mr. Smith) responds to the debate, it behoves him to stress the fact that the BSC now poses a major threat not only to the steed producers of Europe but to the steel producers of the United States of America. We should remember that there has been a remarkable turnround in the performance of the BSC; its progress on productivity has been dramatic. We have equalled and surpassed levels of productivity in most of our competitor countries of Europe—and that is after successive Governments have injected into the BSC more than £12,000 million during the past 15 years.
  Not only has the BSC achieved remarkable levels of productivity; it is on the verge of breaking even —despite the miners' strike, which cost the corporation £180 million. If any one questions the need for such increases in the borrowing powers, it is legitimate to remind him of the ruinous cost of that strike.
  In their efforts, the militant Left and Mr. Scargill were not helping to keep open Ravenscraig steelworks, about which there has been much debate this evening. They were trying to bring about their closure, as well as the closure of Llanwern and Scunthorpe steelworks, in my constituency. It lies ill in the mouths of Opposition Members to criticise the Government's policy when the Leader of the Opposition failed to respond to a letter that I wrote to him on 9 May last year. In the letter I asked whether he supported Mr. Scargill's efforts to put 10,000 men out of work in my constituency. I received no reply. That is the regard that he had for the jobs of steel workers in my constituency.
  In Scunthorpe, we were obliged to endure millions of lorry movements of ore and coal from the port at Immingham and ore from the wharves on the Trent. At Orgreave we had the most amazing scenes of violence directed simply to putting men in my constituency out of work. The rail unions made an effort to combine with the miners' union in that endeavour. With great respect, we did not hear much from the Opposition when those jobs were at stake. It is legitimate to bear it in mind that, despite all those factors, the profit performance of the British Steel Corporation has increased by £400 million over the past two years.
  We are constantly told, both through the media and in the House, that Mr. MacGregor butchered the steel industry. It is a sort of litany that butcher MacGregor butchered steel workers' jobs and has now moved on to the mining industry to butcher miners' jobs. The only people who butchered the steel industry were those who insisted on maintaining manning levels and production techniques that were completely unrealistic. In 1979 we operated the most unproductive steel industry in the world. Britain produced less steel per man than the United States, Korea, Japan, France, West Germany, Italy, Belgium and so on. Steel production was not just marginally less; it was dramatically less. Is any credit given by Opposition Members for turning the British Steel Corporation into a major threat to its European competitors? No, none at all.

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  What is the best thing that will secure the jobs of steel workers and the future of the British Steel Corporation, if it is not the fact that it is a highly competitive and productive organisation with productivity improving from approximately 14 man hours per tonne of liquid steel in 1980–81 to 6·9 man hours per tonne in the third quarter of 1984? No industry can hope to survive when it is so hopelessly unproductive, uncompetitive and uneconomic. It is to the credit of this Government, British Steel Corporation management, those who are employed in BSC and, I believe, the trade unions after the strike in 1981, which lost us so many markets and jobs, that we have faced those difficulties and taken steps that have enabled BSC to survive. Britain is now producing more steel than in June 1980, when BSC was recovering from that steel strike.
  Those enormous improvements in the corporation's position are in stark contrast to five years ago when BSC was terminally ill and about to go down the tube, with our European competitors licking their lips at the prospect of picking up BSC's United Kingdom and world markets. In my view, it is absurd to suggest that we have cut out so much steelmaking capacity. Let me pick up the point about Ravenscraig, that if it were to close, we would cut out so much steelmaking capacity that we would be unable to respond to any reasonable increase in demand. Last year BSC produced 15 million tonnes of liquid steel. The hon. Member for Rotherham (Mr. Crowther) will know that when it comes to debating with the Commission on manned capacity and quotas, there is absolutely no point in talking up one's manned capacity — one does the reverse. If one bears that in mind, the fact is that BSC can produce about 21 million tones — that is to say, more steel than it has produced in the past 10 or 12 years. Those are the facts. BSC is currently operating at about 70 per cent. of capacity. That figure is not consistent with its target of financial viability.
  The hon. Member for Rotherham referred to the closure of Tinsley Park. In my constituency, we lost 11,000 jobs when Normanby Park closed in 1981. Between 1981 and 1983, the industry was slimmed down and made more productive. As a Member of Parliament with a constituency that has about 20 per cent. unemployment as a direct consequence of the rationalisation in the steel industry, I am well aware of the problems associated with that, and the heartache and tragedy that such levels of unemployment cause.
  BSC must pursue policies which, in the long term, protect the jobs of all those who work in the corporation. The special steels division of BSC has suffered from the remarkable decline in the British car industry. What was that decline promoted by? It was promoted by restrictive practices, manning levels and the trade unions' attitude towards employment, which brought British Leyland to its knees. Does the House remember Red Robbo, the shop steward who could bring out BL and the rest of the work force at the drop of a hat? Frequently he did so.
  Mr. Crowther: He is not there now.
  Mr. Hickmet: Why not? He is not there because of the policies towards trade unions pursued by the Government. Those policies have been condemned time and again by Opposition Members, but they are welcomed by the trade unionists who work in the industries concerned.
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  The consequences of the decline in the car industry have meant that United Kingdom car and commercial vehicle manufacturers have contracted by over 50 per cent., with imported cars now taking 60 per cent. and imported commercial vehicles 40 per cent. of the United Kingdom market. Throughout, the Labour party has condemned our efforts to promote trade union reform. In fact, it has fought it tooth and nail all the way.
  Mr. Roy Hughes: The hon. Gentleman does not strike me as being terribly well-informed on the motor industry, because it is generally recognised throughout that industry that the reason for its decline was, first, very poor management and, secondly, a lack of investment.
  Mr. Hickmet: Nobody can condemn this Government for failing to invest in the car industry when only two weeks ago the Secretary of State announced support for a £1·8 billion corporate plan. Throughout the lifetime of this Government they have stood by British Leyland and have attempted to inject proper management techniques into that corporation. It is idle to suppose or to promote the argument that restrictive practices and trade union practices within the car industry in this country had no effect on the position. The policies of the Government have, in fact, arrested the decline of British Leyland and the British car industry with the corporate plan announced by my right hon. Friend two weeks ago, enabling the development of a new British Leyland engine which will be of direct significance to the special steel divisions of the British Steel Corporation. When only 70 per cent. of capacity is utilised in special steels, when we have tried to hang on to our markets both at home and abroad and when special steels exports represent 24 per cent. of BSC's product, it has had to remain competitive in this highly competitive sector of the market. We have to match the competitiveness of our European rivals, who will shortly be producing steel at 9·5 man hours per ton compared to our 10·5 man hours.
  Over the last 12 months the records of the British Steel Corporation have been remarkable. The British Steel Corporation has not only survived but is now breaking even. The Minister is to be commended for the Government's policies in this regard. I very much regret that Opposition Members give no credit whatsoever for what has been a remarkable success for British industry.
  8.42 pm
  Mr. Roy Hughes: At the outset of my contribution, may I first register my disgust at the fact that the Secretary of State for Wales is not on the Front Bench today. Nor has any Welsh Minister appeared throughout the debate. The people of Wales will make their own judgment about that, particularly because of the importance of steel to the Welsh economy.
  In discussing the steel corporation's borrowing powers those of us who have taken an interest in the steel industry over many years will realise that an independent British steel industry is vital to us as an industrial nation. Without such an independent industry we would be at the mercy of overseas suppliers, with all that this can mean in terms of pricing policies and delivery dates. It has been said many times before that an independent steel industry is vital for Britain's defence needs. That is the basic premise from which I start.

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  Having listened to the Minister of State, I believe that it is becoming more apparent every day that the Government's policies are bringing neither stability nor confidence to the industry. Last year he said:
  "We have made it clear that we wish the corporation's activities to be returned to the private sector." — [Official Report, 23 July 1984; Vol. 64, c. 739].
  He was clear, and explicit. Understandably, though, such a declaration sent shock waves throughout the industry. Today he reiterated his position, but he was just a little bit more reticent, political considerations perhaps now having an effect on the Government. The Opposition believe in a publicly owned steel industry. It is too important an industry to be left to the machinations of private operators, because we recall quite vividly how the steel industry was starved of investment when under private ownership. I repeat, the Government's policies are not bringing stability or confidence to the industry.
  For clarification and emphasis of this point I turn again to the evidence of Sir Robert Haslam, chairman of the British Steel Corporation, to the Select Committee on Trade and Industry a fortnight ago. His words were widely reported in the media. He said that the Government are actively discussing closure of either Llanwern or Ravenscraig with the British Steel Corporation. The manner in which that statement was reported is pretty clear and explicit, because, they argued, existing plants like Ravenscraig and Llanwern were operating to only 70 per cent. capacity. This under-utilisation is understandable, bearing in mind the considerable amounts of steel we are still importing. Secondly, we have to consider the very low level of economic activity in the country as a whole, particularly when about 4 million people are out of work.
  Surely, as my hon. Friend the Member for Rotherham (Mr. Crowther) has argued so lucidly, this under-utilisation of capacity will eventually be needed when there is an economic upturn. Some of us believe that the Government expect no such economic upturn; nevertheless, they wish to return the steel industry to private hands. To make the Steel Corporation attractive to possible buyers the British Steel Corporation's assets have to be shown to be operating at capacity and, perhaps even more significantly, profitable. Sir Robert Haslam told the Select Committee that this over-capacity, to use his words, was an albatross around the neck of the British Steel Corporation.
  Here I want to declare my constituency interest because the Llanwern steelworks is in my constituency. My first reaction to that statement was to say "What an albatross", because Llanwern is now universally recognised as one of the most competitive plants in Europe. Since the slimline operation some five years ago, in terms of output and overall efficiency it has won admiration far and wide. With such a spendid record, why should the management and, more particularly, the work force, be again thoroughly demoralised with the threat of closure?
  This is the issue about which the people of Wales are so rightly concerned. It is with good cause, then, that I turn to the ignominious role that has been played in this whole affair by the Secretary of State for Wales. He has repeatedly praised the workers of Llanwern who have brought about such a remarkable transformation. On other occasions, notably in a speech to international business men in London on 12 January 1983, he denied any threat of closure and strongly hinted that new investment at Llanwern would be forthcoming. This has been his theme
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  throughout, yet a fortnight ago the chairman of the British Steel Corporation told the Select Committee on Trade and Industry that the Government were discussing with the Steel Corporation the closure of either Llanwern or Ravenscraig. In other words, the ground has been taken from under the feet of the Secretary of State for Wales. He has deceived the workers of Llanwern. He is becoming recognised increasingly as a man who cannot be trusted.
  The revelation of Sir Robert Haslam has caused dismay and outrage throughout the whole county of Gwent. I have here a letter from Mr. John Murphy, the secretary of Llanmartin and district labour party. I propose to read the letter, which is not politically biased. The housing estates in that district were built to house Llanwern steel workers. People flocked there from all over the country. Mr. Murphy himself, for instance, is a Glaswegian and a redundant steel worker into the bargain—a victim of the so-called slimline operation. He writes that members of his party
  "are greatly concerned about what is happening in the steel industry and what effects it will have to our area if Llanwern had to close when this new corporate plan is published. We would be grateful if you could come to a special meeting of your calling before this plan is published. All I would need is (at the most) 24 hours notice".
  That shows the urgency and concern felt in that area. That concern is understandable, bearing in mind that at the end of the March quarter, according to the figures released by Gwent county council, unemployment in the county stood at 17 per cent. Closure would spell disaster. What a poor reward that would be, in view of the remarkable efforts of the work force in recent years.
  Llanwern requires two specific things — first, an assurance from the Government and the British Steel Corporation that the works will have a long-term future, and, secondly, a go-ahead from those two bodies for a concast scheme in the works at a cost of approximately £100 million. The works has been crying out for such a scheme for years. Concast is recognised as a more efficient way of producing sheet steel. As a country we lag behind our European competitors in concast capacity. Germany has four times the amount that we have and France and Italy have double or more our capacity. Investment in concast at Llanwern can be more than justified by the performance of the works.
  Britain cannot afford any further cutbacks in its steel making capacity. Ultimately it is this country's long term interest that should prevail. The Government have for too long been slaves to political dogma.
  8.53 pm
  Sir Anthony Meyer: The hon. Member for Newport, East (Mr. Hughes) will have noted that his eloquence has drawn into the Chamber my hon. Friend the Minister of State, Welsh Office to listen to his strictures. I shall be agreeing with the hon. Member for Newport, East about the efficiency of the Llanwern steelworks but about precious little else. Certainly I shall not be agreeing with what he said about my right hon. Friend the Secretary of State for Wales, who has fought magnificently within the Cabinet for the interests of Wales and who would require a great deal of convincing if eventually the decision was to be against Llanwern, although I do not think for a moment that it will be.
  It was no doubt shortness of time that obliged the hon. Member for Newport, East not to sing his familiar song about the ills of the British steel industry being entirely the

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  fault of the Common Market. The fanatics against the Common Market, such as the hon. Gentleman, like to pretend that it is the Community that has obliged Britain, and particularly Wales, to shut down so much of its steelmaking capacity and to lose so many jobs in the steel industry. This is, of course, to stand truth on its head.
  The Community has done what any intelligent, modern Government have to do. It has cushioned the process of inevitable change. If there is one thing on which all those who have studied the question are agreed it is that there is enormous overcapacity of steel production in the world as the developing countries come on stream in steel production. Existing steel producers in Europe have the choice either of protecting their high cost production, which means not only massive subsidies to be borne by the taxpayers but imposing a crippling burden on the rest of the steel-using industry, or they can try to become as efficient as the developing countries. What the Davignon plan did was to ease the process of transition towards efficiency which inexorably means the loss of a very large number of jobs.
  I am glad that the steel industry in Wales at Llanwern and at Port Talbot is efficient, judged by any standards. The Shotton steelworks, at one time one of the great producers of steel but sadly alas no longer, is now the most efficient coking plant in western Europe.
  It has been recognised that Welsh steel producers, and Llanwern in particular, have achieved total competitiveness. They have eliminated overmanning, which was notorious. They then dealt with all kinds of demarcation disputes. If a fuse blows in the works, anyone can mend it. The production record is equal to any but — and I cannot stress this enough — the pursuit of competitiveness is unending. One never gets to the point where one is competitive enough to leave things as they are.
  Two factors govern the future of Llanwern. The first is the question already raised on both sides of the House as to whether Llanwern is to get the continuous casting plant that it needs. Without that facility the most heroic effort of its workers will not enable it to stay in the competitive race for much longer. The second question — not yet mentioned — is whether Llanwern is to continue to be handicapped by having to buy more expensive coal than its competitors overseas.
  For so long as the Coal Board is unable to push ahead with its strategy of making the coal industry as competitive as the steel industry has become, by closing down uneconomic pits and concentrating on the good ones, Llanwern, having committed itself to buying Welsh coal, is imposing a £2·5 million a year burden on its production costs. But the whole future of the coal industry in South Wales is bound up, in turn, with the survival of Llanwern and Port Talbot, though one would hardly have thought so from the conduct of the miners and, I am sorry to say, the railwaymen—who equally depend on the steel industry in South Wales—during the coal strike and their efforts to bring production at Llanwern to a halt. If the price of Welsh coal could be brought down, as it will be if the uneconomic pits are taken out of production, Llanwern will be able to remain competitive and to go on using Welsh coal. This obviously beneficent chain of events was too much for Mr. Scargill to swallow, and, sadly, the miners' union in South Wales went along with his wrecking policies.
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  One would have thought that the Labour party in South Wales, and especially the hon. Member for Newport, East, would have found the courage to stand up for their constituents and their supporters in the steelworks at Llanwern. Not a bit of it. The hon. Member for Newport, East went along uncomplainingly, proudly indeed, with the mineworkers and the railway workers trying to stop production at Llanwern. It was a moment of crisis, because it was touch and go whether Llanwern would have to shut down altogether and the furnaces go cold, their linings cracked, and the chance of revival gone for ever.
  If they pulled through it was no thanks to the hon. Member for Newport, East. It was his colleague, my hon. Friend the Member for Newport, West (Mr. Robinson), who emerged as their champion. My hon. Friend is not here tonight; he has gone to help confound the pollsters in Brecon and Radnor. I want to pay my tribute to his heroic efforts on behalf of his constituents. Behind his quiet and diffident manner my hon. Friend has the ferocity of a tiger defending its young. I am sure that at the next election the voters of Newport will remember what my hon. Friend did for Llanwern and will remember what the hon. Member for Newport, East did not do.
  After all this, the steelworkers of Llanwern must feel they deserve well of the Government. They have made themselves super-efficient. They have kept going through a strike designed to cripple them and now they look to the Government to make a gesture of confidence and gratitude, in particular, to give them the concast plant they so desperately need. I do not envy the Government their choice. Despite what the Select Committee on Trade and Industry said in its report the other day, there is no doubt that there is still overcapacity in steel production in this country. Three strip mills is probably one too many.
  The Government have to weigh all the facts, but they have also to weigh, and weigh very heavily, the encouragement that a massive investment in Llanwern, or for that matter in Ravenscraig, would give to workers in coal, or steel or on the railways or throughout British industry who have had the courage to understand they must modernise or perish, and that strikes designed to halt modernisation do not delay death; they merely make it much more painful. The steelworkers at Llanwern, Port Talbot and Ravenscraig have given a lead to other workers in British industry and the Government need to weigh that fact very heavily.
  It would not be reasonable to expect Ministers to give a firm commitment tonight about the future of Llanwern or Ravenscraig, but the workers at those two plants and all who are concerned with their future would do well to reflect on what the future of those plants would be if it lay in the hands of the Labour party who, in government as in opposition, have always lacked the guts to stand up to unions fighting against modernisation. Without a continuous process of modernisation, Llanwern, Ravenscraig and indeed Port Talbot are doomed.
  9.3 pm
  Mr. Paddy Ashdown: The hon. Member for Clwyd, North-West (Sir A. Meyer) touched on the question of managing change. I think he used the words "cushioning the necessary change". That is a matter to which I should like to return later.
  We must welcome the order, because, within the structure by which we fund our nationalised industries—agreed between the Government and the Opposition —

