Commons Sitting of 22 July 1985

PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  BRITISH RAILWAYS (TROWSE BRIDGE) BILL [Lords]
  Read the Third time, and passed, without amendment.
  POOLE BOROUGH COUNCIL BILL [Lords]
  Read a Second time and committed.
Oral Answers to Questions
  TRANSPORT

    Rail Services
    Mr. Snapeasked the Secretary of State for Transport what plans he has to assume direct responsibility for section 20 rail services in the event of one or more constituent district councils declining to participate in joint board arrangements in accordance with the provisions of the Local Government Bill.
    The Secretary of State for Transport (Mr. Nicholas Ridley): It will be for joint authority PTAs to decide what local rail services they want to support. District councils may apply to me to secede but, before giving my agreement, I would want to be satisfied that acceptable arrangements could be made for local rail services.
    Mr. Snape: Is the Secretary of State aware that, in the February 1985 edition of Modern Railways, in an interview between the editor and the Parliamentary Under-Secretary, the latter was reported as saying that the district councils would not be allowed to secede with regard to section 20 arrangements? Will the right hon. Gentleman have a chat with his hon. Friend to resolve that difficulty? Does he agree that his hon. Friend's original view is much more sensible, because to try to operate such services is likely to be difficult, to say the least, if one constituent authority secedes?
    Mr. Ridley: I am always chatting with my hon. Friend the Parliamentary Under-Secretary, and I am sure that the hon. Gentleman will have a chat with the editor, too, to make sure that it is even on both sides. We would not wish a district council to be able to get out of its obligations under section 20 by secession, but there could be cases in which there are no obligations lying on that particular district council. We must judge each case on its merits.
    Mr. Stephen Ross: Is the Secretary of State aware of how much concern is being expressed by British Rail on this subject? It is not sure about its future, particularly in rail operations such as the Tyne and Wear metro. Will the
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    right hon. Gentleman give us an idea of the time scale, and at least guarantee that payments will be made until such time as the metropolitan authorities have disappeared and the district councils have taken over and are sure of their position?
    Mr. Ridley: There is no suggestion of changing section 20 grants, either now or after abolition comes into effect. It will be for the secessor authorties, in the form of joint boards, to consider whether they wish to continue with them. As long as they continue with them, the grants will remain backed up by the section 20 payments from the Government. Therefore, there is no immediate threat. I can give the hon. Gentleman the assurance that secession itself will not take place until some time after abolition. Therefore, his fears need not be taken too seriously.
    Dr. Marek: Will the provision of local rail services go up or down as a result of the changes?
    Mr. Ridley: I am not in the business of making forecasts as to what local authorities will do. If I had been able to forecast what local authorities would do over the past six years, I can assure the hon. Gentleman that I would have got it terribly wrong, not believing that some of them could be so stupid.

    London Docklands
    Mr. Chapmanasked the Secretary of State for Transport if he will report progress on construction of the light railway in the London docklands.
    The Minister of State, Department of Transport (Mrs. Lynda Chalker): The project is well up to schedule. We expect the railway to be in full operation by mid-1987—on time and within budget.
    Mr. Chapman: Does my hon. Friend agree that this form of new infrastructure, taken together with the Government's proposals for the regeneration of the London docklands, is the best form of capital investment? Will she give an undertaking that, if and when application is made for more grants to complete stage 2 of this exciting new enterprise, the Government will consider such a proposal most sympathetically?
    Mrs. Chalker: I agree with my hon. Friend. The London Docklands Development Corporation, together with its partners, is doing an excellent job. I assure my hon. Friend that, although we have not yet received any proposal for a further stage of the docklands light railway, if such a proposal is received it will be given the best possible consideration.
    Mr. Cartwright: In view of the importance of providing good public transport links to the proposed STOLport in the Royal group of docks, will the Minister assure us that any proposal to extend the light railway to serve the STOLport will be favourably considered?
    Mrs. Chalker: That was the essence of my answer to my hon. Friend the Member for Chipping Barnet (Mr. Chapman). I have received no such proposal, and therefore cannot know whether it will include an extension in the direction of the proposed STOLport. Any proposal for an extension will be carefully considered in the light of the important regeneration of docklands.
    Mr. Teddy Taylor: Will my hon. Friend take steps to ensure that what my hon. Friend the Member for Chipping

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    Barnet (Mr. Chapman) described as an exciting new venture will not lead to further delays on the Fenchurch street line?
    Mrs. Chalker: As an old habitué of the Fenchurch street line, I know exactly what my hon. Friend means. I shall certainly see what more can be done, in conjunction with my hon. Friend the Parliamentary Under-Secretary of State, about the Fenchurch street line, on which so many people suffer.
    Mr. Simon Hughes: In the past the Minister has accepted that south-east London is under-served. As the light railway is only for north of the river, will the Minister give an assurance about the possible extension of the Bakerloo line, whether above or below ground, from Elephant and Castle, through Bricklayers Arms and South Bermondsey, to Surrey docks and, perhaps, the constituency of my hon. Friend the Member for Woolwich (Mr. Cartwright) and Thamesmead, which will have the largest growing population in London in the next 10 years?
    Mrs. Chalker: The hon. Gentleman paints a grandiose picture. I assure him that any sensible cost-effective proposal will be fully considered.

    Vehicle Excise Duty
    Mr. Teddy Taylorasked the Secretary of State for Transport what has been the effect of the campaign run by his Department to reduce motor vehicle licence evasion; and what is the latest estimate of the percentage of cars on the roads on which the appropriate licence duty has not been paid.
    The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer): Last year more than 290,000 vehicle excise duty evaders were prosecuted or settled out of court—10 per cent. more than in 1983. The number of offenders dealt with should be even higher this year as a result of further measures now being taken. The most recent survey of evasion estimated that about 3·5 per cent. of cars and light goods vehicles in use on the road are unlicensed.
    Mr. Taylor: Despite my hon. Friend's energetic efforts, the amount of evasion still imposes a horrendous loss on the Treasury. Has he closed his mind to the possibility of raising the revenue through additional tax on petrol? Is he satisfied that local authorities have adequate powers to remove untaxed cars from the roads?
    Mr. Spicer: We are certainly not complacent about the level of evasion, which, as my hon. Friend, who has taken a great deal of interest in the matter, said, results in about a £90 million loss of revenue. My hon. Friend made two suggestions. Changing to a different form of taxation is a matter for my right hon. Friend the Chancellor of the Exchequer. In changing the form of taxation many issues are at stake, one of which is clearly evasion. The Government have no plans to abolish VED now, and will do so only if the benefits from it are greater than the disadvantages. In regard to the suggestion to strengthen local authorities' powers to tow away unlicensed vehicles, such as they have in the case of abandoned vehicles, I point out that there are many practical difficulties. For example, in some cases the licence disc has merely fallen from the windscreen. However, we have not ruled out all possibilities of some form of controlled impounding.
    Mr. Donald Stewart: Is the Minister aware that many of us recall the former Labour Member, Mr. Arthur Lewis challenging the Secretary of State's predecessors to go out with him on to the streets of London where he would demonstrate that more than one third of the licences were out of date? Without casting any aspersions on Londoners as against other United Kingdom citizens, does that not show evasion of that taxation on a massive scale? What does the Minister intend to do to correct that?
    Mr. Spicer: The problem is not exclusive to London. We are glad that the Bill, which is strengthing the Government's powers in Scotland and allows for evasion to be prosecuted with only one witness, is now before the other place. It is a national problem and we are dealing with it nationally.
    Mr. Eggar: Since evasion is a matter for my hon. Friend, should he not urge the Treasury to replace VED by extra tax on petrol?
    Mr. Spicer: There are conflicting views about whether VED should be replaced by a different form of taxation. There are arguments for and against it, as my Department recognises.

    National Bus Company
    Mr. Pikeasked the Secretary of State for Transport when he last met the chairman of the National Bus Company; and what subjects were discussed.
    The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell): My right hon. Friend and I frequently meet the chairman of the NBC, when we discuss a number of subjects of mutual interest.
    Mr. Pike: When Ministers met the chairman, did they consider the NBC's withdrawal from the National Council for the Omnibus Industry, which has stood the test of time since 1947? Does he recognise that that withdrawal has caused considerable industrial unrest in the industry and tends to prove what many Opposition Members have been saying: that, to make the Transport Bill work, the Government will deregulate the working conditions of employees in that industry?
    Mr. Mitchell: That is entirely a matter for the management of the industry. It is not for the Government to interfere, and we were not responsible for asking the NBC to take this step.
    Mr. Rathbone: In his discussions with the chairman, has my hon. Friend mentioned the future of British Transport Advertising? He will be aware that many people in the poster industry are keen that that organisation should be run more competitively, and would be only too willing to assist in so doing?
    Mr. Mitchell: I have discussed this matter with the chairman of the NBC and with representatives of British Rail. Discussions are continuing on the possibility of a management buy-out, and I do not wish to say anything further now.
    Mr. Stott: The Minister will be aware of the great anxiety felt by NBC employees about their pension rights. He will also be aware that his long and detailed answers to amendments which were tabled by me and by my hon. Friends in Committee have in no way assuaged their anxiety. It is time that the Minister reconsidered the

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    matter. Does he accept that there is still time to recognise the genuine concerns of those employees, whose pension rights are being put at risk by his Bill? As a consequence of that, is he now prepared to amend the Bill in the other place to meet their legitimate demands?
    Mr. Mitchell: The National Bus Company asked for a Government guarantee in respect of the pension funds, but the company does not provide such a guarantee, only a renounceable covenant. A renounceable covenant cannot be equated with a Government guarantee, or even an NBC guarantee. However, with the chairman of the NBC, we have been considering ways of ensuring the continuation of those pension rights even more than we do now. One option is for an insurance company to take over the fund. Those discussions are continuing, and I do not wish to prejudice them by going further.

    Driving Test
    Mr. Peter Bruinvelsasked the Secretary of State for Transport if he will take steps to revise the motoring skills tested in the driving test.
    Mrs. Chalker: This morning my right hon. Friend informed the Chairman of the Select Committee on Transport of our response to his report on road safety, I hope that he has received it. As I have been asked this direct question, I should tell the House that my right lion. Friend has said that he is unable to accept the Committee's proposals for an extended driving test.
    Mr. Bruinvels: On behalf of all hon. Members, may I say that that reply is unsatisfactory, bearing in mind the fact that some people who drive cars risk their lives and those of others after only half an hour of instruction and a driving test? Does she agree that night-time driving and driving at speed—possibly on dual carriageways or even on some motorways—should be added to the driving test? Does she accept that it is no good instructing examiners in new rules about how to examine people's driving and then to forget the essential fact that those people must be properly trained to drive?
    Mrs. Chalker: I must ask my hon. Friend to consider the practicalities of the matter and to study it in some detail. In summer, it is not feasible to train people or test them in night driving. In winter, it would require massive examiner overtime and would involve a higher fee for the person taking the driving test. As for dual carriageway driving, I should tell my hon. Friend that fewer than half the network of test centres are within reach of dual carriageways, and even fewer are within reach of motorways. We should consider the response more fully before we go any further.
    Mr. Bagier: I thank the hon. Lady for her attempts to get the report to me on time. I have not had time to look at it. There will be some disappointment in the Committee that she has not been able to accept its recommendations. Is she aware that the safety aspect of driving examiners' tests was one of the main considerations to which the Committee gave its thoughts? In that connection, is she satisfied with the quality of driving school instructors, who at present are not seen to be subject to the scrutiny to which they ought to be subject?
    Mrs. Chalker: I have been seeking contact with the hon. Gentleman all morning, and I am sorry that he has
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    only just received the response from my right hon. Friend. I fully agree with him about the importance of safety and agree with many of the things that his Committee said in the report. I also agree that we need to improve the quality of driving instruction. That is why my hon. Friend the Member for Batley and Spen (Mrs. Peacock) brought in a Bill, which is now an Act, which is helping us to improve driving instruction. The requirements placed on driving instructors will improve instruction, and that will improve further the standard of driving on the roads.
    Mr. Stephen Ross: I assure the Minister that any improvement in driving instruction will be welcomed. What is the Minister doing about shortening the waiting time for a driving test? There is an interminable delay before tests can take place, and the queue is growing longer. What is the Minister doing to speed things up?
    Mrs. Chalker: We have been undertaking substantial recruitment to increase the number of driving examiners. Since 1984, 172 driving examiners have been recruited, and that gives us a net gain, taking into account retirements and those leaving, of 65. On all the best forecasts, we should have 1·85 million tests per annum. The actual turnout in 1984–85 was 1·94 million and we lost more than three weeks of full testing last winter because of the weather. We are recruiting as fast as we can in order to cut the waiting time.

    Bus Services
    Mr. Robert Hughesasked the Secretary of State for Transport what changes to the Transport Bill 1985 he intends to propose following the Government response to the Transport Committee "Report on Buses".
    Mr. Ridley: We have put forward a number of amendments to the Bill since the publication of the Transport Committee's report, including two points identified by the Committee: powers to enable local authorities to require operators to participate in concessionary fares schemes, and provisions to ensure that control over bus stations is not used to secure an unfair advantage in the provision of local bus services.
    Mr. Hughes: Does that answer not show that the Minister is still suffering from the twin viruses of arrogance and contempt? The proposals which he has put forward do not begin to match up to the 15 specific recommendations of the Select Committee. Was it not nonsense for the Minister and his Department to proceed with the Bill before the Select Committee reported and then to ignore its recommendations except in two respects?
    Mr. Ridley: Far from ignoring the recommendations of the Select Committee, I have disagreed with them. The hon. Gentleman will know that we published a White Paper in response to the Select Committee. In it we argued against the system of competitive franchising which the Committee, rather half-heartedly, proposed, and we put forward cogent reasons why that was not the right thing to do.

    London Regional Transport
    Mr. Greenwayasked the Secretary of State for Transport if he will make a statement on the progress being made by London Regional Transport towards reducing costs and improving services.
    Mr. Ridley: I am pleased to say that substantial progress is being made. As I reported in answer to my hon. Friend's question on 18 July, LRT expects to reduce unit costs by more than 2·5 per cent. in real terms in its first year. This is on top of substantial cost savings made during 1984–85 and puts LRT on course towards achieving its objective of halving revenue support between 1984–85 and 1987–88. LRT's initial trial of competitive tendering for bus services yielded cost savings of nearly 20 per cent., while mileage operated on the routes concerned will go up.
    Mr. Greenway: Will my right hon. Friend congratulate LRT on its excellent first year of management and join me in deploring the GLC's putting up of further ratepayers' and taxpayers' money to its sidekick organisation Capital so that it might attack LRT? Will he also assure the House that fares will be kept at or below the level of inflation, a situation which will contrast strongly with the GLC's efforts in 1981, when it doubled fares?
    Mr. Ridley: It is strange that my hon. Friend should refer to Capital. I have before me the leaflet which it published when the Bill was going through the House. It says that the Bill
    "will mean fares having to go up by at least 25 per cent. and the probable end of the line for at least 33 stations and 34 bus routes."
    Can we expect an apology from the GLC and from Capital admitting that that was scandalous scaremongering and that it has not happened?
    Mr. Dobson: Will the Secretary of State say when he expects the policies of London Regional Transport to be as successful as those of London Transport under the GLC's "Fares Fair" policy? When does the right hon. Gentleman expect present policies to result in a 12 per cent. increased usage of buses and an 8 per cent. increased usage of the tube, and a reduction in the number of commuter cars coming into London?
    Mr. Ridley: It has been a great success story. The GLC expected to increase revenue support to £245 million by 1987–88, whereas we are on target to achieving revenue support of only £95 million by that year. That shows the immense savings which have been made for the benefit of the taxpayer and not to the detriment of the passenger.
    Mr. Tony Banks: I realise that the Secretary of State is not a frequent user of London's buses. Is he able to explain his definition of "efficiency", given that during the past 12 months one third of all London's bus routes have been cut or withdrawn? Will he also say whether, if London Regional Transport is able to make an operating surplus because of these cuts during the financial year, that will be used to reduce the precept or the fares?
    Mr. Ridley: The hon. Gentleman accuses me of not being a frequent user of the buses, but I accuse him of not bothering to turn up when most London Members go to get a proper briefing on these facts from London Regional Transport itself. If the hon. Gentleman had taken the trouble to discover the facts from London Regional Transport this morning, he would have discovered that the increase in efficiency is even better than I predicted in Committee, and, further, that there has not been this one third reduction in bus routes but that there has been a plan only to reduce route mileage by 2 per cent., which is rather different from 33 per cent. That is the normal margin of error in the figures of the GLC, of which the hon. Gentleman has the dubious distinction of being chairman.

    Road Traffic (London)
    Mr. Willie W. Hamiltonasked the Secretary of State for Transport if he will make a statement on the incidence of congestion attributable to coach traffic on roads in London for which he has responsibility.
    Mrs. Chalker: The main problems of coach congestion in London are not on trunk roads but in the sensitive central area, where there is a shortage of proper parking space. I have impressed on the GLC the importance of tackling this effectively, and I am seeking to ensure that urgent action is taken for summer 1986.
    Mr. Hamilton: Is the Minister aware that this building particularly is surrounded by roads filled with lawbreaking tourist coaches? Does she recognise especially that Westminster bridge, particularly on the west side where glaringly obvious yellow -No Parking" lines are painted, is cluttered from one side to the other with coaches, ice cream vans and the rest, to the enormous cost and inconvenience of the travelling public? What does her Department intend to do about it?
    Mrs. Chalker: I am aware of and share much of the concern about coach parking in London. It is a major problem, caused really when tourists arrive in London and their drivers have to park their coaches. Although we welcome the £10 billion that tourism brings, we have to take action. It is for the GLC to identify proper stopping and parking places on and off street. It is also important for the GLC to get on with doing that as quickly as possible. The Department has sought to help the GLC in a number of ways, and we shall be having further discussions this week. With other Government Departments, for the forthcoming season we are examining available land on which to park coaches when they have dropped their passengers.
    Mr. Higgins: Does my hon. Friend agree that it is quite wrong that the law should not be enforced? Will she therefore have urgent discussions with my right hon. and learned Friend the Home Secretary to ensure either that the parking restrictions are removed or that the police take action against those who break the law?
    Mrs. Chalker: As my right hon. Friend knows, law enforcement is not a matter for me. I shall draw his remarks to the attention of my right hon. and learned Friend the Home Secretary. However, rather than deterring those who bring important resources to this country, I believe that the Government, with the GLC, must find places for these coaches.
    Mr. Dobson: The Government are abolishing the GLC.
    Mrs. Chalker: It will remain responsible for the next eight months for parking in London. We must find a solution to the problem, which is growing even worse because of the influx of foreign tourists.
    Mr. Dalyell: Are the Government helping British Rail with its imaginative scheme for parkways at places such as Iver? Could not British Rail also be provided with help in re-routeing trains from Scotland and the north through Willesden junction to the south coast?
    Mrs. Chalker: Although I understand the hon. Gentleman's question, that is not a matter for me. We encourage park and ride schemes where they can

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    reasonably be accommodated. Additional park and ride schemes are being investigated, but they will not cope with the many tourist coaches that come to London bringing people to stay in London or to visit the many places of interest in the capital.
    Mr. Soames: Is my hon. Friend aware of the prehistoric arrangements at Victoria bus station? Does she agree that for such conditions to exist in a tourist centre like London is completely unacceptable? Will she get the National Bus Company to sort it out immediately?
    Mrs. Chalker: Given the amount of traffic that wishes to come to this area, somebody ought to think up an imaginative scheme for bus garaging, and I sincerely hope that that will happen. The National Bus Company has a problem not only with its own coaches but with other coaches in the area. We are well aware of the grave concern in Westminster. My right hon. Friend the Secretary of State for Transport and I will be meeting the leader of Westminster city council this week about the matter.

    Heavy Commercial Road Traffic
    Mr. Nicholas Bakerasked the Secretary of State for Transport if he will bring forward further proposals to restrict heavy commercial traffic to particular routes in rural areas.
    Mrs. Chalker: County councils already have a variety of powers to handle heavy commercial traffic in ways appropriate for each locality, including rural areas.
    Mr. Baker: From the Dispatch Box, will my hon. Friend enourage county councils to use their powers to introduce road humps or to direct commercial traffic by one route rather than another? Far too many commercial vehicles are still going down rural roads which were not built to take them.
    Mrs. Chalker: I sympathise with my hon. Friend's question and refer him to paragraph 36 of the transport policy and programme circular of January 1985, where he will see that authorities are again urged to undertake work to alleviate the nuisance caused by lorries in residential areas. The circular shows just how that work can be done and also explains what has already been done in certain rural areas.
    Mr. Allen McKay: Does the Minister accept that the statement by the Central Electricity Generating Board that it is moving a large amount of its coal traffic from rail to road will be unacceptable to highway authorities, and that environmentally such a move is very undesirable?
    Mrs. Chalker: I do not think that I have read the statement to which the hon. Gentleman referred, but every local authority has the power to introduce sensible lorry controls. We are making further progress on lorry management by means of a joint project with the Civic Trust and three county councils to ensure the more economic functioning of lorries by means of low-cost measures. At the same time, we must establish a better understanding of how to keep lorries away from residential and rural areas where they do not need to go.
    Mr. Adley: Further to the question put by my hon. Friend and parliamentary neighbour the Member for Dorset, North (Mr. Baker), will my hon. Friend please
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    take on board the fact that some county councils are not using powers with which the House has provided them, be they for road humps or weight restrictions? For example, will my hon. Friend look at the road that passes through my constituency and that of my hon. Friend the Member for Dorset, North from Ashby Heath to Shaftesbury? It is a classic example of a road that is used by a great deal of heavy traffic. The county council says that it is unsuitable for any of these restrictions, but it is patently just the sort of road that should be subject to those restrictions.
    Mrs. Chalker: I should need prior knowledge of a road if I were to comment in the detail suggested by my hon. Friend. There have been initiatives on local lorry controls which can be implemented. I am sure that he will be encouraging his county council to restrict or, where necessare, ban lorries from roads with amenity problems. I think that that is the angle that my hon. Friend is getting at.
    Mr. Snape: Will the hon. Lady commend to rural authorities the sorts of solutions adopted by the GLC in restricting heavy goods vehicles? Will she bear in mind that the Secretary of State, having been denounced once again for acting "improperly, unlawfully and irrationally-, now has more form than the Kray brothers?
    Mrs. Chalker: The answer to the first question is no. The second matter is sub judice.

    London Regional Trasnport
    Mr. Cartwrightasked the Secretary of State for Transport when he next plans to meet the chairman of London Regional Transport to discuss his proposals for improving the quality of bus services in London.
    Mr. Ridley: I meet the chairman of London Regional Transport at frequent intervals and our discussions cover a wide range of topics. LRT is taking positive steps to improve the quality of the bus services it provides, in accordance with the objectives it has been sent.
    Mr. Cartwright: Does the Secretary of State accept the LRT view that the main threat to the quality of bus services in London comes from a combination of almost perpetual road works and the blocking of main roads by parked vehicles? If so, what encouragement can he give LRT that there will be any improvement of those problems in the foreseeable future?
    Mr. Ridley: I know that in the hon. Gentleman's constituency there has been a deterioration of the service along the Rochester way relief road. I understand from LRT that the road works, which are being carried out by the GLC, are causing the problem. If the hon. Gentleman likes to raise the matter with the GLC, he may get an explanation of why that service in not functioning well.
    Mr. Jessel: Is my right hon. Friend aware that this year I have had fewer complaints about buses than ever before?
    Mr. Corbett: There are fewer buses, that is why.
    Mr. Ridley: I hope that my hon. Friend will find that he has fewer complaints still next year.

    M1 Repairs
    Mr. David Madelasked the Secretary of State for Transport whether he is satisfied with the progress of the major repairs to the M1 south of Bedfordshire, which started on 2 July; and if he will make a statement.
    Mrs. Chalker: Yes, the critical phase of the work was completed on 11 July, five days ahead of schedule, and there was little disruption to traffic either on the motorway itself or in the surrounding area during the works.
    Mr. Madel: Is my hon. Friend aware that there is great appreciation in my constituency of the speed with which the employees of Balfour Beatty completed the work and the co-operation between her Department and the contractors? When further motorway repairs are necessary, will my hon. Friend ensure that there is another effective publicity campaign by her Department warning drivers of the need to take alternative routes, because that helped this time?
    Mrs. Chalker: I am grateful to my hon. Friend for what he said and for the excellent co-operation between all concerned in completing the work early.
    We had to take special publicity measures in this case because of the very heavy loading of 120,000 vehicles per day on this stretch of the M1. Should repairs be needed on any other stretch of motorway that has such a heavy loading—only one is more heavily loaded—we shall consider such publicity measures. In general, if the public heed the lessons learnt from this example, I am sure that we shall be completing other schemes not only early, but without accident, which is important.
    Mr. Stott: Will the Minister say whether it is normal practice for her Department to pay what can only be described as very large sums of public money to contractors who finish a job before time or on time?
    Mrs. Chalker: I think that the hon. Gentleman knows that we have started a system of lane rental, with the objective of saving costs to industry. That means that if contractors finish repair works early they get a bonus, but if they finish late they pay the Department a levy for each day over the target time. The company earned a substantial bonus, but industry is the net beneficiary by about £500,000 because that job was finished five days early. It was certainly worth the bonus which the company received.

    London Regional Transport
    Dr. Twinnasked the Secretary of State for Transport when he last met the chairman of London Regional Transport to discuss the progress towards the objectives set by the Government for the management of London Regional Transport in 1984.
    Mr. Ridley: I refer my hon Friend to the answer which I gave to my hon. Friend the Member for Ealing, North (Mr. Greenway) earlier today.
    Dr. Twinn: What initiatives have resulted from the increase in co-operation between LRT and BR?
    Mr. Ridley: We have made considerable progress with the new capitalcard, with plans for improving interchanges between BR and LRT stations and with bringing together the standards for station maintenance and investment
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    appraisal which the two organisations have performed differently. My hon. Friend will find that the benefits from the meetings will flow quickly.

  ATTORNEY-GENERAL

    Hyde Park (Speakers' Corner)
    Mr. Winnickasked the Attorney-General if the Director of Public Prosecutions is currently considering prosecutions against any persons alleged to have been responsible for persistent obstruction or abuse of speakers at Hyde park, London.
    The Attorney-General (Sir Michael Havers): Earlier this year the Metropolitan police sought the advice of the Director of Public Prosecutions as to the institution of proceedings under the Public Meeting Act 1908 against persons responsible for disruption of proceedings at Speakers' Corner. The director took the view that these traditional gatherings which are not called together to transact business fell outside the scope of the 1908 Act. I agreed with that view and have invited the Home Secretary to consider the problems raised by this case. The police have since been provided with legal advice about their powers under the Royal and other Parks and Gardens Regulations 1977 and my right hon. and learned Friend the Home Secretary and my right hon. Friend the Secretary of State for the Environment are monitoring the situation to see whether the provisions are sufficient to deal with the mischief.
    Mr. Winnick: The Speakers' Corner is visited by many people from outside London. I note the Attorney-General's remarks, but is the right hon. and learned Gentleman aware that further action is needed to deal with those who persistently try to obstruct free speech by abuse and obscenities? Is he further aware that according to a report in The London Standard three weeks ago, one of the main offenders is the political secretary of the Kensington young conservatives? Is this not yet another illustration of the extremist element in the Tory party being determined to stop free speech?
    The Attorney-General: Another of the bad hecklers is a Marxist, so the problem is fairly wide-ranging. Last Sunday the tougher approach by the police under the regulations was put into effect and two well-known hecklers, who have been behaving very badly indeed—not just obstructing, but seeking to bring meetings to an end—were told that they had to leave. They left quietly. The phrase that the chief inspector used was that it "worked like a charm."
    Sir John Biggs-Davison: I commend what my right hon. and learned Friend has said, but is he aware that when I spoke on a young conservative platform at Speakers' Corner I was constantly subjected to abuse and obscenities but that I never complained to anyone?
    The Attorney-General: The distinction is between ordinary heckling, which is part of the "fun", and heckling by a group of people scattered round the audience whose intention is to disrupt and bring the meeting to an end. That cannot be tolerated.

    Duty Solicitor Scheme
    Mr. Dubsasked the Attorney-General whether those who attend police stations voluntarily and the friends

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    and relatives of those held by the police under the provisions of the Police and Criminal Evidence Act 1984 will have access to the 24-hour duty solicitor scheme.
    The Solicitor-General (Sir Patrick Mayhew): The 1984 Act provides for those attending police stations voluntarily to be covered by the 24-hour duty solicitor scheme. The Lord Chancellor plans to make an announcement about the scheme very shortly.
    Mr. Dubs: The Minister's answer is welcome in relation to those attending voluntarily, but may I press him further about the friends and relatives of those who have been either arrested or who are attending voluntarily? Would it not be helpful to the police and the accused if the scheme were extended to include those people?
    The Solicitor-General: I undertake to ensure that my noble Friend the Lord Chancellor takes note of the hon. Gentleman's remarks. I cannot say more than that today.
    Mr. Bermingham: Does the Solicitor-General agree that for this scheme to work properly it is necessary for a duty solicitor, when in attendance at a police station, to inspect the detained person's book. thus allowing him to verify who is or is not detained at the police station at that time?
    The Solicitor-General: There are many detailed matters to be considered in the implementation of the scheme and they are the subject of current consultation and consideration.
    Mr. Nicholas Brown: Will the Solicitor-General tell the House about the remuneration of solicitors under the scheme? In particular, in order to attract the very highest calibre of solicitors, do the Government intend to give solicitors a pay rise in line with that proposed for the Lord Chancellor?
    The Solicitor-General: The hon. Gentleman is in danger of forgetting that the Act under which the scheme will be introduced has for the first time brought police powers to detain without charge under a statutory absolute limitation and under judicial control. Those are great advances, and no Labour Home Secretary introduced a Bill to bring them about.
    We certainly wish to ensure that the scheme provides maximum protection. We have difficult decisions to make, and we are in the middle of doing that.

    Solicitors (Complaints)
    Mr. Maclennanasked the Attorney-General if he will make a statement on the Government's policy towards the recommendations of the Coopers and Lybrand report concerning complaints against solicitors.
    The Attorney-General: The Law Society has now published the exposure draft of the report, together with a report of its steering committee and a statement by the council, as the basis for consultation. My noble Friend the Lord Chancellor will await the outcome of that consultation.
    Mr. Maclennan: Do the Government accept the central recommendation that it would be desirable to have a single entry point for those with complaints against solicitors, and that the complaints should be made to a board independent of the Law Society?
    The Attorney-General: We are awaiting the results of the consultation paper. We are concerned to maintain the independence of the profession, but we are equally clear that the public must be confident that complaints against solicitors are dealt with effectively. The Government have a completely open mind on the principle of an independent body.
    Mr. John David Taylor: As there is even greater concern in Northern Ireland about misappropriation by members of the Law Society in the Province, will the Attorney-General ensure that his study extends to the solicitors' profession throughout the whole of the United Kingdom?
    The Attorney-General: I am afraid that I cannot give that assurance, but I shall ensure that my noble Friend the Lord Chancellor is made aware of the right hon. Gentleman's anxieties.

    Latent Damage
    Mr. Chapmanasked the Attorney-General what recent representations he has received concerning the introduction of legislation concerning latent damage.
    The Solicitor-General: My right hon. and learned Friend has not received any recent representations on this subject, but representations were made on 16 July 1985 on behalf of the construction industry to my hon. Friend the Minister for Housing and Construction.
    Mr. Chapman: Is my hon. and learned Friend aware that there is great concern in all parts of the construction industry about the recommendations in the report of the Law Reform Committee? If the Government are minded to recommend putting on the statute book the recommendations in the report, will he give an assurance that he will consult the construction industry? This affects not only architects and builders who are concerned about the law relating to length of liability and latent defects, but local authorities and owners of buildings. Every section needs a satisfactory conclusion to these problems.
    The Solicitor-General: My hon. Friend assiduously represents an industry and its problems which he knows well. He knows that on 18 June my noble Friend the Lord Chancellor stated that the Government had accepted the recommendations of the Law Reform Committee. When my hon. Friend last asked me this question on 13 May, I said that my noble Friend the Lord Chancellor would be very willing to see anybody from the industry who wished to consult him further, but that substantial consultation had already taken place. However, I certainly reaffirm the undertaking that I gave on behalf of my noble Friend.

    Prevention of Corruption Act (Newspapers)
    Mr. Willie W. Hamiltonasked the Attorney-General on how many occasions the Prevention of Corruption Act has been used against a newspaper: and if he will make a statement.
    The Attorney-General: The relevant records do not distinguish between defendants by reference to their occupation or business. One prosecution of a newspaper company for corruption is at present pending, but I know of no previous cases of that kind.
    Mr. Hamilton: Does the right hon. and learned Gentleman agree that when a newspaper exposes gross extravagance and waste in a Government Department such as the Ministry of Defence, it would be preferable and cheaper to eliminate the waste rather than take that newspaper to court?
    The Attorney-General: The essence of the offence of corruption is the use of financial or other inducement to a person to subvert his loyalty to his principal, whether in the public or private sector. In regard to the hon. Gentleman's question, the means, not the end, is objectionable.

  OVERSEAS DEVELOPMENT

    Philippines
    Mr. Tom Clarkeasked the Secretary of State for Foreign and Commonwealth Affairs what is the current level of overseas aid to the Philippines.
    The Minister for Overseas Development (Mr. Timothy Raison): In 1984 we provided £225,000 under our technical co-operation programme and £32,000 in loan disbursements under the aid and trade provision. Commonwealth Development Corporation loan disbursements totalled £3·55 million.
    Mr. Clarke: Given that in 1983, 80 per cent. of the money available to the Philippines was spent on the Guthrie project, Mindanao, which turned out to be somewhat notorious in terms of abuses of human rights, land grabbing and so on, is the Minister watching carefully how the money is spent? May we be assured that no further such abuses have occurred?
    Mr. Raison: We are watching carefully the progress of the project, about which, I appreciate, there have been difficulties. On the other hand, the latest reports show that it has brought considerable benefits, including a large increase in employment, an improvement in medical services, water and power supplies and, in other ways, has added to the prosperity of the area.
    Mr. John David Taylor: When were the last democratic elections held in the Philippines, and when are the next expected to be held?
    Mr. Raison: That does not arise on this question.