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  we have no choice. It is the way in which we can provide the funding that the British Steel Corporation needs in order to be able to make the changes that are necessary. But it is reasonable and pertinent to discuss why we have such an order before us and why we have to constrict, ossify if we like, the mechanisms by which we fund our nationalised industries in a way which brings this order before us tonight.
  We all know that our nationalised industries are, by statute and by agreement between the two major parties, not permitted to borrow in any sense upon the open market. They must get their money from the Government. That seems to be a product of the kind of tunnel vision that afflicts the two major parties in the way that they view our nationalised industries. Both suffer from tunnel vision about the chasm that both seem to insist shall exist between the private and national sectors. Both pay tribute to the mixed economy, but they cannot mix within the economy. There is a massive chasm between them, and the way in which we fund our nationalised industries is a perfect example of that. The BSC and our other nationalised industries must go exclusively to the Government to receive their funding. Hence the reason for the order.
  One of the reasons evinced by the Government for this curious policy, on which they agree with the Labour party, is that to allow more liberal structures by which the nationalised industries could raise funds would somehow starve the funds available to private industry. We are led into the ludicrous situation where, in order to get more flexible funding, the Government believe that they must go the whole hog and sell off assets such as British Telecom. That produces the very starvation of funds that they seek by this system to avoid.
  It is equally ludicrous that, as a consequence of this kind of structure for financing our nationalised industries, the BSC borrows from the Government and ends up as a net lender of money to non-Government sources. That is revealed in table 5·4 of the BSC's expenditure plan for 1985–86. Although it borrows from the Government, it lends £86 million to non-Government sources, an admittedly very small sum compared with the sums that we are now discussing.
  The Government have told us that they believe in wider share ownership. We have always supported them, because we have always believed in the need to move towards wider share ownership. But why cannot the British people also share in that by helping to provide the funds in their own nationalised industries? We wish to see much more autonomy for our nationalised industries within a broader, longer term plan, part of which would be a more flexible system of funding than at present.
  If that serves to break down the barriers between nationalised industry and private industry, well and good. Those barriers should be broken down in a mixed economy. It is much more sensible to have such barriers broken down naturally by a more liberal programme of funding the nationalised industries than to stick to a system that merely preserves the chasm between the nationalised industries and the privatised industries.
  When we wish to share with the people the industries that they already own, under the present system we must go through the ridiculous exercise of, for example, flogging off British Telecom, which merely converts a public monopoly into a private monopoly.
  The background to funding is in our opinion narrow and afflicted with tunnel vision. But we are also discussing
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  funds that in another way are crucial to the BSC. As the Minister and the right hon. and learned Member for Monklands, East (Mr. Smith) have said, the BSC has now moved significantly and commendably into a much more profitable and productive phase. Had it not been for the miners' strike, the BSC would probably have broken even in the near future, not just because of rationalisation but also because productivity has increased. That was eloquently touched on by the hon. Member for Elmet (Mr. Batiste).
  The House has rightly paid tribute to that fact, because as a result unions, work force and management have good reason to be content with the current operating direction. However, it is one thing to make a small profit for a year or so but quite another to set a new long-term trend towards profitability.
  Here we come up against the longer-term problems of BSC. Its large expenditure during the 1970s allowed for the modernisation that has resulted in increased productivity as well as some rationalisation. We are investing too little in plant and machinery, particularly in research and development.
  Mr. Batiste indicated dissent.
  Mr. Ashdown: I see the hon. Member for Elmet shaking his head. There are significant individual exceptions to that rule, but the corporation as a whole is investing too little. It is hiving off its modernisation investment in the 1970s. I have heard it said with a good deal of justification that the South Korean industry is technologically as advanced as our own. Present funding policies are failing significantly.
  As for Llanwern, Ravenscraig and Port Talbot, we are of course referring to Llanwern and Ravenscraig. I share the concern of the right hon. and learned Member for Monklands, East not so much that the Minister of State cannot give an answer tonight as that he has boxed himself into a position——
  Mr. John Smith: Why not?
  Mr. Ashdown: The right hon. and learned Gentleman asks, "Why not?" The reason is that he has called for a report from BSC. He referred to the central problem when he said that it would have been much more honest and reasonable for the Government to draw up the parameters within which the report should have been submitted. They should say that they want a report from BSC which states whether or not it wants those three plants to remain in operation. But that is not what the Minister of State said. Since he has got himself into that position, we recognise why he cannot tonight give the answer that is being sought.
  Last year the Select Committee reported — I see little reason why its report should be different this year, although we must wait until later this week to discover whether it is — that there is room for all three plants. It was said earlier in the debate that the three plants are operating at two thirds capacity. That means full capacity at two plants. What room is there for expansion? That must be what the Government want. I have heard it said that if production were to increase by as little as 10 per cent., the capacity of the two remaining plants would be significantly increased. I am told that last year productivity went up by 9 per cent. Will not the Government be looking for a similar increase in the years to come?
  Sir Robert Haslam said that he is preparing for privatisation. No doubt there will be another exercise in

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  which we shall flog off the good bits and kill off the bad. We shall be left with a rump that will serve British industry ill in the primary supply of one of its key raw materials. The proposed privatisation programme of the Government is nonsense, but the real point is that this is a classic and symbolic case of the steel industry being treated as a political football by the two major parties. They have damaged one of our great industries. BSC is the key example of political ideology: privatisation versus nationalisation. The question is answered on purely dogmatic, not reasonable, grounds and it has greatly damaged this great British industry.
  The record is well known to those who have studied it. BSC was nationalised by the Labour party in 1951, denationalised by the Conservative party in the late 1950s, and renationalised by the Labour party in 1967. There was also talk of denationalisation by the Heath Government in the 1970s. Now it is back again. What a climate in which to foster one of our great industries. It is a typical example of the dogma that inflicts the two major parties and that so damages British industry. It is a symbol of how a great industry can be destroyed by political ideology and dogma on the central question of nationalisation or denationalisation.
  BSC needs a climate of political stability in Britain. It does not seem likely to get it, at least not under the present two-party system. BSC needs an economy that has been restored to full fitness. I agree with the Labour party's strictures and criticisms on that. BSC needs a Government who are prepared to invest in Britain in rebuilding some of the major parts of our infrastructure.
  Mr. Hickmet: What about the Channel tunnel?
  Mr. Ashdown: The Channel tunnel may be part of that. We are talking not just about the restitution of our existing infrastructure but about the building of an infrastructure which will be suitable for a modern industrial nation moving into the 21st century.
  BSC needs a climate of political stability and an economy restored to more permanent fitness. Unhappily, until we see a change of Government, or until we can persuade the Government to change direction, none of that seems likely. BSC will have to stumble on making the best of an unhappy and unfortunate situation with great dedication, skill — the Minister is right — and commitment from its work force but, nevertheless, in a climate that will always stultify rather than encourage growth.
  9.15 pm
  Mr. A. E. P. Duffy: Employment possibilities in Sheffield have been severely hit by the decline of the British steel industry. In 1971, there were 45,000 workers employed locally in the steel industry, of whom 54 per cent. were employed by the British Steel Corporation. By 1983, there were only 18,000 employees — a decline of nearly 60 per cent. Since then, redundancies have brought the number of steel workers to well below 17,000. At the end of the present financial year, BSC special steels division will employ only a few more than 8,000 people.
  Against that background, on 28 March, the management of BSC special steels division announced its intention to start consultations on the possible closure of
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  the Tinsley Park billet producing works in my constituency. The closure would affect 1,114 workers, with an estimated net job loss of 805, on the assumption that 300 jobs would be created at the Stocksbridge and Aldwarke sites in south Yorkshire.
  On 4 June, it was confirmed that the closure of Tinsley Park would take place. The Iron and Steel Trades Confederation, the Tinsley Park multi-union committee, which is acting as a campaign closure unit, and the Sheffield city council were not satisfied that sufficient consideration had been given to the issues raised by the closure announcement, and they asked me to draw their anxiety to the attention of the House.
  First, if implemented, the proposal would result in the largest closure of a plant in Sheffield in the past five years, and it would be the first local closure of a BSC plant. Secondly, there is considerable doubt locally that the 300 jobs can be created at Aldwarke and Stocksbridge as projected by BSC. The implication is that at least 805 jobs will be lost within BSC but that the final figure will be much greater.
  Thirdly, also immediately affected but not included in BSC's estimates are the employees who work for contractors on the Tinsley Park site on bricklaying, cleaning and other services. In answer to questions from the city council, BSC said that it had not yet discussed the impact of the closure with those contractors.
  Fourthly, the long-term effect will snowball through the rest of the local economy. Estimates produced by the city council's employment department show that every 1,000 jobs lost will mean that more than £2·5 million will be lost in local consumer spending.
  Fifthly, the likelihood of those made redundant at Tinsley Park finding alternative work is limited. In May this year, nearly 44,000 people were registered as unemployed in the Sheffield travel-to-work area, a rate of nearly 16 per cent. At that time, there were 817 notified vacancies in Sheffield so that there was only one vacancy for every 56 people.
  BSC special steels justified the projected closure by reference to its estimates of market prospects. As the House will know, its forecasting record has come under severe criticism in the past.
  Mr. Martin Flannery: Does my hon. Friend remember that we went for a meal with the leadership of BSC, Sir Robert Haslam and Bob Scholey, whom we now know very well? I asked, as I think my hon. Friend also did, whether the Sheffield area had anything pending of any size, and I asked about the Stocksbridge works to which I understand about 300 people from Tinsley Park are going. They replied that nothing was going to happen in Sheffield. A week after that, the closure of Tinsley Park was announced.
  Mr. Duffy: I remember that meeting very well, and I am grateful to my hon. Friend for bringing it to the attention of the House.
  My hon. Friend will know that this is not the only aspect of Tinsley Park which causes us grave concern. It is rumoured that there has been involvement over several years in Phoenix 2 which, despite repeated questioning of the Minister of State, has never been clarified to the House. Even at this late stage we do not know. The Minister, in his opening speech, refused to be drawn by one of his hon. Friends. I say no more about that, although

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  I am very concerned. Because of the time, I wish to reserve my main remarks for the impending closure of Tinsley Park.
  Sheffield city council is not convinced that the forecasts made by BSC have taken adequate account of the expected rate of growth in British manufacturing industry in 1985–86. Nor is the multi-union committee at Tinsley Park convinced. Its secretary, Mr. Geoff Stronach, is reported as saying:
  "We are working in the dark because no one outside BSC senior management knows what the financial situation has been at Tinsley Park. No profit and loss account is ever published; indeed, some of us suspect that our works has often been well into the black."
  The multi-union committee is convinced that the closure decision is purely political and part of a long-term plan to cut back and privatise the UK special steels industry, and that its plant faces the axe solely because the Government desperately need to cut the asset value of BSC's special steel operations if they are to justify handing over control to the private sector under the Phoenix 2 plan.
  Mr. Roy Bishop, who is divisional officer in Sheffield for the ISTC, notified the Select Committee on Trade and Industry last month of rumours abounding in south Yorkshire that the announcement concerning the formation of the new company, code-named Phoenix 2, is to be made in Parliament before the summer recess. This means that before the Select Committee has the opportunity to investigate and report to the House in depth on the crisis in engineering steels on the basis of evidence presented to it only the week before last by BSC as well as by ISTC, including Mr. Bishop, the production capacity in engineering steels will have been reduced from nearly 2·5 million tonnes a year to just over 1·5 million tonnes, a 33 per cent. decrease. The Select Committee will have been faced with a fait accompli, and the total capacity of engineering steels will have been reduced to a level lower than the present 1984–85 total sales of 1·7 million tonnes.
  As Mr. Bishop argued not only in his written submission last month to the Select Committee Chairman but in his oral evidence a week before to the Select Committee, this means that, faced with a monopoly in engineering steels, customers would seek second sourcing from imports. Such increases of imports would reduce demand on the home industry to a level incapable of supporting such an industry, leading to the demise of the engineering steels industry and the dependence of the engineering industry on imports to maintain its production.
  BSC special steels has given insufficient consideration to the wider social and economic implications of the closure of Tinsley Park. Its projections on the future need for engineering steels are too pessimistic. I therefore urge the Minister to delay the closure of the Tinsley Park works and the announcement in Parliament of the Phoenix 2 project until at least the Select Committee has had the opportunity to investigate and report in depth on the crisis now facing in particular the engineering steels industry and in general the supporting manufacturing industry.
  9.25 pm
  Mr. Tom Clarke: I think that my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) will agree that today's events in the House which started with the Prime Minister's report on the Milan conference, and moved to the statement by the Minister of State in opening this debate, reveal the end of the
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  resolute approach. There was nothing resolute about the weak and feeble responses from the Government Dispatch Box—especially those made to the reasonable questions of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith)—or about the speeches by Conservative Members. They did not show that the Government were prepared to accept that our steel industry has little future if we accept the inhibitions pressed on it by a Government who are not prepared to stand up for themselves, for Britain's interests in Europe and for an industry which could thrive and has much to contribute to our manufacturing base. My colleagues have offered not only great hope for the future but the only hope for the future in recognising the role of steel manufacturing in the future of our industry and our economy. In spite of the Government's record, the steel industry has a great deal to offer.
  When do the Government intend publishing the corporate plan? Sir Robert Haslam has said that it will be available in July but, in replying to my question, the Minister did not say when the Government intend taking their decisions. Because of the urgent need for action to be taken and the representations on the steel industry's behalf by hon. Members from all parts of Britain, I hope that major decisions will not be taken during the recess.
  I sometimes believe that the House should pay more attention to Conservative contributions. In this debate we have seen yet again the type of divisions that Britain could well do without. Conservative Members have attacked the trade union movement and attempt to create geographical divisions. One of the greatest tributes paid to the trade union movement during all our recent steel debates has been that paid to its steadfast refusal to allow trade unions to be divided — Wales against Scotland and England against Scotland and the rest. Trade unions are rightly putting up a robust fight in the interests of the steel industry. I certainly want to lend them my support.
  The Minister has every reason to be proud of the steel industry. He told the House on 1 May:
  "The progress on productivity has been dramatic. We have equalled and surpassed the levels in France and Germany and done our restructuring."—[Official Report, 1 May 1985; Vol. 78, c. 254.]
  That is certainly true, so why does he not offer the men in the industry the fruits of their achievement and their labour? In his speech today, instead of praising the employees' productivity and achievements he talked about privatisation, knocking the heart out of the men in the industry. They did not achieve productivity records to see their industry sold off to private speculators. They have achieved those records because they believe in their industry, they want to see a future for it and they are proud of their contribution to it.
  Like my hon. Friends, I regret that the Minister did riot find it possible to say anything about Ravenscraig or Llanwern. I was delighted to hear my hon. Friends draw attention to the fact that the former Secretary of State felt free to make an announcement about Ravenscraig in 1982. Significantly enough, that was in the middle of the Coatbridge and Airdrie by-election campaign. Yet two days before the Brecon and Radnor by-election the Government are so lacking in courage that they will not tell the Welsh, the Scots or the English their proposals for the industry.
  I was delighted, too, that my right hon. and learned Friend the Member for Monklands, East referred to the

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  Gartcosh works in my constituency, which he represented until the last general election. The workers there are grateful to him for his efforts both before and since then. Like so many sectors of the industry, Gartcosh needs investment. No industry can thrive without investment in modern plant and without looking to the future. I met Sir Robert Haslam at the beginning of the year and argued for an investment of £2 million or £3 million to make Gartcosh competitive in recognition of the efforts of the work force, which has achieved such high productivity. Sir Robert could give no assurance even about the future of Ravenscraig. Moreover, he said that even if Ravenscraig survived that did not mean that Gartcosh will survive: If that works does not survive it will be a tragedy in terms of unemployment in my constituency and in Lanarkshire generally. We should be giving that plant the utmost encouragement.
  What is the difficulty about making that small investment? The other day I put down a question asking the Chancellor of the Exchequer
  "if he will estimate the effect on the level of the public sector borrowing requirement of the current level of unemployment in Scotland."
  The Chief Secretary replied — I suspect that the Chancellor did not wish to give the answer himself — as follows:
  "The current cost of benefits to the unemployed in Scotland is about £700 million. Since it is not possible to estimate the revenue forgone, the full effect on the public sector borrowing requirement cannot be estimated."—[Official Report, 27 June 1985; Vol. 81, c. 491.]
  I am asking for just £2 million for Gartcosh to keep 800 people in work. Yet no assurance has been given. The coke ovens for Ravenscraig, to which my hon. Friend the Member for Motherwell, South (Dr. Bray) will doubtless refer in due course, require a mere £90 million. Given the outstanding record of the men of Ravenscraig, Gartcosh and the rest of the industry, it is outrageous that they should be denied the tools for the job in terms of new equipment and a level of investment that the Government have not so far accepted.
  In common with my right hon. and learned Friend the Member for Monklands, East, I represent the town of Coatbridge, which was once described as the iron burgh, and which exported equipment for building railways to Russia, America and other parts of the world. If Gartcosh is closed — there will be a tremendous fight before any such thing happens — there will not be a single iron or steel job in my constituency. Given that all the mines have now been closed since the closure of Cardowan, Monklands, West is being reduced to an industrial desert, which I fear will exist in the rest of Scotland, if we are not prepared to fight.
  In my constituency 32 per cent. of the male population is unemployed. Most of the young people who are leaving school find either no jobs available or are offered opportunities on the youth training scheme, and that is that. That is an absolute tragedy, but it will be short-lived, because, like my right hon. and hon. Friends, I believe that the construction industry, which is in temporary decline, and other industries which are dependent on steel, will find that manufacturing can resume its former place in our industrial society. It is despair at its worst when the Government base their views on the assumption that our manufacturing base will remain at its present level. I do
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  not believe that. The men and women who have given so much to our steel industry are entitled to far more than the Government have promised tonight. Because of the determination and commitment of those people, they will succeed, as will our steel industry.
  9.36 pm
  Dr. Jeremy Bray: My hon. Friend the Member for Monklands, West (Mr. Clarke) argued powerfully that tonight we should have been told how BSC will spend the £700 million on the necessary investment to ensure the future of the steelworks in our constituencies. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith), and my hon. Friends the Members for Motherwell, North (Mr. Hamilton) and for Cunninghame, South (Mr. Lambie), who always speaks in debates on the steel industry, have all contributed to the debate. There have also been speeches from my hon. Friends the Members for Rotherham (Mr. Crowther) and for Newport, East (Mr. Hughes), and my right hon. Friend the Member for Swansea, West (Mr. Williams) will reply.
  Although two Scottish Tory Members are present — they have just come in, no doubt to hear my speech — no Scottish Tory Minister is here to repeat the assurances about the Secretary of State's suit of armour, which, in his rather kinky style, he tends to keep in his wardrobe at home, but which he will dust off and bring out if the Cabinet is rash enough to consider any suggestion about the closure of Ravenscraig.
  Ravenscraig will continue as an integrated steel works into the 21st century, not because it has become the symbol of the industrial survival of Scotland — although it has — nor because of the outstanding productivity records that are achieved by its workforce, which will continue, but because it is an essential element in our industrial recovery.
  This afternoon I attended a conference at Chatham house on the future of information technology in Europe. The Commission's staff came hot foot from the Milan summit, where they had been contributing to the background briefing on EUREKA — the proposed European initiative on advanced technology. It is hoped that it will work in the integration of computer-aided design and computer-aided manufacturing methods. The British Aerospace representative explained the steps that British Aerospace had taken so that the airframe designers, their subcontractors and systems suppliers could work together on the aircraft design on one integrated computer system.
  The other evening I was hearing about the proposed extension of that to the design of offshore production platforms. At present we have the engineering department of British Petroleum with its own computer-aided design and manufacturing system. It is designing the complete detail of production platforms on computer screens. That is then recapitulated entirely by contractors such as Brown and Root which undertake detailed design. That leads on to the production of engineering drawings for the fabricators, firms such as Motherwell Bridge that are hanging on by their teeth because of the current lack of investment. The entire complex of prime process operators, offshore operators, contractors, fabricators and steel producers is being integrated in one technology in which every square millimetre of steel has to be designed to standards which were never dreamt of in the past.

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  Ravenscraig is the only steelworks in the United Kingdom which can produce steel of the specifications required for Trident submarines. The same specifications will be required for the undersea completion systems that will operate in 2,000 ft of water off Rockall. These steels will be required for production platforms, undersea pipelines and for the technology that will be needed to gather minerals from the seabed in far parts of the world.
  Industries that are currently in the cradle will be the basis of Britain's industrial recovery, which the Government are vandalising. The Government have no vision, no sense of responsibility and no plans for the future.
  The House is being asked to approve an increase of £700 million in the borrowing powers of the British Steel Corporation. I am sufficiently old-fashioned to believe that when such a sum is asked for from the House the Secretary of State should ask for it personally and should be able to give a proper account of the plans and prospects of the industry. But what have we had? We have received a bland statement from the Minister of State. Apparently, he does not expect to receive the BSC's corporate plan before the end of July. We have had a further statement that there will be a steel council on 26 July when the future steel regime in Europe will be considered. Are not these mattes relevant to the corporation's borrowing requirements? Can the House be treated with such contempt that the Government can collect the money from us before considering policy requirements? That is no way to treat the House.
  The Minister of State is saying, in effect, that he is prepared to allow the corporation to put up proposals that show no faith in Britain's industrial future. These are proposals that have already shed a destructive, morale-destroying miasma on those who have been, alas, influenced by the mutterings of the chairman and chief executive of the corporation before the Select Committee in June.
  It is not sensible for a Government to give carte blanche to a major nationalised industry such as the steel industry by allowing it to make its own judgments on Britain's industrial future, for the Government to give no indication of what their views are on future steel demand, for example, and then to allow the corporation to say that if it maintains three strip mills one of them will be continuing as an act of charity. That is not the way in which to run a modern and efficient industry. That is no way in which to conduct the government of Britain.
  There are two strategies before us. One is now openly preferred by Mr. Bob Scholey and his sidekick the chairman. It is to see an end to the Europricing regime, production quotas and Government subsidy. This will lead to a price war that will set the steel companies free to close whatever capacity they like to so that they can reduce the industry to a rump, which they think could then operate profitably and create a situation in which they can go off into the wild blue yonder of privatisation. That strategy would not work.
  The chief executive of the BSC has so run down its research and development capability that, unless something is done urgently, it is condemned to be a low-grade bulk steel producer, unable to compete in the premium market. With closures, the BSC would be forced up to such a level of capacity working that the first stockbuilding surge would bring in a flood of imports, lose the loyalty of the customers and reduce the market share
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  so that the BSC would find that it was falling back to the 70 per cent. level of a reduced capacity. That has been the story of the steel industry in cycle after cycle in the past 50 years. It has learnt nothing.
  There is another strategy, which has been put forward most eloquently and with the greatest authority, not in this Chamber and certainly not by the Government, but in a study by the Technical Change Centre carried out for it by Dr. Darnell, a former engineering director of BSC and a widely respected veteran of the steel industry. He was the works director in the Steel, Peach and Tozer works in which the whole of the Sheffield mafia first cut its teeth in steel management, including the present chief executive of BSC.
  The chief executive of BSC tried to suppress Dr. Darnell's report. Mr. Scholey wrote two letters to Sir Bruce Williams, the director of the Technical Change Centre, saying that it was against the public interest to publish this report on the future of the steel industry in Britain. The report points out that there is scope for a growth in the share of the British market and of the share that Britain has in the European steel market, but that it will come from trading up in grades of steel, in specifications, in the types of customers served and in the quality of service given to them.
  The Government have set their face against this strategy by the way in which they have treated the BSC's finances. I hope that the Minister, when he is preparing for the corporate plan, which he will be receiving shortly, will read the report by Dr. Darnell. I am not even sure that the Minister knows about the report, which he should have had two years ago when it was published. It is a prime report on what should be the policy of BSC today.
  The steel corporation has come through this difficult period of the miners' strike quite well. In the words of Mr. Scholey to the Select Committee:
  "I think it is fair to say we emerged from the strike without commercial damage."
  The mean and crafty cavil of the Minister about the damage done by the miners' strike is so much nonsense. Having emerged from that difficult period, already in the first two months of this financial year the BSC has been operating at a profit on only 70 per cent. capacity. What more can the Government expect when, in the earliest stages of industrial recovery, the BSC is already able to make a profit and is finding that, at present levels of manning, its strip product works are working flat out? What possible reason is there for saying that the corporation does not require the capacity to maintain three strip mills?
  If we look into the detail of how BSC does its production planning, we find a most extraordinary story. The Government might have been utterly unsuccessful in privatising BSC but, by God, they have successfully privatised the information on which BSC tries to plan. I invite the Minister to read May's issue of Economic Trends in which there is a contribution from Mr. Astin and Mr. Brady of BSC supporting a description of the commodity flow accounts which will be produced with the aid of finance from a group of users outside the Government. These are the United Kingdom commodity flow accounts giving production, consumption, exports and imports of commodities such as steel, and in future they will be produced and financed by a private consortium— and will not be available even to the House — yet they' will

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  use the powers of the Statistics of Trade Act 1947. They will collect prime information but not make it available for public use.
  The information is so crude, however, that it does not even contain information about the steel consumption of the motor industry. It does not say how much a change in construction output would affect the demand for sections in Scunthorpe. It does not give any information about how a shift in the level of imports of Japanese cars would damage the level of demand from the strip mill division.
  With that mutilated information base, BSC produces its extrapolations which would make the planners of the past such as Sir Robert Shone from British Iron and Steel Federation days turn in their graves. BSC is merely extrapolating present trends and the present defeatism of the Government. It is writing off all possibilities of industrial recovery and saying that, within that prospect, it sees a nice comfortable future for itself with just two strip mills. That is decadent, irresponsible and deplorable in any public corporation.
  Of course, Llanwern and Ravenscraig will survive. Of course, there will be necessary investment in continuous casting at Llanwern and in the new coke ovens at Ravenscraig. There will be a re-establishment of serious research and development in BSC. There will be higher levels of customer service. Higher grades of steel will be introduced. All that will secure a future for the steel industry. The Government's motivation for allowing the first steps during the next few years until we can get on seriously with the job after the general election is simply that they are too scared to face the deplorable consequences of the miserable failures of their economic and industrial policies.
  9.53 pm
  Mr. Alan Williams: Listening to my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and my hon. Friends the Members for Sheffield, Hillsborough (Mr. Flannery) and for Sheffield, Attercliffe (Mr. Duffy), I became increasingly disturbed at the deviousness and evasion that seem to have surrounded the tragic destruction of the Tinsley Park unit. The closure means the loss of 800 jobs in an area where there are 56 jobless people for each vacancy. Closure was determined in December 1983 when the Phoenix proposition was first put forward. Ever since then, the steel industry has consistently denied a relationship between that closure and Phoenix. It is only now that we are discovering the truth.
  My hon. Friend the Member for Hillsborough said that during a meal that he and another of my hon. Friends had with the chairman and senior members of the British Steel Corporation just a week before the closure was announced, they were told that no such closure was envisaged. That leaves us with an impression of complete and thorough dishonesty by the BSC.
  The closure has, in effect, taken place. It is virtually accepted that the plant cannot be saved. In the face of that deception, how can we believe assurances from Ministers, especially when they are given with such ambivalence? The Minister has been singularly coy. He has been offered opportunity after opportunity to repeat the assurances that have been given in the country by the Cabinet Ministers
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  representing Wales and Scotland. We are left with the impression of an inexorable and tragic logic unravelling before us.
  Perhaps inadvertently, the Minister has helped to clarify the position, although I am sure that that was not his intention. He said that his objective was to return the core operation of the BSC to the private sector. A few months ago the chairman of the BSC came to speak to a meeting in the House. He made it clear that there was only one way in which the core operation could be made profitable enough to be privatised. He actually put a figure on the level of profit that he required. Last week he mentioned £200 million, but said that that might not be sufficient. When he spoke to us a few months ago he said that he was aiming for a profit of £300 million. I chaired that meeting and I asked how he could make that profit with the three strip mills. He said that he could not—he could do so only with two strip mills. He said that the three strip mills were operating at 60 per cent. capacity, so that if one was closed there would still be 20 per cent. surplus capacity for any expansion. He has put that view to Ministers also.
  As Margam is already highly profitable, the two units at risk must be Ravenscraig and Llanwern. The Minister said that he would not speculate on the future of any of the works. That is fair enough — after all, he is the responsible Minister. But if he will not speculate, on whose authority was the Secretary of State for Wales speaking when he gave the impression that there was no risk? With what authority was the Secretary of State for Scotland speaking when he tried to give the impression that there was no risk?
  Only last week, the Secretary of State for Wales said:
  "I know of no such closure threat."
  If one knows the Secretary of State for Wales, that is not much comfort, because what the right hon. Gentleman does not know far outweighs what he does know. My hon. Friend the Member for Newport, East (Mr. Hughes) will recollect that for a couple of years there was a scandal of a crumbling hospital near the right hon. Gentleman's head office in Cardiff — directly his responsibility. It was only when we started asking questions in the House that he discovered what was going on. Therefore, I am not surprised that the right hon. Gentleman does not know. Indeed, I sometimes wonder what he does know. However, we had better not speculate too far in that respect. After that statement by the right hon. Gentleman, there was the ominous point:
  "But he admitted that there were problems of overcapacity in the industry."
  Is it not a fact that, regardless of the corporate plan that the Minister hopes to get in July, in July last year the chairman of BSC presented his Department with a document outlining the options if the Government were to achieve their objectives of maximum privatisation, including privatisation of the core sector, as stated by the Minister? Is it not a fact that in that option document, which has been with Ministers for 12 months, the closing of one of the plants that I mentioned was envisaged? Is it not a fact that the Secretary of State for Wales and the Secretary of State for Scotland would or should have been aware of the contents of that document? Is the Minister saying that he has kept that information from the other Departments, or were the other Departments pretending that they had not had the information?