    Sudan
    Mr. Tony Lloydasked the Secretary of State for Foreign and Commonwealth Affairs if he will give the latest details of assistance with food transportation given by European Community countries to Sudan.
    Mr. Raison: We have provided over £3 million for the purchase of 100 trucks and the hire of 50 others, as well as the costs of a Save the Children Fund logistics team in western Sudan. Together with Belgium, Denmark, West Germany and the Community, we are participating in the airlift to western Sudan. In addition, we understand that both West Germany and Italy are providing trucks, and the Community, as well as helping to finance the airlift, is paying for truck hire and supporting the food aid block train scheme.
    Mr. Lloyd: Is the right hon. Gentleman aware of reports coming out of the Sudan to the effect that the Sudanese authorities are blocking even offers of assistance
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    to improve and, where necessary. restore the railway line link to the west? Will the maximum possible diplomatic pressure be put on the Sudanese Government by the British Government to make sure that the Sudanese accept such offers as are appropriate? What is to be the future of the ODA-sponsored Hercules aircraft?
    Mr. Raison: I am extremely concerned about the railway link to the west. It is absolutely essential for the Sudanese to play their part in allowing the food trains to operate effectively, and we have made our views clear. The Hercules which we are sponsoring is due to carry on until the end of the month, and we shall continue it after that as the need continues.
    Mr. Lester: I am pleased to learn from my right hon. Friend about the scale of the support in transport and trucks. What is the time scale between the declaring of support and the arrival of that support in the area, and the ability of such support to operate in the rainy season, especially in Darfur?
    Mr. Raison: Is my hon. Friend referring to aircraft or general support?
    Mr. Lester: I was referring to lorries.
    Mr. Raison: Lorries can operate, although the rains make progress difficult. I regret the problems that have occurred with the railway, which make it all the more important that the lorries should operate effectively.
    Mr. Corbett: I thank the Minister for what he has said about the money that has been made available for the Save the Children Fund. I ask him to give the House a commitment that the Hercules will remain in service for as long as they are needed?
    Mr. Raison: There is one Hercules in Sudan as opposed to Ethiopia. I expect that Hercules to continue in operation after the end of the month while the need is there.
    Mr. Cash: Will the Crown Agents be able to give some assistance in alleviating the rail problems in Sudan in the way in which they have been able to give such assistance over the past 100 years?
    Mr. Raison: I think that it is possible that they might. The British Railways Board might also be able to assist. We have provided an expert consultant, who has been of great value in this respect. I have authorised the expenditure of £50,000 to provide radio communications and I have made it clear throughout that I attach enormous importance to the railway link. I shall take every constructive action that I can to help maintain it.

    International Fund for Agricultural Development
    Mr. Deakinsasked the Secretary of State for Foreign and Commonwealth Affairs what is the United Kingdom contribution to the International Fund for Agricultural Development; and what proportion of United Kingdom bilateral aid is given for similar purposes.
    Mr. Raison: The United Kingdom contributed £18 million to the initial funding and £12·9 million to the first replenishment of the International Fund for Agricultural Development. In 1984, approximately 19 per cent. of United Kingdom bilateral aid was spent on renewable natural resources and related activities.
    Mr. Deakins: In view of the importance of combating hunger, especially in Africa, over the next 20 or 30 years, will the Minister assure the House that an increasing proportion of our bilateral aid will go to long-term agricultural development in that unhappy continent?
    Mr. Raison: I am anxious that a good proportion of our bilateral aid should go to agricultural development. Of all the aid of that sort that we give, that which takes the form of technical co-operation, training and expert advice is possibly the most important. It is not the most expensive aid and it is badly needed. I shall do all that I can to provide it.
    Mr. Bowen Wells: Will my right hon. Friend consider making representations to Mr. Geldof and the organisers of Live Aid to give some of the money that they have collected to the IFAD and other important international organisations which my right hon. Friend has been unable to fund as he would like through the ODA?
    Mr. Raison: I shall consider my hon. Friend's suggestion. By and large, Mr. Geldof likes to go his own way rather than working through the Government. I suggest that my hon. Friend makes some representations. I am sure that his suggestion is well worth considering.
    Mr. Meadowcroft: Does the Minister agree that the huge commitment to repaying the interest on debt has a debilitating effect on recipient African states and aid to Africa generally? What does the right hon. Gentleman say about the comments of the Secretary of State for Energy about the possibility of waiving interest payments?
    Mr. Raison: The hon. Gentleman should realise that we have remitted the aid debts of all the poorest countries. The latest countries with which I agreed to take this course were Ethiopia and Ghana. It is our general policy not to charge aid debts to the poorest countries. We give rather than lend.
    Mr. Maxwell-Hyslop: Will my right hon. Friend make it clear that where he is satisfied that the most efficient instrument for aid can be a registered charity, such as Oxfam, that will be used as a channel for public funds so as to provide effective help, rather than operating on a Government-to-Government basis, where much more may be lost in administrative expense.
    Mr. Raison: Much of our relief aid is channelled through the voluntary agencies. Over the past two years I have doubled the money that is made available to the voluntary agencies through the joint funding scheme.

    Indian Subcontinent
    Mr. Maclennanasked the Secretary of State for Foreign and Commonwealth Affairs what initiatives the Overseas Development Administration, in co-operation with the British Council, has taken since June 1983 to extend the administration of education aid in the Indian subcontinent.
    Mr. Raison: In co-operation with the British Council we have extended our technical co-operation education programmes in India, Pakistan and Bangladesh over the period in question. We have not however altered the administrative system.
    Mr. Maclennan: Does the Government's policy begin to offset the loss of opportunity for those from the subcontinent in higher and further education in Britain following the sharp increases in overseas student fees?
    Mr. Raison: We have financed an increasing quantity of man-hours of training in Britain, which is of great value to those from overseas, and we have extended our scholarship schemes. I announced the addition of a new scholarship scheme only a few weeks ago.
    Mr. Janner: Has the Mir-Ester had the opportunity to discuss this matter, and aid to India generally, with the Indian Foreign Secretary, Romesh Bhandari, who is presently in the United Kingdom? Is the Minister satisfied that the aid programme is contributing substantially to the improvement of relations between Britain and India, which has recently been most welcome and marked?
    Mr. Raison: I have not discussed relations with Mr. Bhandari in the way that the hon. and learned Gentleman has asked, but we have close contact with Indian officials and I have no doubt that our aid programme is a vital part in our good relationship with India.

    Agricultural Reform
    Mr. Stuart Hollandasked the Secretary of State for Foreign and Commonwealth Affairs what measures his Department is taking to promote and sustain agricultural reform programmes in developing countries.
    Mr. Raison: We promote and sustain the improvement of agriculture in developing countries through a wide range of measures. While reform through changes in policy, for example on producer prices and marketing, must ultimately be a matter for the domestic Government, in our discussions with Governments we stress the importance of policies likely to encourage food production.
    Mr. Holland: The Minister will be aware that getting aid to the poorest people in the poorest countries is particlarly relevant in agricultural development, which is an important part of the general debate on drought, aid and famine. The right hon. Gentleman has been foremost in the EEC in pressing for many things, but will he be foremost in pressing for the implementation of the Lom é proposals on agricultural development?
    Mr. Raison: I shall be foremost in pressing on the EEC the importance to be attached to agricultural work in general, and I include in that small-scale agricultural work, which is of great importance.
    Sir Peter Blaker: What study has my right hon. Friend made of the extent to which famine, and consquently drought, in developing countries is a consequence of deforestation? Has he any programmes to assist afforestation in those countries?
    Mr. Raison: My hon. Friend is right. Deforestation is a major problem. One of the objectives of the Lomé convention is to tackle that problem, and my Department supports a number of valuable forestry schemes.

Emergency Procedures
3.31 pm
Mr. Dafydd Wigley: On a point of order, Mr. Speaker.
Mr. Speaker: Does it arise out of questions?
Mr. Wigley: It concerns a private notice question.
Mr. Speaker: Order. We do not discuss that.
Mr. Wigley: Is it not possible to raise a point of order on the procedure relating to private notice questions?
Mr. Speaker: No. The hon. Member knows the rules on that matter.
Mr. Wigley rose—
Mr. Speaker: Order. The hon. Member has been here a good many years and he must know that no point of order can arise out of that matter. He will have to find other ways to raise the issue that he has in mind.
Mr. Wigley: It is a point of order on a procedural matter, Mr. Speaker.
Mr. Speaker: I shall take such points of order after the statement.

Ethiopia (Famine Relief)
3.32 pm
The Minister for Overseas Development (Mr. Timothy Raison): With permission, Mr. Speaker. I should like to make a statement on the relief of the Ethiopian famine. I visited Ethiopia from 16 to 19 July to assess the current famine and the need for further relief there. I revisited the feeding centres at Korem, which I saw last November, spent half a day at Assab port, went on an airdrop operation in an RAF Hercules. and had discussions with Ethiopian Ministers, the United Nations Coordinator, Mr. Kurt Jansson, the Ethiopian Relief and Rehabilitation Commissioner, and representatives of international and voluntary agencies.
The international relief effort, in which both the British Government and the British people have played an important part, has alleviated much of the worst suffering which we saw on our television screens in the latter part of 1984. Rain is now falling in many parts of Ethiopia, some crops have been planted, and livestock is beginning to recover. However, there are still large areas, notably Wollo and parts of Tigré and Eritrea, where the rains have been only intermittent or have yet to come at all. It will be several weeks before any reliable assessment of the probable 1985 harvest can be made. It will be several months before that harvest can be gathered. All to whom I spoke in Ethiopia agreed that even with the most favourable rains this year's harvest will be well below that of a normal year. It is essential, therefore. that the relief efforts are maintained into 1986.
What are the immediate priorities? The United Nations Co-ordinator estimates that with current stocks in Ethiopia and firm pledges of further deliveries, the overall food supply should be adequate for the rest of this year. At Assab, I saw the considerable flow of European Community food aid into Ethiopia—three ships were unloading food grain from the Community. Effective use is being made of the dumper trucks, grain conveyors and tarpaulins that we have provided and we shall be sending, in the next few days, a further supply of tarpaulins for use at Massawa and on relief trucks.
The overriding priority now is to improve food distribution. There are still not enough trucks available. The situation should soon improve significantly with the arrival of trucks pledged earlier. The United Nations Coordinator's assessment is that perhaps another 400 long-haul and short-haul trucks will still be required. It is of course essential that the Ethiopian Government make available all the trucks that they can.
As the House is aware, our major contribution to food distribution in Ethiopia has been the provision since 3 November last year of two RAF Hercules aircraft and their accompanying detachment, including a team from the Royal Corps of Transport. This operation has now airlifted well over 12,600 tonnes of grain and dropped a further 7,000 tonnes to places inaccessible by any other means of transport. It is an operation which, as I have seen for myself, calls for the highest professional skills and cool courage. It is admired by everyone in Ethiopia.
As I told the House last Monday, one of the purposes of my visit to Ethiopia was to judge whether we should maintain the decision that I announced on 10 June to withdraw our aircraft by 30 September. We had expected then that, by 30 September, the ending of the rains and the

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build-up of trucks would enable food to be distributed more widely and efficiently by road. My visit has confirmed that road remains the most cost-effective way of moving large quantities of grain, but the build up of road transport has gone more slowly than expected. Areas inaccessible by road will continue to depend on food brought from outside until their own harvest is in, as we all hope it will be, at the end of the year. The Hercules also provide a much valued flexibility.
We have now been able to weigh up carefully the future of the Hercules operation, and to discuss it fully with the Ethiopian Government—who asked us to extend it—with the United Nations Co-ordinator and with other relief agencies. We have concluded that the aircraft will continue to be needed until the end of the year. We are therefore conveying to the Ethiopian Government our offer to keep the two aircraft and accompanying detachment on relief operations until the latter part of December.
This new commitment, together with the further 10,000 tonnes of food aid which we shall send when the ports are ready to handle it, demonstates the Government's continuing concern for the victims of the Ethiopian drought. Our contribution has been prompt—we helped the Save the Children Fund with its feeding centre in Korem early in 1983. It has been generous—£70 million of emergency aid since 1982—and it has been sustained. We shall continue to do all that we can.
Mr. Stuart Holland: The British and international public have responded magnificently to the Live Aid appeal and shown by their compassion and concern that they care about drought and famine. The Minister has just been in and out of Ethiopia. We know why he went, why he came back and why he made a statement today. It is substantially to follow the impact of the Live Aid appeal and to disguise the fact that the Government have failed to take key measures, having been warned about the drought in Ethiopia and Sudan time and again.
We warned in the spring of last year that there would be a tragedy of biblical proportions in that area unless the Government took pre-emptive action. They failed to take such action. The Minister told us that he went to Assab and Massawa, but the ports are the source of the problem. Food aid distribution is the key issue, as we have warned time and again. The trucks which the right hon. Gentleman has scheduled have not yet arrived, although we have warned time and again that trucks of that capacity are needed. We also warned that unless they were there earlier, many farming families would leave the land, go to drought and refugee centres and aggravate the problems.
We warned that there was not enough fuel in the Sudan. The Minister talks now as though the transport problem has only just occurred. We challenged the Government to match the real fuel needs in the Sudan and to send a tanker of fuel to Port Sudan so that the Sudanese could cope, not least with the problem caused by refugees from Eritrea and Tigré. We pressed the Government to put pressure on the Dergue Administration in Addis Ababa to call for safe passage for food aid. The Minister had nothing to say about the representations which he may or may not have made about that.
We are glad to hear the Minister's announcement that the Hercules programme will continue after September. So it should. A Government who say that they are anxious about
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cost-effectiveness, as the Minister did in his statement, will realise that the cost-effectiveness of providing food aid by Hercules is substantially greater than providing it by road transport, and massively more than providing it by rail transport. In, for example, the Sudan—
Sir John Biggs-Davision: On a point of order, Mr. Speaker.
Mr. Speaker: We do not normally have points of order in the middle of statements.
Sir John Biggs-Davision: Has there been a change in our procedure? Do we have a ministerial statement followed by an Opposition statement, or do we have a ministerial statement followed by questions from Members of the House?
Mr. Speaker: The whole House knows that the Front Bench has a certain discretion. However, Front Bench Members are given the opportunity to rise in order to ask questions.
Mr. Holland: Will the Minister confirm that the Hercules will only supplement the food aid which, by road and rail transport, should have reached the drought areas already, and that the contributions that can be made—sadly, and despite the magnificent role played by the RAF—is likely to be marginal? The fact is—[HON. MEMBERS: "Questions."] Will the Minister confirm that he should have led the Live Aid response rather than followed it, and that he should have matched Live Aid and Band Aid pound for pound with net resources rather than shuffle the aid budget? Tragically, the contribution that is now being made by the Hercules alone is like crumbs from the table which will be out of the reach of many of those who are now suffering because of the culpable delays of the Government in recent months.
Mr. Raison: Frankly, I think that the hon. Gentleman's harangue is largely synthetic in its content. The Leader of the Opposition, who is now in Ethiopia, has apparently shown much more appreciation of what we are doing than has his henchman.
There is absolutely no doubt that we have made a major contribution towards the handling of traffic through the ports. Before the current crisis, we played a big part in improving the facilities in Port Sudan. In the port of Assab, as I have seen for myself, our conveyors, dumper trucks, tarpaulins and so on are doing a great deal to make that port capable of doing what it is doing—handling large quantities of grain.
I have discussed safe passage again with Mr. Jansson. It is an extremely difficult situation. He has made representations to the Ethiopian Government, but we must realise that there is a bitter civil war going on, and that neither side is likely to relinquish that war at present.
With regard to the Hercules only supplementing truck food aid, I have made clear what the role of the Hercules is, and what the role of the truck is. I have not concealed the fact that the trucks are the major part of the operation. I have told the House that the number of trucks is now building up well, but at the same time I believe that the Hercules has a role, which it carries out superbly, in supplementing the efforts of those trucks.
Mr. Robert B. Jones: Is my right hon. Friend aware that, in contrast to the carping attitude of Opposition Members, Conservative Members are delighted with the content of his statement? Can he

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enlighten us as to whether the extra cost of the Hercules project being extended will fall on the aid budget, or is it additional to his present budget? What representations did my hon. Friend make to the Ethiopian Government about the reported charges that they are making the entry of grain into ports, which charges are an affront to most people in this country?
Mr. Raison: I am grateful to my hon. Friend for his remarks. I am also grateful to the Ministry of Defence for agreeing to continue to meet a half share of the costs of the Hercules. The half share amounts to about £750,000 per month. Throughout the operation, the Ministry of Defence has given every possible help.
I discussed port charges at length with the Ethiopian Government and the voluntary agencies. What is needed now is for the voluntary agencies to get together, make a clear statement of their position, talk to the United Nations Co-ordinator and then present their case in a co-ordinated and effective way to the Ethiopian Government. We shall certainly support that.
Dame Judith Hart: Does the Minister accept that, of course, there will be a warm welcome for the fact that the Hercules operation is to continue at least until the end of the year? However, is he aware that there is deep concern throughout the country, first, that not one extra penny has been added to the aid programme to meet the crisis; secondly, that that means that somewhere in the aid programme other people's desperate needs are not being assisted; and, thirdly, that in terms of the supply of trucks and transport there is a general view that, given the long advance notice of the needs, the Government have been dilatory and economical, and that they failed to do what they should have done at the time to meet those needs? Those trucks should have been ordered five months ago and already delivered, not waiting to be delivered.
Mr. Raison: I entirely reject the right hon. Lady's charges. It is not true that no additional money has been provided. As I said only a minute ago, the Ministry of Defence has been providing additional resources. With regard to the overseas aid budget, the bulk of what we have done has been funded from our contingency allowance, which exists exactly for this purpose. Secondly, we have used the food aid programme properly; that is, we have concentrated it on areas of famine and greatest need. As a result, we have been able to maintain an extremely effective quantity of emergency relief during the past few months without cutting our bilateral country programme.
Mr. Anthony Beaumont-Dark: Does my right hon. Friend accept that we are all pleased that hard-headed has not meant hard-hearted—most of us thought that it would not—and therefore we all welcome the continued use of the Hercules aircraft? Will he tell the House how he has been able to get on with helping the Ethiopian Government to come to realise that those in rebel areas must be fed, and not just those who support their awful regime?
Mr. Raison: The civil war makes for an extremely difficult problem in that respect. It is significant that the province of Eritrea has received the highest percentage of the food needs of any province. Moreover, we have made money available to international and voluntary agencies as another means of reaching people in the rebel areas.
Mr. Michael Meadowcroft: I welcome the statement, so far as it goes. Does the Minister accept that the problems that are being encouraged by the Ethiopian regime make the point that diplomatic initiatives are crucial for the next phase of aid to that country? What talks have he and his right hon. and hon. Friends had with those whom the Government believe can bring pressure to bear on the Ethiopian regime?
Mr. Raison: I had careful talks with the Ethiopian regime while I was there, especially about the relief operation and the long term. I did not generally talk about the wider diplomatic position, but we follow events in Ethiopia closely. The work that we are doing now is in many ways enabling us to build a closer everyday relationship, but substantial long-term problems must still be settled. If we are to provide long-term relief aid, there must be a greater meeting of the minds than there has been in the past.
Mr. David Harris: I warmly welcome my right hon. Friend's statement and reject completely the weasel words of the Opposition in reaction to it, but will he tell the House whether during his visit to Ethiopia he had the opportunity to bring home to the Ethiopian Government the strong feeling, not least in this House, about the plight of political prisoners. especially members of the former royal family, including women who have been held in prison for nearly 11 years without trial? Did he make that point forcefully?
Mr. Raison: Yes, I made exactly that point to a senior representative of the Ethiopian Government.
Mr. Ian Mikardo: I join those who have welcomed the report as far as it goes, and it does not go far, but is the Minister not a little ashamed of his inadequate rejoinder to the recent report of the Foreign Affairs Select Committee, which demonstrated in detail and conclusively that by far the greatest part of the aid figures, which the right hon. Gentleman is fond of bandying about, consists not of new money but merely of recycled money?
Mr. Raison: I have already told the House that the money that we are spending on relief in Ethiopia and elsewhere is largely derived from the contingency reserve, which exists precisely to deal with contingencies and emergencies. It is backed up by a judicious and well-directed use of our food aid programme. Together with our share of the European Community contributions and the use of some of the shortfall that may occur at the end of an accounting year, we have been able to mount an effective response. In the last financial year we provided £95 million of relief aid. That is nothing to be ashamed of.
Mr. Sydney Chapman: When my right hon. Friend visited Ethiopia last week, did he get the impression that the Ethiopian Government were much more prepared to co-operate with donor nations and organisations in accepting and distributing the relief, and that that Government were doing all that could reasonably be expected of them, with their resources, to relieve the effects of the famine? If that was the case, as I fervently hope it was, is this not in marked contrast to the position last November, when my right hon. Friend previously visited Ethiopia?
Mr. Raison: I think that there has been such an improvement in the position. For example, the everyday

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working relationship between the RAF team and its Ethiopian counterparts is very good. I would not deny the fact that substantial problems remain to be tackled. However, thanks in good measure to the wisdom of the United Nations Co-ordinator, Mr. Jansson, who is doing an outstanding job, our excellent ambassador and others, there is an effective day-to-day relationship on which I hope we can build.
Mr. Tam Dalyell: What lies behind the elliptical sentence in the Minister's statement:
"It is of course essential that the Ethiopian Government make available all the trucks that they can."
Is this about the civil war? What is the position about spare parts for trucks?
Mr. Raison: There are other calls on Ethiopian trucks—after all, some normal life must continue—but the civil war is a factor. The lack of spare parts is at least as great a problem as the provision of new and additional trucks. The country is extremely short of spares, and Britain has done a great deal to provide them, especially for Land-Rovers, where we are most able to do so.
Mr. Roger King: Reports reached us a short time ago that the Ethiopian Government were trying to get their railway system working again. As it is largely comprised of steam locomotives, what plans does my right hon. Friend have to encourage the thousands of steam buffs and engineers in Britain to go to Ethiopia and help to put the system in working order?
Mr. Raison: That is an attractive proposition, and I understand why people may he thinking along those lines. However, the immediate job must be done primarily by road transport, with the valuable complementary contribution of the RAF and other aircraft there.
Mr. Derek Foster: Is the Minister not ashamed that he must be propped up to make excuses for his Government's slashing of overseas aid by 18 per cent. since 1979? Is not the generosity of the British public in stark contrast to the meanness of the Government?
Mr. Raison: The hon. Gentleman does not understand that the British public provide the voluntary contribution and the Government's contribution through taxation. The British public have shown clearly their concern by subscribing large sums of money. I believe that the Government have every reason to be proud, not ashamed, of the high quality and effectiveness of our aid in Ethiopia, the Sudan and throughout our aid programme.
Mr. Richard Hickmet: Does my right hon. Friend agree that the Government can rightly be proud of the aid and assistance that they have given to Ethiopia? Have not the Government given the lead to the international community in their response to the Ethiopian crisis, and is it not also true that if the Ethiopian Government had used their resources as effectively as they might have done at the beginning the problem would not be as great as it is now?
Mr. Raison: Obviously, history has much to do with the present crisis, but I am grateful for my hon. Friend's remarks. There is no doubt that the Government have given the lead in sending aircraft to Ethiopia—ours were the first to get there—and in concentrating effectively on the bottlenecks which are causing most difficulty.
Mr. Gavin Strang: Although I appreciate the Minister's report of his visit to Ethiopia, does he admit that the overseas aid budget has been cut in real terms since last year, and has been cut substantially since 1979? Is that not a scandal at a time when the human race faces its biggest disaster for many decades'? Does he agree that that fact is widely appreciated by the British people'?
Mr. Raison: There have been reductions in real terms in the aid programme as a result of our public expenditure policy. However, during the past three years we have fully maintained the programme in real terms.
Dr. Ian Twinn: Despite what Opposition Members have said, is my right hon. Friend aware that the good news that he has given to the House will be warmly welcomed? What practical help can be given to Ethiopian farmers now that the rains have started?
Mr. Raison: We have already provided help to farmers through the EEC, which is concentrating on the provision of seeds, and bilaterally in the provision of pesticides to deal with the army worm, which is causing great trouble. I have decided to send tools to help provide for the rehabilitation of agriculture.
Mr. Robert Maclennan: What precise part do the Government propose to play in meeting the shortage of trucks? The Minister put the shortfall at 400 long and short-haul trucks, in the words of the UN Co-ordinator. Will we provide the parts for these, or will we provide a proportion of the trucks?
Mr. Raison: There is a real problem here. The principal trucks being used in Ethiopia are Mercedes, Fiat and Volvo. The authorities there do not wish to add new varieties of truck, because of the great difficulty of servicing them and obtaining spare parts. For those reasons, small additional numbers of other makes are not what they want. We have decided to concentrate our efforts in areas where we can do most. As the House knows, our help includes providing aircraft and Land Rovers. Where we have provided additional Land Rovers, we have also provided a substantial quantity of spares. We have also sent out somebody from British Leyland, who is organising the RRC servicing and repair of Land Rovers. This has to be a co-ordinated effort in which each country does what is most effective, and that is the v^ ay in which we are proceeding.
Mr. Tony Baldry: Does my right hon. Friend agree that there will be more rejoicing in heaven over money given voluntarily by people to help citizens in need on the other side of the world than there will be over money which is taken in taxation and spent by Governments? When one talks about Government money, one is really talking about taxpayers' money, and it is much more meaningful when this is spent voluntarily, because in that case the heart goes out as well as the money.
Mr. Raison: My hon. Friend is absolutely right. The voluntary contributions of the British people to this crisis have been wholly admirable.
Mr. Tom Clarke: Will the Minister accept that every test of public opinion, including taxpayers' opinion, suggests that the Government should be contributing more? Will the Minister tell the House

731
why the Ministry of Defence is contributing only 50 per cent. of the costs of the Hercules, instead of a full 100 per cent.?
Mr. Raison: There is a deepening understanding of these problems on the part of the public, and I welcome that. The reason why the Ministry of Defence is contributing only 50 per cent. is that this is clearly not a defence operation. The Ministry has been extremely generous. Over the first three months it contributed the entire extra cost, and since then it has contributed half the extra cost, and will continue to do so. I am grateful to the Ministry of Defence for its generosity.
Mr. David Ashby: Is my right hon. Friend prepared to tell us what level of aid the Soviet Union is giving to the starving people in Ethiopia?
Mr. Raison: Essentially, the Soviet Union's contribution has to be measured in arms, but it also has its Antonov aircraft, whose natural habitat seems to be the airstrip rather than the air.
Mr. Roland Boyes: Does the Minister agree that there is a direct relationship between lives saved and money sent to Ethiopia? As a consequence, does he agree that every penny that the Government take from concerts such as those organised by Live Aid and records like those made by Band Aid condemns some Ethiopians to death? Will the Minister join me in putting pressure on his colleagues and getting that message through to them? Every penny raised by voluntary and charitable organisations ought to be sent where it is meant to go, which is to Ethiopia, and not into the pockets of those who do not deserve it.
Mr. Raison: It is my understanding that the Customs and Excise Department displayed a sympathetic approach to the recent Live Aid concerts.
Mr. Harry Greenway: Does my right hon. Friend agree that it is sad that the £50 million raised worldwide by the excellent Live Aid concert is contrasted with the £200 million spent by the Ethiopian regime on its
732
10th anniversary celebrations? Has he seen any sign of a change in attitude by the Ethiopian regime towards its own expenditure?
Mr. Raison: I did not discuss celebrations and so on with the Ethiopian Government, but I had many discussions about longer-term matters. Among some members of the Ethiopian regime there is an attempt to concentrate on essentials, but the mystery, or the problem, about Ethiopia is what lies in the minds of those who ultimately hold power there.
Mr. Dennis Skinner: When the Minister met many of the so-called top people in Africa—civil servants, heads of the armed forces and judges—did he say that he would have brought more money with him if Her Majesty's Government had not come across a clever little ruse of deducting VAT and otherwise taxing various other charitable efforts, resulting in their pocketing more money out of all the efforts of those trying to raise money for Ethiopia, and that, instead of taking it with him, he had left behind about £10 million to put into the pockets of judges, top civil servants and all the rest of the nobs in this country? How contemptible can anyone get?
Mr. Raison: I am happy to say that I made no such absurd observation during my visit.
Mr. John David Taylor: What was the response of the Ethiopian authorities to the Minister's complaint about the scandalous increases in port charges for food aid from the United Kingdom? As the right hon. Gentleman underlined in his statement that the advantages of the rain had not extended to Eritrea and Tigré, what additional proposals have our Government to assist those two provinces?
Mr. Raison: On that latter point, we provide food aid to voluntary agencies and international agencies, which are able to work in all parts of the country.
The port tax is a somewhat more complicated matter than has been portrayed. Food and relief supplies which go direct to the RRC appear to pay a lower rate of agency charge than other food or relief supplies. What is important is that the voluntary agencies get together and establish exactly what they are having to pay. If we can help them to make effective representations, I am willing to do so.

Top Salaries Award
4.2 pm
Mr. Roy Hattersley: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration—it is a matter of urgent public interest—namely,
"the implementation without the approval of the House of Commons of Report No. 22 of the Review of Top Salaries",
the implementation of which is of obvious and continuing detriment to good industrial relations in the public sector.
It is clear that the desire to debate the matter is not confined to one side of the House. On Friday, six Government supporters expressed their deep concern at the Government's decision and, since then, other Conservative Members have added their voices to the chorus of apprehension and disapproval. I have no doubt, Mr. Speaker. that were you to grant this application, it would be welcomed on both sides of the House.
Despite the position made very clear on Friday and repeated in quotations in newspapers over the weekend, it is obvious that the Government still do not realise the depth of feeling which has been engendered by last week's decisions—the decision on one day to scrap wages council protection for young workers and, on the next, for example, to increase the salary of the Secretary to the Cabinet by £23,750 a year.
To debate the Government's attitude on these matters would allow the House of Commons to reflect the outrage which is undoubtedly felt in the country and perhaps enable right hon. and hon. Members to fulfil their traditional function of changing the Government's mind on behalf of public opinion. Were we able to do that, it would be possible to remedy some of the damage which is already being done among workers in the public sector.
I give one example to justify the argument that House of Commons intervention is important now. As matters stand, the decision on the top salaries award will have a direct and detrimental effect on the prospects of further disruption in our schools next autumn. There is no doubt from the published statements that the teachers' unions. contemplating a settlement, have been moved away from conciliation and compromise by what was decided last Wednesday and Thursday.
Were we able to change the Government's mind by debate, we would have a chance to save the country from the Government's folly, to attempt to change the Prime
734
Minister's mind and, and as a result, to avoid the disruption which is bound to follow if the Government continue this confrontational policy.
One other factor makes last Thursday's announcement unique. Other large pay awards have been made to top civil servants and the like, but on previous occasions those awards have been phased over two years or more. This year, the whole amount—46 per cent. or 35 per cent.—-is to be paid within a period of nine months. That compression of the payment—the virtual instant: payment of the whole award—has added enormously to the offence felt by lower paid workers, especially those in the public sector, some of whom earn only a fraction of the salary increases which the Government accepted last week for judges, senior civil servants and senior officers in the armed forces.
If we do not debate the whole subject—not the decision to increase the salary of one member of the Government, which we shall be able to debate tomorrow—the House will rise on Friday, the increases will be paid, and the bitterness will remain in the public service for years to come. Today, I ask for the opportunity for the House to change the Government's mind and avoid that bitterness. It is in that spirit that I beg to ask leave to move my motion.
Mr. Speaker: The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the implementation without the approval of the House of Commons of Report No. 22 of the Review of Top Salaries."
I have listened with the greatest care to what the right hon. Gentleman has said. As he knows, my sole duty in considering an application under Standing Order No. 10 is to decide whether it should be given priority over the business already set down for this evening or tomorrow.
I regret that I cannot find the matter that the right hon Gentleman has raised meets the criteria laid down in the Standing Order and, therefore, I cannot submit his application to the House.
Mr. Hattersley: I am very grateful, Mr. Speaker, for the careful consideration that I know that you have given to this matter during the day.
I understand fully the constraints under which you operate. Therefore, it is the duty of the Opposition to find other ways in which it can be raised. Thank you very much.

Police Training Manual
4.7 pm
Mr. Tony Benn: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the contents of the Public Order Tactical Operations Manual drawn up by the Association of Chief Police Officers and approved by the Home Office."
The manual provides for the training of the police in paramilitary operations, including instruction in methods of incapacitating demonstrators by the infliction of actual bodily harm or the use of police horses to canter into crowds and the tactical use of noise to instil fear, all of which are in clear breach of the law.
The existence of these tactics and parts of the manual from which they came were disclosed in the cross-examination by the defence in a recent trial in Sheffield. The trial came to an end when the prosecution withdrew all the charges against the accused before it had even completed the presentation of its own case, and the document was made publicly available only over the weekend.
The matter is specific in that it relates to one document containing instructions for the police that have never been published before and now only partially available and clearly and specifically provides for a major breach of the law by the police.
It is important because it is a manual that has clearly been in use throughout the miners' strike and elsewhere, and it throws a completely different light upon certain events which occurred during the strike.
It is urgent because, unless the House discusses it before the summer recess, the police in Britain may continue to be subject to orders that lead them to act illegally and violently against persons engaged in protests or demonstrations who have never been arrested or charged with any offence.
The document was apparently drawn up by the Association of Chief Police Officers—not an authorised or official body—after the disturbances that occurred in Brixton, Bristol and Toxteth in 1981, and the pages which were released during a recent trial made it clear that officers had been given instructions which laid them open to charges of assault. It is clear from the details that the manoeuvres, with short shields, long shields, horses and truncheons, that it recommends should be deployed are in clear contravention of the rules that have hitherto governed the actions of police forces.
The House will be familiar with the background of the case that I have in mind. It is now over. For the first time, therefore, it can be referred to in the House. Certain
736
persons were charged with riot. Mr. Clements. the deputy chief constable of Yorkshire, said at the beginning of the trial that it was the most serious case of public disorder that he was aware of this century. In the middle of the trial the prosecution offered to drop all the charges if the accused would agree to be bound over to keep the peace. They refused to do so, because they were innocent. Police videos were shown to the jury. They showed that it was a peaceful demonstration until the cavalry charges. The BBC itself had transposed the film to show the missiles were thrown before the charges, whereas the police videos showed that the charges took place before the missiles were thrown.
This manual is a major development in police action. With the long summer ahead of us and with the responsibility of the Home Secretary absolutely manifest, his Department having approved the manual, I urge you, Mr. Speaker, to allow the Adjournment motion in order that the House can discuss the matter before the recess.
Mr. Speaker: The right hon. Member for Chesterfield (Mr. Benn) asks leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the contents of the Public Order Tactical Options Manual drawn up by the Association of Chief Police Officers."
I have listened with great care, and in no way do I underestimate what the right hon. Gentleman said, but I regret that I have to give him the same answer as I gave to his right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley). I do not consider the matter that he has raised is appropriate for discussion under Standing Order No. 10, and I cannot therefore submit his application to the House. However, I am sure that the right hon. Gentleman will find other ways of bringing the matter before the House before we rise for the summer recess.
Mr. Benn: I am not questioning your ruling, Mr. Speaker, but I am asking for your consent to do something which requires your consent. Hon. Members are unable to place documents in the Library of the House without the consent of the Speaker. though Ministers can.
Mr. Speaker: Is the right hon. Gentleman sure about that?
Mr. Benn: I have checked this, Mr. Speaker. I would ask that you should give your consent that the documents released at the trial relating to the police manual should be placed in the Library of the House so that they can be properly and formally published.
Mr. Speaker: If that is within my responsibility, it seems to me to be a very reasonable request.