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  When that document was put to the Government a full year ago, the chairman of BSC was taken aside and told, "Don't expect an answer. Don't expect a discussion. There will be no talk about this until the coal dispute is over". The chariman told us that in Committee. Therefore, the document has been lying on the table. The coal dispute is now over. The chairman told the Select Committee only a week ago that the document is now under discussion.
  So whom do we believe? Do we believe the chairman, in what he has twice repeated in different forms, that one of those plants is at risk? Or do we believe the befuddled ramblings of the Secretary of State for Wales and the dodging and evasion of the Secretary of State for Scotland?
  After all, we are not talking about something that will be imposed by the EEC. That matter was also clarified tonight. In the past, Ministers have always said, "You have to understand: it is not us; it is the nasty Commission. It's those bureaucrats over in Brussels. They're telling us that we have to cut back. We have too much steel." But what do we discover from the Minister of State? Far from having too much, he has cut back more than Brussels asked him to cut back. He admitted that earlier. I invite him to read in the Official Report tomorrow what he said.
  Therefore, if one of those plants is to go, the Minister cannot blame Brussels or say that the reason is the elimination of loss-making, because he boasted to us that BSC is already in trading surplus. But the fact is that the Government intend to take the profitable parts, sell them off as quickly as possible and leave the less profitable parts there so that they continually contract. In pursuit of their ultimate objective — the privatisation of the core sector of the industry — to to which the Minister admitted this evening, all the jobs and capacity will be lost at one of those two plants.
  This is the reality of what the Minister had to say. It is confirmed by silence on one key factor. If there were one degree of truth in what the Secretary of State for Scotland and the Secretary of State for Wales are jointly saying, that neither of those plants is at risk, one would expect to hear tonight something about the level of investment that is needed at Ravenscraig and at Llanwern. That would be the assurance the House and the country might have expected. The Secretary of State for Wales has said that he can be sure that this Government would not allow these plants, on which the industry's future success and profitability depend, to be deprived of the necessary investment. This is an opportunity for the Minister of State to give that assurance. It would be a disaster for the whole of Gwent, with 17 per cent. unemployed already, if Llanwern were to close with 4,000 jobs going at the same time as 2,000 jobs are being phased out nearby at Girling.
  One would have thought that, on the eve of a by-election nearby, a Government who could find the money to save army camps could find the money to revive prospects that seem to be lost in the locality. Every attempt from hon. Members to extract a promise from the right hon. Gentleman that reflects the protestation of the Secretary of State for Wales and the Secretary of State for Scotland has failed. One is left with a rather embarrassing question. Which of these three Ministers is telling the House and the country the truth? Are any of them telling the truth? It is clear from the nature of what we have heard tonight that the Government are ashamed and embarrassed
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  about what they eventually intend to reveal and that they have no intention of revealing it this side of the by-election.
  10.7 pm
  The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): We have heard a blood-chilling speech from the right hon. Member for Swansea, West (Mr. Williams). The only stage at which he became convincing was at the mention of the magic word "by-election" and then we began to see the motive for part of his speech.
  The hon. Member for Motherwell, South (Dr Bray) has made some very interesting speeches. I am not sure that tonight he seemed as anxious to inform the House as to make political points. He sought to imply that the miners' strike had had no effect upon the British Steel Corporation. He referred to the fact that I had the audacity to refer to the miners as mean and cavilling. If the hon. Minister thinks that the miners' strike has had no effect on the steel corporation, let him wait seven or eight days until the accounts come out and he will be able to read about it there. It may be that the chairman of the corporation said to him, "We are resisting this strike, and because of our efforts we are a healthy corporation and we have managed to come through this, but that it has had a financial effect on the corporation nobody can doubt, and it will be demonstrated very clearly in the accounts".
  I had a bit more sympathy with the hon. Member when he referred with some irritation to the fact that we have this order before the accounts are available, before indeed the corporate plan is available to the House. I understand that. But the point at which we raise the level of the ceiling on the borrowings of the corporation is determined, alas, not by the cycle of the corporate plan but by the borrowing situation of the corporation. As the hon. Gentleman, who has often come to these debates, will recall, it is not unusual for Governments of either party to have to make increases in the borrowing powers at a time when a corporate plan has not been submitted to the Government or an outline of it made available to the House.
  The hon. Gentleman will also recognise that we are not, as he put it in his speech, collecting the money or spending the money. The order is permissive only. The expenditure of money will be subject to approval by the Government and subject to the procedures of the House in the normal way.
  The hon. Member for Sheffield, Attercliffe (Mr. Duffy) referred to the closure at Tinsley Park, as did other hon. Members. Of course one regrets very much the loss of jobs that that closure has entailed, particularly in view of the efforts made by the work force and the management at that plant. It was certainly not a decision taken lightly by the steel corporation. But I repeat what was said before which — for reasons that were not clear, the right hon. Member for Swansea, West seemed to dispute — that that decision was not connected with the Phoenix 2 project. It was a decision which BSC had to make and wanted to make on its own account because it was losing money in that sector. It cannot be a decision made on the basis of Phoenix 2 because no decision has yet been made on Phoenix 2. The decision was made on the commercial judgment of the corporation because it thought the decision was necessary.
  Mr. Crowther: The point needs to be clarified. If the closure at Tinsley Park has nothing to do with the Phoenix

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  2 proposal, will the Minister tell us when BSC first decided that it intended to close Phoenix 2 and when BSC first told the Minister? We now know, because Sir Robert Haslam told me when I questioned him about it, that that proposal was included in the Phoenix 2 proposals submitted to the Department in December 1983. If the decision had been made independently of Phoenix, it must have been made some time before that. Yet the unions were not told about the decision until March 1985.
  Mr. Lamont: I do not recall the timing of the decision, but I repeat emphatically that that decision could be made and was made independently of the Phoenix 2 decision. It is one that the corporation wanted to make, regardless of whether Phoenix 2 does or does not go ahead.
  Sir John Osborn: One of the most important things for a person in my position to know is what options have been before BSC locally in connection with Stocksbridge, Aldwarke and Tinsley Park, the options of future sales and why this decision has been reached. Obviously I have to support my hon. Friend the Minister, but so far I have had no information as to what the options are for the basis of that decision. This is what the Select Committee would like to know, too.
  Mr. Lamont: The decision on Tinsley Park had to do with the costs of the plant and demand for the product. Those are the essential features. I cannot comment on the pan that other plants in the Sheffield area might play in the Phoenix 2 project. My hon. Friend will understand that that project is still very much under consideration. I will see that my hon. Friend is given a full account by the corporation of the reasons for the Tinsley Park closure, but the decision was a commercial one and not in any sense political; it was independent of any decision that might be made on Phoenix 2. It is a decision the corporation wanted to make even if Phoenix 2 did not go ahead. My hon. Friend the Member for Sheffield, Hallam (Sir J. Osborn) also referred to the new mood of confidence that he said was appearing in parts of the private sector. Listening to some hon. Members, I did not recognise the picture either of the steel industry in general or of the British Steel Corporation in particular that was being painted in the debate.
  I very much agree with what my hon. Friend said, that the great thing we must not do in the steel industry, and particularly in the British Steel Corporation, is to have Governments making political decisions about the industry and all the time about particular plants. The hon. Member for Rotherham (Mr. Crowther) just dismissed Sir Robert Haslam's views and those of Mr. Scholey—they are not the owners of the business, he said—as though we did not think it was in the interest of the taxpayer to have the professional manager's views. But that must be in the interests of the taxpayer and in the interests of those who work in the industry.
  Several hon. Members referred to the state of demand in the steel market. The hon. Member for Rotherham and the hon. Member for Motherwell, South thought that the Government and the steel corporation were being far too pessimistic about steel demand and very much regarded what they saw as the low level of steel production in this country as being a result of the Government's industrial policies and an utter condemnation of the Government's
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  policies. What they seem to leave totally out of account is the fact that steel production throughout Europe in 1985 is lower than it was in 1979. They leave totally out of account the fact that there has been a structural change, and that other materials are being substituted for steel. They leave totally out of account the fact that the European Commission is forecasting that in 1990 steel consumption in Europe will be no higher than it is today.
  We may not like it and we may think it is very difficult, but those are things that we have to take into account. They are things upon which it is useful to have the opinion of the British Steel managers which the Opposition simply wish to wave away.
  The hon. Member for Yeovil (Mr. Ashdown) wondered whether the corporation could raise money on the private capital market. As he rightly said, that is difficult to do within the present legislative framework, although nationalised industries have borrowed on the Euro currency markets. I very much agree with his general point that we ought to blur the distinction between the public and private sectors. That is one reason why we have been keen to have the joint ventures, Phoenix 1, 2 and 3. I agree with the hon. Gentleman on that point, but I did not agree with the picture that he painted of the steel corporation being depressed and restricted and fed up with the Government's policies.
  If Opposition Members think that, let them ask the management of the steel corporation. I talk with them and I know that all my hon. Friends who take an interest in the steel industry talk to the managers of the corporation. If hon. Members opposite talk to them, they will find that morale is high because people are encouraged by the fact that they have been given greater commercial freedom, that they have been able to make decisions and have brought about spectacular improvements in the productivity and profitability of the industry, and that we shall see the first accounting profit for a decade. Such things encourage people and mean that morale in the industry is high.
  Inevitably, much of the debate has been about Llanwern and Ravenscraig. The hon. Member for Newport, East (Mr. Hughes) called for investment in concast at Llanwern and the right hon. and learned Member for Monklands, East (Mr. Smith) called for investment in the coke ovens at Ravenscraig. He wants £90 million invested in the coke ovens at Ravenscraig before we have had the opinion of the steel corporation. Of course, we shall consider it, but we are of the opinion, particularly when we are thinking about spending £90 million, that we might as well have the opinion of the professional managers first before making a decision about it. I agree with the comments of my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) about Llanwern and the great improvements there. There have been remarkable improvements in productivity and the people there have very much responded to the fact that they have been given greater commercial freedom. I met a number of shop stewards from Llanwern the other day and they told me that one of the best things that had ever happened to the steel corporation was the appointment of Mr. MacGregor. The shop stewards from Llanwern told me what he had achieved for the corporation.
  As to Ravenscraig and Llanwern, we have made it clear that these are decisions in which the Government must obviously be involved. We have also made it clear — I did so again in the debate—that we must have the views

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  of the BSC, and we have not yet had the corporate plan or the recommendations of the corporation. I do not believe that that is inconsistent with what my right hon. Friends the Secretaries of State for Scotland and for Wales have said. Of course they are proud of what has been achieved at the steel plants in their countries, but we must also have the views of the corporation.
  Mr. John Smith: If that is the case, what attitude are we to take to statements by the Secretaries of State for Scotland and for Wales? Are they pronouncements on behalf of the Government to which we should lend credence?
  Mr. Lamont: No one has ever said that there is a guaranteed future, for ever, for every plant in the corporation, and nothing I have said tonight has been inconsistent with what has been said by my right hon. Friends.
  The right hon. and learned Member for Monklands, East is extremely agreeable and makes intelligent speeches, but tonight he made a slightly dishonest speech. He accused me of bland evasions because I did not answer specific questions about specific plants. I am sure that any Minister would do the same. But I was absolutely clear about viability and said that that was the Government's objective. The Government want the corporation to achieve enduring viability. Decisions on plants are largely for the management, although the Government wish to be involved in the Ravenscraig and Llanwern decisions.
  The right hon. and learned Gentleman could not be clear about viability. He would not accept that viability
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  was a reasonable objective for the corporation. From the way that he answered the questions that I put to him, he seemed to suggest that every decision on every closure — not just the big strip mills—ought to be made by the Government, and that such decisions would be made by a Labour Government. In other words, we would go back to the way in which the BSC was so disastrously run by the last Labour Government—a sort of Beswick review, where every decision was subject to their preoccupations with by-elections, a subject that has not been so absent from the minds of Opposition Members tonight.
  It was not at all clear whether the right hon. and learned Gentleman was in favour of viability. He seemed to agree with his hon. Friend the Member for Rotherham, who seemed to want a social policy for steel. The right hon. and learned Gentleman does not want the industry run in order to create a profit and to be a wealth creator rather than a wealth consumer. That is what we want for the corporation, and that is why we want privatisation. That is a spur to the creation of wealth rather than the consumption of wealth.
  All the signs are that the BSC is making substantial progress and is well on the way to being a wealth creator. That is why the finance made available by the order ought to be accepted by the House.
  Question put and agreed to.
  Resolved,
  That the draft British Steel Corporation (Borrowing Powers) Order 1985, which was laid before this House on 20th June, be approved.

  Supplementary Benefit
  10.23 pm
  The Minister for Social Security (Mr. Tony Newton): I beg to move,
  That the draft Supplementary Benefit (Requirements) Amendment Regulations 1985, which were laid before this House on 26th June, be approved.
  At the outset I shall speak fairly briefly, and later I shall respond as fully as I can to the points that I know a number of hon. Members on all sides of the House wish to make.
  As is the convention on these occasions, I shall first outline the main points of the regulations.
  The first part of the regulations relates to the financial limits rather than to the time limits for board and lodging and increases the flexibility of the transitional protection arrangements that are contained in the original regulations. Those arrangements allowed for 13 weeks' transitional protection of the charge being met immediately before 29 April 1985 for people in ordinary board and lodging accommodation over the age of 25, and for those aged 16 to 25 who fell into any of the categories that are exempt from the time limits. Under the amending legislation the 13 weeks can be extended, at our discretion, for particular cases or classes of case.
  The second part of the regulations extends the categories of claimants who are exempt from the time limits on boarder status to cover those young people under the age of 26 who are living with their parents or stepparents in board and lodging accommodation. We know, for example, that the absence of this exemption has been causing particular anxiety among young refugees, many of whom live with their parents in such accommodation. That was not our intention. I hope that hon. Members will be pleased to know not only that we are making this further exemption but that we have made arrangements to make ex-gratia payments to claimants who fall into this new category until the regulations come into operation.
  Thirdly, the regulations also provide generally for greater flexibility in the area of exemption categories. As I said in my statement last Tuesday, we believe that our original list of exemptions generally covers those vulnerable young people who genuinely need to be in board and lodging accommodation for more than a short time. However, we want the ability to move swiftly to cover other categories, should it prove to be necessary. The regulations therefore provide for the Government to extend the list of exemptions, if it should become clear that there are other groups to whom the time limits should not apply.
  I should also record that the regulations are being made under the urgency procedures so that their wholly beneficial provisions can be introduced as soon as possible. They were not, therefore, referred to the Social Security Advisory Committee before being laid before the House, but they were referred immediately after they were laid. I am glad to say that I understand that the Committee has considered the regulations and, because of their beneficial nature, has decided that it does not wish the regulations to be referred to it for report.
  Part of our purpose in these further regulations is to provide additional flexibility to respond without delay to problems, as they arise, that affect non-exempt groups. We have identified two situations where we think that it
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  would be appropriate to use this new power at once. First, we propose to extend the exemption list to cover ex-foster children living as boarders with their former foster parents, a point that has been raised by, among others, the right hon. Member for Chesterfield (Mr. Benn). Secondly, we intend to extend the list to include young people on bail where the operation of the regulations would otherwise conflict with the conditions of their bail—for example, if there is a requirement to remain in the area. These are two groups where it is clearly right, within the purpose of the policy, to exempt those concerned from the time limits.
  I indicated, both in my statement last Tuesday, and in response last Friday to the Adjournment debate of the hon. Member for Livingston (Mr. Cook), that we have reinforced our guidance to local officers about the administration of these regulations, in particular to ensure that notification letters to claimants not only ask the claimant or, equally important, anybody acting on the claimant's behalf, to let the office know immediately if he thinks that he falls into one of the exemption categories but to let it know of any special circumstances that may show a need to be in board and lodging accommodation. That is not only to enable us to ensure that the regulations are administered as effectively as possible but to assist us in examining whether there are any further exemption categories that need to be covered and taking the appropriate action, if need is shown.
  The hon. Member for Livingston raised a number of points in last Friday's debate, which he asked me to consider. I am pleased to be able to respond tonight to one of those points. We have asked local officers to draw up a list of places and agencies in their area, including the DHSS office, where claimants will be able to seek help and advice over, for example, finding accommodation or understanding how the exemption categories may apply to them. I hope that that news will be welcomed on both sides of the House.
  I cannot respond in the same way to the other suggestion that the hon. Member for Livingston made about what might be called the administrative side — in effect, that we should communicate to such agencies the names of people to whom notices under the board and lodging regulations had been sent — for the obvious and I hope simple reason that it would not be appropriate for the DHSS routinely to send information about claimants' affairs to other bodies. I hope that the House will appreciate the difficulty that such a proposal would cause.
  Mr. Gordon Wilson: I welcome those relaxations, but the Minister said that if special cases warranting exemption arose they would be considered sympathetically by his Department. What time will elapse between a category arising and the finding of a solution? One of the points made by the hon. Member for Livingston (Mr. Cook) was that there could be problems with suicides and other such unfortunate events.
  Mr. Newton: One of the advantages of the amending regulations and the reason why we have brought them forward is that they provide a mechanism for extending the exemption categories by enabling the Secretary of State to specify classes of case to be added to the exemption list. It is a process which can take place quickly. It would depend only on the decision-making process within the Department which would, of course, involve Ministers. I

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  hope that that can be done quickly, if the need is shown. The decisions can be communicated quickly to the local offices.
  The merit of what I am proposing is that it enables us to respond quickly. I must emphasise, so as not to mislead the House, that the power is to specify types of case that would be exempt; it does not extend to the use of discretion about individual cases. That would raise rather different legal issues.
  When we introduced the new regulations in April we promised to monitor them closely and to be willing to make changes if the need were shown. These regulations are evidence that we meant what we said. That monitoring will continue through regular returns from all our offices and in other ways. In particular, we have asked the social security policy inspectorate to extend its earlier work on board and lodging and to consider also the effects of the new regulations. We have also commissioned a firm of management consultants, Ernst and Whinney, to undertake a detailed study for us of residential care and nursing homes. The study will have the following terms of reference:
  "To provide information on the operation of the market in private and voluntary provision of residential and nursing care, with particular emphasis on the impact of social security payments to residents in homes."
  We have asked the consultants, within that broad framework, to examine the relationship between charges and costs; cost differentials in different categories of homes and different parts of the country; and the effects of benefit levels on the operation of the market. Many organisations have expressed their willingness to assist in a factual examination of those issues, and I am sure that the consultants will receive full co-operation.
  We expect a report within about six months, and intend to take account of the findings in the review of these matters which we have, in any case, undertaken to carry out within a year of the implementation of the regulations.
  Mr. Frank Dobson: How much will the Minister pay the consultants?
  Mr. Newton: I cannot give an estimate of that at this stage, but I shall see whether I can provide one when I seek to reply or at some later stage. It will to some extent depend upon the work involved.
  Mr. Frank Field: When the inspectorate's work is complete, will it be published?
  Mr. Newton: The hon. Gentleman will be aware that we have made it our practice generally to publish social security policy inspectorate reports. I do not wish to give a definite undertaking, but I shall consider that point sympathetically.
  In conclusion, I wish to remind the House of the main reasons for the action that the Government have taken. The figures of escalating expenditure are now well known. Ordinary board and lodging rose from £52 million in 1979 to an estimated £380 million in 1984. The total of board and lodging payments, including residential care and nursing homes, rose from about £60 million in 1979 to an estimated figure of nearly £600 million in 1984. To put those figures in perspective, I make the point that they would pay for almost all the significant improvements in benefits for disabled people which are frequently urged upon me by both sides of the House. It would be hard for
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  anyone to justify expenditure on such a scale for this purpose alongside the other pressing needs which many perceive in the social security system.
  Frankly, however, cost alone was not by any means the only reason for moving in this direction. I have already referred to the study that we have commissioned by Ernst and Whinney in the residential care and nursing home sector. I ought to tell the House that some months ago we commissioned a study into the board and lodging market by the same firm of management consultants. The report, which we have recently received and which 1 am arranging to have published and placed in the Library shortly, contains some revealing points. In three of the six areas that it studied, landlords set their charges by reference to the Department of Health and Social Security supplementary benefit limits. In half the areas, there was evidence that landlords were charging higher amounts for DHSS claimants than for other residents, sometimes as much as £15 higher. In four of the six areas, a high proportion of advertising by landlords was directed specifically at DHSS claimants and, of course, many landlords acknowledged that claimants were their primary market.
  Those findings are, I think, some indication — together with figures that showed an increase in Reading of 37 per cent. in the number of board and lodging claimants in less than six months — of a degree of abuse and exploitation that was widespread and on which, in my judgment, action needed to be taken. There was considerable abuse and exploitation, not only by claimants but also by landlords. There was a pattern of encouragement of inappropriate use of board and lodging accommodation and, not least, a position in which a growing number of young people were effectively trapped in that they could not afford to take work because there was no way, once they had taken a job, in which they could continue to pay for the accommodation in which they were living.
  In moving to curb these problems, the Government were at least equally anxious to protect those with real needs, hence the extensive range of exemption categories and the further action that I propose to the House tonight.
  I do not believe that any hon. Member seriously doubts that some action was necessary. As I said last Tuesday, the aim of our action is to strike a proper balance between curbing that undoubted abuse and ensuring that genuine social security needs are effectively met. The purpose of the regulations is to help us further that aim.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): I remind the House that the debate should be restricted to the specific provisions of the regulations, which deal with the extension of board and lodging allowances for persons under 26, and to the transitional arrangements for persons in ordinary board and lodging accommodation.
  10.38 pm
  Mrs. Margaret Beckett: We have listened with interest to the Minister tonight, and noted that once again he has explained facts of which, as my hon. Friends have already pointed out, we were fairly cognisant, facts which we took pains to try to point out to the Government when they brought before the House the temporary regulations, which the regulations now under consideration seek to amend.
  Perhaps some people were exploiting a loophole that the Government opened. It was not the claimants who

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  were exploiting the loophole, but the landlords, yet it is against the claimants that the Government have taken action. This is one of our main concerns.
  The Minister has had to return to the House within a short period with urgent amending regulations. Unless he suspends or withdraws them, he will speedily return with yet more amendments and changes, even though he has taken powers under these regulations to make some of the changes that might be necessary.
  A week or so ago, I was present at a meeting of claimant advisers from a range of areas and agencies in my constituency. The meeting had been arranged some time before to discuss issues that the advisers believed to be of prime importance. The advisers talked for more than an hour about nothing except board and lodging regulations. I asked why they were concerned mostly about these regulations, and they replied that the nature, extent and scope of the problems that they were facing as advisers had swamped every other aspect of social security work and had completely destroyed all the other advice work that they sought to do. That is the nature of our concern about the regulations. Do they go far enough? Will they allow the Government to do enough? Will the Government use the powers that they have been given? The Minister touched only lightly on that last aspect.
  The regulations fall basically into two parts—those that mostly affect the young with regard to time limits and those that affect all claimants, including those in need of care who are in homes of one type or another and are affected by the limit on payments. Despite what the Minister said about reports, the common thread that runs through the background to the regulations has been the wish to save money. The hon. Gentleman referred to a recently received report from the same management consultants who are inquiring into residential homes. I suspect that the report was received after the amending and original regulations were drafted and introduced. It is unfortunate, to say the least, that the Minister is commissioning a study of the effects on residential homes only at this stage. Those effects will have been felt for nearly a year by the time the report is published. It is a pity that the studies were not conducted first. When the Social Security Advisory Committee looked at the regulations, it pointed out that the Government seemed to have little evidence to support their action, although they had plenty of stories and anecdotes and made plenty of horrified remarks.
  We are dealing with the effect of Government action, yet the burden will fall on the claimants. It is worth restating the basic nature of the problem. Increased homelessness and unemployment have contributed to the tendency that the Government so deplore. Conservative Members do not seem fully to understand that point. About a week ago, the Under-Secretary of State said:
  "Nobody in need can slip through that net of exemptions."
  Presumably that has been overtaken by events, or we would not be considering these regulations.
  The hon. Gentleman continued:
  "Opposition is coming solely from those individuals who cannot be bothered to look for jobs and prefer to live without effort off the B and B allowance."
  Those remarks were insulting but, more unfortunately, they were singularly inaccurate.
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  The basic problem is that the regulations are utterly unrealistic. They had their genesis during the reign of the former Minister for Social Security — the hon. Member for Brent, North (Dr. Boyson) — whose measures have had many unfortunate effects. The regulations are governed by the "Gillick syndrome", which the Government seek to attack in the other place and against whose effects they seek to defend us. The syndrome assumes that all young people have happy relationships with their parents, that all parents have adequate resources and that all is for the best in the best of all possible worlds. Unfortunately, the reality is emerging so quickly that, even before the regulations come fully into effect, we are seeing the effects on the large numbers of vulnerable claimants who are not protected by the exemptions, and who will not be protected by the amended regulations, and on those who are not regarded as sufficiently vulnerable to be in exempt categories but who often are genuinely unable to find suitable alternative accommodation. We recognise that accommodation is also a matter for the Department of the Environment. While the Minister is having consultations and getting reports it might be as well to consult that Department about how to deal with the problems of inadequate housing.
  People now in board and lodgings because it is difficult or impossible for them to find other accommodation will be even less well placed when the regulations come fully into effect and they have to move on every two, four of eight weeks. They will then never be able to qualify for local authority housing in the normal way. They will effectively lose their right to vote and their right to sustained medical treatment because they will not be in the same area long enough to enjoy the normal rights available in a civilised society.
  There are then those who are potentially exempt, or who should be exempt if we are to be stuck with the regulations, but who are not allowed exemption. There are enormous problems of definition. There are supposed to be exemptions for those who are chronically sick. I understand that that may cover relatively minor but longstanding illness. Those refused exemption in that category include an unstabilised epileptic, an asthmatic who has severe attacks and a diabetic who has to inject himself daily. The former need stability and supervision while the latter needs a clean environment to maintain health.
  Others who should be exempt but have been refused include a young man of 20 who is educationally subnormal and has anxiety and other medical problems. As it happens, he is living in board and lodgings with his brother, both of them having been in care most of their lives. The brother is exempt because he is only 17, but the 20-year-old has been refused exemption despite a letter from his doctor supporting his claim. Another young man of 20 is backward, suffers from chronic epilepsy, has lived in board and lodgings since he was 17 and has no parents, but the local officer has ruled that he is not exempt because board and lodging accommodation is not the only form of accommodation suitable for him. Another young man who is registered disabled, spent most of his childhood in care and has no parental home has been told that he could reasonably live in accommodation other than board and lodging. There are many other cases.
  Then there is the exemption for young people who until very recently have been in the care of a local authority and have no parents, but there is an age limit of 19. What is an orphan over the age of 19 supposed to do? When these

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  rules were first proposed, the then Minister peddled the theory that all these young people would just go home to their mothers and fathers. Orphans do not have mothers and fathers, but it is still assumed that they will go "home".
  A 17-year-old who has been living alone for two years comes from a broken home and has lost contact with his step-parents, but the local authority will not accept responsibility for him as a homeless person and he cannot register on the housing waiting list until he is 25, so he has eight years to be pushed around from pillar to post under the Government's regulations because he has been told that he is not exempt.
  A young man whose father has remarried and moved away and whose mother lives in a bedsitter and another who is unwilling to produce evidence of violence against him have also been told that they are not exempt.
  I could cite a whole series of cases of young people who have no possibility of going "home" because their parents are abroad or whatever but who are told that they must move on because the DHSS takes the view that they should somehow be able to return to a non-existent parental home.
  Mr. Roger Gale: Will the hon. Lady give way?
  Mrs. Beckett: I would rather not, as the hon. Gentleman usually has nothing new to say.
  Mr. Gale: Why are young people being told to move on when the non-householder is available? From experience in my constituency, my understanding is that if it is possible to find accommodation other than in an organisation which seeks to make a profit out of it, accommodation can be found in the person's own area at the non-householder allowance level, so the young person is not required to move on. With respect, unless the hon Lady can substantiate her claim, she should withdraw what she has said.
  Mrs. Beckett: I knew that I should not have given away to the hon. Gentleman, because it is almost always a waste of time.
  Mrs. Edwina Currie rose——
  Mrs. Beckett: I am prepared to answer the hon. Lady; in her constituency and mine about 1,000 young people live in board and lodging accommodation because there is nothing else. In the hon. Gentleman's constituency, people may be more fortunately placed, but little rented accommodation is available in my constituency.
  Mrs. Currie rose— —
  Mrs. Beckett: I am sorry, but I shall not give way. It is a short debate, 1 have a great deal to say, and I am not interested in allowing Conservative Members to score points on a serious matter.
  In most places there is insufficient alternative accommodation available. Most young people do not choose to live in that accommodation. If the hon. Gentleman had ever seen it, he would know that nobody would want to live in it. The young people certainly do not choose to pay the exorbitant prices that have caused the DHSS to introduce these regulations, which in any case affect the claimant rather than the landlord. They live there because they have nowhere else to go. If the hon. Gentleman listened more to those people and the agencies that represent them, he would know that that was true.
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  The categories of exemption apply to those who are said to be in physical or moral danger. In my constituency, I came across a young woman who had to sign a formal legal statement that she had been sexually attacked by her father to qualify for exemption. Even if a person can justify that he or she has been in physical or moral danger, what on earth leads the DHSS to imagine that that will cease with the wave of a magic wand when that person reaches the age of 19?
  There is the case of a young man who has twice been put in hospital by his stepfather and who, not unnaturally, is unwilling now at the age of 20 to return to the step-parental home. Yet under the regulations he is in danger of being forced to do so. It is unrealistic of the Department to imagine that the provision is workable.
  There is the question whether people in employment or education are eligible for exemption. The local office has been asked to pronounce on whether full-time and part-time places on YTS and the community programme count. It seems that, if places are part-time, they do not. If a person can get only a part-time community programme place, they lose their accommodation and whatever hope they have of getting a job.
  The category of people who are told that they are exempt includes refugees. When we last debated the issue, we asked the Minister whether he would make refugees an exempt category. When the Government wrote to the British Refugee Council saying that the children of refugees in Clapham were exempt because they were undergoing rehabilitation or resettlement, the local DHSS office, on the advice of the chief adjudication officer, sent letters to say that they were not exempt and that their benefit would be cut. There is a great deal of argument about how the exemption categories work now, and whether the definitions are adequate.
  I suggest to the Minister that the present categories are not working well, and that some people should not fall outside them. At present there is no exemption, as there should be if the Minister is considering extending the list, for those who have lived away from the parental home for some years, and whose partner has died or left them. They are expected to return to the parental home. Under the regulations, separated people may be required to leave the area where their children live, although their access arrangements to those children depend on their being in the area. I have heard of a young woman who threatened to remove her child from foster care because if she were forced to leave the area she would no longer have access to the child. The stability of the arrangements for the care of that child are threatened. Many youngsters are simply estranged from their parents and have little possibility of returning home and many need the support that good hoard and lodging accommodation can give.
  In my constituency, two caring people are trying to run accommodation in which young people with a variety of problems can live. Some are on probation, some are not, and some are on the fringes. Because it is not yet a properly defined hostel, those two people have been told that the youngsters must move on. The probation service says that it is reluctant to lift a probation order from a young person when it knows that by so doing it will put him or her out of an exemption category. That will cause the individual to move on from lodgings where perhaps he or she is receiving the sort of support that we would all wish such people to have.