Top Salaries Award
4.12 pm
Mr. Anthony Beaumont-Dark: On a point of order, Mr. Speaker. May I ask for your advice? As Speaker of the House, you will not have been aware of the fact that lively interest has been expressed this weekend by our constituents in a debate that is to take place tomorrow night for an hour and a half on the subject of the Lord Chancellor's salary'. The cases that will be made by the two Front Benches will take at least 20 minutes each. This means that only about 45 minutes will be available to Back Benchers to make their points. Is there any way in which this debate can be changed from one that lasts for an hour and a half to a debate that lasts until any hour of the night so that hon. Members can express the opinions and feelings of their constituents?
Mr. Speaker: Order. I am not unaware of this matter, because I am also a constituency Member of Parliament. However, the hon. Gentleman's suggestion is patently a matter for his right hon. Friend the Chief Whip and the usual channels.
Mr. David Winnick: Further to that point of order, Mr. Speaker. As we shall be breaking up later this week and there will be no opportunity for nearly three months to discuss a matter which, as you have implied, is causing a great deal of concern in our constituencies, is there not a responsibility upon the Leader of the House, who is present on the Government Front Bench, at least to tell the House that the Cabinet will consider allowing a debate that lasts for more than one and a half hours? The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) is absolutely correct. If the Front Benches take up, and rightly so, the normal amount of time allotted to them, how many Back Benchers are likely to be called tomorrow—one, two, or three at the most? Is it not scandalous that, on top of what has happened, Back Benchers are to be deprived of the right to debate this matter for at least three months? The Leader of the House has a responsibility to ensure that we have sufficient time in which to debate this matter.
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I appreciate that announcing the business on Friday meant that my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) did not have the chance to raise the matter with me, albeit indirectly, until now. However, the day and time were chosen in the belief that they would be for the general convenience of the House. However, I am happy to have these matters looked at again, as Mr. Speaker has indicated, through the usual channels, but I do not want to hold out too many hopes to my hon. Friend.

Emergency Procedure
4.15 pm
Mr. Dafydd Wigley: On a point of order, Mr. Speaker. It relates to matters of emergency and urgency. I do not want to ask a question that impugns the reason why a private notice question request may have been turned down. The fact that I made one this morning on a matter of considerable importance relating to a tribunal decision on the Welsh language is only one example of what may happen. When a matter of importance like this requires a decision to be taken by you, in conjunction with the Department that will have to answer the question, or otherwise, and you decide, in your wisdom, not to allow a private notice question to be asked—
Mr. Speaker: Order. The hon. Gentleman is now raising that matter which I have already said is out of order. Perhaps he would phrase his point of order in a different way.
Mr. Wigley: I ask you, Mr. Speaker, whether it is possible, in these circumstances, for a reply on a private notice question refusal to be given before 12 midday so that the hon. Member who has raised the question cart come to the House under Standing Order No. 10 and ask the House to consider, through you, whether the matter is of sufficient importance and urgency to merit an emergency debate. That is a reasonable point to put. It would facilitate the discussion of emergency matters, without hon. Members having to resort to the belt and braces procedure of putting in both a Standing Order No. 10 request and a private notice question simultaneously, thereby making work for you.
Mr. Speaker: Order. The hon. Gentleman knows that it has long been the practice of the House that to put in a private notice question backed up by a Standing Order No. 10 request is unacceptable. The hon. Gentleman, and every other hon. Member, must make his decision as to which of the two courses of action he prefers to adopt. I have nothing further to say, apart from this: there will be other opportunities this week when the matter can be aired by him.

Select Committee on Foreign Affairs
4.17 pm
Mr. Tam Dalyell: On a point of order, Mr. Speaker. Circumstances have come to your notice through a letter, which may or may not have reached you, which was written at 1.30 pm. I understand that the majority report of the Select Committee on Foreign Affairs was laid before the House this weekend and that it contains strong criticism of my behaviour. It implies serious steps relating to alleged defiance of the House of Commons; an alleged defiance of the wishes of the Committee.
It appears to me to be contrary to the traditions of the House and the relations between hon. Members for a Select Committee to criticise an hon. Member without asking that hon. Member either for a written explanation or providing him with the opportunity to give evidence before the Committee. I put it to you, Mr. Speaker: is it proper for a Select Committee of the House to make such charges, for such they appear to be, against a Member of this House, under pages 704 and 705 of "Erskine May", without even having asked that Member for an explanation, let alone having asked him to appear as a witness?
There was no leak until Ministers, for their own reasons which it would be improper to go into on this occasion, decided to charge Clive Ponting under section 2 of the Official Secrets Act 1911 and send him to the Old Bailey and to make public announcements, on a Saturday in August 1984, to that effect. I ask, very gently, whether we are in the position now of having kangaroo courts in the House of Commons.
This point of order is about the right of hon. Members to be heard before they are rebuked by a major report of a Select Committee. There are two sides to this story, and
740
before the report was issued my side ought to have been heard. Nearly 20 years ago I was hauled before a senior Committee of the House on the subject of chemical and biological weapons and was reprimanded. Many people have doubted the justice of what happened then. On this occasion, I say to you, Mr. Speaker, and to my colleagues, that I behaved properly and that it was Ministers who opened the Pandora's Box which led to the Ponting trial. May I ask you to rule on this matter when the papers become available to you?
Mr. Speaker: I say straightaway to the hon. Gentleman that the whole House will agree that no one here would doubt his honour. As to the matter that he raised, which is a serious one, the report has not yet been published. I have received the hon. Gentleman's letter, which enabled me to look into the matter, and I draw attention to the front page of the report from the Select Committee on Foreign Affairs, which says:
"This Document is issued in advance on the strict understanding that no approach is made to any organisation or person about its contents before the time of publication."
Therefore, I have had no opportunity of seeing what the hon. Gentleman alleges and nor, I think, has any other hon. Member.
Mr. Dalyell: Further to that point of order, Mr. Speaker. Somehow or other, by some alchemy, it has become the talk of the place. Certainly, the Chairman of the Select Committee did not consult me about it. When I arrived from Edinburgh this morning I was confronted by these questions, which I was supposed to answer.
Mr. Speaker: I have the greatest sympathy with the hon. Gentleman, but I cannot rule on the matter today. We must return to it on Wednesday, when the report is published.

Orders of the Day
  Social Security Bill
  Lords amendments considered.
  Social Security Bill
    Clause 9

      ABATEMENT OF INVALIDITY ALLOWANCE, ETC., WHERE BENEFICIARY ENTITLED TO ADDITIONAL COMPONENT IN PENSION OR TO GUARANTEED MINIMUM PENSION
      Lords amendment: No. 1, in page 11, line 36, leave out "below" and insert
      "of the Social Security Act 1975"
      4.21 pm
      The Minister for Social Security (Mr. Tony Newton): I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Speaker: With this we may take Lords amendment No. 2, in page 12, line 9, leave out "below" and insert
      "of the Social Security Act 1975"
      Mr. Newton: These are drafting amendments, which correct a mistake in the present wording.
      Question put and agreed to.
      Lords amendment No. 2 agreed to.
      Lords amendment: No. 3, after clause 9, insert the following new clause—Voluntary redundancy entitlement to unemployment benefit—
      "In section 20 of the Social Security Act 1975 (disqualifications for receipt of benefit). the following subsection shall be inserted after subsection (3)—
      "(3A) For the purposes of this section, a person who has been dismissed by his employer by reason of redundancy within the meaning of section 81(2) of the Employment Protection (Consolidation) Act 1978 after volunteering or agreeing so to be dismissed shall not be deemed to have left his employment voluntarily."."
      Mr. Newton: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Speaker: With this we may take Lords amendment No. 9, in clause 29, page 27, line 10, at end insert—
      "section (Voluntary redundancy—entitlement to unemployment benefit);"
      Mr. Newton: This is more than a technical amendment, but I hope that it will command ready support on both sides of the House. It amends section 20 of the Social Security Act 1975 and has been proposed to maintain the Government's policy that people who are made redundant, even though they may have agreed to take voluntary redundancy, should not be regarded as having left employment voluntarily, which would mean that they would incur up to six weeks disqualification from unemployment benefit.
      Until recently it was understood to be the case—and it was certainly the Government's intention—that people taking voluntary redundancy would not be disqualified from receiving unemployment benefit for up to six weeks. However, the chief adjudication officer, who is independent of Ministers—for once I have proof of that fact, which hon. Members have been known to doubt—issued new guidance based on recent case law suggesting
      742
      that those who had volunteered for redundancy should normally be regarded as having left employment voluntarily, with the consequences that I have described.
      That would have had serious implications for redundancy schemes in a number of industries, not lease the mining industry, and was most unwelcome to the Government. Faced with that advice, which we could not overturn and for which we could not substitute Minister's views, we decided that the proper course was to change the law to make sure that it clearly achieved what Ministers wished to achieve.
      Happily, we had before Parliament at the time that flexible instrument the Social Security Bill—it has proved to be an almost infinitely flexible instrument—and we took the opportunity to insert the amendment and amendment No. 9, which is consequential, to establish the position as we and, I believe, the whole House want it to be.
      Mrs. Margaret Beckett: I welcome the amendment and the speed with which the Government have acted. I am only sorry that I have not been able to give the Minister more notice of a question that I wish to put to him. The circular that gives rise to the question has come to my notice in only the past few days.
      Can the Minister tell us now—if he cannot, will he check the matter—whether the amendment covers all the cases raised in the circular, which refers not only to the case being changed by the amendment, but to similar action being taken where a claimant is participating in an early retirement scheme or has retired at the normal retiring age but had the option of remaining in the job?
      I am as horrified by the assumption that people should be forced to stay on after the normal retirement age or risk losing unemployment benefit as I am by the chief adjudication officer's original proposal. Will the Minister confirm that he is under the impression that both areas are covered by the new clause and that, if not, the Government will consider my question with the same speed as they considered the earlier proposal?
      Mr. Newton: There may be some misunderstanding here, but I shall check on the matter raised by the hon. Member for Derby, South (Mrs. Beckett).
      However, I can make it clear that the amendment is related to voluntary redundancy and not to voluntary retirement, which is a different issue. Although the chief adjudication officer has issued fresh and clearer guidance on early retirement, it did not significantly change the position from what it was understood to be. I hope the hon. Lady will agree that a decision to remove oneself from the labour market early is not the same as a voluntary redundancy under an agreed redundancy scheme. The same considerations would not necessarily apply.
      There may be some misunderstanding about those who retire early. If a person retires after he is entitled to the national insurance retirement benefit, that is a matter for him. If he has the relevant contribution record, we shall pay the national insurance retirement pension. The point at issue is whether people should be entitled to unemployment benefit.
      A person who retires voluntarily, whether before or after retirement age, cannot be regarded as unemployed in the normal sense. If he retires after retirement age and has the relevant contribution record, he will be entitled to retirement pension, in which case he would not be entitled to unemployment benefit.
      Mrs. Beckett: I confess that I had to read the circular several times before I could understand what it could be getting at. I do not see how it could be dealing with someone who retires after the normal pension age. Presumably it refers to people in jobs where the normal retirement age is earlier than, say, 65 for men.
      We all know that people have been said to be retiring voluntarily when, in effect, they are taking redundancy. The two things are not interwoven in pay terms, but they become interwoven in moving people on from their jobs. Will the Minister consider my question?
      Mr. Newton: I shall certainly look at the matter raised by the hon. Lady, but I do not think that we face the difficulty that she suggests might exist.
      There are provisions for those who retire on an occupational pension after the age of 60, but before 65. Those provisions govern their entitlement to unemployment benefit and the extent to which their occupational pension is taken into account against benefit. However, that is a different point from that raised by the hon. Lady.
      I think that the position is fair and that it is right to maintain a distinction between voluntary redundancy and voluntary retirement. However, I shall crawl over the circular and over the hon. Lady's words to make sure that she does not have a valid point—she has been right before—and that I am right to offer her reassurances.
      Question put and agreed to.

    New Clause

      UP-RATING BENEFITS
      Lords amendment: No. 4, after clause 14, insert the following new Clause—
      ".—(1) The words "in the month of June" shall be ommitted from subsection (1) of sections 125 and 126A of the Social Security Act 1975 (annual reviews of benefits for purposes of up-rating).
      (2) The following subsection shall be substituted for subsection (4A) of section 125—
      "(4A) A review under this section or section 126A below shall cover a period of not more than twelve months beginning immediately after the end of the period covered by the last review under the relevant section."."
      Mr. Newton: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): With this we may discuss Lords amendment No. 38, in schedule 6, page 69, line 26, column 3, at end insert—

      "In section 125(1), the words "in the month of June".

      In section 126A(1), the words "in the month of June"."

      4.30 pm
      Mr. Newton: The amendments make it possible for the Government to align the social security uprating year, which currently runs from November to November, with the year which applies to tax, rent and rates—April to April. The Government have given notice of that intention.
      There were two possibilities. One was to have a 16-month gap between upratings, from November to April. We did not find that prospect attractive, so we decided to adopt the obvious alternative—to have two
      744
      upratings in the 16-month period. We intend to make social security upratings in November 1985, July 1986 and April 1987.
      We need to amend the Bill because the current law requires the Secretary of State to review social security benefits in June. The amendment allows the Secretary of State flexibility to conduct upratings at shorter intervals over the next two years. I hope that the House will think that reasonable.
      I emphasise that the change in the law will not allow us to make upratings at intervals of more than 12 months. Benefits must be reviewed at intervals which cannot exceed 12 months. We intend to stick to the historic method. Upratings will be related to a measured past increase in prices—the latest that we can consider in order to carry out the uprating when it is due. I hope that the House will agree to the amendments.
      Mrs. Beckett: We understand the proposed mechanism, but we have reservations about the dates. Are the dates likely to be in legislation. or will they be arbitrary? Most of the proposals for the social security' review are likely to be unpopular, so perhaps we can see a hint of the date for the next general election, as we are to have two upratings before April 1987.
      Mr. Frank Field: Twice in our history Governments have tried to change the length of the year. The first was in medieval times, and the second was during the period of this Government, when claimants had to live in a 53-week year and then in a 54-week year.
      The House should welcome the move so long as we have an undertaking that it will not be used to cut the real value of benefits. I have three questions for the Minister. When the Government calculate the move to July and then to April, will the calculation accurately reflect the number of weeks involved? Secondly, may we have an undertaking that because prices vary throughout the year, with peaks and troughs which are evened out on a year-to-year basis, the move will not lead to benefit levels which are lower than the old November-to-November levels? Thirdly, since convention, and not statute, links supplementary benefit to prices, will that convention be maintained?
      Mr. Newton: I shall answer first the hon. Member for Derby, South (Mrs. Beckett). The amendments will give the Secretary of State flexibility in the uprating date, although the interval cannot be longer than 12 months. My off-the-cuff reaction is that I can see no reason why the actual dates for the uprating need to be written into legislation.
      I do not understand the first question asked by the hon. Member for Birkenhead (Mr. Field). The problem about the number of weeks in a benefit year arises because of the quirks in the calendar. Our calendar does not have precisely 52 weeks in a year. I do not wish to weary the House with another lecture on the phenomenon which came to be known to the cognoscenti as "creep", but the hon. Gentleman will be aware that if upratings take place religiously at 52-week intervals they steadily advance through the year, and if one projects into the next century there could be two upratings in a year because of that phenomenon.
      We propose two upratings at eight-month intervals, so it is fruitless to argue about how many weeks there are in a month. I do not understand the hon. Gentleman's

      745
      argument. We shall take the latest available retail prices index for the appointed time, which enables us to carry out the uprating at the time that we want to do it, and apply that faithfully to the benefit figures.
      I understand the hon. Gentleman's second question more clearly. We abandoned the old forecasting method because of its uncertainties. Without going back to that method, it is difficult to estimate the precise effects on benefit levels of using different periods. It is clear that any change in the period of uprating means that at some point in the following period benefit will be higher than it would otherwise have been because the uprating has been advanced. At some other period it would be lower for the opposite reason. The exact effects at a particular time will depend on the pattern of inflation, which I cannot predict.
      I hope that I understood the hon. Gentleman's third question. We certainly intend to maintain the historic basis of uprating and to apply it in the way described. We shall not alter the method without making it plain to Parliament. We think that our proposal is sensible and right.
      I do not wish to mislead anybody. Supplementary benefit uprating is related to the retail prices index, less housing costs. That is another complicated factor which makes it difficult for me to give better answers to the hon. Gentleman's questions. I hope that the hon. Gentleman will be reassured.
      Question put and agreed to.

    New Clause

      VACCINE DAMAGE PAYMENTS
      Lords amendment: No. 5, after clause 20, insert the following new clause—
      ".In section 1 of the Vaccine Damage Payments Act 1979—

      (a) in subsection (1), for "£10,000" there shall he substituted "the relevant statutory sum";

      (b) the following subsection shall be inserted after that subsection—

      "(1A) In subsection (1) above "statutory sum" means £10,000 or such other sum as is specified by the Secretary of State for the purposes of this Act by order made by statutory instrument with the consent of the Treasury and the relevant statutory sum for the purposes of that subsection is the statutory sum at the time when a claim for paments is first made."; and
      (c) the following subsection shall be inserted after subsection (4)—
      "(4A) No order shall be made by virtue of subsection (1A) above unless a draft of the order has been laid before Parliament and been approved by a resolution of each House."."
      Mr. Newton: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this we may discuss the following Lords amendments:
      No. 7, in clause 28, page 26, line 37, at end insert—
      "(3A) Section [Vaccine damage payments] extends to Northern Ireland and the Isle of Man."
      No. 8, in clause 28, page 26, line 38, leave out "(3)" and insert "(3A)"
      No. 10, in clause 29, page 27, line 15, at end insert—
      "section [Vaccine damage payments];"
      No. 40, in the title, in line 3, after "to" insert
      "amend section 1 of the Vaccine Damage Payments Act 1979 and"
      I must inform the House that these amendments involve privilege.
      Mr. Newton: The amendment provides the power needed to change the Vaccine Damage Payments Act 1979 to vary the amount payable by means of an order subject to affirmative resolution in each House.
      The House will recall that among the many announcements made by my right hon. Friend during recent weeks that have caused pleasure was his statement—[Interruption] Do I sense an air of disbelief in the House? It cannot be from the Government Benches and there are hardly sufficient Opposition Members present to constitute disbelief.
      The House will recall that my right hon. Friend told the House on 18 June of his intention to double the present vaccine damage payment of £10,000—which has stood unaltered since such payments were first introduced under the 1979 Act—to £20,000. There was no provision in the 1979 Act for increases. Therefore, we have used the flexible instrument of this Bill to introduce the necessary primary legislative amendment quickly. We hope to bring the necessary order before the House at the earliest possible moment after the Bill has received Royal Assent., should it be so favoured.
      Although the power that we have taken will make the new amount payable in respect of new claims made on or after the date of coming into operation of the order, my right hon. Friend is making arrangements to apply the increased amount to new, successful claims made on or after 18 June, when he announced the increase. I hope that that provision will be welcomed by the House and that I will have its support in carrying this amendment into law.
      Mrs. Beckett: We give a cautionary welcome to the proposal. It is most unfortunate that the payment has not been increased since it was announced in 1978 and introduced in 1979. We note the flexibility of the Bill that has allowed this proposal to be chucked in at the last minute.
      Why was the proposal chucked in at the last minute? Given that it is a fairly obvious proposal for the Government to introduce, we wonder why it happened only in the amendments made in another place and was not put before us for lengthier consideration at an earlier stage. What will be the cost of the increase in a full year?
      Most important, we wonder what the proposal means for the future of the scheme. The Minister said that there was no provision for increases under the 1979 Act. I am sure that he will recall that that was because we did not want the Act to pre-empt decisions that we thought would have to be made following the recommendations of the Pearson commission. It was intended as a stop-gap measure to ensure that vaccine damaged children received some assistance before a proper scheme could be worked out that would be more far-reaching and generous.
      Will introducing the proposal to increase the sums available, welcome though it is, mean that the whole idea of implementing the Pearson commission's recommendations has now been consigned to the dustbin? The sum is to be increased broadly in line with the rate of inflation between 1978 and the present day. Is it intended that the order should be increased each year, as are other regular payments? If not, I am sure that the Minister will tell us why not.
      On the timing of the proposal, will the Minister tell us what light it casts on the consideration of the review being undertaken into degrees of disability? Although any increase is always welcome, it is a little strange that the

      747
      Government have brought forward this proposal so abruptly at a time when they are undertaking a fundamental survey of the needs of the disabled.
      4.45 pm
      Mrs. Edwina Currie: My hon. Friend introduced the amendments with a degree of levity. I wish briefly and seriously to welcome the Government's prompt action in responding to the needs of these children. I am especially delighted that the measure will be backdated to 18 June. That is a tremendously generous gesture and will be very welcome.
      I first came across vaccine damaged children in care in Birmingham. I was most concerned by the degree of disability that they suffered. Some were only mildly disabled, but some were seriously disabled and many will need care for the remainder of their lives. One family in my constituency has a seriously disabled daughter aged 14, who obviously faces the future with some apprehension.
      Mr. Frank Field: It is understandable that the hon. Lady should welcome the measure and its backdating. But does she not realise that, in a sense, it would be unfair if the benefit was reviewed only every so many years? Many of our constituents will have claimed compensation at the old rates and some will be a few days outside being eligible for the new rates.
      While we welcome the uprating—I am sure that the whole House does—if it is reviewed only every now and again instead of regularly each year, that will make a tremendous difference to the amounts of money payable to these children.
      Mrs. Currie: I am sure that the hon. Gentleman agrees that nothing can compensate for that sort of disability when children are born normal but handicapped through vaccine. I hope that he will bear with me for a minute because I have a view on the matter that he raised.
      These children are tragic victims of something that, in a sense, benefits the whole of society. I hope that people will not be put off having their children vaccinated and inoculated. The hospital with which I used to be involved in central Birmingham was involved in the eradication of smallpox, which was substantially carried out through an inoculation programme. I hope that in years to come the day will arrive when most infectious diseases can be eradicated from this nation and others by such programmes.
      There is no doubt that those who care for these people are devoted and dedicated, whether the children are in care or at home. They deserve our full support. I hope that eventually it will be possible to set up some form of proper tribunal for assessment of such cases to determine payment of appropriate compensation—perhaps on the lines of the Criminal Injuries Compensation Board. However, this is obviously not the time to debate the methods that might be used.
      I am sure that the whole House will join me in welcoming the Government's generous action in introducing these amendments.
      Mr. Newton: I am grateful to my hon. Friend the Member for Derbyshire, South (Mrs. Currie) for her kind words.
      748
      I come now to the specific points raised by the hon. Member for Derby, South (Mrs. Beckett). To pick up the slightly uncharacteristically uncharitable phrasing that she used about why the proposal was "chucked in at the last minute", I can tell her that it was because a number of representations had been made to the Government. It is well known that there has been concern about this matter for some time.
      The Government came to the conclusion—and I personally strongly reached the conclusion—that it was right to create a position in which we could increase, and increase more easily, the amount payable. and we have taken the opportunity provided by this Bill to do that.
      On the last of the hon. Lady's questions about inflation and future uprating, this increase goes rather beyond the simple application of inflation during the period since 1979. No doubt because of the movement in prices at some points around the time when the payment was first introduced, the calculations may depend slightly on the time of the year taken. My calculations show that the 1985 equivalent of the £10,000 applicable in 1979 is £17,750. Therefore, on that basis the increase to £20,000 is significantly more than pure inflation proofing.
      Mrs. Beckett: I calculated my figures from the announcement of the scheme in 1978, and what was thought then to be a worthwhile sum of £10,000 would now need to be £19,230. The Government are being slightly generous, but not a lot.
      Mr. Newton: That may be right, but the hon. Lady might have been wiser not to have raised that point because she has calculated the rate of inflation between the time when the then Labour Government announced the proposal in 1978 and implemented it in 1979. That is not the sort of issue on which I want to have a verbal punch-up with the hon. Lady today, but when she walks right into it in that way I am bound to pick up the implication of her remarks.
      What we are doing cannot be described as a mean increase. It represents a broad sum of £20,000, ahead in value of the £10,000 when it was introduced in 1979. That probably gives the hon. Lady a clue to my next remark, which is that we do not have a definite plan for annual uprating, though it follows from the type of amendment that we have made—which is not to substitute a new substantive figure in the primary legislation but to take power to make such an increase by order—that there will henceforth be greater flexibility. As I say, I cannot make a commitment on behalf of the Government to engage in annual uprating of the payment.
      Regarding the future of the scheme, as the hon. Member for Derby, South pointed out, some of the broader issues that can be related to this relatively limited issue—picking up the whole theme of the Pearson commission and the question of compensation more widely—go wider than we can sensibly debate today. However, the hon. Lady will be aware that the Government have not accepted the recommendation of the Pearson commission for a system of compensation in the courts based on strict liability in tort, subject only to causation being proved.
      I hope that I carry the hon. Member for Derby, South—this answers her question about our survey of the extent and effect of disablement in the population—when I say that it would not be sensible now to make

      749
      further large decisions in this sphere until we have the results of that survey—which is the biggest survey ever carried out in Britain of disablement problems and their effects—and are thus in a position to have the greater information required to examine disability and disability benefits as a whole.
      Mrs. Beckett: May I take it, therefore, that the Minister is saying that the decision to make the uprating in this way does not pre-empt a more widespread scheme in the future?
      Mr. Newton: In putting forward this proposal in relation to vaccine damage payments under the 1979 Act, the Government are not seeking to pre-empt anything in the future. Equally, I am not seeking to prejudge anything in the future or to suggest that the Government have taken decisions beyond the decision to raise the vaccine damage payment from £10,000 to £20,000 in relation to claims made on or after 18 June 1985.
      The hon. Member for Derby, South questioned me about the cost. It is modest. We estimate that the extra cost in a full year will be £120,000, so that in terms of the great sweep of the Department of Health and Social Security budget it is a small sum. Nevertheless, it will be of considerable significance to those families who are helped.
      Question put and agreed to. [Special Entry.]

    Clause 28

      EXTENT
      Lords amendment: No. 6, in page 26, line 37, leave out
      "extends to Northern Ireland only."
      and insert—
      ", this section, and sections 29 and 30 below extend to Northern Ireland."
      Mr. Newton: I beg to move, That this House doth agree with the Lords in the said amendment.
      Clause 28 provides for the extent to which the Bill applies to England and Wales, Scotland and Northern Ireland. This technical amendment provides that clause 28, and clauses 29 and 30, extend to Northern Ireland, as we are, naturally, anxious that those in Northern Ireland, as well as those in the rest of the United Kingdom, should have the benefits of the provisions of the Bill.
      Question put and agreed to.
      Lords amendments Nos. 7 to 10 agreed to [Some with Special Entry.]

    Clause 29

      COMMENCEMENT
      Lords amendment: No. 11, in page 27, line 17, after "paragraphs" insert "22,".
      The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Ray Whitney): I beg to move, That this House doth agree with the Lords in the said amendment.
      This is a technical amendment. Clause 29, which deals with commencement, states that any provisions not specifically listed there will be brought into force by commencement order. Paragraph 22 of schedule 5 is not listed, even though it will have retrospective effect from 1 January 1985. This is obviously inconsistent, and the amendment adds this provision to the list of those that will take effect on the day the Bill is enacted.
      Question put and agreed to.

    Schedule 1

      TRANSFER AND REVALUATION
      Lords amendment: No. 12, in page 31, leave out lines 32 to 35 and insert—
      "52C.—(1) The taking out or the transfer of the benefit of a policy of insurance or a number of such policies, or the entry into or the transfer of the benefit of an annuity contract or a number of such contracts, if it takes place after the commencement of this section. only discharges trustees or managers of an occupational pension scheme from their liability, or any part of their liability."
      Mr. Whitney: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: It will be convenient for the House to consider at the same time the following Lords amendments:
      No. 13, in page 31, line 40, at beginning insert -for or".
      No. 14, in page 31, line 40, leave out from "person" to end of line 43 and insert
      "in a case where and to the extent that subsection (2) below has effect."
      No. 15, in page 31, line 44, at end insert
      "at the time an earner's pensionable service terminates or at any later time"
      No. 16, in page 31, line 49, after "provided" insert
      "for or in respect of him"
      No. 17, in page 32, line 1, leave out
      ", after an earner's pensionable service terminates"
      No. 18, in page 32, line 4, leave out "(a),"
      No. 19, in page 32, line 8, at end insert—
      "(2A) Where before the commencement of this section—

      (a) an earner's pensionable service terminated; and

      (b) at the time his pensionable service terminated or at a later time the whole or any part—

      (i) of the requisite benefits; or

      (ii) of the short service benefit or of any alternative to short service benefit,

      provided for or in respect of him by an occupational pension scheme was appropriately secured,
      the trustees or managers of the scheme shall be deemed to have been discharged from their liability, so far as what they were liable to provide was so secured, at the time when it was first so secured."
      No. 20, in page 32, line 15, leave out from beginning to "authorised" in line 16 and insert—
      "(a) the insurance company with which it is, or was. taken out or entered into is, or was, at the relevant time."
      No. 21, in page 32, line 18, after "1982" insert
      "or any similar previous enactment"
      No. 22, in page 32, leave out lines 20 to 31.
      No. 23, in page 32, line 33, leave out "prescribed conditions" and insert
      "conditions which satisfy such requirements as may be prescribed".
      No. 24, in page 32, line 36, leave out "prescribed conditions" and insert
      "conditions which satisfy such requirements as may be prescribed".
      No. 25, in page 32, line 36, at end insert—
      "and
      (e) it satisfies such other requirements as may be prescribed."
      No. 26, in page 32, leave out lines 39 to 41.
      No. 27, in page 33, line 8, at end insert—
      "(4A) In subsection (3)(a) above, "the relevant time" means the time when the policy of insurance was taken out or the annuity contract was entered into or, as the case may be, when the benefit of the policy or contract was transferred."
      No. 28, in page 33, line 44, leave out from "where" to end of line 45 and insert
      "section 52C(2A) above has effect."
      No. 29, in page 33, line 47, at beginning insert—
      "section 52C(2A) above does not have effect and".
      No. 30, in page 33, line 48, leave out "(a)" and insert "(b)".
      Mr. Whitney: Our consultations with experts in the pensions world have persuaded us that there are deficiencies in the provisions in new sections 52C and 52D which the Bill adds to the Social Security Pensions Act 1975. I must admit that these provisions have given us considerable trouble, and I record our gratitude for the help and advice that we have been given by the pensions experts.
      The amendments clarify the position—a position which we had always intended to achieve in this part of the Bill—relating to the extent to which trustees can discharge their liability when the benefit rights of early leavers are secured by an insurance policy.
      We are dealing with a number of amendments and I am conscious of the fact that this is not the first time that it has been necessary for us to amend these provisions. However, we are dealing with a complicated area of law, even by the demanding standards of occupational pensions legislation. The changes reflect our wish to get the new provisions right and our willingness to listen to the experts to enable us to do that. Should hon. Members require me to do so, I shall spell out the detailed points of the amendments.
      Question put and agreed to.
      Lords amendments Nos. 13 to 30 agreed to.
      Lords amendment: No. 31, in page 35, line 31, leave out "and".
      Mr. Whitney: I beg to move, That this House doth agree with the Lords in the said amendment.
      This is a minor drafting amendment, but it seems worth getting paragraph 2(2) right while schedule 1 is being amended. The removal of the word "and" is a drafting point.
      Question put and agreed to.
      Lords amendment: No. 32, in page 37, line 8, leave out "his widow" and insert
      "to any other person in respect of him"
      Mr. Whitney: I beg to move, That this House doth agree with the Lords in the said amendment.
      This is a technical amendment which will put right a defect in the revaluation requirements for flat-rate benefits. The requirements apply, for other benefits, to all dependants' benefits provided by the scheme, but flat-rate benefits cover only widows benefits. This is an error which the amendment corrects.
      Question put and agreed to.
      Lords amendment: No. 33, in page 37, line 20, leave out
      "payments made from time to time"
      and insert
      "a payment or payments made"
      Mr. Whitney: I beg to move, That this House doth agree with the Lords in the said amendment.
      752
      This is another technical amendment. The definition of a money purchase benefit is defective because it does not cover the situation where the benefit results from a single contribution or payment. This amendment will remedy the defect.
      Question put and agreed to.
      Lords amendment: No. 34, in page 39, line 35, after "to" insert "or in respect of
      Mr. Whitney: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: It will be convenient for the House to consider at the same time Lords amendment No. 35, in page 39, line 37, after "to" insert "or in respect of"
      Mr. Whitney: It has been suggested that it is not entirely clear whether accrued rights include all benefits for or in respect of the member. These amendments make it clear that they do.
      Question put and agreed to.
      Lords amendment No. 35 agreed to.
      Lords amendment: No. 36, in page 40, line 46, leave out "or friendly societies" and insert
      "such as are mentioned in section 52C(3)(a) above"
      Mr. Whitney: I beg to move, That this House doth agree with the Lords in the said amendment.
      This is another technical amendment. When someone uses a transfer value to buy an annuity, the annuity will have to satisfy prescribed conditions. It was always our intention that these conditions should include restrictions on with whom the policy or contract can be taken out. It was also our intention that the prescribed conditions should not conflict with new section 52C, which deals with discharging liability on buy-out. We now have doubts whether the power in paragraph 13(2)(b) is sufficient to enable us to do this. We have therefore concluded that it would be best to put this provision on all fours with new section 52C.
      Question put and agreed to.