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  The Minister must consider the position of those who have not yet had their appeals decided. All the young men who live in the house to which I have referred have been notified that their benefit will cease. They have all applied for exemption on a variety of grounds and not one of them has received a written decision on their exemption. They have merely been told that their benefit will no longer be supplied. They have submitted appeals against their non-written decisions and asked how long it will take for the appeals to be decided. They have been told that it will take until August at least for the appeals even to be heard. Where are they likely to be by August? How will they travel back if they want to participate in the appeal? No travel grant will be available to them. Travel grants are available only if the individual is moving to a defined place at a specified address or if he is returning to the parental home.
  Mr. Frank Field: Perhaps my hon. Friend is being slightly gentle with the Government. Once a claimant is put on his bike and moved out of the area in which he is living, he will have no address. He will have nowhere to instruct the Department to send his appeal papers. This is an extremely important issue and if the Minister is prepared to respond immediately, perhaps my hon. Friend will allow him to intervene now so that he can deal with it and perhaps allay our fears by clearing it up.
  Mrs. Beckett: If the Minister wishes to intervene, I shall be happy to allow him to do so immediately. If he feels that he cannot answer immediately, perhaps he will be able to take up the issue when he replies. I hope that he will tell us how the Government feel that they can give some sort of understanding to claimants that their appeals can properly be heard. I should like to know how they are to travel to a new place and how they will find accommodation. How will the Department send on their papers? How long will it take for the papers to reach them. If they go to a seaside area, it might take longer than two weeks for the papers to arrive. No one can judge to what benefit they will be entitled. Some of them might be judged to be of no fixed abode and not, therefore, entitled to any benefit.
  In short, the regulations are a mess. We are faced with exemptions that do not work, claimants who do not know whether they are exempt or not, claimants who cannot appeal and claimants who are not exempt and should be. We are faced with a disaster from start to finish, and unfortunately the claimants are bearing the burden.
  We hope to hear from the Minister how he proposes to extend the classes of exemptions. As the hon. Member for Dundee, East (Mr. Wilson) said, we shall be interested to know when that extension can take place. We want to hear about the categories in which other decisions are to be made—for example, the limits on which the money can be paid. I understand that the Prime Minister told us this afternoon that the limits that are allowed under the regulations are quite reasonable. I am not sure how she knows that, when the study that will tell us what they will be and how reasonable they are has barely been commissioned. That is the effect of what the Minister has told us.
  I note that the Under-Secretary of State told one of my colleagues in a written answer the other day that it was "believed" that 60 per cent. of the residential homes that
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  are affected by limits under the regulations will come within the limits that the Government have set. Presumably the other 40 per cent. are expected to lower their charges or to close down immediately. How can it be said that the charges, especially for nursing homes, are reasonable? Those who run the homes have been saying ever since the proposals were drawn up that they are not reasonable. We are not talking about property-owning organisations, although I recognise that there may be some such individuals. We are discussing voluntary organisations, charities and non-profit-making organisations, which say that their expenses cannot be met within the limits that the Department has chosen to set.
  In any case, I do not see how the Government can argue that their limits for nursing homes are reasonable. Let us accept for a second that the Government are right about ordinary residential care homes, and that £110 to £170, depending on the category, is a reasonable charge for straightforward residential care. How on earth do the Government argue that for a mere £28·60 more, full nursing care can be provided in homes in the parallel category?
  I can remind the Minister what that means in terms of the care provided. In the south Derbyshire health authority, certain guidelines are given to judge whether a place is a nursing home. There are 10 in all, of which some are whether a person is doubly incontinent for more than a week, whether there is a need for two staff to mobilise, dress, bathe and toilet the resident, whether the resident needs care at night as well as in the day time, or assistance with feeding, such as tube feeding, or has pressure sores, a catheter and so on. These categories of care decide whether a place can be considered a nursing home, but for all that extra care over and above ordinary residential facilities, the home receives the princely some of £28·60 a week. Even by the standards of this Government, it is hard to see how that can be judged to be an adequate sum.
  The Minister knows that it has long been argued by many, including the Social Security Advisory Committee, that we are lacking one category of suitable provision, that for the elderly mentally infirm. The Minister has said that he might be able to extend the transitional period for old limits, and we might welcome that — it is better than going ahead with the previous provisions. However, I wonder how he can justify the charges at the intended levels, and how it can be justified that a physically handicapped person under the age of retirement who is in a home that charges above the level will have a year to find somewhere else to live? Have the Government told them that yet?
  Already, the young people affected by the other regulation have had a week's notice because the Department has not got around to sending out the letters. When will it send out the letters to the severely handicapped telling that they must move out of their home to somewhere cheaper? I feel sorry for the civil servant who has to draft that letter. It will be a work of art to make it sound reasonable.
  Fundamentally, as I have said before, these regulations are an absolute and utter mess. We want to know how the Minister will take the power to extend the length of the transitional period, and how it will be administered—I understand that it might be devolved to individual offices. Will there be a right of appeal against a decision? If it is a power of the Minister, it might mean that there is no such right.

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  These regulations have been in place for only a few weeks. Already the evidence is pouring in, and it must be pouring in to the Minister as well as to everybody else, of claimants who are severely disadvantaged by them. The Government have emergency procedures and powers. When they first embarked on the disastrous course of action that we are discussing tonight, they began by suspending the regulations then in force. Unless, perhaps not tonight but very soon, the Minister either suspends or withdraws these regulations, he, and many other people, will live to regret it, and rather too many people might not live at all.
  11.3 pm
  Mr. Humfrey Malins: My right hon. Friend the Secretary of State for Social Services was right to come to the House in November and tell us of the escalation in costs of DHSS payments for board and lodging. It was a scandal that could not be faced indefinitely. He rightly pointed out the other scandal of the unscrupulous landlord. On that occasion, I reminded my right hon. Friend of a number of real problems such as the appalling squalor that in which many people in board and lodging accommodation live, with particular reference to overcrowding, which is appalling in this day and age. I asked whether the Government would act and he replied, "Yes, I agree."
  In a later debate, I said that the fundamental problem is that there is no obligation on the DHSS or housing authorities to enforce any standards. There are powers, but no duties. I said that it was time that there were duties so that important customers might enjoy a decent standard of service. There are two sets of customers—taxpayers and homeless families. Since then, I have corresponded with my hon. Friend the Parliamentary Under-Secretary of State for the Environment. When asked whether the Government would introduce measures to ensure better accommodation, he replied in a letter:
  "As you know, the Government is concerned to see restraint in central and local government expenditure, and there must be reservations about the cost implications of proposals which impose further duties indiscriminately, of applied national minimum standards and reduced local authorities' discretion in deciding when and how to act."
  The Government are right to want to save money, but they should be prepared to spend some money to ensure proper conditions for the homeless. My hon. Friend continued to say that the Department was carrying out research which involved examination of the condition of housing in multiple occupation and local authorities' use of existing legislation. Local authorities have some powers, but they rarely use them. In 1982, there were 145,000 substandard houses in multiple occupation in Britain but, in the same year, only about 6,500 repair orders, notices or closing orders were served by local authorities. Less than 5 per cent. of substandard properties were attacked.
  In June last year, the institution of Environmental Health Officers said:
  "Few Local Authorities throughout the Country have a comprehensive approach or even a coherent policy."
  It is a scandal that, in 1985, families are condemned to living in the most appalling squalor. The House is able to act by introducing measures that insist that accommodation, for which taxpayers pay through the DHSS, is decent.
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  I believe that Mr. Jim Marshall introduced a Bill in the previous Parliament which would have gone some way to help. That Bill fell because of the general election. There are powerful reasons why the Government should introduce a similar measure. There are two customers. We are looking after those who pay quite well, but in a civilised age, the recipients are more important. If we are to be a caring Government, we must not open ourselves to the charge that we lack compassion on this issue. If we fail to act soon, that charge will be difficult to resist.
  11.8 pm
  Mr. Archy Kirkwood: I agree with the hon. Member for Croydon, North-West (Mr. Malins) that the Government should put much more emphasis on what is provided by landlords.
  I and my colleagues have had much correspondence from people who are affected and from others who think that compassion has been missing from the Government's handling of this issue. We accept, however, that administration of the system is difficult.
  What steps are being taken by the Department to assist local offices in the administration of the regulations? I know of a number of different examples of problems. Staff, in all good faith, have found differences of approach and interpretation. Some of the existing exemptions, in addition to those we are now considering, are difficult to interpret. They can be fiendishly complicated. Are additional staff and training being devoted to the problem?
  I agree in principle with what the Minister said about the difficulties of the DHSS handing on details of individual claimants to other offices—whether housing or social work. We must be careful to ensure that confidentiality is preserved. But in cases where the DHSS considers people to be vulnerable, and who could be assisted by other offices, is the Minister saying that the DHSS offices should adopt a self-denying ordinance?
  I wish to repeat a few points raised by my hon. Friend the Member for Leeds, West (Mr. Meadowcroft) following the statement last week. We have come across a few cases that we think are stupid. The first is when claimants are moved on because they have run out of the time limit—whether two, four or eight weeks—but have been offered jobs in the area. If the claimant can show a written offer of a job to begin in, say, 10 weeks, it is daft to move him out of the area. Secondly, if a local authority offers a claimant a house in 10 weeks, it is daft to move on an unemployed youngster.
  Thirdly, there have been television programmes about youngsters with bail conditions. All three categories are suitable for potential exemption.
  We welcome the Minister's announcement about foster children. We have been pressing the Government to consider that matter.
  I am concerned about two cases that have been referred to the Minister from the Eastern Borders citizens advice bureau in a letter dated 21 June. They involve women aged 16 and 19 who were moved on, although they were permanent residents in the Berwickshire area generally. I should be grateful if the Government would study the circumstances surrounding those cases.
  If I correctly understand information given to me by Shelter in Scotland, there is now a trend for landlords looking for new ways around the regulations to convert some of their board and lodging accommodation into bedsits. I hope that the Minister will bear that in mind

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  when carrying out his monitoring. If various conditions apply, they can charge more money which would be recoverable through housing benefit rather than board and lodging payments. If the Minister is carrying our monitoring, I hope that he will look carefully at the amounts of money that continue to be spent in that way. If bedsits are created out of board and lodging accommodation, we shall be no better off in many respects. Shelter in Scotland calculated that the taxpayer could eventually pay more for a situation that would be less satisfactory than the present one.
  The hon. Member for Derby, South (Mrs. Beckett) raised an important point about appeals. There is a strong case to be made for exemption. I accept that it could be open to abuse, but if the monitoring arrangements are sensitive, they should be able to pick that up. When people who are subject to appeal have made appeals, in some cases they take two or three months to be heard. There is a good case to be made for giving urgent consideration to including them in the category of exemptions.
  Many more detailed points could be made. There is much more evidence that I could adduce to the Minister, but other hon. Members wish to take part in the debate, so I shall conclude.
  11.14 pm
  Mr. Gerrard Neale: I do not think that my hon. Friend the Minister for Social Security needs any lessons on compassion from colleagues in the House. He has displayed a close interest in these problems ever since they came to light. The way in which he has handled the various complaints and comments from colleagues has shown that he is sensitive to the issues, aware of the problems, and perfectly capable of resolving them. I congratulate my hon. Friend particularly on the announcement of a factual examination relating to residential and nursing homes. That is a worthy thing to do. It will discover what is going on in that area of the board and lodging issue.
  The hon. Member for Derby, South (Mrs. Beckett) introduced a whole range of considerations, some of which seemed to conflict with her own argument. One document that she may not have studied with close interest or analysis can be found in the Library. I recommend that she and any other colleague gets a copy of "Supplementary Benefit Local Limits on Board and Lodging Payments to be adopted by the Secretary of State for Social Services under the Supplementary Benefit (Requirements) Amendment and Temporary Provisions Regulations 1984". If any colleague on either side of the House wishes to see the wide diversity of payments for board and lodging made by various homes, whether residential care or nursing homes, it is in that document. Thus my colleagues can see just what a nonsense it has become and how much justification there is in what the Government seek to do.
  Having listened to some of the comments by colleagues on both sides of the House, I have to say that they hardly describe the young people in my constituency who appear to be enjoying benefit under the provisions. Few seem to be incapable of working out exactly what they are entitled to, and the way in which they can make the best use of the benefits that are available to them. Opposition Members
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  seem to chuckle in derision each time it is suggested that claimants are taking advantage of the current regulations. There is clear evidence——
  Mrs. Beckett rose——
  Mr. Neale: I shall not give way.
  There is clear evidence in my area that there is widespread misuse and advantage taken. I concede that there is also far too prelevant a misuse of the regulations by landlords, too. But to suggest that it is only landlords, not young people, is wrong.
  I hope that my hon. Friend will give careful consideration to all the points that have been made, but will not rush in to change things on a wide scale. It is far too soon to judge what the effect of the regulations is. My hon. Friend has already introduced a range of exemptions in the original regulations. They should be given time to work through. Already, as the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) mentioned, a problem about bedsits is developing. I ask my hon. Friend to alert benefit offices to this. It is not merely a question of one room, not having a cooker and then being provided with a cooker to make it a bedsit for one person. There is evidence in my constituency of one cooker being provided for eight or 10 people and enabling eight or 10 people to change to some form of housing benefit provision. The local offices have become aware of that, and I hope that my hon. Friend will make certain that others are alerted to that situation.
  The most critical point I wish to put to my hon. Friend is this. This situation has occurred only in very recent times simply because the lid was taken off the level of charges which enabled a new market to be created. The Opposition seem to recognise this but do not seem to want to show any will to change. Taking the lid off has enabled young people to become nomadic and to tour the country without any obligation to find work.
  Mr. Patrick Thompson rose— —
  Mr. Neale: I would like to give way, but I have refused the hon. Member for Derby, South and there is limited time.
  We already have these nomadic groups moving around. A tremendous number of them have come to my constituency. Payments to these young people have been higher than benefits payable to other local people in similar difficulties. Similarly the benefits are untaxed. What is more important is that they are largely unchecked. How the money is spent is largely unaccountable. I put it to my hon. Friend, as I put it to him the other day, that they are paid without any attendant obligation to look for work.
  In coastal areas like mine, it is almost as if it is a paid holiday for young people, even a sort of early retirement. The hon. Member for Derby, South and some of her hon. Friends disputed that and said that these people were looking for work. In Newquay, where we have 30 per cent. male unemployment, anyone who goes to the local benefit office will establish beyond doubt that the vast majority of these people have nothing to do with Newquay or Cornwall. They have come in from outside. In total 2,420 people are out of work. Only 502 of them are registered at the jobcentre. Only 20 per cent. are registered as looking for work. Opposition Members may say "Ah, yes, but they can go in on a self-service basis and check. They do not