    Schedule 5

      MINOR AND CONSEQUENTAL AMENDMENTS
      Lords amendment: No. 37, in page 68, line 15, at end insert—
      "32A. The words "under section 38 of this Act" shall be omitted from subsection (5)5b) of section 59 of that Act (increase of official pensions)."
      Mr. Whitney: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this it will be convenient to take Lords amendment No. 39, in schedule 6, page 69, line 38, column 3, at end insert—
      "In section 59(5)(b), the words "under section 38 of this Act."
      Mr. Whitney: The amendments are technical and put right an oversight in the Health and Social Security Act 1984.
      Question put and agreed to.
      Lords amendments Nos. 38 to 40 agreed to.

  Interception of Communications Bill
  Lords amendments considered.
  Interception of Communications Bill
    Clause 1

      PROHIBITION ON INTERCEPTION
      Lords amendment: No. 1, in page 1, line 5, at beginning insert
      "Subject to the following provisions of this section,"
      5 pm
      The Minister of State, Home Office, (Mr. David Waddington): I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take the following Lords amendments: No. 2, in page 1, line 7, leave out from "offence" to end of line 15 and insert "and"
      No. 3 in page 1, line 20, at end insert—
      "(2) A person shall not be guilty of an offence under this section if—

      (a) the communication is intercepted in obedience to a warrant issued by the Secretary of State under section 2 below; or

      (b) that person has reasonable grounds for believing that the person to whom, or the person by whom, the communication is sent has consented to the interception.

      (2A) A person shall not be guilty of an offence under this section if—

      (a) the communication is intercepted for purposes connected with the provision of postal or public telecommunication services or with the enforcement of any enactment relating to the use of those services; or

      (b) the communication is being transmitted by wireless telegraphy and is intercepted, with the authority of the Secretary of State, for purposes connected with the issue of licences under the Wireless Telegraphy Act 1949 or the prevention or detection of interference with wireless telegraphy."

      No. 15, in clause 10, page 9, line 23, at end insert—
      " "wireless telegraphy" has the same meaning as in the Wireless Telegraphy Act 1949;"
      Mr. Waddington: The amendments implement an undertaking that I gave in Committee to narrow the exception to the new offence which dealt with giving consent to an interception. The amendments make a drafting change to the exception for interception for purposes connected with the provision of postal or telecommunications services. We are making it clear that the exception covers Post Office powers to open letters believed to contain inflammable material or to monitor obscene telephone calls, which is an offence under the Telecommunications Act.
      Finally, the amendents incorporate a further but limited exception for those acting under Wireless Telegraphy Act powers who monitor radio transmissions for purposes connected with the issuing of licences or for the protection or prevention of radio interference. Certain forms of telecommunications on the public system are nowadays conveyed by radio for part of their journey. In certain circumstances, those acting to prevent interference might have to monitor across a band that is used by such a system and this exception is introduced against that possibility.
      I hope that I shall be excused for mentioning one other matter and setting the scene for our consideration of the eight groups of amendments that we shall be discussing. This group of amendments, and Lords amendment No. 5, fulfil undertakings. The others respond to submissions
      754
      made in another place, which in some instances followed on from what was said in this place a few months ago. In the course of the earlier proceedings in this place the Government demonstrated their readiness to meet submissions made to them by making a number of significant changes. The nature of the amendments now before us is further evidence of the Government's willingness throughout to accept constructive suggestions from whichever side of the House they have come and to deal with these important issues in the non-partisan spirit which I am sure the House would wish.
      Mr. John Golding: I speak for the union which sponsors me, the Union of Communication Workers (Engineering Group). There is still some disappointment that unofficial telephone tapping has not been tackled further. All the amendments made in another place have improved what we consider to be a fundamentally unsatisfactory position. I welcome the slightly greater protection that will be given to employees by Lords amendment No. 3 in subsection (2A)(a). It widens the definition to cover
      "the enforcement of any enactment relating to the use of"
      public telecommunication services.
      We shall have to consider the operation of this measure extremely carefully. It will be important for the Government to give thorough consideration to the detailed working of the measure within a few months, or perhaps within a year, to ensure that it is operating satisfactorily and fairly.
      Question put and agreed to.
      Lords amendments Nos. 2 and 3 agreed to.

    Clause 2

      WARRANTS FOR INTERCEPTION
      Lords amendment: No. 4, in page 2, line 23, at end insert—
      "(2A) The matters to be taken into account in considering whether a warrant is necessary as mentioned in subsection (2) above shall include whether the information which it is considered necessary to acquire could reasonably be acquired by other means."
      Mr. Waddington: I beg to move, That this House doth agree with the Lords in the said amendment.
      The amendment clarifies "necessary" in clause 2, obliging the Secretary of State, as he always does in practice, to consider whether the information in question
      "could reasonably be acquired by other means."
      Thus the Bill expressly mentions one of the main elements of the existing non-statutory procedures set out in the White Paper in a way which I hope will commend itself to the House. The change places beyond any doubt that there must be a consideration of alternatives and that it is one of the factors which the tribunal will consider in reviewing the Secretary of State's decisions. By qualifying "necessary", the amendment applies also to the Secretary of State's power to renew warrants and his duty to cancel them.
      Mr. Clive Soley: The Minister moved towards us at a number of stages in the Bill's passage through this House. It is sad that he did not so move at an earlier stage on this issue. The argument was advanced clearly by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) on Second Reading.
      In Committee, the. Opposition moved amendments which were supported by some Conservative Members.

      755
      The hon. Member for Grantham (Mr. Hogg), for example, supported the Opposition in a Division that we forced in an effort to get an amendment made to the Bill. If we had been successful, their Lordships in another place would have been saved some trouble.
      I am rather puzzled why the amendment has taken the form in which it appears before us. The 1980 White Paper stated:
      "normal methods of investigation must have been tried and failed, or must, from the nature of things, be unlikely to succeed if tried."
      Their Lordships have included a rather weaker test. The test is that
      "The matters to be taken into account … could reasonably be acquired by other means."
      That is a looser test than that which appeared in the White Paper. On balance, we would have preferred the White Paper's wording. However, that is a minor matter. The inclusion of the amendment strengthens the Bill and for that reason we welcome it.
      Mr. Douglas Hogg: I echo the remarks of the Opposition spokesman, the hon. Member for Hammersmith (Mr. Soley). The acceptance of the amendment will improve the Bill. I am grateful to my hon. and learned Friend the Minister of State for notifying the Government's acceptance. I am much in favour of defining the circumstances in which a warrant can be issued and defining them as exactly as possible in the circumstances. The amendment is a step in the right direction. I hope that my hon. and learned Friend will forgive me when I say that it is a small step and that I wish he had gone further.
      Mr. Waddington: I take on board the remarks of the hon. Member for Hammersmith (Mr. Soley) and of my hon. Friend the Member for Grantham (Mr. Hogg). White Paper language is seldom suitable for direct incorporation into statute. For example, that criterion rests on "normal" methods having failed, but normality does not have a sufficiently precise meaning to serve here at the heart of the statutory definition of the Secretary of State's powers. The alternative test of impracticability, which was proposed in an amendment which was tabled in another place, does not allow the Secretary of State to take proper account of the need for speed or the adverse consequences of the discovery of alternatives. I believe that the formulation before us follows existing practices and gives proper effect to the approach set out in the White Paper. I am grateful to the hon. Member for Hammersmith and my hon. Friend the Member for Grantham for their comments, but even by their lights the amendment offers an improvement.
      Question put and agreed to.

    Clause 4

      ISSUE AND DURATION OF WARRANTS
      Lords amendment: No. 5, in page 4, line 6, leave out from "period—to end of line 13 and insert—
      "

      (a) in relation to a warrant which has not been renewed, means—

      (i) if the warrant was issued under subsection (1)(a) above, the period of two months beginning with the day on which it was issued; and

      756

      (ii) if the warrant was issued under subsection (1)(b) above, the period ending with the second working day following that day:

      (b) in relation to a warrant which was last renewed within the period mentioned in paragraph la(ii) above, means the period of two months beginning with the day on which it was so renewed; and

      (c) in relation to a warrant which was last renewed at any other time, means—

      (i) if the instrument by which it was so renewed is endorsed with a statement that the renewal is considered necessary as mentioned in section 2(2)(a) or (c) above, the period of six months beginning with the day on which it was so renewed: and

      (ii) if that instrument is not so endorsed, the period of one month beginning with that day."

      Mr. Waddington: I beg to move, That this House doth agree with the Lords in the said amendment.
      The amendment fulfils an undertaking that was given in Committee that the Government would incorporate in an appropriate way in the Bill the arrangements for the duration of warrants as set out in paragraph 11 of the White Paper. The amendment secures the same practical effect as those arrangements. The original undertakings met with the support of hon. Members on both sides of the Committee. I hope that its implementation in this way will be found equally acceptable.
      Mr. Gerald Kaufman: I asked for this amendment on Second Reading and requested it from the Home Secretary in the discussions that I had with him. The Home Secretary was good enough to tell me that he would meet that request. The amendment fulfils that undertaking and I thank the Government for making an important improvement in the Bill.
      Mr. Waddington: I thank the right hon. Gentleman for being helpful. He suggested this amendment at an earlier stage. It concerned another of those cases where one could not incorporate in the Bill the precise wording of the White Paper, but we knew what we wanted to attain and we have attained it.
      Question put and agreed to.

    Clause 6

      SAFEGUARDS
      Lords amendment: No. 6, in page 5, line 5, leave out "subsection (2)" and insert "subsections (2) and (3)"
      Mr. Waddington: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this, it will be convenient to take Lords amendment No. 7, in page 5, line 17, at end insert "and"
      No. 8, in page 5, leave out lines 19 to 21.
      No. 9, in page 5, line 23, at end insert
      "(3) The requirements of this subsection are satisfied in relation to any intercepted material if each copy made of any of that material is destroyed as soon as its retention is no longer necessary as mentioned in section 2(2) above."
      Mr. Waddington: These amendments incorporate in the clause 6 safeguards an express reference to the destruction of material the retention of which is no longer necessary. They fulfil an undertaking given following discussions in the other place of an amendment identical to the one moved by the hon. Member for Caithness and Sutherland (Mr. Maclennan) in Committee on 2 April. The change makes explicit the requirement that material must

      757
      be destroyed as soon as it no longer meets the purposes for which warrants can be issued, and it can be welcomed by both sides of the House.
      Mr. Kaufman: The amendment is welcome, but where are alliance Members? We hear a great deal about the concern of the Liberal and SDP Members for civil liberties, but not one of those hon. Members is present in the Chamber for this extremely important debate. They have a great deal to say outside the Chamber about their claims to work hard here, but when we are debating matters of fundamental importance to civil liberties, heaven alone knows where they are. It is important to have that on record.
      Mr. Golding: There is a trip to Windsor races this evening.
      Mr. Kaufman: If alliance Members are on that trip, they are doing something more constructive than they are normally doing. Nevertheless, it is offensive to the House that, when a Minister says that he is adding something to a Bill in response to a point made by the hon. Member for Caithness and Sutherland (Mr. Maclennan), neither the hon. Gentleman nor any of his colleagues is here.
      Question put and agreed to.
      Lords amendments Nos. 7 to 9 agreed to.

    Clause 7

      THE TRIBUNAL
      Lords amendment: No. 10, in page 5, line 40, after "applicable" insert "by a court"
      Mr. Waddington: I beg to move, That this House doth agree with the Lords in the said amendment.
      This amendment complements the reference to judical review added to the Bill in Committee on 2 April, which was accepted on both sides of the House as placing beyond any doubt that it was the task of the tribunal to consider whether the Secretary of State's decision was proper. This further change meets concern expressed in the other place about whether the principles of judical review were sufficiently clear and states expressly that they are the principles that would he applied by the court. Therefore, the amendment does not change the substance of the clause or alter the effect that, in the Government's view, was secured by the earlier change. Hon. Members may see this amendment as a clarification, and in that sense I invite them to agree to it.
      Question put and agreed to.

    Clause 9

      EXCLUSION OF EVIDENCE
      Lords amendment: No. 11, in page 8, line 16, after "apply" insert
      "—
      (a)"
      Mr. Waddington: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this, it will be convenient to take Lords amendment No. 12, in page 8, line 18, at end insert
      "or
      (b) where the evidence is adduced or the question in cross-examination is asked for the purpose of establishing the
      758
      fairness or unfairness of a dismissal on grounds of an offence under section 1 above or of conduct from which such an offence might be inferred:
      and paragraph (a) of that subsection does not apply where a person has been convicted of the offence under that section."
      Mr. Waddington: These amendments meet a point originally identified by my hon. Friend the Member for Grantham (Mr. Hogg) in Committee. He pointed out that if the Post Office or a public telecommunications operator were challenged in an industrial tribunal with dismissing an employee on grounds of conduct that amounted to improper interception, they might not be able to adduce evidence in support of their case. The same matter was pursued by an Opposition spokesman in the other place. The Government found the point persuasive, and these amendments meet it.
      Mr. Douglas Hogg: I thank my hon. and learned Friend for having responded to my point. The amendment takes account of the point that I was making, and there should be no further problems.
      Question put and agreed to.
      Lords amendment No. 12 agreed to.

    Clause 10

      INTERPRETATION
      Lords amendment: No. 13, in page 8. line 40, leave out from first "copy—to "and" in line 41 and insert
      ", in relation to intercepted material, means any of the following, whether or not in documentary form—

      (a) any copy, extract or summary of the material; and

      (b) any record of the identities of the persons to or by whom the material was sent:"

      5.15 pm
      Mr. Waddington: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this, it will be convenient to take Lords amendment No. 14, in page 9, line 7. leave out from "warrant" to end of line 9.
      Mr. Waddington: These are drafting amendments, which secure the better expression of two of the terms used in the Bill. They make no change of substance.
      Question put and agreed to.
      Lords amendments Nos. 14 and 15 agreed to.

    SCHEDULE 1
      THE TRIBUNAL
      Lords amendment: No. 16, in page 11, leave out lines 27 to 37 and insert—
      THE TRIBUNAL

        Procedure of Tribunal
        3. The functions of the Tribunal in relation to any application made to them shall be capable of being carried out, in any place in the United Kingdom, by any two or more members of the Tribunal designated for the purpose by their President; and different members of the Tribunal may carry out functions in relation to different applications at the same time."
        Mr. Waddington: I beg to move, That this House doth agree with the Lords in the said amendment.
        This amendment fulfils an undertaking given in Committee in the other place to introduce a quorum for the tribunal. It means that no decisions may be taken in the name of the tribunal by fewer than two of its members. It has been necessary to recast paragraph 3 of schedule 1, but

        759
        the other adjustments are essentially consequential and do not affect its substance. In particular, the president of the tribunal will, as in the original version, remain responsible for determining how business will be conducted, and so for deciding how many members in addition to the minimum two should be concerned with any particular matter.
        Question put and agreed to.

  Sporting Events (Control of Alcohol Etc.) Bill
  Lords amendments considered.
  Sporting Events (Control of Alcohol Etc.) Bill
    Clause 1

      OFFENCES IN CONNECTION WITH ALCOHOL ON COACHES AND TRAINS
      Lords amendment: No. 1, in page 2, line 3, leave out from "offence" to end of line 7 and insert—
      "

      (a) if the vehicle is a public service vehicle and he is the operator of the vehicle or the servant or agent of the operator, or

      (b) if the vehicle is a hired vehicle and he is the person to whom it is hired or the servant or agent of that person".

      5.17 pm
      The Minister of State, Home Office (Mr. Giles Shaw): I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): With this, it will be convenient to take Lords amendment No. 2, in page 2, line 14, leave out
      "in relation to such a vehicle"
      No. 3, in page 2, line 16, leave out from "1981" to end of line 18.
      Mr. Shaw: These amendments relate to the liability of operators and hirers of vehicles to which clause 1 applies and their servants or agents, who knowingly cause or permit the carriage of alcohol. As presently drafted, the clause catches the operator and the hirer and the servant or agent of either whether the vehicle in question is a public service vehicle or a train. During earlier proceedings on the Bill, hon. Members, particularly the hon. Member for Glasgow, Garscadden (Mr. Dewar), expressed concern that in England and Wales the position of British Rail and its employees would be different from that in Scotland. In England and Wales they would be liable; in Scotland they would not. The Government agree that the position should be the same so far as possible on both sides of the border, and that is the purpose of these amendments.
      The net effect of the amendments is that for public service vehicles—coaches and so on—the hirer and the operator and the servant or agent of either are all caught whereas for trains only the hirer and his servant or agent are caught. So British Rail and its drivers, guards and ticket collectors are not liable.
      Question put and agreed to.
      Lords amendments Nos. 2 and 3 agreed to.

    Clause 2

      OFFENCES IN CONNECTION WITH ALCHOHOL, CONTAINERS ETC, AT SPORTS GROUNDS
      Lords amendment: No. 4, in page 2, line 19, leave out "a controlled container" and insert
      "an article to which this section applies"
      Mr. Giles Shaw: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker: With this, it will be convenient to take Lords amendment No. 5, in page 2, line 33, leave out subsection (3) and insert—

      761
      "(3) This section applies to any article capable of causing injury to a person struck by it, being—

      (a) a bottle, can or other portable container (including such an article when crushed or broken) which—

      (i) is for holding any drink, and

      (ii) is of a kind which, when empty, is normally discarded or returned to, or left to be recovered by, the supplier, or

      (b) part of an article falling within paragraph (a) above; but does not apply to anything that is for holding any medicinal product (within the meaning of the Medicines Act 1968)."

      Mr. Shaw: These amendments relate to the types of container which people will be prohibited from taking into football grounds and from possessing in any area of the ground which has a direct view of the pitch. In Committee, a number of hon. Members thought that our definition was too wide. Particular concern was expressed because articles such as thermos flasks and scent bottles would be prohibited. By these amendments, we have sought to narrow the definition so that only those containers which are most likely to be used as missiles are prohibited.
      As compared with clause 2(3) the amendments limit in two respects the containers caught. First, only containers for drink would be caught. Clause 2(3) catches containers of liquid. The effect of this is to free such items as scent bottles and deodorant aerosols. Secondly the amendments would catch only containers which are normally discarded when empty, or returned to the supplier. This would decriminalise—if that is the word—such items as thermos flasks and babies' bottles. We are catching cans and most bottles, and glasses of the type normally provided in pubs and bars. These are the containers most commonly misused. I hope the House will welcome the restrictions embodied, and the revisions made, in these amendments.
      Mr. A. J. Beith: I welcome the attention the Lords gave this matter. It may seem trivial but it is important to many people who enjoy attending various types of sports fixture. My noble Friend Lord Harris did excellent work on the Bill and described the problem of the small boy with a soft drink at a cricket match. Small boys have attended cricket matches and had bottles of squash for many years and I hope that they will long be able to do so. The Minister said that we are considering people carrying a drink container at a football match, but we are not. The amendment is about people carrying drink containers at any type of sporting fixture that Ministers might decide to include in the scope of the Bill. I appreciate the care that the Lords gave this matter precisely because the Bill goes so wide.
      It has been suggested that the other place should not have given the Bill such detailed consideration, but that the consequences of the parties in this House ensuring that the Bill had a smooth passage ought to have been that the Lords gave it no attention or only minimal attention. I refute that view and the suggestion, which appeared in some of the public prints, that my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) and my hon. and learned Friend the Member for Montgomery (Mr. Carlile), by having a valuable meeting with the Home Secretary, committed themselves to every jot and detail of a Bill that had not then been printed.
      One of the features that bears on the amendment, but which was not in the Bill as it was then described, is the ease with which the Bill can be extended to any other sport. It could cover sports that take place during much longer periods of time than football matches, such as
      762
      whole day race meetings, athletics meetings and cricket matches. Moreover, the Bill could apply to sports that are generally attended by whole families, such as speedway.
      Only a motion under the negative procedure is required to extend to any other sport the provisions concerning containers. Under that procedure, there is no guarantee that an hon. Member or substantial group of hon. Members can secure votes, or even a debate, on the matter. There is usually not too much difficulty securing a debate in Committee on a prayer, but such debate does not give rise to a vote on the Floor of the House. It is therefore open to a Minister to extend the Bill to any other sport by a procedure which offers no guarantee of a vote. I and my right hon. and hon. Friends remain worried that the Bill is couched in such wide terms as to open up such a possibility.
      The way of life of people who attend longer lasting sporting events could be affected, and there are problems concerning sponsorship of sports grounds by companies involved with alcoholic or non-alcoholic drinks. It would be helpful if the Minister could affirm that the only problem of which the Government are aware concerns football. The ease with which the Minister spoke of the Bill applying only to football enables us to read the minds of Ministers, but the wide powers involved have understandably given rise to anxieties in sports such as cricket, racing, speedway and rugby league, where there are no crowd control problems and nobody throws drink bottles about. The normal peaceful watching of sport should be allowed to continue without interruption or the threat of it.
      Mr. Douglas Hogg: Like the hon. Member for Berwick-upon-Tweed (Mr. Beith), I am glad that the Government have decided that the amendment can be accepted. When we last discussed the matter, I expressed considerable anxiety on several scores. The first was that the Bill would be extended to a variety of sports such as cricket. I tabled an amendment which suggested that the Bill should be extended only by affirmative resolutioh. It received the support of the Liberal party—it is perhaps the first time that I have ever had its support—but, unfortunately, it was not selected.
      I also expressed doubt about the desirability of prohibiting such a wide range of containers, which would have included thermos and hip flasks, as they might also be prohibited at cricket matches. I welcome the amendment. It reduces the scope of activity which is rendered criminal, and I favour that. I still regret that the Bill is couched in such wide terms, but the Government's acceptance of the amendment is welcome and I congratulate my hon. Friend on having done so.
      Mr. Giles Shaw: With the leave of the House, may I say that my right hon. Friend has no intention at present of designating grounds or sporting events other than those which are associated with association football and which have been so described. However, as the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, there could be an occasion when action might have to be taken fairly speedily should there be a further outbreak of the type of crowd violence that has given rise to the Bill.
      Question put and agreed to.
      Lords amendment No. 5 agreed to.

    Clause 3

      LICENSING HOURS WITHIN SPORTS GROUNDS. I964 C. 26
      Lords amendment: No. 6, in page 4, line 36, leave out
      "in contravention of conditions or restrictions imposed by or"
      and insert
      "at any time that is excluded from the permitted hours by virtue of this section or in contravention of conditions imposed".
      Mr. Giles Shaw: I beg to move, That this House doth agree with the Lords in the said amendment.
      This is a highly technical drafting amendment.
      Question put and agreed to.

    Clause 4
      SUPPLEMENTARY PROVISIONS ABOUT ORDERS UNDER

        SECTION 3
        Lords amendment: No. 7, in page 5, line 16, leave out "or removal".
        Mr. Shaw: I beg to move, That this House doth agree with the Lords in the said amendment.
        This is a minor drafting amendment. The effect of removal of a justices' licence to different premises is that the premises to which the licence originally related cease to be licensed premises. The words "or removal" thus add nothing to the final words of the subsection.
        Question put and agreed to.
        Lords amendment: No. 8, in page 5, line 17, leave out
        "or the grant of a protection order in respect of the premises".
        Mr. Giles Shaw: I beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy Speaker: With this it will be convenient to consider Lords amendment No. 9, in page 5, line 22, leave out subsection (4) and insert—
        "(4) Where an order under that section is in force in respect of any premises and application is made not less than twenty-eight days before the order is due to expire for renewal of the order or for a further order in respect of the premises, the first-mentioned order shall not cease to have effect by virtue of subsection (1)(b) above until the application is disposed of by the magistrates' court."
        Mr. Shaw: Both of these amendments are designed to protect football clubs which undergo a change of licensee. As the Bill is drafted, such a change could in certain circumstances terminate the exemption order with no possibility of a new order for at least 28 days. That would mean that no alcohol could be sold at the premises during that period. We see no justification for penalising a club under those circumstances, which are probably outside its control. The amendments permit the current exemption order to continue in force until the courts have dealt with a fresh application for a new order by the new licensee, provided that the application is made in good time before the expiry of the current order. The amendments are somewhat technical, but I hope that the House will agree to accept them.
        Mr. Tom Pendry: I understand that the amendment originated with a firm of Liverpool solicitors which managed to see the Bill and comment on it in time for its suggestions to be included. That is a victory for people who will be closely affected by the Bill. The Bill was rushed. Not many of us were able to see such comments in time for them to be debated, and it took the other place to rectify that shortcoming. It is
        764
        therefore right that the other place had longer than us to discuss the Bill. The Bill is bad in many respects and I hope that the promised monitoring exercise is effective.
        Mr. Shaw: I accept that, through the co-operation of the official Opposition and the other parties, the Bill was granted rapid progress. However, I think that the hon. Gentleman will agree that the circumstances in which the legislation was brought before the House are, I hope, exceptional, in both their character and importance.
        The hon. Gentleman referred to monitoring. The assurance given by my noble Friend Lord Glenarthur in the upper House is clear. It is our intention to review the position during the season in relation to the legislation on public order that will be brought before the House in due course. My noble Friend gave the assurance that the long title of that Bill would allow, if it were necessary, and if my right hon. and learned Friend the Home Secretary deemed it right, for amendments to be brought forward. I am sure that the hon. Gentleman will recognise that further amendment would have to be looked at carefully in relation to the state of the game at the time.
        5.30 pm
        Mr. Gerald Kaufman: As we are coming to the end of the not exactly protracted proceedings on the Bill, and as the Act will be in operation at the beginning of the football season in fewer than four weeks from now, may I ask the Minister whether the Government have any plans to keep the House informed of the progress of the monitoring exercise, so that we may share in the information that the Government will be gaining on the use of the Act? For example, it would be interesting if the House could be informed periodically of the number of exemption orders being granted. There may be no reason why we cannot be given a list of the clubs that have been granted those orders. It would also be interesting and useful, if we have to reconsider these matters in future more permanent legislation, for the police, the football authorities and others to give us some idea, first of the success of the Act in dealing with the serious problem that every one of us in the House wants to be dealt with, and secondly of the financial effect on the clubs because, inevitably, that has given rise to a great deal of concern. It would be useful if, over the next season, we could be kept informed of how things were going on that front, too.
        Mr. Shaw: I fully understand why it would be useful to keep the House informed. I am sure that that will be done through the questioning procedure.
        The consequences on the football clubs were the crucial factor giving rise to the concern expressed about the exemption procedure, particularly for sponsored boxes. I understand that it is the intention of the football league itself to keep my right hon. and learned Friend the Home Secretary advised on how it views the position. Its information could form the basis of any evidence that is put before us. However, the right hon. Gentleman is right. We have agreed to review the matter as the season progresses.
        The right hon. Gentleman said that there might be a review of the legislation to put it on a more permanent footing. I remind him that it is primary legislation, which is therefore already on a permanent footing.
        Mr. Kaufman: Of course, we have the questioning procedure, but we do not always know when information

        765
        is available to the Government. It would be useful if the Government, of their own accord, could make information available to the House from time to time. It may well be that the Minister is unaware of the device of the planted question. I should like to remind him of it. It is something to which he might have recourse to keep the House informed.
        Mr. Shaw: Of course, as I am so close to the Floor, I rarely stoop so low, but I understand that there is such a device. I shall bear in mind what the right hon. Gentleman has said.
        Question put and agreed to.
        Lords amendment No. 9 agreed to.

      Clause 10

        AMENDMENT OF CRIMINAL JUSTICE (SCOTLAND) ACT I980
        Lords amendment: No. 10, in page 8, leave out lines 10 to 12 and insert—
        "(a) in section 68(1), after paragraph (b) there shall be inserted
        "(c) a sporting event, or a class of sporting event, taking place outside Great Britain:";"
        Mr. Shaw: I beg to move, That this House doth agree with the Lords in the said amendment.
        The amendment corrects a drafting defect in relation to the Scottish legislation—the Criminal Justice (Scotland) Act 1980. As presently drafted, it gives the impression that the Secretary' of State would designate grounds outside Great Britain, whereas all that is required is that events, or classes of event, should be designated. The amendment now makes that clear.
        Mr. Beith: It is ironic that the last Lords amendment that we should consider brings us back to the basis on which the Bill was introduced—an event that took place outside Great Britain at a sportsground that is incapable of being designated, even under the amendment. Useful though the provisions will be in controlling alcohol in football grounds. I believe that they leave unanswered many of the problems of football hooliganism, including some of those that may have contributed to the original cause of the Bill. Those problems will require the continued attention of Ministers.
        Mr. Shaw: I remind the hon. Gentleman that it was not purely the event that occurred in Brussels that gave rise to the legislation, although it was the last straw. I am sure that he recognises that the problem of violence in football grounds has been steadily getting worse in recent years, culminating in major events during the last season here in the United Kingdom.
        Question put and agreed to.

    Bankruptcy (Scotland) Bill [Lords]
    As amended (in the Standing Committee), considered.
    Bankruptcy (Scotland) Bill [Lords]
      New Clause 2

        MEANING OF 'ASSOCIATE'
        —(1) Subject to subsection (7) below, for the purposes of this Act any question whether a person is an associate of another person shall be determined in accordance with the following provisions of this section (any reference, whether in those provisions or in regulations under the said subsection (7). to a person being as associate of another person being taken to be a reference to their being associates of each other).
        (2) A person is an associate of an individual if that person is the individual's husband or wife. or is a relative, or the husband or wife of a relative, of the individual or of the individual's husband or wife.
        (3) A person is an associate of any person with whom he is in partnership, and of the husband or wife or a relative of any individual with whom he is in partnership; and a firm is an associate of any person who is a member of the firm.
        (4) For the purposes of this section a person is a relative of an individual if he is that individual's brother, sister, uncle, aunt, nephew, niece, lineal ancester or lineal descendant, treating

        (a) any relationship of the half blood as a relationship of the whole blood and the stepchild or adopted child of any person as his child; and

        (b) an illegitimate child as the legitimate child of his mother and reputed father, and references in this section to a husband or wife include a former husband or wife and a reputed husband or wife.

        (5) A person is an associate of any person whom he employs or by whom he is employed; and for the purposes of this subsection any director or other officer of a company shall be treated as employed by that company.
        (6) In subsection (5) above, "company" includes any body corporate (whether incorporated in Great Britain or elsewhere).
        (7) The Secretary of State may by regulations—

        (a) amend the foregoing provisions of this section so as to provide further categories of persons who, for the purposes of this Act, are to be associates of other persons; and

        (b) provide that any or all of subsections (2) and (6) above (or any subsection added by virtue of paragraph (a) above) shall cease to apply, whether in whole o: :in part, or shall apply subject to such modifications as he may specify in the regulations; and he may in the regulations make such incidental or transitional provision as he considers appropriate. '.—[The Solicitor-General for Scotland.]

        Brought up, and read the First time.
        5.35 pm
        The Solicitor-General for Scotland (Mr. Peter Fraser): I beg to move, That the clause be read a Second time.
        Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take Government amendment No. 30.
        The Solicitor-General for Scotland: The purpose of the new clause is to provide a definition in the Bill of the expression "associate", and follows from our discussions in Committee. The definition covers the principal categories relevant to personal bankruptcy of persons who are defined as being associates for the purposes of the Insolvency Bill. The definition will allow for arty necessary changes to it to be made by regulations. The amendment to clause 72 makes a consequential change in the interpretation clause.
        Mr. Bruce Millan: I welcome the new clause. In Committee I said that it was unsatisfactory that the Bill did not contain a definition of "associate" and I welcome the fact that we now have it.
        I take it that, although the wording is different, the effect of the clause is basically the same as the effect of the definition in the Insolvency Bill. Perhaps the Minister will confirm that.
        The Solicitor-Generalfor Scotland: I am happy to give that confirmation. The effect is the same. As I said, the only difference is that, should it be necessary to extend that classification, it could be done by regulation in future.
        Question put and agreed to.
        Clause read a Second time, and added to the Bill.

      New Clause 3

        POWER OF PERMANENT TRUSTEE IN RELATION TO THE DEBTOR'S FAMILY HOME
        '.—(1) Before the permanent trustee sells or disposes of any right or interest in the dobtor's family home he shall—

        (a) obtain the relevant consent; or

        (b) where he is unable to do so, obtain the authority of the court in accordance with subsection (2) below.

        (2) Where the permanent trustee requires to obtain the authority of the court in terms of subsection (1)(b) above, the court, after having regard to all the circumstances of the case, including—

        (a) the needs and financial resources of the debtor's spouse or former spouse;

        (b) the needs and financial resources of any child of the family;

        (c) the interests of the creditors;

        (d) the length of the period during which (whether before or after the relevant date) the family home was used as a residence by any of the persons referred to in paragraph (a) or (b) above; may refuse to grant the application or may postpone the granting of the application for such period (not exceeding twelve months) as it may consider reasonable in the circumstances or may grant the application subject to such conditions as it may prescribe.

        (3) Subsection (2) above shall apply—

        (a) to an action for division and sale of the debtor's family home; or

        (b) to an action for the purpose of obtaining vacant possession of the debtor's family home, brought by the permanent trustee as it applies to an application under subsection (1)(b) above and, for the purposes of this subsection, any reference in the said subsection (2) to that granting of the application shall be construed as a reference to the granting of decree in the action.

        (4) In this section—

        (a) "family home" means any property in which, at the relevant date, the debtor had (whether alone or jointly with any other person) a right or interest, being property which was occupied at that date as a residence by the debtor and his spouse or by the debtor's spouse or former spouse (in any case with or without a child of the family) or by the debtor with a child of the family;

        (b) "child of the family" includes any child or grandchild of either the debtor or his spouse or former spouse, and any person who has been brought up or accepted by either the debtor or his spouse or former spouse as if he or she were a child of the debtor, spouse or former spouse whatever the age of such a child, grandchild or person may be;

        (c) "relevant consent" means in relation to the sale or disposal of any right or interest in a family home—

        (i) in a case where the family home is occupied by the debtor's spouse or former spouse, the consent of the spouse, or, as the case may be, the former spouse, whether or not the family home is also occupied by the debtor;

        768

        (ii) where sub-paragraph (i) above does not apply, in a case where the family home is occupied by the debtor with a child of the family. the consent of the debtor; and

        (d) "relevant date" means the day immediately preceding the date of sequestration.'.—[The Solicitor-General for Scotland.]

        Brought up, and read the First time.
        The Solicitor-General for Scotland: I beg to move, That the clause be read a Second time.
        Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 23.
        The Solicitor-General for Scotland: Hon. Members will be aware that the Government have been considering, both in the context of this Bill and the Insolvency Bill. the introduction of the provision to give some protection to certain members of the debtor's family who were living in his property when it vested in the permanent trustee in his sequestration and who are therefore vulnerable under present law to being required to leave that property as soon as the permanent trustee wishes to sell it for the benefit of the creditors.
        The new clause achieves that, first, by requiring the permanent trustee to obtain the court's authorisation if he wishes to sell or dispose of the family home. For this purpose, "family home" is defined as meaning any property in which, immediately before the date of his sequestration, the debtor has a right or interest and which is used as a residence by the debtor's spouse or former spouse or by the debtor and his children. Secondly, the clause requires the court to take into account all the circumstances of each case when considering whether to give such authorisation or any action which would have the effect of requiring them to leave that home. Among the circumstances which the court is specifically required to take into account are the needs and financial resources of the spouse, former spouse or children in the family home, the interests of the creditors and the length of time—both before and after the debtor's sequestration—in which they have lived in the family home. Thirdly, the court is empowered to refuse or impose conditions upon the granting of any such authorisation or decree or to postpone the granting of such authorisation or decree for up to 12 months.
        I recognise that the provision represents a significant inroad into the rights of creditors to all the assets of the debtor, but it was clear during the Insolvency Bill's passage in another place that there was a strong feeling that some regard should be given in these circumstances to the needs of persons who are dependent upon the debtor to the extent that, as a consequence of the sequestration, they may be evicted from property in which they have lived as their family home. I believe that the provision before us represents a reasonable balance between those conflicting interests, in that it gives the court the flexibility to make an appropriate decision in every case, after weighing up the different interests. I therefore commend it to the House.
        Mr. Millan: Again I welcome the new clause, which deals with a matter which I raised in the context of another clause in Committee. A consultation document was issued for the Insolvency Bill, and now there is a similar provision in that Bill.
        The final words of the Solicitor-General for Scotland sum up the whole business. It is necessary to take account

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        of the interests of the creditors, but, equally, the bankruptcy of an individual should not impose undue hardship on his wife, or, in the case of a bankrupt woman, her husband, and the rest of the family. It is necessary to strike the right balance.
        I shall not presume to deal with the clause in detail, because we have had little time to consider the detail of it, but its approach. which balances the interests of the creditor and the family, is right, and gives the court the full power of discretion in dealing with these difficult matters. I welcome the clause, especially the approach adopted in it.
        Mr. Donald Dewar: Not for the last time, I echo the words of my right hon. Friend the Member for Glasgow, Govan (Mr. Millan). The Solicitor-General for Scotland properly said that the change was significant and that the new clause was not merely a technical amendment. If one were hostile, one would say that the provisions infringe the rights of the creditor and the powers of the permanent trustee. I think that I speak for many people—I certainly speak for Labour Members—when I say that the provision seems humane and sensible. It is absolutely right that a court should have to give permission for the sale of a home which is occupied by the debtor's spouse or the debtor and his children, and should have the power to weigh all the competing interests and to refuse an application or grant a postponement for up to 12 months to allow the family to make other arrangements for accommodation. Obviously, the matter is important, and the new clause introduces an element of flexibility which is eminently reasonable. I am grateful to the Government for introducing the new clause.
        The Solicitor-General for Scotland: I am grateful to both the right hon. Member for Glasgow, Govan (Mr. Millan) and the hon. Member for Glasgow, Garscadden (Mr. Dewar) for welcoming the new clause, and the flexibility that it introduces.
        I should have drawn their attention to a small technical point. In line 27 of the new clause, as printed, where the word "jointly" appears, there should have been substituted the words "in common". I am sure that, as a distinguished conveyancer, the hon. Member for Garscadden will understand why.
        Question put and agreed to.
        Clause read a Second time, and added to the Bill.

      New Clause 1

        COMPENSATION OF DEBTS DUE TO AND BY THE CROWN
        '(1) Where this section applies compensation shall not be available between debts due to or by the Crown under the provisions of any statute and debts due to or by the Crown in respect of contractual obligations.
        (2) This section applies

        (a) in the case of a sequestration under this Act;

        (b) in the case of a protected trust deed.'.—[Mr. Millan.]

        Brought up, and read the First time.
        Mr. Millan: I beg to move, That the clause be read a Second time.
        Although this is an excellent new clause, I am not as confident that the Government will accept it as I was about the other two clauses. It deals with compensation for debts due to and by the Crown. It is a modified version of the
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        new clause which I moved in Committee, in that it is a more modest attempt to reduce the procedure of compensation at present available to the Crown.
        Later we shall deal with the question of Government preference. In a bankruptcy, the Government have both preference on debts and the advantage that, if they owe money to the debtor's estate, they can search for another Government Department which may be owed money by the debtor and set one against the other. That applies to both statutory debts and ordinary debts arising from contractual obligations, which may be in respect of the supply of goods under an ordinary commercial contract.
        As the Government are now all pervasive—not all persuasive, because they are greatly unpersuasive—and large numbers of Government Departments are involved in all sorts of different activities, the Crown has advantages which no individual creditor can possibly have. The principle of compensation and set-off is well established in Scottish law. In the case of the Government, it is taken to extremes. The new clause would limit it to either contractual debt obligations or statutory obligations. It is a restrictive new clause.
        5.45 pm
        Apart from the equity of the matter, there are practical difficulties in settling sequestrations in certain circumstances. Those who are involved in this area of activity tell me that it is sometimes difficult to get money from a Government Department because it will spend a great deal of time making absolutely sure that it cannot avoid paying the money and that the debtor did not owe it or another Department money. As the rest of the Bill reduces Government preference, it is anachronistic to maintain the full rights of compensation and set-off of the Crown. The clause would reduce the set-off considerably. It is an excellent new clause and it will be a pity if the Government do not accept it.
        The Solicitor-General for Scotland: I am pleased that the right hon. Member for Glasgow, Govan (Mr. Millan) recognised the difficulties that would have ensued if he had sought, as he did in Committee, to prevent a set-off of debts owed to and by different Government Departments. With regard to the remainder of his new clause, my arguments in Committee remain unchanged, and unless he and and other hon. Members wish me to rehearse them, I shall not do so.
        A further factor must be considered. If a change were made in the Bill to the law relating to compensation, it would create an anomaly, not only between the English and Scottish personal bankruptcy procedures, but between the law of compensation as it relates to company insolvency in Scotland and as it would relate to personal bankruptcy in Scotland. [Interruption.] If the right hon. Member for Western Isles (Mr. Stewart) did not care for the first argument, he will see the force of the second.
        The right hon. Member for Govan said in Committee in relation to Crown preferences that the argument for a consistent approach throughout the United Kingdom was powerful. The same is true for compensation and set-off. To have one system applying to personal bankruptcies in Scotland and another to all the remaining insolvency procedures in Great Britain is a recipe for considerable confusion and dissatisfaction.
        Mr. Millan: I believe in consistency, which is why I tabled a similar new clause to the Insolvency Bill last Thursday, not with conspicuous success.
        The Solicitor-General for Scotland: I appreciate that the right hon. Gentleman is anxious to secure consistency. He may feel that he has been badly done by in the House, in that his argument has not secured the favour that he believes it deserves. Nevertheless, if the right hon. Gentleman appreciates that he cannot secure a general change, he should found on his failure and have a consistent approach here.
        For that reason, and without rehearsing the more general arguments on compensation or set-off, I ask the right hon. Gentleman to withdraw his new clause.
        Mr. Dewar: My right hon. Friend the Member for Glasgow, Govan (Mr. Millan) will not have been surprised by the Minister's response. Indeed, there was a hint of his expectation in the way in which he moved the new clause. It is unfortunate that the Government are not prepared to consider the arguments more sympathetically. I did not have the advantage—I use the word a little timidly—of serving on the Committee or of being involved at any stage in the Insolvency Bill, which overshadowed and prejudged many of the decisions made in connection with this Bill. However, I am not greatly impressed by the Minister's arguments on this occasion, although I did not have the advantage of hearing him at length in Committee.
        The fact that there would be a gap between insolvency law for companies and personal bankruptcies might lead to some difficulty, but, as my right hon. Friend said, if the new clause were valid, it would be logical to import a similar approach into the other Bill and not merely to trump the argument by saying that we had made a mistake in the first place. The merits of the matter should rule. In any event, company law has always been on a United Kingdom basis, whereas, almost from the first decade of this century, bankruptcy law has been considered on the different Scottish legal basis.
        I agree with my right hon. Friend that there is a problem with the unbridled right to compensation which the Crown has, and the new clause is clearly an attempt to find a reasonable limitation by stipulating that the right to set-off should be limited, as described, to sums owed and sums payable under statute, or to the set-off between sums that arise from contractual obligations. That is a reasonable proposition, but the Minister has clearly set his face against it.
        The Solicitor-General for Scotland: Although the hon. Gentleman is not persuaded by the Government's approach to the matter—I appreciate that he was not a member of the Committee, so he may have missed the arguments—the Scottish Law Commission, not surprisingly, gave some attention to it when preparing its report. It said that we might need to find a satisfactory solution to the common law on compensation as it stands now, but it did not believe it appropriate to make such a change solely in the context of bankruptcy. It suggested that any change should become part of its examination of the law of obligations in Scotland. That is the best way to approach the matter.
        Mr. Dewar: That may be so, and no doubt that is a persuasive argument for putting off anything. The trouble is that, as we know, the law of diligence has been under review for about a decade, and although the cathartic moment of production is almost upon us—I understand that from a written answer the other day—it has been a long and weary road. I am not entirely convinced by the
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        argument that we should leave this matter until the Scottish Law Commission considers the law of obligations, because its review may take a long time. My right hon. Friend was considering the specific problem of compensation and the privileges of the Crown, which are regulated to some extent by statute. If we need a change in the law now, I should have thought that it would be reasonable to try to strike the right balance.
        I should outlive my welcome if I tried to rehearse the arguments that I did not hear in Committee. Therefore, I merely record my regret that Ministers have taken—I suppose predictably—a conservative view of the matter.
        Question put and negatived.

      Clause 2

        INTERIM TRUSTEE
        The Solicitor-General for Scotland: I beg to move amendment No. 1, in page 3, line 33, leave out
        'or is not a fit and proper person to act as an interim trustee'.
        Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 2 and 31.
        The Solicitor-General for Scotland: Hon. Members who attended the Committee stage of the Bill will recall that the Government introduced several amendments to provide an interim system relating to the qualifications required for insolvency practitioners under the Bill until part I of the Insolvency Bill comes into effect and the system contained in that part can be used throughout Great Britain.
        These amendments retain that interim provision, but also provide for the time when part I of the Insolvency Bill comes into force. It was originally intended that such provisions would be inserted into this Bill by part I of the Insolvency Bill when that part became effective, but on further consideration we have decided that it is simpler and more convenient to amend now so that the Bill's provisions tell the whole story.
        Mr. Millan: This is another matter which I raised in Committee, and I am glad that the provision is being tidied up. One difficulty with the Bill is that it ran simultaneously with the Insolvency Bill and the Government seemed unable to make up their mind about many important matters in the Insolvency Bill. All the provisions relating to insolvency practitioners were rewritten during the Report stage of the Insolvency Bill last week, which produced an almost completely new part I. I am still unhappy about at least one aspect of the insolvency practitioner provision in that Bill, but it would be more appropriate to pursue that with the Department of Trade and Industry than with the Solicitor-General.
        In the meantime, I am glad that the interim arrangements have been clarified by the amendments.
        Amendment agreed to.
        Amendment made: No. 2, in page 3, line 45, at end insert—
        ';
        Provided also that, until the coming into force of section 2 of the Insolvency Act 1985 (qualifications of insolvency practitioners), paragraph (b) above shall have effect as if at the end were added the words "or is not a fit and proper person to act as an interim trustee".'.—[The Solicitor-General for Scotland.]

      Clause 7

        MEANING OF APPARENT INSOLVENCY
        Mr. Millan: I beg to move amendment No. 3, in page 8, line 13, leave out from 'due' to end of line 27.
        Mr. Deputy Speaker: With this it will be convenient to discuss Government amendments Nos. 4, 5, 6 and 7 and the following amendments: No. 8, in page 8, line 17, leave out '3' and insert '4'.
        No. 9, in page 8, line 31, leave out '(c) or (d)' and insert 'or (c)'.
        Mr. Millan: This amendment deals with a matter raised by the Scottish Consumer Council, unfortunately after the Committee stage of the Bill. The matter was not discussed in Committee, but, having considered it with Scottish Members, I believe that the Scottish Consumer Council has a valid point. It is worried about paragraph (d) of clause 7(1), and the first of my amendments would simply eliminate that paragraph. Amendment No. 8 would extend the period of notice from three to four weeks.
        If the Government do not accept that we should reconsider this entire matter, I hope that they will at least accept that we should give a debtor a longer period of notice than three weeks. One week is a modest increase. I hope that the Solicitor-General will not tell me that a clause in the Insolvency Bill—I believe that it is clause 113—provides only three weeks' notice in cases of personal bankruptcy in England and Wales. On this matter there is no virtue in consistency, and it is wrong to have only three weeks in the English Bill. The period of notice should be longer than three weeks.
        The merits of the matter rest on the procedure which allows a creditor simply to serve a notice—a demand for payment—on a debtor. If the debtor does not pay within three weeks, under the terms of the Bill, he will be treated as apparently insolvent. That brings in all the other provisions, including petitions for sequestration, provided in the Bill.
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        That is a fairly stringent provision, because in other circumstances, before one can say that a debtor is apparently insolvent, other conditions have to be fulfilled, and they are outlined in the earlier part of the clause. In many cases they involve some sort of preliminary court action, but here there need be no court action at all; simply a notice in a prescribed form by a creditor to a debtor. If, on the basis of that, the debtor does not pay, the whole process of sequestration can follow.
        I am not as worried about this situation as the Scottish Consumer Council appears to be, because in most circumstances the creditor would find the initiation of the whole procedure of sequestration an elaborate way of obtaining payment when, by taking appropriate court action, he could obtain payment of his debt in some other way. Thus the procedure would not be used frequently, certainly not by a creditor as a matter of course. Nevertheless, the Bill says that lodging a demand for payment and not being paid within three weeks is an indication of an apparent insolvency and everything else can follow from that. That worries me considerably.
        It may be that part of the answer lies in the phrase "in the prescribed form". Perhaps the Solicitor-General can let us know what will be included in the prescribed form.
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        Presumably, it will include a warning to the debtor about the dire consequences which may follow if he does not pay within three weeks. We do not know whether that is the case, because we have not seen the prescribed form and have not been given any indication of what might be in it.
        Having looked at the provision, I am not at all convinced that it is necessary to have it in the Bill as one of the indications of an apparent insolvency. No creditor will be put to any disadvantage if we simply take it out. If a creditor goes through the courts and obtains a successful decree against the debtor, and the debtor does not pay, then, as I understand the rest of this clause, that by itself is sufficient for him to be able to petition for sequestration. I do not see why the creditor should not be able to go through the court. A simple solution to the problem would be to remove the paragraph altogether.
        The second of my amendments, which would simply extend the period of notice from three to four weeks. is second best. It is not an appropriate way of amending the provision, but the very least we ought to do is to give rather more notice to the debtor. To be frank with the Solicitor-General, when I first looked at the representations of the Scottish Consumer Council I was a bit sceptical. However, having considered them more carefully, I consider that there are strong grounds for being concerned about this paragraph. As I say, I do not believe it will be used as frequently or in the sorts of circumstances about which the Scottish Consumer Council is anxious. The way to deal with those anxieties is to remove the paragraph, and that is the purpose of amendment No. 3.
        The Solicitor-General for Scotland: Clause 7(1)(d) was introduced to provide a relatively uncomplicated means of access to the sequestration process where there is no dispute that a debt equal to or exceeding the relevant amount is payable. For that reason, it also provides a straightforward method for a debtor to avoid being prejudiced by the procedure. He can achieve that by a straightforward denial that a sum of £750 or more is payable. The provision is designed to cover situations where the debtor has not acknowledged that he has ceased to pay his debts but where he is, none the less, prepared to accept, if it is put to him, that he is unable to pay that debt. In those circumstances, it may be in his best interests to have his estate sequestrated.
        The hon. Gentleman will appreciate that if the only way in which that can be done is by having the debt judicially constituted, that procedure involves additional expense. It is not a particularly large sum, but at a time when we are constantly trying to ensure that administrative costs are kept to a minimum, if the opportunity is given to the debtor in terms of a letter in a prescribed form and he does not deny the debt, it is a key-in to the sequestration procedure and obviates an unnecessary action for debt which could cost money.
        Mr. Millan: The trouble with that argument is that whatever is in the prescribed form, and whatever is in the paragraph, there will be circumstances where the debtor does not understand the full significance of what is being said to him. Ordinary people understand that if they are taken to court it is a serious matter, but unfortunately quite a number of people get letters asking them to pay bills and pay little attention to them. That applies whether or not the letters are sent by recorded delivery, for which the amendment provides. Many debtors should be paying their

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        bills and perhaps are perfectly able to pay them, but they will not realise the full significance of this simply because it does not involve court action.
        The Solicitor-General for Scotland: I understand the point made by the right hon. Gentleman, but he pre-empts the argument that he knows I am about to make. This is not just a little brown envelope coming through the door. As the right hon. Gentleman is aware, when it comes in the prescribed form it will be by recorded delivery. He is correct in that we have not yet decided what the prescribed form will be, but it is expected that the form will spell out clearly that if the debt is in any way disputed a simple denial of the debt will be sufficient to stop a sequestration procedure.
        The right hon. Gentleman and I could go on endlessly disputing whether the form could be set out in a style appropriate enough to make the point clear to every debtor who receives it. Recently we have had cause to be proud of the forms that we have set up, and the Scottish Consumer Council has complimented us in the last two years on a form which was provided.
        Mr. Millan: The Solicitor-General for Scotland is positively smiling.
        The Solicitor-General for Scotland: The hon. Gentleman says that I am positively smiling, and he is correct. Those compliments were in relation to the form prescribed for the simplified method of divorce. I recognise the anxieties of the right hon. Gentleman, but this provides a simple, cheap and desirable technique.
        The right hon. Gentleman's first amendment seeks to exclude the paragraph altogether, but coupled with it are a number of Government amendments. As he may recall, he was concerned in Committee that a series of debts amounting to £750 might be prescribed as well as a single debt of not less than that amount, and this would entitle a creditor to use clause 7(1)(d). I am grateful to the right hon. Gentleman for raising that point and I hope that the Government amendments make the point clear. Amendment No. 5 provides that a demand under clause 7 must be served on the debtor by recorded delivery. That is to avoid the possibility of the debtor not being aware of the letter because he is on holiday, for example.
        I deal finally with the right hon. Gentleman's amendment changing the period from three weeks to four weeks. With some perception, the right hon. Gentleman anticipated my argument. It is not just an illogical difference between English and Scottish personal bankruptcy provisions. Once again it is the difference in Scotland between personal bankruptcy and corporate insolvency procedures. The Bankruptcy (Scotland) Bill, as well as relating to individual insolvency, deals with the insolvency of such entities as partnerships and bodies corporate as well as registered companies. I see that as an anomaly, and accordingly there is no great value in the right hon. Gentleman's proposal.
        More importantly, because we recognise that there must be some anxiety that too short a period might mean that inadvertently or without the knowledge of the debtor this procedure got under way, we inserted the provision that such a letter had to be served by recorded delivery. That seems to me to be a greater safeguard than three, four or even five weeks. It might be anticipated that ordinary
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        people went on holiday for a fortnight, but there could be any one of a variety of reasons which took someone away from home for a longer period and simply having a letter popping through the letter box could create problems. Because we intend to require such a letter to be served by recorded delivery, I suggest to the right hon. Gentleman that the problem that he sees arising is better dealt with in that way than by moving the period from three weeks to four weeks.
        Mr. Donald Stewart: I hope that the hon. and learned Gentleman can enlighten me about one matter raised by the Scottish Consumer Council. The hon. and learned Gentleman spoke of the debt being accepted by the debtor or repudiated, in which case the procedure would follow. What happens if the debtor offers to pay in part? I gather from the council that that would not be acceptable—it has to be all or nothing.
        Mr. Dewar: I share a good deal of the concern expressed by my right hon. Friend the Member for Glasgow, Govan (Mr. Millan). He said, quite properly, that for most of us the starting point was the briefing from the Scottish Consumer Council. There is nothing wrong in that. It is one of the most valuable roles of informed groups, such as the council, that they alert hon. Members to matters giving rise to anxiety in lengthy, complicated and highly technical legislation. My attention having been drawn to it, I concluded that there was cause for the concern which the Scottish Consumer Council expressed, and that has not been removed by the Minister.
        I accept that the Government amendment which says that the notice under clause 7(1)(d) has to be sent by recorded delivery is a useful minor improvement, but it seems to me to be a little bit of conscience money and does not strike at the heart of what was canvassed by the Scottish Consumer Council.
        6.15 pm
        We are dealing here with any sum of more than £750. Although that might once have been a large sum, it is no longer so. As the council points out, it might well cover a wide range of consumer debts, and it is below the summary cause limit, for example, which puts it in some perspective. Furniture or a motor car—even an elderly, decrepit secondhand one—will cross the mark, allowing the purchaser to fall within the procedure envisaged in the clause.
        I have a great deal of sympathy with the argument that the simplest way would not be to improve with minor changes such as the introduction of recorded delivery letters but to excise the subsection from the Bill. The reason is one based upon the psychology of the people likely to be involved. I am especially unsympathetic to the argument of the Solicitor-General for Scotland that we could not, for example, extend the period to four weeks because that would take us out of line with similar provisions which apply to companies.
        There is a world of difference between the approach of a company, even a small closed company, and that of the kind of person who might find himself in difficulty as a debtor under this provision. I accept that companies have to be on the same basis north and south of the border. It might be inconvenient if they were not, and company law has always been on a United Kingdom basis, but I see no reason why in Scotland we should not have a different approach to the individual debtor from that applied to a company.

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        Very often there are circumstances in which letters are winging out. many of them by recorded delivery no doubt, saying "Pay up. or else." There are people who are used to getting them and used to turning up at court, once they are summonsed, to minute their views on instalment payments or dissent. Even if a form is very carefully drafted, an enormous number of people who fortunately do not know what insolvency, liquidation or bankruptcy is will be asked to understand that they are about to be plunged into a legal process the consequences of which are very serious.
        Sequestration means that assets are taken over by a trustee. The debtor has to reveal all sorts of information about his personal and financial affairs to the trustee administering his assets. If he continues to work, there are implications about paying a proportion of his income to the trustees. It is quite out of the ordinary and very different from the action for debt which may be pursued under a summary cause. It is a difference of degree, and I do not believe that even a form drafted with personal care by the Solicitor-General for Scotland is likely to ensure that people know exactly what is happening and what the significance may be.
        I fear that in many cases a recorded delivery letter will be seen by the recipient as another attempt to recover money which he owes. He may not owe it, and he may not even realise the significance of having to dispute the debt at that stage. Thinking that he can deal with it as he would deal with a summary cause action for the normal form of recovering debt, he may find that he has given up the right to dispute the debt, and he is then on the slippery slope towards sequestration and in a difficult legal position with which he is not well qualified to deal.
        The fact that the letter has to be sent in the prescribed form—I am not sure how it is prescribed—
        Mr. Millan: By regulations.
        Mr. Dewar: I am grateful to my right hon. Friend. However carefully it is prescribed, we are in that difficult position. There is a point of principle here because, as the Scottish Consumer Council pointed out, we are initiating a sequestration without a court decree stating that the debt is owed. That is dangerous. If the Solicitor-General for Scotland received a letter saying, "We shall sequestrate you and an apparent insolvency will be established if you do not within the specified period write and deny the debt," I have no doubt that he would know what to do. After all, he is a man of the law. But I can think of constituents of mine who would not understand. In the unlikely event of this machinery being used, they would find themselves slipping into a very hazardous position.
        The second line of argument which has been properly advanced by my hon. Friend the Member for Govan is that it is unlikely in the event that this machinery will be used very often. If it is, the consequences could be unfortunate. However, an important point is that it is in no way illogical to argue that it is unnecessary to have this provision if it is unlikely to be used very often. There are all kinds of other ways in which a creditor could proceed against a debtor. It would in no way be a substantial infringement of the rights of a creditor to excise paragraph (d) from the Bill. It would remove the fears to which we have referred; fears which in a small number of cases could become very real.
        In an earlier debate the Solicitor-General for Scotland referred to the fact that the Scottish Law Commission was
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        carrying out a number of general reviews. One relates to the system of debt enforcement and diligence. If it decided to introduce changes which made the law of diligence in Scotland a little more humane and sensible, it would seem to be unwise to put paragraph (d) of clause 7(1) on the statute book. It might stand out as an unsatisfactory procedure which ran counter to the general reform which we hope will emerge from the lengthy review of the law of diligence which is being carried out by the Scottish Law Commission.
        This provision would endanger individual liberties and might be misunderstood. Therefore, I urge the Solicitor-General for Scotland to accept the admirably clear amendment of my right hon. Friend the Member for Govan. There is nothing wrong with its drafting; it merely asks for this provision to be deleted. In no sense would it prejudice the creditor, and in a small number of important cases the debtor would be protected if this provision were removed from the Bill.
        Mr. Millan: By leave of the House, Mr. Deputy Speaker, may I say that if this provision is left in the Bill. we shall ultimately regret it. Eventually it will have to be removed from the legislation. The arguments advanced by the Solicitor-General for Scotland were singularly unpersuasive. He made it sound as though it was for the good of the debtor that there should be a simplified procedure. He has completely misunderstood its effect. Recorded delivery is useful, but this paragraph means that the debtor is already under an obligation to give his denial by recorded delivery. It is astonishing that recorded delivery was never applied in the first instance to the demand. It puts the debtor on the same basis as the creditor in terms of recorded delivery.
        The right hon. Member for Western Isles (Mr. Stewart) raised an interesting point on denial—that even an offer to pay is not a denial if the money is owing and that under this paragraph it has no effect. There may be many occasions when there is no dispute that the money is owed, although the debtor may have difficulty in paying the money within the stated time. But that does not help him. Unless he says that the money is not owed, sequestration will be enforced. If I were advising a constituent who received a recorded delivery letter, I would say that he ought to tell a lie and write back saying, "I deny that the money is immediately payable." That would afford protection under this clause. That is absurd, but it is his only protection. He does not have to demonstrate that the debt is not immediately payable he merely has to say that it is not immediately payable, even if, when he says that, he knows that he is telling a lie. That cannot be right.
        As for the parallel with companies, that again is absurd. A trading company employs solicitors, accountants and other professional advisers. The Solicitor-General for Scotland looks sceptical, but a company will certainly employ accountants, because there is a statutory obligation to have an audit. Solicitors would also have been involved, when the company was set up, to draw up the articles of association. A trading company presumably takes matters of this kind seriously and would understand the implications, whereas an individual debtor may not fully understand them.
        In certain trades and businesses one finds that there are notoriously bad payers, in the sense that they do not pay their debts frequently. Farmers are a good example. Many perfectly reputable farmers who have been farming for

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        many years do not pay their debts within three weeks. However, if they do not pay their debts within three weeks their assets can be sequestrated. Either this paragraph will not be used, in which case it is unnecessary, or its use will mean that a number of farmers will suddenly find that their assets have been sequestrated. If their farms are in the constituencies of Conservative Members, this provision will have to be deleted. The Solicitor-General for Scotland smiles, but this is a serious point. If this provision were enforced against farmers, we would be unable to retain this provision in the law of Scotland.
        This point was not raised in Committee. Most hon. Members did not understand its full import. My original scepticism about the point made by the Scottish Consumer Council has given way on my part, and on the part of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and the right hon. Member for Western Isles, to real anxiety. I believe that if it should be used Ministers will regret having retained this paragraph.
        The Solicitor-General for Scotland: I believe that this is a valuable way to constitute insolvency. I am at one with the right hon. Member for Glasgow, Govan (Mr. Millan) in believing that this provision will be used infrequently. It will not frighten farmers or anybody else into paying their bills if they are insolvent. All one is doing is setting up an elaborate procedure for sequestration. If that is what one wants to do, the simplest way to set about it is to take action to have the debt judicially constituted.
        The hon. Member for Glasgow, Garscadden (Mr. Dewar) said that his constituents who might have small, outstanding debts would have recorded delivery letters suddenly popping through their letter boxes which would cause confusion. To that extent, it is important that there should be a lower limit of £750. Even in 1985 that is a very considerable sum of money to owe either to a group or to an individual, so the lower limit is important.
        I would point out to the right hon. Member for Western Isles (Mr. Stewart) that if one was in this position one could not offer to pay the debt by instalments. Either the debt is owed, or it is not. That is the point that would be followed through if such an action were to be pursued, as the right hon. Member for Govan suggested that it should be pursued by taking it to the courts. A debtor might say, "I accept that I owe Mr. X £100, but I deny that I owe him £750." In that case, the process leading to sequestration would not be set in motion.
        6.30 pm
        We are introducing a novelty, but I do not share the anxieties expressed in the debate. Given our fruitful cooperation with the Scottish Consumer Council in the past, I hope that we shall be able to draw up a letter, in a prescribed form, leaving people in no doubt about what steps they should take if they accept that they owe a sum in excess of £750 or, if they deny that they owe the money, what steps they should take to avoid the prospect of sequestration.
        Amendment negatived.
        Amendments made: No. 4, in page 8, line 14, after third of', insert
        '(or debts the aggregate of which is)'.
        No. 5, in page 8, line 15, after 'debtor', insert by recorded delivery,'.
        No. 6, in page 8, line 16, after 'debt'. insert '(or debts)'.
        No. 7, in page 8, line 17, after 'its', insert '(or their)'.—[The Solicitor-General for Scotland.]

      Clause 24

        ELECTION OF PERMANENT TRUSTEE
        Mr. Millan: I beg to move amendment No. 10, in page 25, line 17, at end insert
        '(e) a person who is an associate of the debtor'.
        It seems strange that, now that we have in the Bill a definition of an associate, we should not, when dealing with those who are not eligible for election as a permanent trustee, exclude a person who is an associate of the debtor. It may seem obvious that such a person should not be appointed as a permanent trustee, but a number of other fairly obvious people who should not be so appointed, including the debtor himself, for example, are mentioned in the subsection.
        I intend the amendment to improve the Bill. Indeed, that has been the aim of all my amendments, but the Solicitor-General for Scotland has not seen them in that light. I hope that he will accept this one.
        The Solicitor-General for Scotland: I have to disappoint the right hon. Member for Glasgow, Govan (Mr. Millan). However, before he gets too gloomy, I should add that he may find that I am in a more favourable frame of mind later. I understand the reasoning behind the amendment, but I think that it is undesirable and unnecessary.
        The amendment is undesirable because, having regard to the definition of an associate in new clause 2, it would prevent a person from acting as an insolvency practitioner in cases where there was no likelihood of any conflict of interest. That was the main reason why a similar provision was omitted from part I of the Insolvency Bill. The amendment would require persons who wished to be insolvency practitioners in a sequestration in Scotland to meet more stringent conditions than would be required in the case of a Scottish company liquidation or English bankruptcy proceedings.
        The amendment is unnecessary because persons proposing to act as insolvency practitioners under this Bill will be subject to the provisions in part I of the Insolvency Bill when that part comes into operation. As a result of an amendment made to the Insolvency Bill on Report last Thursday, regulations will be able to be made
        "prohibiting a person from acting as an insolvency practitioner in prescribed cases, being cases in which a conflict of interest will or may arise."
        In the interim period, pending the commencement of part I of the Insolvency Bill, consideration will be given, in consultation with the professional bodies, to including in regulations as one of the prescribed requirements for a person being qualified to act as an insolvency practitioner a requirement which, in effect, would prevent him from acting where there is likely to be a conflict of interest.
        I take it that the right hon. Gentleman is anxious to avoid such a conflict of interests. I hope that he will appreciate that, given the amendment that was made to the Insolvency Bill last week, his objection will be met.
        Mr. Millan: I am not persuaded, but I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.

      Clause 31

        VESTING OF ESTATE AT DATE OF SEQUESTRATION
        The Solicitor-General for Scotland: I beg to move amendment No. 11. in page 33, line 3, after 'bankruptcy', insert
        'or other similar orders in, or in connection with, bankruptcy proceedings'.
        Mr. Deputy Speaker (Sir Paul Dean): With this we may take Government amendment No. 12.
        The Solicitor-General for Scotland: The purpose of the amendment is to put beyond doubt the fact that the trustee's act and warrant will be registered in the appropriate register in the part of the United Kingdom where the estate is studied and to ensure that acquisitions for value of the bankrupt's estate prior to the registration will not be prejudiced by it. This savings provision virtually re-enacts the provision at the end of section 97(3) of the Bankruptcy (Scotland) Act 1913.
        Amendment agreed to.
        Amendment made: No. 12, in page 33, line 6, leave out 'to the same effect' and insert
        ';but any right or interest acquired for value before the registration or publication shall not be prejudiced by the effect of the act and warrant or by such registration. or publication'.—[The Solicitor-General for Scotland.]
        The Solicitor-General for Scotland: I beg to move amendment No. 13, in page 33, line 20, leave out subsection (7).
        Mr. Deputy Speaker: With this we may take Government amendments Nos. 18 and 27.
        The Solicitor-General for Scotland: The amendments are designed to meet a point raised by the right hon. Member for Glasgow, Govan (Mr. Millan) in Committee about the unfairness of the provisions that vest immixed funds of a debtor and spouse in the permanent trustee, even though most of them belong to the debtor's spouse, and then have the spouse to rank as a postponed creditor in respect of her share. The amendments delete those provisions and will mean that the ownership of such funds will be a matter of fact to be determined, in the event of an unresolved dispute, by the court. I am grateful to the right hon. Member for Govan for raising the matter.
        Mr. Millan: I am glad to acknowledge that the Solicitor-General for Scotland listened to my arguments in Committee and I am pleased that he has responded.
        Amendment agreed to.