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  have to register." If hon. Members check with the local benefits office, they will find that few of those unemployed people ever appear in a jobcentre, even on a casual basis, to look for work.
  I am sure that the Minister works in close liaison with the Department of Employment and his colleagues there. I ask him to make absolutely certain that there is a clear obligation through jobcentres to provide information regarding job availability in the area to which people wish to go. Until we impose on these young people the responsibility of ascertaining the availability of jobs before they go, they will wander around and blame all and sundry because they cannot find work, and hon. Members will bleat that young people do not have a fair chance to find work. There is every facility available for them, if they use it, through the jobcentres.
  My hon. Friend has commendably introduced these regulations and commendably announced that he is willing to consider the necessity for change. My plea is that he does not rush into any further change until the current exemptions have been given time to work. There is no doubt in my mind that certain agencies have done everything they possibly can to induce a sense of hype in order to frighten him — 1 know he is not easily frightened — into making changes the necessity for which at this stage is far from proven.
  11.24 pm
  Mr. Frank Field: I am pleased to follow the hon. Member for Cornwall, North (Mr. Neale) because, perhaps to the surprise of my hon. Friends and Conservative Members, there are some issues on which I agree with him, but I draw different conclusions from the analysis he put forward.
  I have often made the plea to the Government for a firmer link between the payment of benefit and the opportunities, such as they are, for work. When Conservative Members make that same point, a point clearly set out in the Beveridge report, it would be good if they not only made it from the Benches but joined us in the Division Lobby to try to concentrate the Government's mind on the issue. Do not let us have division on this point tonight. Most of us in the Chamber want to see many more jobs. Even with the current level of unemployment there are still large numbers of people who get jobs at any one time. There is a need to link the payment of benefit to the jobs that are available. The move that has gone on for 10 years or more of pushing the work to the jobcentres, and of the jobcentres not having links with the benefit offices, is a retrograde step both for taxpayers and, more important, for those who are looking for work. There was a combined service but it has been broken up.
  Surely the hon. Member for Cornwall, North would agree that there is all the difference in the world between how the regulations should apply in seaside towns, and how they should apply in constituencies like mine, which is Birkenhead. It may be the view of Conservative Members that we are so vindictive that in periods of high unemployment we do not want people who do not have jobs to move to seaside towns to draw benefit that they previously would have been able to draw in their own towns. I can understand people taking that stand but it is not one that I share. Much as I love my own area of Birkenhead it is not an area to which people go to have a pleasant time at the seaside when they do not have work. There is that fundamental difference. That difference is not
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  made clear in the regulations. So I am in some agreement with the analysis that has been put forward by the hon. Member for Cornwall, North.
  Mr. Neale: Will the hon. Gentleman accept that great frustration is caused in a place such as Newquay because jobs exist there, but these young people show no evidence of wanting to take them? if they took the work for which some of them have been recommended, there would be less frustration.
  Mr. Field: There would be less frustration if there was a link between the payment of benefit and the jobs available. What the hon. Gentleman did not do tonight was make the error that he made when he spoke previously, when he rather welcomed the regulations because he said that people were coming to his area and taking Jobs from local people. He cannot claim that people are flooding in to take jobs, so depriving local people of the work, if at the same time he is claiming that these people are not prepared to work. He did rot make that inconsistent stand tonight although it is on the record on previous occasions.
  Mrs. Currie rose——
  Mr. Field: Large numbers of hon. Members want to speak and I wish to make only a few points.
  My other introductory point is to appeal to the Minister to grab hold of the lifeline that has been thrown to him by the hon. Member for Croydon, North-West (Mr. Malins). The Opposition are putting clearly on the record that large numbers of landlords exploit the position and rip off the welfare state—to use a crude phrase. We are anxious for that to end, although we want measures aimed at the landlords directly and not aimed at the landlords through individual claimants. If we are to go down the path that the Government have begun, it is important that resources, manpower and money are used for a proper system of checks on the board and lodging arrangements that exist in various parts of the country. Not only would that create an extra few jobs, but in the long run it would give taxpayers a better deal. Above all, it would give claimants who have to use these places a much better standard of living. Those are the introductory points I want to make, but I have three questions to put to the Minister. First, could he tell us more about how he will exercise the discretion he has been talking about this evening? Is he going to listen to these debates? What happens when he has listened to them, and when will we know when he has made a new decision about the extension of exempted categories?
  Secondly, when the Government responded to one of the advisory committee reports in March 1985. Cmnd. 9467, they talked about the uprating limits, and I wish to quote one sentence in that report. The Government said:
  "The Government will make a further statement on the arrangements for reviewing limits when it announces the uprating of social security benefits in June."
  What happened to that key paragraph in that document? Was that yet another part of the Government's programme that got lost on the way to the printers? Presumably we are to have a statement on those upratings before the end of July.
  My third question has been touched on much more eloquently by my hon. Friend the Member for Derby, South (Mrs. Beckett). How will the rights of appeal of claimants be operated under this measure? If people are moved within two, four or eight weeks in a particular area,

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  how can we ensure that those claimants are allowed to make effective their rights of appeal against what we regard as a very bad measure indeed?
  11.32 pm
  Mr. Peter Griffiths: My hon. Friend may have been disappointed in that, when he came before the House with amendments to the regulations, which eased their operation and provided for a more generous interpretation of the rules, he did not receive a more generous response from both sides of the House. We ought to welcome what he has had to say. However, I fear that in discussing these matters the terminology that is sometimes used is unfortunate. I have had the pleasure of listening to the hon. Member for Birkenhead (Mr. Field) ever since he spoke at a meeting of Conservative party candidates on the subject of social security. I must make it clear that he was not a Conservative candidate. He used the word vindictive and suggested it was vindictive of the Government to say that it was improper for young people to come to a seaside town, such as that which I have the pleasure to represent, when there was little prospect of obtaining work. I would not use the word vindictive. I think it is commonsense.
  Mr. Frank Field: I do not want to intervene too much, but I was invited to address that meeting as a lobbyist, and I happily did so.
  Mr. Griffiths: I am happy to confirm that the hon. Gentleman was certainly not one of the audience. The tirade from the hon. Member for Derby, South (Mrs. Beckett) was not really a response to the amendments tonight but to the original regulations. My feeling is that while we may well disagree on the original regulations, we welcome these amendments. I agree with her on one point. I am quite sure that my hon. Friend will find that the payments that the DHSS makes available to residents in nursing homes will prove to be grossly inadequate following any kind of investigation he carries out. I fear that in nursing homes where there is a mix of private patients and those whose fees are paid by the DHSS, there is a great danger that if the patients whose fees are paid from public funds have their fees restricted it may well be that those who are paying out of their meagre savings will have to pay more, so that, when those savings are exhausted they in turn will become dependent on public support.
  I rose to say that I very much welcome these amendments because they make it easier for us to support the original regulations. They also show that there is a genuine willingness on the part of the Government to accept that, once the principle is estabished, the way to look for a job is not to move into a seaside hotel but to move to places where there is employment——
  Mr. Dobson: Where?
  Mr. Griffiths: Victoria street, not more than half a mile from here, where there have been thousands of jobs ever since this Government came into office. The hon. Gentleman might care to go along tomorrow morning to have a look.
  Young people should also seek more traditional forms of accommodation in hostels, with families or with friends. Given that we support the regulations, we should also support the amendments.
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  The Minister said that, given our welcome to and acceptance of refugees, we should not make a distinction between those under the age of 26 and their parents or seek to separate such groups. The same applies to the homeless in general. Families do become homeless, and it would be quite wrong for a different restriction to apply to the younger members of such families. I therefore welcome that part of the regulations.
  The Minister said that he is willing to consider further categories of exemption. He made it clear that he was not talking about individual cases that would be dealt with and exempted separately. How many individual cases of a similar nature must be drawn to my hon. Friend's attention before he recognises that a category exists?
  The situation is complicated because many young people go into board and lodging accommodation for all sorts of reasons. It may well be that from time to time, through individual cases from different parts of the country, we can show that there are grounds for bringing areas within a general exemption.
  Mr. Richard Holt: Does my hon. Friend agree that the Government should consider exemption when young people have been resident in a community all their lives, as is the case in Cleveland in my constituency? For arbitrary reasons, that is designated as a coastal resort area, yet under the regulations young people are now being forced to move away from the only place that they have known as home, simply because Saltburn at one time and Redcar at another happened to be seaside resorts.
  Mr. Griffiths: There may well be categories of young people in board and lodging accommodation who have been associated with an area over a long period either because they do not have a home elsewhere to which they could return or because they have an opportunity to take employment in the foreseeable future. They ought to be within exempted categories. If a number of such cases are forthcoming from hon. Members, I trust that the Minister will seek to make them an exempted category.
  11.40 pm
  Mr. Roland Boyes: In the short time available, I want to put a series of questions to the Minister for Social Security. I begin, however, with a quotation that I used when I asked leave to move the Adjournment of the House under Standing Order No. 10:
  "'It may be that the Government reacted too quickly and without proper research to deal with a situation which happens to fit their own particular prejudices.—[0fficial Report, 25 June 1985; Vol. 81, c. 792.]
  The Minister's speech strongly underlined the fact that the Government are introducing new techniques into government. They will introduce a measure, see how many social problems it creates and then try to solve each social problem. Week after week there will be new exemptions. That is a ludicrous way to govern.
  The Minister for Social Security said last week that the hon. Member for Houghton and Washington was not a bad bloke. As the story goes, the Minister is not a bad bloke. I am sure that his political masters have forced him to introduce this most wicked and evil measure.
  The Minister ended his speech by saying that much of this accommodation is of a very low standard. That was the subject of a debate that I initiated in December 1984. We examined the lousy conditions in many of these hostels. Why are the Government not courageous enough

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  to deal with those who are ripping off the homeless? Why do they not demand minimum standards in the hostels? Why do they not relate price to quality? Why do they not look after the weakest and the most vulnerable group, the unemployed and the homeless who have nowhere else to go because conditions in their homes make it impossible for them to return?
  The Minister also said that prices are rising quickly. The Child Poverty Action Group has shown that the percentage increase in the average charge for board and lodging in 1984 was the lowest for five years. Why did the Minister ignore the advice of the Social Security Advisory Committee which said on page 41 of its report that the root problem was not supplementary benefit but housing? By introducing exemption clauses, the Minister still appears to be dealing with it as a supplementary benefit problem, not as a housing problem. How can the Minister expect to solve this very serious problem without encouraging his colleagues in other Departments to provide specialised types of housing for the young homeless?
  The Minister said that the Department may have to consider time limits. Has he considered providing exemption for a group of youngsters who may take the advice of the hon. Member for Portsmouth, North (Mr. Griffiths) and apply for a job? Mention was made of jobs being available, but, I doubt that. One can stay for only two weeks in some parts of the north of England. What chance is there of getting a job if one has to say that by the time a company has replied to one's application one may no longer be at the same address? Will the Minister consider an exemption for those who have applied for jobs until they know whether their applications have been successful?
  Can the Minister say how much research will be undertaken into the board and lodging problem? He has implied that legislation will be introduced on a piecemeal basis. I should like the Government to show courage and say that they were wrong, that the legislation is flawed and that it must be re-examined. Every Opposition speaker has said that the jungle of board and lodging payments creates serious problems. We want to see something done about that. I am sure that the Opposition Front Bench would be pleased to co-operate in a study of some of the aspects of the problem.
  Tackling the problem in the way that the Minister has done does not help the Opposition, the Government or the people involved. It is a terrible way of legislating. The Minister might dwell on the fact that one of the problems is that some of the youngsters will not be able to vote unless they are on the electoral register. I shall advise the 100,000 homeless youngsters that one third of them should register in the constituency of Braintree, one third in the constituency of Finchley and one third in the constituency of Wanstead and Woodford, because one of the vindictive aspects of this—it has been said that it is not vindictive —is that the youngsters most affected by the legislation have no mechanism whereby they can vote against the Government who introduced the legislation, unless they register in the constituencies that I have mentioned, in the hope that those right hon. and hon. Members suffer the ultimate punishment.
  I have said over and over again that this is an atrocious, terrible, vindictive and wicked piece of legislation. It solves none of the problems. I am sure that I speak for all Opposition right hon. and hon. Members when I say, let us be rid of the legislation; let us start all over again; let
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  us tackle the problems properly; and let us see whether the Minister has the courage to say to the Secretary of State for Social Services that they should get rid of it and introduce a useful measure that has meaning.
  11.46 pm
  Mr. Newton: In the seven or so remaining minutes of the debate I cannot attempt to comment upon all the points that have been mentioned on both sides of the House about the categories of people that we should consider in further changes to the exemption categories. I undertake to study carefully what has been said during the debate.
  I wish to make two points about the exemption categories. The first is in response to my hon. Friend the Member for Cornwall, North (Mr. Neale). The proposals that I made last Tuesday and this evening in the regulations, or in the powers that the regulations give the Government, are limited extensions directed towards cases that I am sure will be recognised on both sides of the House as clearly requiring exemption, rather than the major moves that he feared and Opposition Members have sought. We believe that the signs so far show that the proposed exemption categories cover most of those people who need to be included.
  My worry about the examples that the hon. Member for Derby, South (Mrs. Beckett) gave, most of which I recognised as drawn from documents which have been widely circulated by two or three groups of various kinds, is that the Department has not been given sufficient detail to follow up the cases, and it is far from clear whether they have all been fully and properly discussed with local DHSS officers. I hesitate to say that they have not, because I have no basis for doing so. I wish to re-emphasise the advice that I gave last Tuesday—anyone who is worried about cases should ensure that the facts are drawn fully to the attention of the local DHSS office. We shall do our best, as we have by reinforcing our guidance to them, to ensure that all those facts are considered properly.
  If genuine points emerge from that examination and the cases drawn to our attention in this debate, in correspondence from Members or in other ways, we are prepared to look openly and honestly at them and to move quickly—as I have demonstrated this evening—towards introducing small extensions to the exemption categories.
  My response to the hon. Member for Houghton and Washington (Mr. Boyes) is that I suspect that the reason why the charges rose less fast in 1984 than previously is that the Government imposed a freeze on the limits during 1984. Indeed, I would hope that had some effect.
  The hon. Member for Derby, South made some play of her view that there was no, or insufficient, evidence for the policies.
  Mrs. Beckett: It is the view of the Social Security Advisory Committee.
  Mr. Newton: Regardless of whether it is the view of the Social Security Advisory Committee, from what the hon. Lady said I would wish to attribute it to her.
  In view of the observations that I understand were made by the Leader of the Opposition earlier today on nursing and residential care homes, I want to draw attention to what the Opposition spokesman on social security said when my hon. Friend made a statement on these same matters last November. The hon. Member for Oldham, West (Mr. Meacher) referred to the fact that
  "private developers cashed in on a building boom which had nothing to do with providing care and attention for those elderly

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  people in greatest need, and everything to do with raking off huge profits". — [Official Report, 29 November 1984; Vol. 68, c. 1099.]
  When we seek to check that process, however, we are told that we are being uncaring about the needs of the elderly and the disabled.
  Mr. Dobson: The Minister is blocking the charitable ones as well.
  The hon. Member for Oldham, West want on to talk about private operators — I paraphrase what he said — using every fiddle in the book to push up charges, and said that there had been nothing to stop them. When we take action in these matters, we are told that this is in some way uncaring and totally against the interests of — [Interruption.] It is a pity that the hon. Member for Oldham, West is not present. I want to know the policy of the Opposition on these matters. This has been one of the worst examples of trying to have one's cake and eat it which I have observed for a very long time.
  Mrs. Beckett: The Minister knows well that we are in favour of proper control, whether on ordinary board and lodging or on care, to ensure that there is value for money, that people are not exploited and that the available money is properly used. That is not what the Minister is doing. He is penalising claimants, not those who exploit them.
  Mr. Newton: Although I had hoped to keep the temperature down, I am afraid that the debate has now become a classic social security debate in which the Opposition state that they are all in favour of proper control, but the one thing that they never tell the House is what their policy would be. All we know is that every time any real attempt is made to curb abuse and to achieve proper balance in the social security system, the Opposition denounce this as an uncaring attack on the poor and the needy. It is as big a nonsense tonight as on all the other occasions which we have witnessed in the last few weeks.
  I therefore ask the House to approve the regulations.
  Question put and agreed to.
  Resolved,
  That the draft Supplementary Benefit (Requirements) Amendment Regulations 1985, which were laid before this House on 26th June, be approved.

  Supplementary Benefit

    EDUCATION AND TRAINING (WALES)
    Ordered,
    That during the proceedings on the matter of Education and Training in Wales, the Welsh Grand Committee have leave to sit twice on the first day on which it shall meet; and that, notwithstanding the provisions of Standing Order No. 67 (Meetings of standing committees), the second such sitting shall not commence before Four o'clock nor continue after the Committee has considered the matter for two hours at that sitting. —[Mr. Peter Lloyd.]