      Clause 32

        VESTING OF ESTATE, AND DEALINGS OF DEBTOR, AFTER SEQUESTRATION
        The Solicitor-General for Scotland: I beg to move amendment No. 14, in page 34, line 6, leave out from 'may' to 'shall' in line 9 and insert
        ', after having regard to all the circumstances, determine a suitable amount to allow for—

        (a) alignment for the debtor; and

        (b) the debtor's relevant obligations;

        and if the debtor's income is in excess of the total amount so allowed the sheriff.
        Mr. Deputy Speaker: With this, we may take Government amendments Nos. 15, 16, 21 and 22.
        The Solicitor-General for Scotland: The amendments have as their common theme the need for consideration to be given in bankruptcy proceedings to the maintenance of the debtor and his family. Amendments Nos. 14 and 15 are intended to ensure that the court, when deciding the level of the income that should be left to him, will take account of the debtor's need to maintain himself and his family, including any spouse or former spouse and children even though they are not living with him.
        The amendments to clause 35 provide that in considering whether to recall an order awarding a capital payment or a transfer of property on divorce, the court must consider all the circumstances, and in particular the financial circumstances of the person from whom the payment or property would be recovered in the event of recall of the order.
        The purpose of amendment No. 16 is to make it clear that any creditor, even an alimentary creditor, whose debt would be discharged in the sequestration by virtue of clause 54 should not be able to do diligence in respect of that debt against any income vesting in the debtor after the date of his sequestration. As drafted, clause 32(4) does not prevent alimentary creditors, who can claim in the sequestration—and whose claim would be discharged by virtue of clause 54—from, as it were, "coming out" of the sequestration and doing diligence directly against the debtor's post-sequestration income. That would be an unfortunate result. The amendment prevents it from taking place.
        Amendment agreed to.
        Amendments made: No. 15, in page 34, line 10, at end insert—
        '(2A) The debtor's relevant obligations referred to in paragraph (b) of subsection (2) above are—

        (a) any obligation of aliment owned by him ("obligation of aliment" having the same meaning as in the Family Law (Scotland) Act 1985);

        (b) any obligation of his to make a periodical allowance to a former spouse; but any amount allowed under that subsection for the relevant obligations need not be sufficient for compliance with a subsisting order or agreement as regards such aliment or periodical allowance.'.

        No. 16, in page 34, line 15, leave out subsection (4) and insert—
        '(4) Diligence in respect of a debt or obligation of which the debtor would be discharged under section 54 of this Act were he discharged under section 53 thereof shall not be competent against income vesting in him under subsection (1) above.'.—[The Solicitor-General for Scotland.]
        The Solicitor-General for Scotland: I beg to move manuscript amendment No. 75, in page 35, line 14, leave out from "dealing" to "is" in line 16.
        Mr. Deputy Speaker: With this, we may take amendment No. 17, in page 35, line 14, leave out "before" and insert
        'within a period of 3 months commencing on'.
        The Solicitor-General for Scotland: Following the tabling of amendment No. 17 by the hon. Member for Glasgow, Garscadden (Mr. Dewar), we have given further consideration to the period after the date of sequestration within which certain transactions between a debtor and a third party would be protected.
        The hon. Member for Garscadden is probably aware that the Scottish Law Commission gives no reason for its

        783
        view in paragraph 11.38 of its report that the protection for such dealings, which at present is unlimited, should continue only until the date of publication of the award of sequestration in the Edinburgh Gazette. It would appear, however, that it might have been influenced by the thought that publication in the Edinburgh Gazette should be taken as notice to the world of sequestration. That is not correct either as a matter of fact or of law.
        We have accordingly concluded that there should be no time limit upon the protection afforded to such dealings and I have tabled a manuscript amendment to this effect. This would appear to be preferable to the amendment extending the period for three months because it is equally arbitrary to have a three-month period as to have the period as at present specified in the Bill.
        I appreciate, of course, the argument that it is important to avoid any fraudulent misuse of this period to the detriment of the creditors, but having looked carefully at the provision, I am convinced that the safeguards contained in it are more than adequate. Certainly section 107 of the 1913 Act which is similar in many ways to what we are now proposing has not, to my knowledge, caused any difficulty in the 72 years that it has been operating.
        I am grateful to the hon. Member for Garscadden and I hope that he thinks that the Government amendment is desirable. I suspect that he chose the three-month period because he did not believe that he would be successful in achieving any time limit.
        Mr. Dewar: The Minister is partly correct. I am grateful to him for tabling his manuscript amendment which goes further than my amendment. I enjoyed his modest knocking of the Edinburgh Gazette and its role in the world. I do not know who edits that august publication, but the Solicitor-General's view was probably realistic.
        I agree that any period of protection would be arbitrary and that it is better to remove the restriction and to leave protection to be dealt with by clause 32(8)(b) which states
        "the person dealing with the debtor was.… unaware of the sequestration and had.… no reason to believe that the debtor's estate had been sequestrated or was the subject of sequestration proceedings."
        That means that in a bona fide case the person will be completely protected. That is a sensible approach which has worked well for many years under the law of Scotland. It is a good amendment, even if it had to be scrawled in quill pen at the last moment by one of the Solicitor-General for Scotland's aides.
        Amendment agreed to.

      Clause 33

        LIMITATIONS ON VESTING
        Amendment made: No. 18, in page 35, line 39 leave out
        'other than such money as is mentioned in section 31(7) of this Ace.—[The Solicitor-General for Scotland.]

      Clause 34

        GRATUITOUS ALIENATIONS
        The Solicitor-General for Scotland: I beg to move amendment No. 19, in page 37, line 6 leave out from 'that' to second 'or' in line 7 and insert
        'immediately, or at any other time, after the alienation the debtor's assets were greater than his liabilities.'.
        784
        The amendment makes it clear what is meant by absolute solvency. It is in line with existing case law based on the Bankruptcy Act 1621, which this Bill replaces
        Amendment agreed to.

      Clause 35

        RECALLING OF ORDER FOR PAYMENT OF CAPITAL SUM ON DIVORCE
        Amendments made: No. 21, in page 38, line 20 leave out
        ', after having regard to all the circumstances of the case,'.
        No. 22, in page 38, line 27 at end insert—
        ': Provided that before making an order under this subsection the court shall have regard to all the circumstances including, without prejudice to the generality of this proviso, the financial, and other, circumstances (in so far as made known to the court) of the person against whom the order would be made.'.—[The Solicitor-General for Scotland.]

      Clause 38

        TAKING POSSESSION OF ESTATE BY PERMANENT TRUSTEE
        Amendment made: No. 23, in page 42, line 5 after 'Act,', insert
        'and subject to section [Power of permanent trustee in relation to the debtor's family home] of this Act,',—[The Solicitor-General for Scotland.]

      Clause 39

        MANAGEMENT AND REALISATION OF ESTATE
        The Solicitor-General for Scotland: I beg to move manuscript amendment No. 76, in page 42, line 34, leave out "subsections (6) and (7)" and insert "subsection (6)"
        Mr. Deputy Speaker: With this we may discuss Government amendments Nos. 24 and 33.
        The Solicitor-General for Scotland: The manuscript amendment is consequential on amendment No. 24 and comes immediately before it.
        Mr. Dewar: I am sure that the amendment is only technical, but we do not have a copy of it. Perhaps the Solicitor-General for Scotland will explain it. I understand from the noises behind me that no one else has seen it.
        Mr. Deputy Speaker: Perhaps the Solicitor-General for Scotland will help the House by explaining a little further.
        The Solicitor-General for Scotland: I had hoped to move quickly since there is nothing mysterious about the amendment, which reads
        "page 42, line 34, leave out 'subsections (6) and (7)' and insert 'subsection (6)'."
        I am sure that the hon. Member for Garscadden agrees that the amendment is desirable and necessary.
        Amendment agreed to.
        Amendment made: No. 24, in page 44, line 5, leave out subsection (7).—[The Solicitor-General for Scotland.]

      Clause 40

        PROTECTION OF RIGHTS OF SPOUSE AGAINST ARRANGEMENTS INTENDED TO DEFEAT THEM
        The Solicitor-General for Scotland: I beg to move amendment No. 25, in page 45, line 16, after 'Act,', insert

        785
        'as amended by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985'.
        Mr. Deputy Speaker: With this we may discuss Government amendment No. 26.
        The Solicitor-General for Scotland: These are drafting amendments.
        Amendment agreed to.
        Amendment made: No. 26, in page 45, line 18, leave out 'that Act' and insert 'the said Act of 1981'.—[The Solicitor-General for Scotland.]

      Clause 50

        ORDER OF PRIORITY IN DISTRIBUTION
        Amendment made: No. 27, in page 53, line 9, leave out
        'or a spouse's right to money vesting in the permanent trustee by virtue of section 31(7) of this Act'.—[The Solicitor-General for Scotland.]

      Clause 53
        AUTOMATIC DISCHARGE AFTER 3 YEARS
        Amendment made: No. 28, in page 58, line 30, leave out 'above'.—[The Solicitor-General for Scotland.]
      Clause 66

        GENERAL OFFENCES BY DEBTOR ETC
        6.45 pm
        Mr. Dewar: I beg to move amendment No. 29, in page 66, line 38, at end insert 'or any individual creditor'.
        Mr. Deputy Speaker: With this we may discuss Government manuscript amendments Nos. 73 and 74.
        Mr. Dewar: Fortunately, the amendments need not detain us long because the Solicitor-General for Scotland has decided to fall into line with admirable advice that he has been given and table more skilfully drafted amendments which have the same effect. Clause 66(7) states:
        "A debtor who is engaged in trade or business shall be guilty of an offence if … he pledges or disposes of … any property which he has obtained on credit and has not paid for unless he shows that he did not intend to prejudice his creditors."
        It is suggested that a car might be bought on hire purchase and that the debtor might sell that car and use the proceeds to satisfy some of his creditors. He would not act in any sense to their prejudice, but would specifically prejudice the hire purchase company which would lose the car and the security which it represents.
        The amendment makes it clear that the phrase "prejudice his creditors" covers the prejudice of any individual creditor. The Minister proposes a different solution in his manuscript amendment No. 74, which includes the words
        "references to intent to prejudice creditors shall include references to intent to prejudice an individual creditor."
        That is more elegant, but it has the same intent and I am pleased with it.
        The Solicitor-General for Scotland: The purpose of the amendment is to prevent a debtor who has unlawfully disposed of goods on hire purchase from claiming that the disposal, far from prejudicing the general body of creditors, has benefited them at the expense of the unfortunate creditor involved in the hire purchase agreement.
        786
        Such a case is unlikely to arise frequently, but I accept that it is not beyond the bounds of possibility. I am grateful to the hon. Member for Glasgow, Garscadden (Mr. Dewar) for tabling his amendment. However, acceptance of the amendment in its present form might permit the debtor to establish a defence if he shows either that he did not intend to prejudice the general body of creditors or that he did not intend to prejudice any one of them.
        My amendment makes it clear that the debtor must establish that he intended to prejudice neither the general body of the creditors nor any one of them. A similar point might also arise in connection with clause 66(2) and 66(6). The manuscript amendments cover those sections.
        Mr. Dewar: I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.
        Amendments made: No. 73, in page 67, line 31, after 'section' insert '(a)'.
        No. 74, in page 67, line 33, at end insert—
        '(b) references to intent to prejudice creditors shall include references to intent to prejudice an individual creditor.'.—[The Solicitor-General for Scotland.]

      Clause 72

        INTERPRETATION
        Amendments made: No. 30, in page 70, line 15, leave out
        'means such person as may be prescribed'
        and insert
        'shall be construed in accordance with section [Meaning of "associate"] of this Act;'.
        No. 31, in page 71, line 7, at end insert
        'being, in accordance with section 2 of the Insolvency Act 1985 (qualifications of insolvency practitioners), so qualified:
        Provided that, until the coming into force of that section, the expression shall instead mean'.
        No. 32, in page 71, line 45, at end insert—
        '(5) Any reference in this Act to an enactment relating to the limitation of actions shall not include any such enactment which implements or gives effect to any international agreement or obligation. '.—[The Solicitor-General for Scotland.]

      Clause 73

        AMENDMENTS, REPEALS AND TRANSITIONAL PROVISIONS
        Amendment made: No. 33, in page 73, line 10, at end insert—
        '(6A) Where a debtor whose estate is sequestrated after the commencement of this subsection is liable, by virtue of a transaction entered into before that date, to pay royalties or a share of the profits to any person in respect of any copyright or interest in copyright comprised in the sequestrated estate, section 102 of the Bankruptcy (Scotland) Act 1913 (trustee's powers in relation to copyright) shall apply in relation to the permanent trustee as it applied before its repeal in relation to a trustee in bankruptcy under the said Act of 1913.'.—[The Solicitor-General for Scotland.]
        The Solicitor-General for Scotland: I beg to move amendment No. 34, in page 73, line 24, at end insert—
        '() Unless the context otherwise requires, any reference in any enactment or document to a person's estate being sequestrated under the Bankruptcy (Scotland) Act 1913 shall be construed as, or as including, a reference to its being sequestrated under this Act; and analogous references shall be construed accordingly.'.
        Mr. Deputy Speaker: With this we shall discuss Government amendments No. 48 and 52.
        The Solicitor-General for Scotland: These are purely drafting amendments.
        Amendment agreed to.

      Schedule 3

        PREFERRED DEBTS
        Mr. Millan: I beg to move amendment No. 35, in page 79, line 12, leave out 'twelve' and insert 'six'.
        Mr. Deputy Speaker: With this we shall discuss Government amendments Nos. 36 to 38, and the following amendments: No. 39, in page 79, line 29, leave out 'twelve' and insert 'six'.
        No. 40, in page 79, line 38, leave out 'twelve' and insert 'six'.
        No. 41, in page 79, line 43, leave out 'twelve' and insert 'six'.
        Government amendments Nos. 43 and 44.
        Mr. Millan: The amendment deals with the question of preferred debts. I intend to say little about this, not because the matter is not of considerable importance—it is one of the most important matters in the Bill—but because we dealt with it in Committee and again on the Report stage of the Insolvency Bill last Thursday.
        Whatever the quality of the arguments that I put forward, the Solicitor-General will simply say that we must be consistent with the Insolvency Bill and that he cannot accept my amendments. I want to put on record that I am glad that the Government have accepted their defeat on VAT and reduced the preference from 12 to six months. I shall not embarrass the hon. and learned Gentleman by quoting back at him some of the things that he said in Committee about VAT and PAYE. However, it is not logical that the Government have accepted the reduction in preference on VAT from 12 to six months, yet are not willing to accept the reduction in preference on PAYE and national insurance contributions—which would be the effect of my amendment. I know that the Government will not accept it because they turned down a similar amendment on the Report stage of the Insolvency Bill.
        It is a pity that, having given way more or less gracefully on VAT, the Government have not accepted the logic of the matter and reduced the preference on PAYE. I do not hold out any hope that there will be a conversion at this late stage, unless the Solicitor-General takes a bold step and says, "I do not care what happened with the Insolvency Bill, this is such a powerful argument that I shall accept it." On past behaviour, I do not think that he will do that.
        I simply record my disappointment that the Government have not accepted the logic of the position and reduced preference in a way that ultimately will be to the benefit of small firms, which are the ordinary creditors. For a Government who are anxious to say how much they support small firms and want to help them in every possible way to deny themselves the opportunity to give them help by reducing Government preference in bankruptcy is, to say the least, unfortunate.
        I wish to place on record that I have been consistently trying to reduce the ravages of Government in bankruptcies in favour of small firms and ordinary creditors.
        The Solicitor-General for Scotland: I would have been quite happy if the right hon. Gentleman had referred to what I had to say; I doubt whether anyone else would have been at this stage.
        The purpose of the Government amendments is twofold. First, they reduce the preference period for VAT debts to six months, bringing the Bill into line—as the right hon. Gentleman appreciates—with the Insolvency Bill. Secondly, they clarify the six months period relating to VAT charged on supply of goods and services made prior to the date of sequestration, even though, because of the VAT accounting arrangements, payment need not at that time have been made to Customs and Excise. A similar clarificatory amendment has been inserted in the Insolvency Bill.
        As the right hon. Gentleman said, during the course of the two Bills at various stages, and in another place, the matter of Crown preference was discussed exhaustively. A position has been adopted in the Insolvency Bill, and it appears that, at this stage, there is little purpose in pursuing the matter further.
        Amendment negatived.
        Amendments made: No. 36, in page 79, line 23, leave out from beginning to 'the' in line 24 and insert 'is referable to'.
        No. 37, in page 79, line 24, leave out 'twelve' and insert 'six'.
        No. 38, in page 79, leave out lines 25 and 26 and insert 'the relevant date'.
        No. 42, in page 80, line 30, at end insert—
        '5A. So much of any amount which—

        (a) is ordered, whether before or after the relevant date. to be paid by the debtor under the Reserve Forces (Safeguard of Employment) Act 1985; and

        (b) is so ordered in respect of a default made by the debtor before that date in the discharge of his obligations under that Act,

        as does not exceed such amount as may be prescribed.'.
        No. 43, in page 80, line 41, leave out
        'in respect of which any value added tax is due'
        and insert
        'to which any value added tax is attributable'.
        No. 44, in page 81, line 1, leave out 'twelve' and insert 'six'.
        No. 45, in page 82, line 13, leave out
        '(5) Regulations under paragraph 5'
        and insert—

        PREFERRED DEBTS
          'Transitional Provisions
          9. Regulations under paragraph 5 or 5A'.—[The Solicitor-General for Scotland.]
      Schedule 5

        VOLUNTARY TRUST DEEDS FOR CREDITORS
        Mr. Millan: I beg to move amendment No. 46, in page 88, line 34, at end insert—
        '7A. In the case of a trust deed to which paragraphs 6 and 7 of this Schedule apply, the trustee shall, not later than 28 days after final distribution to creditors of the estate which falls to be distributed under the trust deed registered under paragraph 5(D) of this Schedule, send to the accountant in bankruptcy a certificate that the estate has been distributed in accordance with the provisions of the trust deed together with a statement in the prescribed form as to the realisation of the estate and its distribution.
        7B(1) Where a trustee under a trust deed to which paragraphs 6 and 7 of this Schedule apply has, in terms of that trust deed, obtained a discharge from the acceding creditors and from the debtor, he may give notice of his discharge to each qualified creditor who has not acceded to the trust deed.

        789
        (2) Subject to sub-paragraphs (3) and (4) below, where notice has been given in terms of sub-paragraph (1) above then the creditors who did not accede to the trust deed shall be deemed to be parties to the discharge of the trustee.
        (3) A qualified creditor who has not acceded to the trust deed may within 28 days of the date of the notice given in terms of sub-paragraph (1) above apply to the court for an order setting aside his deemed participation in the discharge of the trustee.
        (4) The court shall make such an order if, but only if, it is satisfied that the conduct of the trustee has been such as to preclude a deemed discharge from the creditor concerned.'.
        Mr. Deputy Speaker: With this we will discuss Government amendment No. 47.
        Mr. Millan: I shall not spend a great deal of time discussing this amendment. It deals with a matter that I raised in Committee. The Institute of Chartered Accountants of Scotland drew attention to the fact that schedule 5 did not contain a provision for the discharge of the trustee in dealing with the voluntary trust deeds for creditors. I tabled the amendment to try to deal with that position. The Government's amendment is, no doubt, better drafted and I shall be happy to see it adopted.
        I am grateful to the Solicitor-General for responding to the point that I made in Committee.
        The Solicitor-General for Scotland: As the right hon. Gentleman indicated, there is no substantial difference between the two amendments. The Government amendment covers one or two minor points of detail not covered by the right hon. Gentleman's amendment. On that basis, and that basis alone, I ask the House to accept our amendment.
        Mr. Millan: I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.
        Amendment made: No. 47, in page 88, line 36, at end insert—
        '9. Where the trustee under a protected trust deed has made the final distribution of the estate among the creditors, he shall, not more than 28 days after the final distribution, send to the Accountant in Bankruptcy for registration in the register of insolvencies—

        (a) a statement in the prescribed form indicating how the estate was realised and distributed; and

        (b) a certificate to the effect that the distribution was in accordance with the trust deed.

        10. Where the trustee under a protected trust deed has obtained a discharge from the creditors who have acceded to the trust deed he shall forthwith give notice of the discharge—

        (a) by sending the notice by recorded delivery to every creditor known to him who has not acceded to the trust deed; and

        (b) by sending the notice to the Accountant in Bankruptcy who shall register the fact of the discharge in the register of insolvencies, and, except where the court makes an order under paragraph 12 below, the sending of such notice to a creditor who has not acceded to the trust deed shall be effective to make the discharge binding upon that creditor.

        Creditors not acceding to protected trust deed
        11. A creditor who has not acceded to a protected trust deed may, not more than 28 days after notice has been sent under paragraph 10 above, apply to the court for an order under paragraph 12 below.
        12. Where, on an application by a creditor under paragraph 11 above, the court is satisfied (on grounds other than those on which a petition under paragraph 7(1)(b) above was or could have been presented by that creditor) that the intromissions of the trustee under the proteced trust deed with the estate of the debtor have been so unduly prejudicial to that creditor's claim that he should not be bound by the discharge it may order that he shall not be so bound.
        13. Where the court makes an order under paragraph 12 above, the clerk of court shall send a copy of the order to—
        790

        (a) the trustee; and

        (b) the Accountant in Bankruptcy who shall register the copy of the order in the register of insolvencies.'.[The Solicitor-General for Scotland.]

    Schedule 7
      CONSEQUENTIAL AMENDMENTS AND RE-ENACTMENTS
      Amendments made: No. 48, in page 94, line 12, at end insert—
      CONSEQUENTIAL AMENDMENTS AND RE-ENACTMENTS

        'The Conveyancing and Feudal Reform (Scotland) Act 1970 (c. 35)
        In paragraph 9(2)(b) of Schedule 3 ("insolvent" for purposes of standard condition as to default), for the words "163 of the Bankruptcy (Scotland) Act 1913"' there shall be substituted the words "11A of the Judicial Factors (Scotland) Act 1889".'.'
        No. 49, in page 94, line 46, leave out '22' and insert '26'.
        No. 50, in page 95, line 13, leave out '22' and insert '26'.
        No. 51, in page 95, line 18, leave out 'and' and insert—
        '(iiA) in paragraph 2(2) for the words "in a case where the relevant event took place on or after the day of the passing of the Social Security Act 1985" there were substituted the words 'in any other case"; and.'
        No. 52, in page 96, line 20, at end insert—

        'The Value Added Tax Act 1983 (c. 55)
        In section 22(4)(a)(ii) ("insolvency" for purposes of refund of tax in cases of bad debts), for the words "163 of the Bankruptcy (Scotland) Act 1913" there shall be substituted the words "11A of the Judicial Factors (Scotland) Act 1889".'.
        No. 53, in page 97, line 2, after 'applies', insert
        'and—
        (a) the winding up of a company has commenced,'
        No. 54, in page 97, line 3, leave out 'a' and insert 'the'.
        No. 55, in page 97, line 4, leave out '(a)' and insert '(i)'
        No. 56, in page 97, line 5, after 'the' insert 'date of such'.
        No. 57, in page 97, line 6. leave out
        'of the winding up of the company'.
        No. 58, in page 97, line 7, leave out '(b)' and insert '(ii)'.
        No. 59, in page 97, line 7, at end insert—
        ';
        (b) an administration order is in force in relation to a company, an alienation by the company is challengeable by the administrator.'.
        No. 60, in page 97, line 15, leave out from '(b)', to 'the' in line 17.
        No. 61, in page 97, line 18, leave out '(c)' and insert '(b)'
        No. 62, in page 97, line 26, leave out 'the commencement of and insert
        'the date on which—
        (i)'.
        No. 63, in page 97, line 27, after 'company', insert
        'commences: or
        (ii) as the case may be, the administration order is made'.
        No. 64, in page 97, line 29, leave out 'commencement' and insert 'date'.
        No. 65, in page 97, line 30, after '(4)', insert 'to'.
        No. 66, in page 97, line 38, after 'liquidator', insert
        'and, after the coming into force of Chapter III of Part II of the Insolvency Act 1985, an administrator appointed thereunder'.
        No. 67, in page 97, line 38, at end insert—
        '(5) In subsections (1) to (3) above, any reference to an administrator or to an administration order—

        (a) shall be construed in accordance with Chapter III of Part II of the Insolvency Act 1985; and

        (b) shall be of no effect until the coming into force of that Chapter.

        (6) This section extends to Scotland only.'.
        No. 68, in page 97, line 39, leave out
        'In the winding up of a company registered in Scotland'.
        No. 69, in page 97, line 41 leave out from 'preferences)' to end of line 19 on page 98 and insert
        'applies for the purposes of this Act as it applies for the purposes of that Act but as if—

        (a) for any reference to a debtor there is substituted a reference to a company;

        (b) in subsection (1), for paragraphs (a) to (c) there are substituted the words "the commencement of the winding up of the company or the making of an administration order in relation to the company.";

        (c) in subsection (4) for paragraphs (a) and (b) there are substituted the following paragraphs—

        "(a) in the case of a winding up—

        (i)any creditor who is a creditor by virtue of a debt incurred on or before the date of commencement of the winding up; or

        (ii) the liquidator; and

        (b) in the case of an administration order, the administrator.";

        (d) in subsection (6), for the words from the beginning to "1889" there are substituted the words "A liquidator and an administrator"; and

        (e) for subsection (7) there is substituted the following subsection—

        "(7) This section shall be construed as one with Part XX of the Companies Act 1985; and subsection (5) of section 615A of that Act shall apply in relation to the foregoing provisions of this section as it applies in relation to subsections (1) to (3) of that section.".
        (2) This section applies to Scotland only.'.—[The Solicitor-General for Scotland]

    Schedule 8

      REPEALS
      Amendments made: No. 70, in page 102, line 13, column 3 at beginning insert 'In'.
      No. 71, in page 102, line 19, column 3 at beginning insert 'In'.
      No. 72, in page 102, line 58, at end insert—

      '1985 c. 17.

      The Reserve (Safeguard Employment) 1985.

      Forces of Act

      In section 13, the word "—(a)"; the words from "or, (b)" to "estate,"; the word"—(i)"; and the words from 'or, (ii)" to "1913,".'.

      6.59 pm
      The Solicitor-General for Scotland: I beg to move, That the Bill be now read the Third time.
      We have made some significant changes to the Bill during its passage, and I am grateful to the many professional bodies for their assistance.
      Question put and agreed to.
      Bill read the Third time, and passed, with amendments.

  Yorkshire Water Authority Bill (By Order)
  Order for Second Reading read.
  7 pm
  Mr. Conal Gregory: I beg to move, That the Bill be now read a Second time.
  The Bill has been in embryonic form for a number of years. The works proposed in the measure would alleviate flooding from the River Foss, which occurs at its confluence with the River Ouse close to the city centre of York. The River Foss is a left-bank tributary of the River Ouse, joining it some 1,100 m downstream of Lendal bridge.
  Flooding from the River Foss is linked directly with flood levels in the River Ouse. The River Foss has been canalised, and within its urban reaches has sufficient capacity to pass one in 100 year flood flows. However, with high levels in the River Ouse, water simply backs up the River Foss.
  A similar and related problem occurs with the Tang Hall and Osbaldwick Beck, which, until the late 18th century, were tributaries to the River Foss, but which are now in culvert to the River Ouse, with high level overflows to the Foss.
  In recent years, serious flooding has occurred in York—in 1968, 1978 and 1982—the flooding in January 1982 being the worst since 1947 and having an estimated return period of 80 years. In the January 1982 floods, 78 domestic properties and 64 industrial and commercial premises were inundated for two or three days. As a result of cleaning-up operations, day-to-day commercial and domestic routines were affected for considerably longer than that. I recall the great concern of my constituents for months, indeed years, after that flooding, and the special help of the lord mayor of York's alleviation plan to assist individual constituents.
  Traffic in the flooded area was totally disrupted and, as the floods affected the inner ring road, the effects of the disruption were felt over a much wider area. Inevitably, the flooding severely limited the deployment of the services used in the emergency and diverted them from their normal duties. Those services were stretched to their limit.
  The feasibility study which the Yorkshire water authority commissioned following the 1982 floods recommended, as the preferred solution, the construction of a flood barrier in the River Foss, with a pump station. It has the merit that because the Foss level can be controlled by pumping the run-off from the Foss catchment while the barrier is closed, the operation of the storm sewer and beck overflows will not be inhibited by high River Foss levels, as they would have been under the alternative proposals which were then considered. The estimated cost of the recommended solution was also the lowest of those investigated.
  The feasibility study reported that the proposed barrier should be sited downstream of the Castle Mills bridge so that no modification of existing upstream defences would be necessary, and gave as the recommended gate location a position immediately upstream of Blue bridge. It further stated that the most appropriate type of barrier would be a turn-over lift gate, its detailed appearance being subject to approval by York city council as the planning authority.

  793
  As for the pumping station, the feasibility study mentioned that a substantial building would be required if conventional axial flow vertically-mounted land drainage pumps were used and that an underground pumping station would, therefore, be preferable. While giving details of such an arrangement of an underground pumping station midway between Blue bridge and Castle Mills bridge, the feasibility study stated:
  "the layout and location of this station remain flexible at present being the subject of both technical and planning considerations."
  Hon. Members will understand if, at this point in my remarks, I slake my thirst with some Yorkshire water authority produce.
  In addition to the barrier and pumping station, the Bill provides for a number of necessary additional works. These are a flood protection wall and access road, works Nos. 3 and 4, running north from the pumping station; a new control structure with sluice gate, work No. 5, in substitution for the existing control structure at Castle Mills lock; a new pipe, work No. 6, in substitution for an existing pipe to take waters in that pipe above the barrier; the raising of Tower street, work No. 7; and a new car park access and adjacent flood wall, works Nos. 8 and 9, on St. George's field.
  The principal reason why Yorkshire water authority cannot rely on existing general powers to implement the scheme is that it involves interference with navigation. No general powers are available for this purpose and, accordingly, it is necessary in each case to obtain the requisite powers by way of private legislation. Recent examples are the Severn-Trent Water Authority Act 1983 in respect of flood prevention in the valley of the River Soar, and the Southern Water Authority Act 1982, which was for a new control structure with lock gates on the River Rother.
  In addition, water authorities' general powers are insufficient or of doubtful application in a number of detailed respects. The necessary powers proposed in the Bill for the management and operation of the barrier and pumping station are an example, general powers not being available for the purpose. Also, with a scheme of this nature, the inclusion of all necessary powers in one Bill overcomes any difficulties that may be encountered in the interaction of the authority's several different general powers and can result in a considerable saving in time and expense in implementing a scheme.
  Early in 1985 a number of local residents voiced objections concerning the environmental impact of the proposed works, particularly in respect of the effect on the Georgian riverside promenade known as New Walk terrace, and it became apparent that there was genuine concern over that. In the light of the objections then raised, I organised a public local meeting. Because of the views then expressed, the water authority has agreed to propose amendments in Committee to provide for the proposed barrier and pumping station to be relocated within the limits of the deviation for those works and away from New Walk.
  It is understood that the proposed modifications meet the objections that have been raised, and the water authority has now applied and obtained planning permission for the revised scheme. As proposed to be modified, the scheme remains consistent with the recommendations of the feasibility study commissioned by the water authority.
  794
  The miscellaneous general powers that are proposed are contained in part IV of the Bill. The majority of these reflect powers conferred on other water authorities in recent years by local Acts, and this part of the Bill in particular was the subject of detailed prior consultation with the relevant Government Departments.
  Parts I, II, IV and V concern the flood relief scheme, and I shall outline the principal provisions. Part II contains the necessary powers for land acquisition, and these provisions are, in the main, well precedented. Clause 14 contains the description of the works to be authorised. with powers for ancillary works contained in clause 15, and a general power in clause 16 to deviate within the limits shown on the plans.
  Clause 17 provides for alterations in paths likely to be affected, and clauses 18 to 20 contain the common additional provisions regarding interference with highways generally. Clauses 21 to 27 provide various necessary powers for operations in and the control of the rivers affected and, again, are closely based on precedent, the power to give directions under clause 24 to vessels being modelled on similar provisions conferred on harbour authorities.
  Clause 28 ensures that the specific powers are without prejudice to the application of the authority's general powers, and that is a common provision in measures of this character. Clauses 29 to 33 provide for the manner in which the barrier, pumping station and sluice gate may be operated, and provide penalties for interference with them. The restrictions upon the use of the barrier and pumping station are necessary in the interests of navigation.
  Clause 34 provides, as necessary, that restrictions contained in existing local legislation affecting the Rivers Ouse and Foss do not operate to prevent the application of the powers in the Bill.
  Part V contains general and administrative provisions including, in clause 47, the requisite adaptation of the Land Drainage Act 1976 to enable central Government grants to be available and the limitation, in clause 50, of the deemed planning permission available under the general development order. Clause 50 and a number of other clauses bearing on the city council's functions are likely to be subject to restrictive amendments to be agreed with the council in due course. Amendments to effect the proposed alteration of works are required to a number of clauses, and most notably clause 14, in which the description of work needs to be modified to accord with the revised scheme. In addition. the revised scheme calls for restrictive limits of deviation for the altered works, the deletion of references to the towing path on the east bank of the River Ouse and to New Walk in clause 17 and the omission of most other references to the River Ouse, which, in the main, will no longer be affected. All the requisite amendments for the revised scheme will be proposed by the promoters in Committee.
  The miscellaneous clauses are contained in part IV and have been the subject of prior consultation with relevant Departments, especially the Ministry of Agriculture, Fisheries and Food, the Department of the Environment and the Lord Chancellor's Department.
  I shall refer to Calderdale and its sewage works. The instruction in the name of my hon. Friend the Member for Halifax (Mr. Galley) is as follows:
  "After Second Reading of the Yorkshire Water Authority Bill, to move, That it be an Instruction to the Committee on the Bill to amend Clause 36 to require the Promoters to provide and

  795
  maintain a sludge main which will take out of Calderdale the sludge now tipped, treated or dried at the Low fields site and at the Press House at North Dean."
  It is apparent from the steps that I have outlined and from the letters to my hon. Friend the Member for Halifax that the authority is committed to solving the problem of odour and fly nuisance from its sewage works at North Dean and Lowfields as a matter of urgency. In the short term, the authority is treating the sludge at the North Dean works with lime to reduce smells and has found an alternative site to Lowfields to which the sludge can be taken. A planning application has been submitted for this site. It is a remote and disused reservoir named Coldacre, which could quickly be brought into use once permission is given.
  Mr. Richard Wainwright: The hon. Gentleman is correct in saying that a planning application has been submitted. What is his estimate of the likelihood of that application being approved? I represent an adjoining constituency which would be affected by the application, if granted. It is my understanding that the chances of its being granted are nil.
  Mr. Gregory: I am grateful to the hon. Gentleman for his intervention. I cannot presume upon the planning decisions of local authorities. I was seeking to deal with the principle behind the instruction of my hon. Friend the Member for Halifax. If the hon. Gentleman bears with me for a little longer, I may be able to throw some more light on the issue.
  If planning permission is refused, further attempts will be made to find an alternative site. Given the topography of Calderdale, that may be difficult.
  The proposed instruction is mandatory and would require clause 36 to be amended to oblige the authority to make a pipeline to take the sludge out of Calderdale. The instruction does not state where the sludge main is to go and, in the absence of an alternative site being available, this presents a difficulty. Some of the sludge might not be capable of being transported by a sludge main. Apart from these practical difficulties, and the absence of available finance to implement the instruction, the passage of the instruction would pre-empt the studies that are now being undertaken by the Yorkshire water authority and would preclude the adoption of the best solution identified by those studies.
  The passage of the instruction would present the water authority with real difficulties in continuing the promotion of the Bill. If the authority—
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I must remind the hon. Gentleman that the instruction is out of order and that he must not go into detail.
  Mr. Gregory: I shall not talk further about the instruction, Mr. Deputy Speaker. I appeal to your kindness, Mr. Deputy Speaker, and I hope that if necessary I can respond to any hon. Members who subsequently direct their remarks to the instruction.
  I have set out the basis of the Bill, and it remains to be said that the people of York have been waiting for decades for such a measure and have suffered quite considerably in the process. I hope that the Bill will have the support of the House.
  7.16 pm
  Mr. Roy Galley: The Bill does not relate solely to flood prevention in York, as it contains a variety of wide-ranging general powers which the Yorkshire water authority is seeking from Parliament.
  My original concern stemmed from these accretions to the already extensive powers of the authority. However, I was persuaded eventually that the powers were largely necessary and that there was considerable precedent for them.
  The Bill is presented at a time when there are sewage disposal and treatment problems in the Halifax area and in the constituency of my hon. Friend the Member for Calder Valley (Mr. Thompson). The Calderdale area is served by a complex of sewage works at Salterhebble, Copley and North Dean. These extensive developments are in close proximity to residential property and the odour nuisance has been to varying degrees a problem in the area for decades.
  When the problems came to the fore in the mid-1970s the odours were attributed to the manufacture of humus-based products. A series of measures was taken to mask the odours such as the spraying of scented chemicals. However, that did not overcome the problem. The production of the humus was then discontinued, but that did not result in a significant reduction or elimination of the odours.
  The smells have continued and they are more than the slightly earthy smells which one would usually associate with any sewage treatment operation. The difficulties that arose in 1983 were exacerbated by the decision of the water authority to compost in the area the sludge which is the end product of the treatment process. A pressed cake is produced at the press house at the North Dean works. This is currently transferred for composting to another site at Lowfields, which is in the constituency of my hon. Friend the Member for Calder Valley. This gives rise to further foul odours and considerable problems of fly infestation in an area which is very near to residential areas.
  Over the years the water authority has sought to reduce the odours by a variety of measures, and principally by the installation of new machinery for the addition of lime to the sludge. However, smells continue.
  There have been further plans, which I hope will be implemented shortly, to introduce an oxygen injection process at the Copley plant. This may help, but no one can be sure that it will solve the problem. As a result of this history of very serious problems which have continued for a long time, and which have been of great concern to my constituents and those of my hon. Friends, my hon. Friend the Member for Calder Valley and I decided that our constituents had suffered from these problems for too long. I therefore added to the Bill an instruction which would mean taking sludge from the area of Calderdale. I hope that it is appropriate to explain the reasoning behind it, although the instruction is out of order.
  The objective is to take the sludge by a sludge main to a more appropriate location where the sludge can be properly treated. The Yorkshire water authority's powers in respect of sludge mains are set out fully in clause 36. After detailed discussion with the authority, I accept that the process of removing sludge from the area by means of a sludge main is only one of the options available for dealing with a serious sewerage problem. The options

  797
  include an entirely new processing method and covering in parts of the sewage works. These options could be more effective. It seems reasonable to allow the water authority to consider the various options and details and produce a strategy for dealing with the problem.
  What is vitally important is that my constituents and those of my hon. Friend the Member for Calder Valley know that the studies will be completed in a relatively short time and that the solution will be implemented on a priority basis. They cannot be expected to suffer for a further few more decades as they have suffered in the past.
  Accordingly, on 17 June, the deputy chairman of the Yorkshire water authority, Mr. J. P. Coverdale, who has been extremely helpful to me and to my hon. Friends throughout the discussions, wrote to me. His letter is headed:
  "Calderdale Sewage Disposal Strategy including Halifax and Lowfields."
  It says:
  "The Authority recognises that a long-term solution to the problem of odours and fly nuisance from its sewage works in the Calder Valley must be found urgently and is now preparing a sludge strategy and carrying out local studies of sewage works in the Calder Valley which will be completed within 12 months.
  Immediately after completion the preferred solutions will be considered by the Authority and implemented on a priority basis as soon as reasonably practicable."
  It is important that these points are recorded. On that basis, one would hope that future officials of the Yorkshire water authority would not be able to gainsay what are regarded by me and my constituents as binding commitments on the part of the authority—commitments that a way will be found to solve the problem, that the solution will be implemented quickly and that we in Halifax and Calder Valley can look forward confidently to the removal of this nuisance.
  It has never been my intention to impede flood prevention work in York, although some, for their own devious reasons, have sought to distort and misrepresent the situation. Having received adequate assurances from the Yorkshire water authority about sewage disposal and treatment in Calderdale, I shall not oppose the Bill.
  7.22 pm
  Mr. William O'Brien: I support the Second Reading because it is important to the people of York in particular and Yorkshire in general that progress by the Yorkshire water authority in alleviating flooding in York be allowed to continue. It is also important to ensure that the provisions of former water undertakings be continued, and the water authority be given the authority of the past local water boards to continue certain protections and services for the people of Yorkshire. There is much that I do not agree with in what the Yorkshire water authority does, but on this occasion I believe that we should support Second Reading.
  The hon. Member for Halifax (Mr. Galley) spoke about the future development of the Calderdale area. It is important to inform the House that a great deal of energy and expense has been put into the Calderdale area by the Yorkshire water authority to alleviate the difficulties suffered by the constituents of the hon. Member for Halifax. The hon. Gentleman accepted that in what he said about the letter from the deputy chairman of the Yorkshire water authority. A great deal of concern about alleviating the difficulties of the people in Calderdale has been
  798
  expressed. I hope that the Bill will have a smooth passage, as it will ensure that we do not have the repercussions from flooding in York that we have had over decades.
  Some of the areas that are flooded suffer badly. The people who have to put up with this disturbance should be given an assurance by the House that every effort will be made to help the Yorkshire water authority to prevent that flooding. As the hon. Member for Halifax will not challenge the Bill, I ask the House to give the Bill its blessing so that we can get the business required by the Yorkshire water authority through. It can then get on with the job of alleviating the flooding and providing the necessary services for Yorkshire.
  7.25 pm
  Mr. Peter Hardy: I support the argument advanced by my hon. Friend the Member for Normanton (Mr. O'Brien). I do not want the House to interfere with what the Yorkshire water authority does. I am not concerned with the Calderdale area, although I respect the concern of the hon. Member for Halifax (Mr. Galley). However, I am concerned that the Yorkshire water authority should not find its tasks made more difficult because of anything that the House has done. We should support the authority in its tasks of providing a decent water supply and adequate sewage treatment in Yorkshire.
  I am particularly concerned about sewage provision and water supply in Rawmarsh in my constituency. I have been satisfied in correspondence with the chairman of the Yorkshire water authority in the past few weeks that it has plans to deal fairly soon with these problems. I do not wish the problems to be exacerbated by any delay for which the House could be held responsible. I hope that, as further retrenchment appears attractive to the Treasury, there will be no discouragement of the water authority from fulfilling the plans about which we have been informed in the past few weeks.
  I trust that the Government will not merely accept and facilitate the Bill but will make sure that the water authority lacks neither resources nor the approvals necessary to maintain adequate sewage provision, a decent water supply and proper progress in cleaning water courses and rivers in our region.
  7.27 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. William Waldegrave): The Government have considered the content of the Bill and have no objection in principle to the powers sought by the Yorkshire water authority. My Department has no outstanding points on the Bill and it is acceptable to us. My right hon. Friend the Minister of Agriculture, Fisheries and Food is very much aware of the Bill and is content with its proposals. The flood prevention scheme will benefit art urban area and is needed to protect part of York from flooding.
  It may be helpful to the House if I touch on the local issue of the sewage works in Halifax, which my hon. Friend the Member for Halifax (Mr. Galley) described in more detail than I am aware of.
  Water authorities discuss their plans with sponsor Departments—the Department of the Environment and the Ministry of Agriculture, Fisheries and Food—and Ministers take account of their needs when setting the financial parameters within which they operate, and this point was well taken by the hon. Member for Wentworth

  799
  (Mr. Hardy). However, within the limits it is for the authority to set out reasonable priorities and, as the hon. Gentleman said, the Yorkshire water authority is doing so.
  Both my hon. Friend the Member for Halifax and my hon. Friend the Member for York (Mr. Gregory) have demonstrated how constituency interests can be properly advanced. On behalf of his constituents, my hon. Friend the Member for York initially made some criticisms of the plans. In consultation with the water authority, he got the plans made better and I congratulate him on that.
  Equally, my hon. Friend the Member for Halifax, who was representing the views of my hon. Friend the Member for Calder Valley (Mr. Thompson) as well, has, in discussions with the water authority, secured promises from it that he was generous enough to accept.
  On that basis, the Government recomend that the Bill be given a Second Reading and allowed to proceed in the usual way into Committee, where its provisions can be considered in detail.
  Question put and agreed to.
  Bill accordingly read a Second time, and committed.

  Yorkshire Water Authority Bill (By Order)

    House of Commons Disqualification Act 1975
    7.29 pm
    The Minister of State, Treasury (Mr. Barney Hayhoe): I beg to move,
    That Schedule 1 to the House of Commons Disqualification Act 1975 be amended as follows:—

    House of Commons Disqualification Act 1975

      PART I OF SCHEDULE 1
      1. After the entry beginning 'Chief or other Social Security Commissioner for Northern Ireland' there shall be inserted:—
      'Commissioner for the special purposes of the Income Tax Acts appointed under section 4 of the Taxes Management Act 1970.'.

      PART II OF SCHEDULE 1

        Additional entries
        2. There shall be inserted at the appropriate places:—
        'A Dairy Produce Quota Tribunal constituted under the Dairy Produce Quotas Regulations 1984.
        The National Development Team for Mentally Handicapped People.'.

        Entries omitted
        3. The following entries shall be omitted:—

        'The Crown Agents for Overseas Governments and Administrations.

        The Health and Safety Agency for Northern Ireland.

        The Health and Safety Commission.

        The Home-Grown Cereals Authority.

        The Land Authority for Wales.

        The Manpower Services Commission.

        The National Dock Labour Board.

        The Northern Ireland Tourist Board.

        The Red Deer Commission.'

      PART III OF SCHEDULE 1

        Additional entries
        4. There shall be inserted at the appropriate places:—

        'Chairman of the Business & Technician Education Council.

        Chairman of the Council for Small Industries in Rural Areas.

        Chairman, Deputy Chairman or Managing Director of the Crown Agents for Overseas Governments and Administrations.

        Chairman of the Fire Authority for Northern Ireland.

        Chairman of the Health and Safety Agency for Northern Ireland.

        Chairman of the Health and Safety Commission.

        Chairman or Vice-Chairman of the Home-Grown Cereals Authority.

        Chairman of the Land Authority for Wales.

        Chairman of the Manpower Services Commission.

        Chairman of the Board of the National Advisory Body for Public Sector Higher Education.

        Chairman or Vice-Chairman of the National Dock Labour Board.

        Chairman of the Northern Ireland Tourist Board.

        Chairman of the Northern Ireland Training Authority.

        Chairman of the Red Deer Commission.

        A full-time chairman of Social Security Appeal Tribunals and Medical Appeal Tribunals for Northern Ireland.
        Commons Commissioner.
        Director of British Telecommunications p.l.c. appointed by a Minister of the Crown or government department.
        Director of any company in receipt of financial assistance under section 5 of the Films Act 1985, being a director appointed by a Minister of the Crown or government department.
        Member of a panel appointed under section 97(2D)(a) of the Social Security (Northern Ireland) Act 1975 of persons eligible to act as chairmen of Social Security Appeal Tribunals for Northern Ireland.
        Member of the Trinity House Lighthouse Board nominated by the Secretary of State.
        President of Social Security Appeal Tribunals and Medical Appeal Tribunals for Northern Ireland.'

        Entries omitted
        5. The following entries shall be omitted:—

        'Chairman of an Appeal Tribunal constituted in accordance with Schedule 4 to the Supplementary Benefits (Northern Ireland) Order 1977, or Senior Chairman in relation to such a tribunal.

        Chairman of a Local Tribunal constituted under section 97(2) of, and Schedule 10 to, the Social Security (Northern Ireland) Act 1975.

        Constable, Lieutenant or Major of the Tower of London.

        Director of ICL Public Limited Company nominated by a Minister of the Crown or government department.

        Levy Exemption Referee for the purposes of the Industrial Training Act 1982.'

        Other amendments
        6.—(1) In the entry 'Chairman of a committee constituted under section 90 of the Mental Health (Scotland) Act 1960' for 'section 90 of the Mental Health (Scotland) Act 1960' there shall be substituted 'section 91 of the Mental Health (Scotland) Act 1984'.
        (2) In the entry 'Chairman or Vice-Chairman of the National Seed Development Organisation Limited' the words 'or vice-chairman' shall be omitted.
        (3) In the entry 'Director of Harland and Wolff Limited' for 'Limited' there shall be substituted 'p.l.c.'.
        (4) In the entry 'Director of Short Brothers Limited' for 'Limited' there shall be substituted 'p.l.c.'.
        (5) In the entry 'Member of the panel of persons appointed under Schedule 5 to the Rent (Scotland) Act 1971 to act as chairmen and other members of rent assessment committees' for 'Schedule 5 to the Rent (Scotland) Act 1971' there shall be substituted 'Schedule 4 to the Rent (Scotland) Act 1984'.
        (6) In the entry 'President, or member of a panel of chairmen, of industrial tribunals established under section 13 of the Industrial Training Act (Northern Ireland) 1964' for 'section 13 of the Industrial Training Act (Northern Ireland) 1964' there shall be substituted 'Article 30 of the Industrial Training (Northern Ireland) Order 1984'.
        The schedule lists offices the holders of which are disqualified from membership of the House. It is desirable and important that those detailed provisions are updated regularly. Of the 44 amendments covered, 24 are new entries, 14 are deletions and six are amendments to existing entries. Approximately 95 office holders will be brought into the scope of schedule 1 and 104 will be released. There is, therefore, a net reduction of nine. I have arranged an explanatory note giving details of all the changes, which was put in the Vote Office some weeks ago. As far as I am aware, no comment or amendment has been made. As we are following a well-established procedure, I commend the motion to the House.
        7.29 pm
        Mr. Jeff Rooker: My right hon. Friend the Member for Swansea, West (Mr. Williams) is due to respond on behalf of the Opposition. I know that he wants to ask a question. I was just doing duty on the Yorkshire Water Authority Bill. My right hon. Friend will be heading towards the Chamber quite quickly as the Annunciator will have shown that the Minister was speaking.
        My right hon. Friend wanted to ask about recorders. I freely admit that I have not read the explanatory memorandum. My right hon. Friend wanted to raise with the Minister the rather peculiar circumstances of recorders and members of the judiciary in respect of their being hon. Members. Has the Minister had any thoughts about that? I do not know whether the matter has been put to him in writing. I do not recall it being raised before. Indeed, I do not know how many right hon. and hon. Members are recorders but, in my decade in the House, I have heard about some of my hon. Friends carrying out the duties of recorders. Time does not constrain us, so I hope that my right hon. Friend will be able to pursue the matter in some detail, and the Minister might like to respond.
        Mr. Hayhoe: I am happy to reply to what the hon. Member for Birmingham, Perry Barr (Mr. Rooker) asked about recorders, but, as the right hon. Member for Swansea, West (Mr. Williams) has now arrived, perhaps it would be for the convenience of the House if I were to reply to any points that he or any other hon. Members raise.
        7.31 pm
        Mr. Douglas Hogg: I apologise to m) right hon. Friend the Member for Brentford and Isleworth (Mr. Hayhoe) for missing his speech. It was so brief that I rushed in only to find that he had sat down.
        This is an important debate in that, if accepted, the motion will disqualify some people from sitting in the House and thus to a significant extent diminish individual liberty and political rights. In view of that, it is a pity that the debate is relatively ill attended.
        I do not wish to be critical of my right hon. Friend, but I have considerable reservations about the methods that we are adopting. I do not feel able to formulate a clear view about the rightness or wrongness of the changes in the schedule here envisaged. For many years past the House has entrusted to the Minister and his officials the power of making orders under section 5 of the 1975 Act, and we have abdicated responsibility. That is highly undesirable.
        I congratulate my right hen. Friend because he, in common with other Ministers, has made it a practice to put an explanatory memorandum in the Vote Office. They have proved to be of considerable assistance to those of us who want to know why people are omitted from, or included in, the schedule. The Government are to be congratulated on that improvement in procedure. The fact that we have an explanatory memorandum, however, reveals as many defects as it tries to cure.
        I should like to draw attention to several of those defects. We can now see all of the criteria with which the House is concerned. Apparently, Ministers and officials take account of four criteria when determining whether an office holder should appear in a schedule. Why does £4,000 appear among the criteria? I do not believe that Parliament has ever been asked to express a view about whether the £4,000 is right or wrong. No doubt the figure will be uprated. When? Who will be asked? To what extent will Parliament be consulted? I fancy that the answer is not at all—we shall be told when it happens and not before.
        That is true of all of the criteria. I do not believe that any has received statutory approval or been discussed in detail in this place. That is bizarre when those criteria can be used to disqualify people from membership of this House.
        Have the criteria ever been the subject of parliamentary discussion? If not, why not? Will we be consulted when the £4,000 is uprated? If not, why not? Criteria (b), (c) and (d) involve quality judgments of some nicety. They are quite capable of abuse. It is clear that many office holders are disqualified when it is not possible to test whether they should be disqualified. It is not possible to determine whether the judgment is fair or unfair.
        We also discover that some office holders who have previously been disqualified should not have been disqualified. At least, that must be the implication. We should take the example of members of the Red Deer Commission who are unpaid. They have previously been disqualified, but we now learn that they should not have

        803
        been. Why were they disqualified in the first place? If they should not have been, how have they suddenly been relieved of the exemption? We are making changes in people's constitutional rights and have not a clue what is going on.
        Another category of office holder is now to be disqualified. There is a rather engaging phrase in the explanatory memorandum concerning them:
        "the need to disqualify has only just been recognised."
        Hard luck on them, but what is the need? Examples are the Commons Commissioner, the director and assistant director of the National Development Team for Mentally Handicapped People, and the chairman of the Business and Technician Education Council. Why has the need to disquality them only just been recognised? What need? Have they been consulted? Did they know that they would be disqualified? What effect does disqualification have on their contracts of employment? It is a very rum situation. Although we can be flippant about it, people's political rights are affected. Their liberties are diminished, as is the electorate's right to choose whom it wishes.
        There is another group of people for whom it is extremely difficult to see why disqualification should be justified. I could go on like this for a long time. It becomes tedious in the end.
        By the motion, which, if passed by the House, will be incorporated into a statutory instrument, we are legislating to diminish people's political and personal rights. I doubt whether anybody in the Chamber, with the possible exception of the Minister, knows enough about each office that is the subject of disqualification to form a clear view as to whether that office or office holder should be disqualified. I do not, I suspect that Opposition Members do not, and looking at the sparsely attended Conservative Back Benches, I venture to suggest that my hon. Friends do not, either. The fact that the House is so sparsely attended suggests that people are not greatly interested in any event.
        The present procedure is inadequate. We as the legislature should not entrust to Ministers and officials the right to enfranchise or disqualify. We need to have a Select Committee, and the draft resolution should be laid before it. It could then comment on the proposals and advise the House so that when the motion comes to be considered by the House on such an occasion, we should have the benefit of a Select Committee's advice, rather like the Select Committee on European Legislation.
        Mr. Robert N. Wareing: I am listening to the hon. Gentleman with great interest. Like him, I find the list of disqualifications and cases where disqualification is no longer thought to be necessary rather foggy. More information is required so that right hon. and hon. Members can make a judgment. The hon. Gentleman and the Minister might consider that, given that under the Government's economic policies we are going through a period of record bankruptcies, that in itself—
        Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I remind the hon. Gentleman that the motion deals with office holders. We are not to discuss other disqualifications. We must stick to the schedule that we are now discussing.
        Mr. Wareing: I am sorry. I was hoping only that that might be discussed in future by the House. I cannot raise that issue, but I hope that the hon. Gentleman will take it into account and that in future we shall have the opportunity to debate that aspect of disqualification from membership of the House of Commons.
        Mr. Hogg: That will arise only if we have an opportunity, by way of primary legislation, to discuss the 1975 Act in the context of proposed amendments. Today we are discussing the schedule, which is given statutory force by section 5 of the 1975 Act. That does not extend to bankruptcy.
        The Government must be congratulated to this extent. The explanatory memorandum helps us, but not sufficiently, because in relation to each of the offices that are being disqualified we do not know which of the criteria has resulted in that disqualification, nor is it possible for the House to form a clear view as to whether the nice judgment formed by the Minister and his officials is fair or unfair. For that reason, I am making my proposals.
        7.42 pm
        Mr. Teddy Taylor: I have just one question for the Minister. How many people are covered by
        "A Dairy Produce Quota Tribunal constituted under the Dairy Produce Quotas Regulations 1984."?
        The reason why I ask that question is obvious. Many of our friends and colleagues take an active part in tribunal work. It can be time-consuming. take a great deal of effort, and involve individuals in considerable expense.
        When the regulations were passed in 1984, I found that the tribunal was not like others. Basically those who work in those tribunals decide whether someone has a special case for additional milk quota, and they do not have such wide responsibilities as those in some other tribunals. For no apparent reason, the amount fixed for fees is about five or six times that of other tribunals. Therefore, instead of a small, compact number, a large number of people must be involved. Therefore, how many people are affected who are involved in dairy produce quota tribunals?
        7.43 pm
        Mr. Alan Williams: I agree with the hon. Member for Grantham (Mr. Hogg), as would everyone in the House, that it is important to be sure that we have considered all aspects when we talk of disqualifying people from their political rights. Therefore, I should be interested to hear from the Minister whether those listed as people to be disqualified have been consulted in advance, or whether it has been presented to them as a fait accompli.
        I also echo a question asked by the hon. Gentleman. Why, other than the monetary threshold figure, have some of the needs to disqualify only just been recognised? With regard to the threshold figure itself, does it represent any change in the threshold in real terms compared with the threshold when we last dealt with the legislation? In other words, is it purely a cost of living adjustment, or has there been an additional exclusion?
        My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) referred to recorders. I do not need to elaborate further. I should like to hear the Minister's answer.
        7.45 pm
        Mr. Hayhoe: I should like to refer to the points that were raised in the debate.
        The hon. Member for Birmingham, Perry Barr (Mr. Rooker) asked about recorders. I refer him to the debate that we had in April 1983, when the matter was considered in some detail. I am not sure whether my hon. Friend the Member for Grantham (Mr. Hogg) participated—
        Mr. Douglas Hogg: I was in the Whips' Office.
        Mr. Hayhoe: No doubt my hon. Friend hoped to participate. However, I know that several of my right hon. and hon. Friends did.
        It has been recognised for a long time that full-time members of the judiciary are debarred from being members of the legislature. That is common ground between us. It has also been recognised for many years that several hon. Members are lay justices, and, providing that they exercise their jurisdiction outside their own constituencies, some hon. Members continue to give valuable service in that regard.
        The position of recorders lies in between those two in that they are paid. I understand that by tradition they do not deal with cases arising from their own constituencies, or sit in their own constituencies. It has been a longstanding practice of the House that recorders and deputy recorders should not be excluded from membership of the House.
        The hon. Member for Perry Barr asked how many right hon. and hon. Members practise as recorders or deputy recorders. I understand that at present the figure is 10. The matter could be looked at again, but when we discussed it last time in 1983 the consensus was that the practice had been followed for many years, and there seemed to be no particular reason why we should depart from it.
        My hon. Friend the Member for Grantham was right to refer to the explanatory memorandum, although he was a little less generous than he sometimes is. It was an innovation that I helped to bring in a few years ago. It is not produced just a day or so before the debate. I always arrange for a parliamentary question to be answered making it clear that it is in the Vote Office, and a few weeks elapse. This time, it went into the Vote Office on 5 July, which gave people time to study it and raise questions about it. One is always happy to seek to answer any of those questions.
        Mr. Douglas Hogg: I did not mean to sound ungenerous. I am grateful to my right hon. Friend, because I know that, following the 1982 difficulties, he introduced that procedure. It would be of great assistance to hon. Members if, in relation to each of the office holders being disqualified or relieved, he would say which criterion of the four has had the result of bringing about the disqualification.
        Mr. Hayhoe: I was just about to refer to that. As so often happens, my hon. Friend's intervention pre-empted my answer. I was going to say that I had noted his point carefully. I shall look at the matter and see whether that can be done in future years.
        I was asked about the £4,000 de minimis figure, which is quoted in the memorandum. It was £500 in 1957 and was uprated to £4,000 in 1983. The figure was published for the first time in last year's explanatory memorandum.
        In cost of living terms, £500 in 1957 is equivalent to £4,103 today. Therefore, it has roughly been valorised,
        806
        and I undertake that the level will be reconsidered. It has certainly not drawn particular criticism in our debates, and perhaps it was about right in 1957, and is about right now. If a change is desirable next year, it will be reported to the House.
        My hon. Friend the Member for Grantham rightly said that we were discussing the disenfranchising of people tonight, but happily the balance lies with enfranchising people. When we compare the strict balance of those put into disqualification with those taken out, one sees that it is slightly more favourable to enfranchisement, with nine more people no longer being disqualified. The individuals concerned are informed. I would not and could not guarantee that the matter was discussed with everyone affected. However, I take my hon. Friend's point, and will find out whether that would be possible for the limited numbers involved.
        My hon. Friend also suggested the possibility of a Select Committee looking into these matters, and I shall draw that to the attention of my right hon. Friend the Leader of the House.
        My hon. Friend the Member for Southend, East (Mr. Taylor) referred to the dairy produce quota tribunals The explanatory memorandum shows that 31 individuals are involved.
        As I said earlier, we are following well-tried procedures. These are important matters, and it is right that they should come before the House and that hon. Members should have the opportunity, which I have sought to provide by publishing the details of the proposals well before our debate, to make their views known. I shall certainly continue that practice in future, without any commitment one way or the other to the important possibility of a Select Committee studying these matters. I commend the motion to the House.
        Question put and agreed to.
        Resolved,
        That Schedule 1 to the House of Commons Disqualification Act 1975 be amended as follows:—

      PART I OF SCHEDULE 1
      1. After the entry beginning 'C'hief or other Social Security Commissioner for Northern Ireland' there shall be inserted:—
      'Commissioner for the special purposes of the Income Tax Acts appointed under section 4 of the Taxes Management Act 1970.'.

      PART II OF SCHEDULE 1

        Additional entries
        2. There shall be inserted at the appropriate places:—
        'A Dairy Produce Quota Tribunal constituted under the Dairy Produce Quotas Regulations 1984.
        The National Development Team for Mentally Handicapped People.'.

        Entries omitted
        3. The following entries shall be omitted:—

        'The Crown Agents for Oversea Governments and Administrations.

        The Health and Safety Agency for Northern Ireland.

        The Health and Safety Commission.

        The Home-Grown Cereals Authority.

        The Land Authority for Wales.

        The Manpower Services Commission.

        The National Dock Labour Board.

        The Northern Ireland Tourist Board.

        The Red Deer Commission.'

      PART III OF SCHEDULE 1

        Additional entries
        4. There shall be inserted at the appropriate places:—

        'Chairman of the Business & Technician Education Council.

        Chairman of the Council for Small Industries in Rural Areas.

        807

        Chairman, Deputy Chairman or Managing Director of the Crown Agents for Oversea Governments and Administrations.

        Chairman of the Fire Authority for Northern Ireland.

        Chairman of the Health and Safety Agency for Northern Ireland.

        Chairman of the Health and Safety Commission.

        Chairman or Vice-Chairman of the Home-Grown Cereals Authority.

        Chairman of the Land Authority for Wales.

        Chairman of the Manpower Services Commission.

        Chairman of the Board of the National Advisory Body for Public Sector Higher Education.

        Chairman or Vice-Chairman of the National Dock Labour Board.

        Chairman of the Northern Ireland Tourist Board.

        Chairman of the Red Deer Commission.

        A full-time chairman of Social Security Appeal Tribunals and Medical Appeal Tribunals for Northern Ireland.
        Commons Commissioner.
        Director of British Telecommunications p.l.c. appointed by a Minister of the Crown or government department.
        Director of any company in receipt of financial assistance under section 5 of the Films Act 1985, being a director appointed by a Minister of the Crown or government department.
        Member of a panel appointed under section 97(2D)(a) of the Social Security (Northern Ireland) Act 1975 of persons eligible to act as chairmen of Social Security Appeal Tribunals for Northern Ireland.
        Member of the Trinity House Lighthouse Board nominated by the Secretary of State.
        President of Social Security Appeal Tribunals and Medical Appeal Tribunals for Northern Ireland.'

        Entries omitted
        5. The following entries shall be omitted:—
        'Chairman of an Appeal Tribunal constituted in accordance with Schedule 4 to the Supplementary Benefits (Northern Ireland) Order 1977, or Senior Chairman in relation to such a tribunal.
        Chairman of a Local Tribunal constituted under section 97(2) of, and Schedule 10 to, the Social Security (Northern Ireland) Act 1975.
        Constable, Lieutenant or Major of the Tower of London.
        808
        Director of ICL Public Limited Company nominated by a Minister of the Crown or government department.
        Levy Exemption Referee for the purposes of the Industrial Training Act 1982.'

        Other amendments
        6.—(1) In the entry 'Chairman of a committee constituted under section 90 of the Mental Health (Scotland) Act 1960' for 'section 90 of the Mental Health (Scotland) Act 1960' there shall be substituted 'section 91 of the Mental Health (Scotland) Act 1984'.
        (2) In the entry 'Chairman or Vice-Chairman of the National Seed Development Organisation Limited' the words 'or Vice-Chairman' shall be omitted.
        (3) In the entry 'Director of Harland and Wolff Limited' for 'Limited' there shall be substituted 'p.l.c.'.
        (4) In the entry 'Director of Short Brothers Limited' for 'Limited' there shall be substituted 'p.l.c.'.
        (5) In the entry 'Member of the panel of persons appointed under Schedule 5 to the Rent (Scotland) Act 1971 to act as chairmen and other members of rent assessment committees' for 'Schedule 5 to the Rent (Scotland) Act 1971' there shall be substituted 'Schedule 4 to the Rent (Scotland) Act 1984'.
        (6) In the entry 'President, or member of a panel of chairmen. of industrial tribunals established under section 13 of the Industrial Training Act (Northern Ireland) 1964' for 'section 13 of the Industrial Training Act (Northern Ireland) 1964' there shall be substituted 'Article 30 of the Industrial Training (Northern Ireland) Order 1984'.