  Toxic Waste (Gwent)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]
  11.53 pm
  Mr. Leo Abse: Yet again, I plead on behalf of my anxious and discomfited constituents for a public inquiry into the disposal of toxic waste in Gwent. It is a demand that has come repeatedly from Torfaen council and Gwent county council — which have been discourteously refused an interview with the Secretary of State for Wales—and from many environmental groups in the constituencies.
  The concern expressed is not confined to my constituency. Although the Minister of State and the hon. Member for Newport, West (Mr. Robinson) have received representations and invitations to meetings from their constituents, it is not to their credit that their only comments have been to support the Secretary of State for Wales in his characteristically insensitive and stubborn refusal to grant the public inquiry at which the frustrations, the fears and the facts could be formally ventilated.
  I advise the Minister of State to take care. The Brecon candidate is on the point of discovering that he will be found guilty by association as one who is working for the unloved Secretary of State for Wales. If the Minister of State obsequiously persists in his condonation of the refusal by the Secretary of State, he will find that those of his constituents who are lamentably affected by the activities of ReChem International will be equally unforgiving. I understand that Torfaen is requesting the Minister's attendance—it is his council as well as mine — to explain his attitude. I hope that he will display more tact and understanding than his boss and will make haste to attend.
  The problems stem from the profound mistrust that my constituents have for ReChem International and its claims. It is not surprising that the firm is mistrusted. It came into my constituency by trickery. Backed by the huge resources of the British parent company — The British Traction Company — ReChem must have known, if it had a scintilla of the technical accomplishments that it claims, that inevitably noxious fumes, smoke and smells would regurgitate, as they now do, out of the stack, sometimes by day but usually by night. Nevertheless, the company gave assurances to the small local authorities then in existence, which were hungry for employment, that there would be no nuisance and no impingement upon a desirable residential area and nearby valuable farming and pastoral land. It duped the local authorities.
  From the company's first days of arrival, there have been never-ending and justifiable complaints. Each surgery that I hold in my constituency brings fresh complaints. At my last surgery, I was seen by a lady who went into her garden in March, when suddenly a plume of smoke came from the factory and blew into her face. Her eyes immediately started to burn and, after notifying the factory straight away, her condition deteriorated and she was admitted to St. Woolos hospital. Now she has been told that she is likely to lose the sight of one eye. I do not know whether the plume of smoke acted as the catalyst or the cause of her condition, but I am still awaiting ReChem's comments on the matter. I hope that the Secretary of State for Wales who, parrot-like, always defends this company by saying that there is no evidence

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  to justify the holding of any public inquiry, will give the assurance that he will make immediate inquiries into this lamentable incident.
  The precipitating causes of my requesting this debate are threefold. First, there is the discovery by the BBC's investigating team of the deadly poison PCB in a capacitator on the Tirpentwys site used regularly by ReChem for dumping. Secondly, there is the evidence which has become available in recent days from the Government Chemist which reveals that the ReChem claim—that it does not emit the dangerous chemicals of dioxins or furans—is false and that the incinerator ash taken to the landfilling site includes measurable quantities of both deadly chemicals in the most dangerous isomer group, the Tetra group. Thirdly, the contents of the June reports of the hazardous waste inspectorate have revealed the appalling manner in which hazardous waste is nationally managed and the consequences that flow from this in Gwent.
  On each of those three points I put these questions to the Under-Secretary of State: why does the Secretary of State, in his desperate efforts always to protect ReChem, so strenuously seek to suggest that the discovered capacitator did not come from ReChem? That point was disbelieved by my council, my constituents and me. Is this not the far more likely hypothesis—that the system of control at ReChem allowed the capacitator to be brought in to the works and to pass out without having been dealt with at all, or after having been inadequately dealt with by incineration? What interest always prompts the Secretary of State to find excuses for ReChem?
  Why, while taunting the Torfaen council that it has shown insufficient cause to hold a public inquiry, does the Secretary of State thwart the council's efforts to have thorough environmental investigations by persistently refusing to assist the funding of the needed investigation by refusing to disregard the extra expenditure of the target expenditure permitted by this Government to Torfaen council?
  It was a shameless shifting of responsibility to Torfaen ratepayers for the Welsh Office to write to the council on 11 February this year saying that the Secretary of State for Wales
  "does not consider that, in this instance, a case exists for a disregard. He is aware of the background to your application and appreciates that the proposed expenditure could well make a valuable contribution to a wider understanding of emissions in the area. He strongly believes, however, that if your Council feels that the monitoring is essential to meet its public health responsibilities, it must absorb the additional spending involved within its target level of expenditure."
  Why should the ratepayers of Torfaen be required to pay to investigate the havoc wrought by ReChem because that company, avaricious for profits, is allowed by the Government to import for incineration thousands of tons of hazardous waste through Newport from Holland and Ireland?
  Perhaps my most important question to the Minister is this. Last week the Government Chemist certified that the incinerated ash at ReChem set to the Government Chemist by my local authority showed the presence in it of deadly dioxins and furans in the most deadly isomer group. What action are the Government taking in the light of that new evidence? The matter cannot be delayed. Given the well publicised and acknowledged deficiency in ReChem's flue gas cleaning system, from this week on my constituents can look at the emissions coming from ReChem's
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  chimneys and believe as reasonable men and women that deadly dioxins and furans may be falling on them and their children. What reassurance, can the Minister give my constituents today?
  What is the Government's reaction to the ominous statement released yesterday by the Welsh water authority that ReChem is discharging PCBs into the sewers? The statement makes it clear that those fearsome chemicals have now entered the Ponthin treatment works and the water authority feels compelled to extend investigations to cover all sewerage works in its south-east division. That bare and taciturn statement will of itself send a chill throughout Gwent. Will the Minister now explain the significance of that statement? Can he genuinely and with conviction put a reassuring gloss on it to relieve the anxieties that are now bound to arise?
  Does the Minister accept the validity of the recent request by the industrial air pollution inspectorate to Torfaen council saying that the inspectorate must be consulted on virtually all types of proposed new development within a 1¼ mile radius of ReChem? If the Secretary of State for Wales is so confident that our complaints are groundless, is the Minister prepared to tell the council that that request should be ignored? If he supports the request, why does he do so? Does he realise that if he supports the inspectorate we are justified in describing ReChem as a curse upon our valley, sterilising an area of prime industrial and residential land, engendering doubt and unease among all the industries and inhabitants in the area, inevitably depressing house prices and thus robbing the many proud home owners in Panteg? Is it any wonder that all of us in Torfaen want ReChem to quit our valley?
  My next question concerns the tip at Tirpentwys. All the problems there arise primarily because ReChem and its associates disgorge their waste there. Not surprisingly, there is deep feeling in the area that in the battle of priorities for the limited funds at the council's disposal as a result of the Government's squeeze serious security and supervisory deficiencies have arisen. I am sure that the council will now remedy that, whatever the cost, and it must be done speedily. But why should my ratepayers be called upon to pay for this absolutely necessary work and supervision? Why should they have to pay to contain the industrial waste, not only of areas outside my constituency in Britain, but of the Dutch and the Irish, to swell ReChem's profits? It is high time that the Government banned the importation of toxic waste, even as they now intend to ban the importation of asbestos waste.
  My final question relates to the hazardous waste inspectorate's recent revelation that, although a high proportion of the 5,000 tonnes imported into Britain comes through Newport, the contracting importer—presumably ReChem — has failed to appoint a port agent and, therefore, defeats the main purpose of the Control of Pollution Regulations. What is the Secretary of State doing to remedy what the inspectorate last month called "this unsatisfactory situation"?
  I could ask many more questions, but I am aware that the hon. Member for Romsey and Waterside (Mr. Colvin) wishes to speak, and I am deeply anxious to have replies, at least to my third and fourth questions.
  I hope that the Minister realises that in 1972 the Royal Commission on environmental pollution said that the public should be entitled to

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  "the fullest possible amount of information on all forms of environmental pollution, with the onus placed on the polluter to substantiate claims for exceptional treatment."
  The Royal Commission made the overriding recommendation that
  "a guiding principle behind all legislative and administrative controls relating to environmental pollution should be a presumption in favour of unrestricted access for the public to information which the pollution control authorities obtain or receive by virtue of their statutory powers, with provision for secrecy only in those circumstances where a genuine case for it can be substantiated."
  Those principles, which the Government are supposed to have accepted, can be implemented only if the Government reconsider their position and permit us to have a proper and exhaustive public inquiry. I am sure that, when all the evidence has been tested, the result will reveal overwhelmingly the need for ReChem to be moved from my constituency.
  12.6 am
  Mr. Michael Colvin: I thank the hon. Member for Torfaen (Mr. Abse) and the Minister for giving me a minute to make a short intervention.
  I have listened with interest to what the hon. Gentleman said, and I support him because my constituency is now the only other one with a ReChem plant. I thank his constituents in Gwent for their advice and help regarding public anxiety about ReChem's operations. I congratulate the Government, local authorities, the various inspectorates and the company on the way in which they have responded to public anxiety about hazardous waste disposal.
  ReChem International's plants at Hythe, which does not at present dispose of PCBs, and, no doubt, in Gwent must now be the most monitored and inspected plants in the country. I have one question, which corresponds with one of the hon. Gentleman's questions. It is all very well for the company's operations to be safe and monitored, but they must be seen by the public to be safe. Therefore, I ask the Government to give the green light to the Environmental Pollution Information Bill, which my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) introduced last week. It would implement paragraph 21 of the Government's response to the 10th report of the Royal Commission on environmental pollution, and would give our citizens the right to see information on monitoring and hazardous assessments, without which fears about ReChem are bound to persist.
  Most of us fear the unknown. Freedom of information is what we require.
  12.10 am
  The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): The hon. Member for Torfaen (Mr. Abse) has expressed his concern and reflected local anxiety about the alleged effect on human health of the processes undertaken by the ReChem plant at Pontypool. My right hon. Friend the Secretary of State, my hon. Friend the Minister of State, Welsh Office, my hon. Friend the Member for Newport, West (Mr. Robinson) and I have also taken these anxieties extremely seriously. I can assure the hon. Gentleman and his constituents that we shall not shrink from taking whatever
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  action is open to us if the evidence suggests that there is a threat to the health of the local population. That has been our position from the outset and so it remains.
  Our clear duty, and one which we have pursued vigorously from the start, is to obtain and examine evidence that might indicate whether such a threat exists. A considerable effort has been put into that by the Department and so far it has not confirmed the allegations.
  The hon. Member for Torfaen referred to a lady who is suffering from some eye trouble. I am aware of that case through the industrial air pollution inspectorate, which examined the circumstances. My officials will be raising the matter with Gwent district health authority. The hon. Gentleman has called for a public inquiry and so have Gwent county council and Torfaen council. I believe that a petition is being prepared. We have said repeatedly in answer to representations that no link has been found between the activity at the ReChem incinerator and animal or human health in the area.
  The considerable amount of work that we have done, the inquiry of Professor Lenihan in Scotland and other work that has been commissioned privately all points the same way. There is nothing unusual about the general health of the people in the vicinity of the ReChem plant. Animal morbidity appears to be related to well recognised causes and the levels of PCBs, dioxins and other possible environmental contaminants are not different significantly from those that might be found elsewhere.
  Responsibility for monitoring the operation of the ReChem incinerator plant rests primarily with Her Majesty's industrial air pollution inspectorate. If the ReChem company were to fail to meet criteria which the inspectorate has set, or may set in future, or if the inspectorate considered that there was a danger to public health, it has the power to close the incinerator. The inspectorate has assured me that the plant has met the best practicable means standards that have been set. The plant is 10 years old and the technology of incineration has advanced. There have been considerable improvements by way of modifications over the years of the plant's operation. I look to the inspectorate to decide when further improvement or replacement is necessary and to require that work to be carried out within a reasonable time scale.
  We have no evidence that would justify holding an inquiry, but we have said throughout that despite the absence of any evidence we are continuing to keep an open mind on the subject and will continue to consider carefully any real evidence that might suggest a need for further work in the vicinity of the plant. If we consider that such work is justified, we shall ensure that it is carried out. If we judge that there is a need for an inquiry, that, too, will be undertaken.
  The hon. Member for Torfaen mentioned the report of the hazardous waste inspectorate, which was published last month. The report refers to the pressures focused on the plant at Pontypool and the calls for an inquiry. The report acknowledges that high temperature incineration is the best practicable environmental option for the disposal of a significant proportion of the more hazardous wastes arising in the United Kingdom. We must not underestimate the importance of the plant. Without it, wastes in the United Kingdom would not be properly disposed of. I understand that imports amounted to 1,500 tonnes in 1984.
  The hazardous waste inspectorate has clearly stated that further closures of merchant incinerators, as they are

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  called, will result in the best practicable environmental option for disposal being unavailable for some of the more hazardous wastes. The hon. Gentleman has read the report, and I am sure that he has seen that section. The inspectorate finds the results of the medical and statistical work undertaken to be reassuring and in its view it reinforces the repeated statements by the regulatory authority and the plant operator that the facilities are operated safely and efficiently.
  We accept that more information is needed on dioxins in the environment, as they are known to be a by-product of many forms of low temperature combustion. We are taking steps to find out more about them. We know that dioxins exist in the environment nationwide. We accept that there is a need for the subject to be researched further, but if the presence of dioxin is a problem, it is national and not local. We have discussed the practicalities of further research with other Government colleagues, and a contract has now been let to determine the level of polychlorinated dibenzo dioxins, and polychlorinated dibenzofurans in the soils, with the aim of adding to our knowledge of what is normal, what is safe and what might be a cause for concern.
  I take note of the points made by my hon. Friend the Member for Romsey and Waterside (Mr. Colvin), but the industrial air pollution inspectorate gives as much information to the public as is practicable within the restrictions of confidentiality imposed by statute. The inspectorate also encourages individual works to be as open as possible with the release of atmospheric emission data. The inspectorate publishes reports by the chief inspector and by individual district inspectors, and these reports are available to the public. The hazardous waste inspectorate operates on similar lines, as my hon. Friend knows from his recent contacts with that body.
  The hon. Member for Torfaen referred to the BBC "Newsnight" programme. Following media reports about the finding of a partially burnt capacitor at the Tirpentwys landfill site and the allegation that it had come from ReChem, we have made inquiries, and my right hon. Friend the Secretary of State has written to the hon. Member recently about this aspect. In his letter, my right hon. Friend explained that, as the capacitor taken for analysis had not undergone complete thermal degradation, it was not surprising that it contained a significant quantity of PCBs. Although it was alleged that the partially burnt capacitor had come from ReChem, this has not been substantiated.
  The hon. Gentleman does not attach much weight to that point, but my information is that no PCBs were found in any of the samples taken by the "Newsnight" team, other than the one partially burnt capacitor winding featured in the programme. Others had been completely incinerated and appeared on analysis to be typical of what might be expected in the incinerator ash. The level of PCB contamination in the exception, and its general condition when found, suggest that it has been drained before being dumped, and I am told that that is not what normally happens at ReChem. Therefore, it is unlikely to have come from that company.
  The hon. Gentleman has said that the local authority has recently begun sampling chemical wastes from the plant,
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  which is waste deposited at Tirpentwys. I understand that the PCB content has been much lower than might be expected in ordinary domestic refuse, but the hon. Gentleman suggests otherwise. I shall look into what he said about the local authority's monitoring. The Welsh water authority has carried out tests on the leachates from the site, and no PCBs have been found within its limits of detection. The hon. Gentleman mentioned that, and I understand that there is a range of figures of PCB contamination of effluents from ReChem, the lower end of which is no more than one would expect to find as a background level in water and the higher of which is, on the face of it, worthy of further investigation although it is within the levels found in polluted lake waters. Again, we shall pursue the matter.
  The "Newsnight" team's finding has highlighted the conditions at the Tirpentwys landfill site and the serious security and supervisory deficiencies there which left it open to casual and unauthorised tipping. The hazardous waste inspectorate has visited the site four times recently and it has been in correspondence with Torfaen borough council about its condition. The council has given assurances that site security will be improved but, as recently as last week, fly tipping and unauthorised entry were still taking place. This is very serious but, regrettably, it is not untypical of waste disposal sites. The hazardous waste inspectorate's first report makes that only too clear.
  There is no doubt that the proper handling of special/hazardous wastes calls for considerable expertise. Professional knowledge and experience are extremely important and are becoming more so. Torfaen borough council has a large responsibility in relation to the complex subject of hazardous waste disposal. It has responsibilities as the licensing authority for the incinerator plant and the Tirpentwys landfill site and it is responsible for seeing that its licensing conditions are met.
  The council has asked for extra resources to undertake a programme of environmental monitoring, but it is part of a local authority's responsibility to undertake whatever monitoring it judges to be necessary. I understand that a meeting was recently convened by the industrial air pollution inspectorate with Torfaen borough council and ReChem to discuss the formation and operation of a local liaison committee as quickly as possible. I hope that this committee will soon be meeting and that, fully supported by community interests, it will be a useful forum for a rational interchange of information.
  There are few waste disposal sites in Wales which are formally designated as suitable for hazardous wastes. Tirpentwys is one of them in a limited way, and it is imperative that those few should be operated to proper and acceptable standards. I have emphasised that to waste disposal authorities in Wales and I am anxious that the should perform all aspects of waste management properly.
  The Question having been proposed after Ten o' clock on Tuesday 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 twenty three minutes past Twelve o'clock.