      Royal Assent
      Mr. Deputy Speaker (Mr. Ernest Armstrong): I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

      1. Town and Country Planning (Amendment) Act 1985.

      2. Social Security Act 1985.

      3. Shetlands Islands Council (Omnibus Services) Order Confirmation Act 1985.

      4. Scarborough Council Act 1985.

      5. Durham City Council Act 1985.

      6. British Railways (Trowse Bridge) Act 1985.

    Liability for Defective Products
    7.53 pm
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alex Fletcher): I beg to move,
    That this House takes note of European Community Document No. 9427/79, draft Directive on the approximation of the laws, regulations and administrative provisions of all Member States concerning liability for defective products and of the Explanatory Memorandum by the Department of Trade and Industry dated 1st July 1985; and supports the Government's intention to have the Directive adopted at the earliest opportunity.
    The subject of product liability is not new to the House. The Select Committee on European Legislation considered the subject in 1976 and again in 1979, and it was debated by the House at some length in November 1980.
    The anomalies in our existing laws governing product liability are well known. A purchaser who is injured by a defective product is entitled to compensation from his supplier, usually a retailer, in strict liability, that is without proof of default, under the law of contract. A victim other than the purchaser, however, can recover damages only under the law of tort—or delict in Scotland—if he can show that someone in the chain of supply has been negligent. For many years now, it has been recognised that this state of affairs is unjust.
    As the House will be aware, the Scottish and English Law Commissions examined the question of product liability and published a joint report in 1977. They were critical of the existing law on a number of counts and recommended that the United Kingdom should introduce a system of strict liability. They recognised that it was desirable to impose liability on those in the chain of manufacture and distribution, who were in the best position to exercise control over the quality and safety of a product, and to insure against possible defects.
    The Royal Commission on civil liability and compensation for personal injury—the Pearson commission—also reported on this subject in March 1978, and made a similar recommendation. It was against that background that our support for the underlying principles of the proposed directive developed.
    The proposed directive is a harmonisation measure introduced under article 100 of the Treaty of Rome. In putting forward its proposal, the European Commission recognised that the divergence in the laws of member states might distort competition, influence the free movement of goods and lead to different levels of protection for the consumer. The extent to which such distortions have occurred is extremely difficult to measure, but we must recognise, considering the experience some British companies have had in exporting, for example, to the United States, that differences in potential liability and in insurance costs arising from different regimes can, indeed, have an influence on marketing decisions and on the terms of trade.
    When the House debated an earlier draft of the proposed directive in November 1980, there was a general consensus that a harmonised European regime based on strict liability was the right way forward, but a number of problems with the text of the directive were pointed out. My right hon. Friend the Member for Gloucester (Mrs. Oppenheim) pointed out that, although the Government agreed with the aim of establishing a common system of liability throughout the Community, the draft could not be accepted as it stood.
    810
    One of the most important changes that we considered necessary was the incorporation of a development risks defence. It is sometimes referred to as a "state-of-the-art" defence. We accepted the argument put to us by industry that the extension of liability to a producer, even when it was impossible to have detected the defect in the product at the time it was put on the market, could substantially inhibit innovation, especially in high-risk industries. We have, therefore, sought to incorporate this defence, to make a number of other changes, and to seek clarification on other points raised during the extensive consultations we have undertaken.
    In Brussels, differences of opinion between member states have persisted on one or two points, in particular on the development risks defence and on the imposition of a financial limit on a producer's total liability. Those differences could not be resolved and, therefore, a compromise package was put forward earlier this year. It incorporated the development risks defence based on the principle of strict liability without financial limit.
    Individual member states are, however, allowed to derogate on both those points, subject to certain limitations. On financial limits, for example, no member state could introduce a total limit for a single manufacturer's liability on a single product of less than 70 million ecu—about £40 million. Experience of operating under those derogations would be reviewed after 10 years to consider their effect and to explore the scope for coming closer together on these points.
    We would, obviously, have much preferred a completely harmonised regime throughout the EC, with a development risks defence but no financial limit, but the course of the negotiations made it quite clear that a common regime on those lines would never be agreed, and that the only alternative to accepting the compromise was to continue for another decade. or more, without reaching agreement.
    In those circumstances, we believe that the compromise package, on which the revised text of the directive is based, should be supported. If the directive is adopted in this form, we shall be free to introduce, in our implementing legislation, a system in the United Kingdom of unlimited strict liability with a development risks defence. Many of our partners will do the same, although some will exclude the defence, and some will impose a limit on total liability. Although such differences are regrettable, we consider that the common features in the directive—especially the common establishment of the principle of strict liability—are more important than the two differences.
    The circumstances in which the development risks defence can be successfully invoked are likely to be rare. It sets a tough standard, and the minimum financial limit is set high so that it should have a minimum effect, if any, on the cost of insurance.
    The package should be seen as a whole. It includes all the other elements in the proposed directive, which have received less attention during the past five years than development risks and financial limits. We have managed to secure some substantial improvements to the text on these points, and to secure clarification on the interpretation of some of the articles, in response to the concerns raised in this House and elsewhere since the first draft was published. For example, hon. Members will notice that we have secured a much more satisfactory definition of "a defective product", and of the scope of

    811
    products covered by the directive, and we have secured some important changes and extensions to the defences listed under article 5.
    On property damage, we have limited the application of the directive to damage done to purely personal property, with a minimum claims limit to exclude trivial claims. Although some hon. Members might have preferred property damage to be excluded altogether, I hope they will agree that, with these limitations to the scope and definition, the provision is now acceptable.
    Some anxiety has been expressed about the effect that the directive might have on the cost of insurance against product liability claims and on the consequent extra burden on industry at a time when the Government are making special efforts to lift such burdens.
    Every study of which the Government are aware, including comparative evidence from countries with different regimes, has shown that the provisions in this directive should lead only to a marginal rise in insurance premiums. This is not surprising. Industry is already subject to strict liability in contract and to liability subject to proof of negligence in tort.
    Mr. Teddy Taylor: How wide are the Department's consultations? Has my hon. Friend heard of an organisation called the Society of British Aerospace Companies Ltd, and has he consulted it as to whether the effect of insurance costs will be marginal?
    Mr. Fletcher: We have had wide consultations with industry, including the CBI. Even if we did not consult the industry to which my hon. Friend referred directly—I cannot answer his point now, but I shall try to find out—I hope that its representations were included in those made to my Department by the CBI.
    Mr. Taylor: The Minister said that his Department may not have had consultations with the aircraft industry, but that it consulted the CBI. This morning, I received a letter from the CBI saying that the change would result in significant increases in insurance costs for the consumer. My hon. Friend will know that I am worried about this, especially about rubbers. The Minister said that the CBI agrees with him, but I say that it does not. Would he check this with his Department, because my view is confirmed in a letter from the CBI?
    Mr. Fletcher: One of the joys of being a Member of the House, at least for the remainder of the time that I am here, is realising that my hon. Friend will never allow me to forget about rubbers. For those who do not understand the reference, I should explain that we are talking about scented erasers. We have discussed this matter at length with the CBI, whose representatives I met only a few weeks ago.
    My hon. Friend said that the change would result in increased costs to the consumer. The insurance costs will be borne by the consumer. Of course, if the increase is significant, it will be passed on to consumers through the pricing mechanism. However, we have had detailed discussions with industry, and we have made the best attempts that we can with the British insurance industry, taking into account experience elsewhere, to judge what the increase in insurance costs would be. The answer is
    812
    that it will be negligible. I know what the CBI says in the letter to my hon. Friend and to other hon. Members, but the letter does not display any expertise on insurance costs.
    I do not accept comparisons with the American experience of product liability as proof that a strict liability regime brings in its wake automatic increases in insurance costs. With punitive damages, contingency fees for lawyers and jury trials for civil liability cases, it is not surprising that companies in high-risk industries have had special difficulties with product liability insurance in the United States. In our view, however, the vagaries of the United States legal system, not the concept of strict liability, caused the so-called "crisis" in product liability insurance in the United States some years ago.
    This directive does not represent a burden on business. The best British companies take their responsibilities for potential defects in their products very seriously; they already insure against possible disasters, and they pay up when it is clearly established that innocent victims have been damaged by their products. This directive will make it clear that all manufacturers and, equally important, all importers must reach these same high standards.
    It is no longer acceptable that retailers, but not manufacturers, should be subject to strict liability, or that the innocent victims of the occasional disaster caused by a defective product must bear the burden on their own. Ultimately, the burden must be shared by all those who benefit from the product, as any increase in insurance or testing costs resulting from strict liability will be passed on to consumers through the pricing mechanism.
    Mr. Taylor: If it is so desperately important to look after consumers' rights and to give them compensation, why has the Minister excluded agriculture? Is that not an area where people suffer damage and death because of problems with products?
    Mr. Fletcher: My hon. Friend is correct to say that the directive excludes primary agriculture, on the basis that farmers cannot be held personally responsible for the vagaries of climate and conditions outwith their control. However, once agricultural produce is processed by manufacturers, it will come within the scope of the directive.
    All products supplied in the EC will be covered by the directive. So British companies will not be placed at any competitive disadvantage. I repeat that it will apply also to all importers, regardless of where the products originate.
    The directive in its present form represents a long-needed advance in consumer protection throughout the EC. I invite the House to agree that we should adopt it without delay.
    8.9 pm
    Mr. Paddy Ashdown: I tried to jot down the Minister's last words. I believe he said that this was a long-needed advance in consumer protection. I am happy to support that view. The ludicrous state of our law until now has meant, as the Minister explained, that only those who had purchased an item and could prove negligence could claim consequently. An example would be a woman who had bought a defective hot water bottle. She could sue if she was scalded, but not if her child was scalded. In the cases of thalidomide, and, more recently, Opren, people seeking to claim compensation have been unable to do so

    813
    because of the lack of a compensation provision for third parties. As the Minister has said, this is a welcome strengthening of the Act.
    The Minister spent a good deal of time on the state-of-the-art defence. The Minister said that it was at the United Kingdom behest that the state-of-the-art defence was included, and it is that which gives me the greatest cause for concern. There is concern in many areas that this may be widened to include design defects, and the National Consumer Council in its brief expressed concerns which are widely held, and which I certainly support, that this will give the possibility of the reintroduction by the back door of the concept of negligence.
    The Minister did not address himself to why we need this provision. He will no doubt know the details better that I do, but we must be just about the only country in Europe to have sought this state-of-the-art defence. In his speech, the Minister said that the reason for it was that if we did not do it it might cut back on some of the development and research in the British pharmaceutical industry. Look at what happens elsewhere in Europe. Germany has a thriving pharmaceutical industry but it has seen no need for a state-of-the-art defence and its industry prospers and survives. The likelihood is that Germany, France and Denmark will derogate from this position and will not call into effect the state-of-the-art defence.
    Mr. Fletcher: It will be helpful if I mention the countries which are for and against the state-of-the-art defence. The countries in favour are the United Kingdom, the Republic of Ireland, Italy, the Netherlands, Denmark and Germany—except in pharmaceuticals. The countries against are France, Greece, Belgium and Luxembourg.
    Mr. Ashdown: There is a significant schism and the interesting point is that Germany does not seek this for pharmaceuticals, yet it has a thriving pharmaceutical industry. Why does the Minister believe that it is so important for us? Does he not concede that there is a possibility, however strict his definitions, that there will be a back door return to the concept of negligence? Other countries do not have it. Is it not also true that those countries which have the state-of-the-art defence, like Britain, may be used as test beds for research and development?
    The Minister mentioned the Pearson commission and I should like to draw his attention to what it said about the matter. It described the position very clearly when it said:
    "to exclude development risks from a regime of strict liability would be to leave a gap in the compensation cover, through which, for example, the victims of another thalidomide disaster might easily slip."
    Is that not precisely the gap we want to close? The Pearson commission made that point strongly. The Minister gave a brief explanation, which was much too weak and inadequate, about why he wishes to see the state-of-the-art defence maintained. We can give this piece of legislation two cheers, but not three. The inclusion of the state-of-the-art defence means that the legislation has within it a gaping black hole through which it seems quite possible that many cases of injustice and inadequate compensation will slip.
    Particularly in the case of another disaster like thalidomide, as the Pearson commission said is it not the case that that defence leaves that massive hole? When the Minister comes to sum up, I hope he will take time to explain to the House why precisely he wishes to see the
    814
    state-of-the-art defence continued when other countries think it is not necessary and when the Pearson commission in particular has recommended the opposite approach.
    8.16 pm
    Mr. William Cash: As a recently appointed member of the Select Committee on European Legislation, I am concerned that this directive has been around for many years. The information I have received is that the Select Committee called for a debate. I was not a member of the Committee at the time that happened. In 1980, this subject first obtained in scientific journals the sort of coverage it deserved. Since then, there has been a tendency for the subject to be rushed and I suspect that perhaps what the Minister said about the need for achieving a breakthrough has led to a compromise that will leave many people in industry rather perturbed.
    I understand the need for getting on with legislation in the European Community. Apparently, it gets bogged down sometimes, but at times there are important matters of this kind which have been around for a long time, and one is left wondering why the matter has been brought forward and effectively, it can fairly be said, pushed through at short notice after inadequate discussion towards the end of a consultation period. I am informed that, when the previous Minister was considering this matter. assurances were given that the United Kingdom would seek as major objectives, first, the achievement of a common regime and, secondly, as has been mentioned on several occasions, the incorporation of the state-of-the-art defence.
    It has also been made clear to me that the present compromise neither adequately safeguards either of those two objectives nor excludes liability for damage to property. As I understand it, the directive will not lead to the harmonisation of European laws. The Minister fairly pointed out that several countries do not subscribe to the directive in its complete form. Therefore, it will add an extra burden to industry and create an uncertainty of approach which is likely to harm further investment decisions.
    The main concerns raised with me are, first, that if strict liability without proof of fault is introduced it must be a specific requirement and claimants collectively should prove that the product was defective, that the injury was caused by the defect, and that the defendant was the producer. Secondly, it must also be open to the manufacturer to prove that he did not put the product into circulation, and that if he did the product was not defective when it was put into circulation, or that the product was not put into circulation in the course of business.
    It is further put to me that the defence of contributory negligence should be maintained, particularly where it could be clearly adduced that the manufacturer issued with the product clear instructions or a warning drawing the consumer's attention to the need to exercise care in the use of the product. I suspect that those arguments are familiar to the Minister, but what may have gone on behind the scenes and what representations may have been made to the European Legislation Select Committee have not previously been heard in the House.
    As I have said before, I am in favour of moving the log jam of legislation which has been snarled up in Europe for a number of years. But there are priorities which must be applied, and it has been put to me most strongly that there has been inadequate consultation in the run-up to the

    815
    adoption of this directive. Adopting it is effectively what we are doing today. As a new member of the Select Committee, I hope we do not find that the removal of a log jam means that things suddenly get rushed through the House.
    This matter has not been the subject of public debate in Britain for five years or more and consultation at the last minute is inadequate. Moreover, the proposed directive does not comply with the Government's previously stated position. The people who are greatly concerned about this would have liked to see the achievement, both in the common regime and in the specific requirement, of the incorporation of the state-of-the-art defence.
    I shall be interested to hear the Minister's view. I understand that there are difficulties in getting through directives of this type given the problems in Europe at the moment. However, it has to be done in such a way as to ensure that those who have been consulted in the past are adequately consulted as the matter proceeds to a final conclusion. That is precisely what we are doing in this debate.
    8.20 pm
    Mr. Teddy Taylor: It would be wrong to approve the motion without conveying that there is real concern in industry about the proposals in the directive. The Minister mentioned the CBI. It should be put on record that the CBI has made it clear that it believes that the regulations will be contrary to the main policy objectives outlined by the Government and will expose industry to the possibility of precisely that degree of liability that the Government declared was unacceptable.
    The CBI also points out that the directive will not lead to harmonisation, though that has been mentioned, that the proposals will mean extra burdens on industry just when the Government are seeking ways to lessen them, and that it will introduce further uncertainties at a time when industry is working hard to remain competitive in the face of increasing insurance and other costs.
    There is no doubt about the insurance position. Although the Minister has had consultations with someone, the CBI has no doubt. It says that the directive will involve very substantial additional insurance costs and that it will be very serious for industry
    It is not just the CBI that is saying that. Other organisations such as the Federation of British Electrotechnical and Allied Manufacturers' Associations makes it clear that in its view the directive will do enormous damage to its members, to jobs, to profits and to trade. The Minister should make it clear that, although he may think that it will not do a great deal of damage, our major industries, especially those on the heavy side, think that these are very damaging proposals.
    It is not just trade associations which take this view. This morning I spoke to people running a number of firms in Southend. If the Minister has any doubt about what industry thinks of the proposals, he should speak to the giant MK Electrical Company, which is greatly concerned that the proposals will have a very serious effect on jobs, on investment, on profits and on its future.
    I want to ask the Minister a few basic questions. Why is he so confident that the effects on insurance costs will be marginal? In this connection, I sought the views of the Society of British Aerospace Companies. After consulting
    816
    top aviation underwriters, the society accepts that for those involved in the production of boots or blankets, for example, there will probably not be an enormous difference in insurance costs, but for anyone involved in a technical or developed product in a special or high-risk industry such as aerospace there will be a devastating effect on insurance premiums. The society—not one or two renegades in it but a society which represents British aerospace—has made it clear that not only does it think that these proposals will add enormously to the insurance costs of its members but that in some cases there will be great difficulty in getting insurance cover at all.
    It must also be made clear that we are not achieving a great deal, if anything, by these proposals. We shall not get the famous harmonisation which the Common Market is obsessively keen to secure. These are not harmonisation proposals. Countries will still be different.
    The Minister also said that we had the protection of the state-of-the-art defence, that the Government thought that this would be a good idea and that we should see it within three years. But let us add three years to 1985. In 1988, although I hope that it will not happen, we could have a different Government. We might have a Labour Government. By and large, the Labour and Conservative parties, in different ways, are concerned for the welfare of industry. I do not suggest that Labour does not care because in a different way the Labour party cares a great deal about jobs and investment, just as Conservatives do. But we also have these strange creatures, the Liberals, who pop into debates such as this for five minutes, speak from a Consumers Association brief and then disappear. It should be recorded that when we are debating a very important motion which will affect the future of British industry, jobs and investment, there is no one present to represent the Liberal party and no one from the Social Democratic party. Instead, a representative popped in to say that the Consumers Association was a grand idea, and then shot out to have a cup of tea. The hon. Member for Yeovil (Mr. Ashdown) said that the Liberals believed that the Government should drop the state-of-the-art defence.
    Although I know that the chairman of the Conservative 1922 Committee and all members of the party will fight hard to make sure that we have a Conservative Government next time round, it is just possible that, because of events outwith our control, there will be a change of Government. If the Liberals and the Social Democrats held the balance of power, they could say that one of their conditions for doing a deal with one of the major parties would be to drop the state-of-the-art defence. That would have a devastating effect on industry and on jobs in any company involved in technology or heavy industry. To that extent, it is desperately important for the Minister to realise that here we have uncertainty, which is the one thing that we do not want at present, as the CBI says.
    Within the three years of implementation, we could have a change of Government. We could just have the alliance, which wants to drop the state-of-the-art defence, having effective control by holding the balance of power. What, then, would be the position of industry? The Government are bringing in uncertainty for industry at the one time that it does not want it.
    There is a second uncertainty. In 10 years, this directive is to be reviewed by the EEC Commission. At that time it will review how the derogations are working out. We know that all kinds of exciting developments are expected

    817
    from a conference on a treaty of European union and more majority voting. As I understand it, the Government's position is that we do not want a treaty but that we want to see more majority voting. My hon. Friend the Member for Stafford (Mr. Cash), who spends all his time studying European matters, will confirm that the British Government accept that any review will be done by a majority vote. So far the majority of the European nations—and certainly they will by then—think that the state-of-the-art defence is one that they are not too keen about in Britain's case. We could in 10 years' time find the state-of-the-art defence being thrown out simply because of a majority vote. Even if the 630 Members of this House say that we do not like it, it will not matter two hoots.
    Mr. Cash: I should point out that I have on a number of occasions expressed my disquiet at some aspects of the Dooge report and also at too rapid a movement to majority voting. I have gone even further and said that I have grave reservations about it.
    Mr. Taylor: I am delighted to hear that. My hon. Friend is one of the sincere hon. Members present. He is saying that he does not like the Dooge report and that he does not like majority voting. But I am saying that he will be able to do nothing about it, apart from complain, in a few months. He knows that we have a vote about the extra cash, which means the end of reform of the EEC. We are now going on to discuss extra majority voting. More and more Conservatives are saying that they are not happy with the way that the Common Market is working. They do not like the jobs that it is losing for Britain. They do not like the extra taxes. They are worried about the effects on industry. It goes on and on.
    With this directive the Commission will have the power to propose to the Council of Ministers that by a majority vote the state-of-the-art defence will be got rid of. If that happens, it will be a bad day for British industry.
    If there was any doubt that this directive would be damaging to industry, that the Department was right and that it was not so bad after all, I think that we saw that it was likely to be gravely damaging when the Common Market decided to leave out agriculture. Whenever agriculture is exempted we know that it must be something nasty. For example, rates are a terrible burden but agriculture is exempted from paying rates. If anything is particularly bad or nasty, one usually finds that agriculture is exempt. Although we are told that this measure is needed to protect European consumers, agriculture is exempt. Can the Parliamentary Under-Secretary say what is meant by the exclusion of primary agricultural products? I think it means that foodstuffs are not exempt if it can be proved that they have undergone industrial processing which causes a defect. If, therefore, people are poisoned or deformed as a consequence of a primary agricultural activity it will not be possible to make a claim against those who produced the food. Only if somebody puts paper around the food which is found to be defective can a claim be made.
    Mr. Cash: I refer my hon. Friend the Member for Southend, East (Mr. Taylor) to the explanatory memorandum that is attached to the amendment to the proposal which sets out the reasons why it appears to be justified to exclude primary agricultural products. It says:
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    "This is by way of contrast to agricultural products industrially produced because strict liability for defects in such products which have been caused by factors extraneous to the activities of agricultural producers could be too onerous"
    without adding why.
    "Such an exemption is even admissible from the point of view of consumer protection for it says that the formulation of the amendment under the present directive when read with article 11 does not exclude liability for fault which generally speaking will not be impossible to attribute."
    If my hon. Friend can make sense of that, I shall welcome his comments.
    Mr. Taylor: What they are saying is quite clear: that it could be too onerous. In other words, if this is applied to agriculture, it could be too onerous a burden for agriculture to carry. But what about British Aerospace? It is not provided with the same protection and subsidy as is provided for agriculture. And what about heavy industry and engineering? It worries me intensely that a Government who are concerned about looking after the interests of British industry and British jobs sadly do not seem to care about them so much whenever agriculture is at stake. It is said that agriculture cannot be allowed to suffer damage. If the Parliamentary Under-Secretary of State thinks that agriculture is so important, what protection will be provided for people who are deformed or damaged because of the various chemicals that are used in agricultural production? As my hon. Friend the Member for Stafford said, the only reason for the exclusion of agriculture is that the liability would be too onerous for agriculture. If it is too onerous for agriculture, what about other industries? Are we not concerned about investment and jobs in British Aerospace, engineering and the whole gamut of British industry?
    The proposals will achieve nothing of value. We are not even getting the harmonisation which the Euro-nuts want that would help trade. The proposals will simply add to the burdens placed upon industry and, far more important, will add to the uncertainties faced by industry. Once again we are introducing something that is completely unjust. We are piling further burdens upon industry without putting any extra burdens upon agriculture. It is tragic that something that is so devastatingly bad for British industry and that contains all these wide implications of uncertainty is being debated in a House which, admittedly on a special night, is not quite so full as it should be. If hon. Members knew what was involved and were to think about their effects, these regulations would be thrown out very quickly, whether or not, as is still the case, members of the Liberal party and the Social Democratic party were in attendance.
    8.34 pm
    Mr. Peter Griffiths: It is always difficult, in legislation of this kind, whether it originates in the European Community or in this country, to obtain the right balance between obtaining protection for the consumer, which is one of the primary objectives, and avoiding placing upon industry any burden which would make it more difficult for it to provide jobs and compete in the world. We must ensure that industry is not faced with additional costs, when it is the avowed intention of Her Majesty's Government to seek ways in which to reduce complications and costs for British industry.
    Mr. Cash: "Lifting the Burden" has just been published and contains a section relating to European regulations. Does my hon. Friend think that this subject ought to be referred back for further consideration?
    Mr. Griffiths: My hon. Friend is right. At this point, however, I am simply accepting that we need to obtain a balance between these considerations and protection of the consumer. One of the problems which during the last few years has made the discussion of consumer protection more difficult has been the number of extremely tragic and highly publicised disasters which have been caused by pharmaceutical products. The result has been a particularly strong demand for consumer protection, which has led to the House being in danger of imposing upon industries far wider than that particular sector a burden which is both unnecessary and unhelpful.
    In general, industry likes certainty. It likes to know what its position will be in a variety of markets. If these proposals were to lead to harmonisation, I should support them. I, like my hon. Friend the Member for Southend, East (Mr. Taylor), do not support harmonisation for its own ends. Nevertheless, harmonisation of matters of this kind would result in many advantages. It is not simply a question of competing with firms which operate in countries with different legal fegimes. We are also trying to sell in those markets, so we are subject to the national laws of those countries. Harmonisation would therefore be desirable, but unfortunately we are not debating a measure that will result in harmonisation. It will create a new set of uncertainties to replace the existing uncertainties. One wonders whether there is a case for saying that if we cannot have harmonisation it would be better to leave well alone.
    I remember that I said a good deal of what I am saying now in our 1980 debate. I congratulate my hon. Friend the Parliamentary Under-Secretary of State for Trade and Industry on the fact that tonight he is able to bring back the fruits of his predecessor's promise: a firm adherence to the principle of a state-of-the-art defence. I wish that the hon. Member for Yeovil (Mr. Ashdown) had remained in the Chamber after making his speech because, if nothing else, he and I have one thing in common. Both he and I have within our constituencies parts of the Westland organisation.
    I listened with blank amazement to the hon. Gentleman opposing a state-of-the-art defence, when the subsidiary of Westlands in my constituency is one of the strongest and most vociferous companies impressing the need for a state-of-the-art defence if we are to maintain our position on the frontiers of research and development, particularly in developments in the aircraft and aerospace industries, and also in the development of composite materials, since it is difficult to know in advance how these materials will operate in long-term use. It is essential that a firm knows that state of the art can be put forward as a genuine defence if a defect arises which could not have been foreseen at the time of manufacture because we did not have the scientific ability to recognise it.
    I congratulate my hon. Friend the Minister on the fact that that problem has been taken on board, but, like my hon. Friend the Member for Southend, East, I am alarmed that there is a possibility that not only may we find that after 10 years some countries have opted out of accepting that defence within their national boundaries, but that the EEC could decide that the defence should not be accepted in the harmonised legislation which we hope to see at that
    820
    time. That would be worrying not just in 10 years' time, but in the intervening period, because it is not possible for industries to know in advance what will happen. We are not getting the certainty that we seek.
    My hon. Friend the Minister said that the brief that hon. Members had received from the CBI did not show any great expertise in insurance matters. Surely no one would wish to suggest that the CBI does not have that expertise. If the confederation says that there may be cost burdens and additional factors of competitiveness, that should be considered as the view of a respected and responsible body. I wonder whether my hon. Friend meant what he said. Perhaps he would like to rephrase his comments.
    I had hoped for a much better agreement from the EEC on harmonisation, based on the general attitude taken by our Government. Aparently that has proved impossible, and I congratulate my hon. Friend on what has been achieved. I hope that our representatives will continue to watch over the interests of British industry in the next 10 years and ensure that we do not have harmonised difficulty to replace existing uncertainties.
    8.43 pm
    Mr. Gerald Howarth: I agree with my hon. Friends that the proposal has been rushed through. Industry is unhappy about it, particularly because of the short notice at which the debate was arranged.
    Following what my hon. Friend the Member for Southend, East (Mr. Taylor) said about the Society of British Aerospace Companies, I stress that it represents the whole range of aerospace companies, including Short Brothers and Rolls-Royce, as well as British Aerospace and all the major and minor subcontractors. Those companies have not been consulted about the detailed provisions of the directive. They say:
    "While the various drafts in recent times have been handed around in most other Community countries they have only been shown to SBAC in strict confidence".
    I understand that open government is operated in Brussels. A hallmark of our Administration has been their concern with open government, but that does not appear to have operated in this case, and that is regrettable. It seems that the proposal will go through, but I hope that the Minister will note that this is not a happy way to proceed.
    I welcome the fact that the Minister has ensured that importers will be subject to the same conditions as British industry, but I should like some clarification from him about what will happen when an imported product—a domestic toaster, for example—becomes defective, causes injury and someone sues for compensation.
    Unlike the manufacturer, the importer may have only a small operation with £100 capital and his business may merely be importing goods, selling them and making a return on the way. What recourse will the consumer have? What recourse will he have if there is a defect in an imported product that is handled by an importer of insufficient standing? What requirement will there be for small importing companies to insure themselves so that funds are available to meet claims?
    I declare an interest as the parliamentary adviser to the Electric Cable Makers Federation. Manufacturers of cable are extremely worried about the implications of the proposal. They produce the cable that goes into appliances such as domestic toasters. If a toaster causes injury, will a cable manufacturer who has merely provided the cable

    821
    be joined in an action and be subject to unlimited liability, even though his product meets British standards? All British cable meets British standards. However, an imported appliance, to which cable is attached, may not meet British standards and a United Kingdom cable manufacturer could be joined in an action.
    I apply that analogy to the aerospace industry. An aeroplane is an amalgam of thousands, sometimes millions, of components. What will happen if a claim is made against a manufacturer who has incorporated a component that has become defective, notwithstanding the fact that it meets all British standards? Will the manufacturer of the plane be liable? Will he be liable if the component comes from overseas? Planes are seldom made from components from only one country. Equally, could a manufacturer of one component be liable for the failure of others? For example, could the manufacturer of the undercarraige be joined in an action because an aeroplane crashed owing to a fault in the navigation system?
    Those are serious questions and I have touched on them only briefly. I hope that the Minister will be able to answer some of them, because there is anxiety on the Conservative Benches that the proposal is being rushed through and that it will have serious consequences for British industry, not only in terms of jobs, but in terms of insurance costs. I hope that my hon. Friend will be able to reassure us.
    8.50 pm
    Mr. Roger King: It is difficult to be a small business man these days. The laws and regulations which are constantly brought before the House make it even more difficult. Large corporations have the funds and resources to take on the challenge of producing high quality products. The smaller manufacturer, employing 20 or 30 people, has severe difficulty in producing the right type of quality products. Under this legislation his task will become more difficult.
    I speak from experience because in the late 1970s my small company, employing 25 to 30 people, earned a living producing replacement road wheels and car seating for motor cars. The company exported to Japan, the United States and to most European countries.
    The problem particularly in America in the late 1970s when product liability was the in thing was that enormous claims were brought against companies such as General Motors and Ford in respect of cars produced 20 years before, after their occupants had been killed in bad crashes. That trend filtered through to the suppliers of accessories such as my firm. Our insurers were hesitant to underwrite us and our products because they argued that, even though we might have tested our products efficiently, given the levels of testing available on this side of the Atlantic, we did not oversee the fitment of the product to the vehicle. The insurers asked, if our product was all right and the car into which it was put was all right, who would be liable for the fitment if all we did was supply the component and the owner fitted it himself. If our product failed, would we be able to fall back on its being incorrectly fitted? It was a grey area which we never resolved because it seemed that everyone successfully fitted our product.
    I hope that the legislation will impose some control over the vast quantity of imported products that enter Britain, particularly spare parts. I have in mind alternators,
    822
    generators, brake systems, brake pipes and so on which are made in the far east and which are packaged in boxes identical to those used by reputable companies in Europe. Even the names are the same. They are sold here under household names. The products are made to reasonable standards and are good copies, but they are liable to failure. I hope that the legislation will bar scurrilous producers in the far east who seek to gain opportunities here and in Europe by peddling components.
    The American experience of unlimited product liability was unhappy initially, and I am worried about the state-of-the-art provision. In two or three years perhaps the users of cars produced today may complain if a vehicle is rammed in the side and a fatality occurs. There is no current statutory requirement to side-impact test a car. Front tests into a concrete block are required and most manufacturers ensure a rear shunt test. The side impact test is voluntary.
    The American experience shows that it is possible to challenge manufacturers in respect of that which they did not find necessary. The situation is dangerous enough for the small manufacturer, but it is fraught with difficulties for the larger company. Legions of lawyers seek to exploit opportunities to bring large manufacturers to account for tests which they were not aware had to be undertaken. Fortunately, the British and European motor industries have to be competitive to stay in business. Their products have to be extremely well made and engineered; if they are not, they will get a bad name and lose in the market place.
    If we are to have rules in Europe, they should help our industry and discourage importers from selling inferior products here. Harmonisation is a small step in the right direction.
    8.55 pm
    Mr. Alan Williams: I approach the order in the role of gamekeeper-poacher as one who was Minister responsible for consumer affairs when discussions began in Brussels in the mid-1970s and who subsequently became the Minister responsible for manufacturing industry.
    It is strange that 10 years after the consultation began complaints are being made about lack of consultation. Lest the Minister thinks that he has found an Opposition ally, I must add that, paradoxical though it might seem, his hon. Friends have a legitimate point.
    The CBI says that the recent changes have been so sudden that it has not had an opportunity to comment on them adequately. I received a brief early last week from a European consumer group explaining why it thought it wrong that the Government should change its position and allow exemption for the Food Manufacturers Federation's clients. About 48 hours later I received a draft document which said that those clients were now omitted from the legislation.
    I received a telephone call today from the Associated British Chambers of Commerce saying that not only had it not been consulted but that it was able to find information only by borrowing a copy of the directive from the CBI. It was in a desperate position, being unable to brief anyone because it had not had time to deal with the changes.

    823
    My hon. Friend the Member for Newham, South (Mr. Spearing), a member of the Select Committee on European Legislation, brought to my attention a comment in a report by that Committee which stated:
    "The Committee have not had time to consult those who submitted written evidence in respect of the original draft Directive. This would in any event have been difficult as no official text of the revised version of the text is available."
    Our watchdog Committee set up to ensure the proper scrutiny of European legislation did not even have a copy of the legislation about which it was supposed to advise the House.
    The peculiarity of the Government's position was demonstrated by the fact that I encountered the document at about 5.30 in the evening with a note saying that the Government Whips wanted clearance to put the matter in the hands of a Committee upstairs. I protested because the issue is far too important to be dealt with tucked away cosily in a Committee from which the hon. Member for Southend, East (Mr. Taylor) would probably be excluded. However, it is not for me to cause mischief between the hon. Gentleman and his Minister. I am sure that he is perfectly capable of creating his own mischief. It so happens that in this case, as with the case of the scented erasers, the hon. Gentleman has a valid complaint about the failure of the Department to carry out consultation on its final proposals. That is the important point. It is all well and good having consultations on the early stage proposals, but the final proposals are those that are likely to operate. Therefore, it is especially important that everyone who has a point of view, especially hon. Members, should be fully up to date on what the Government have in mind.
    The point against the Government in their lack of consultation during recent weeks and the attempt to bounce this provision through the House is justifiable—
    Mr. Nigel Spearing: Is my right hon. Friend aware that the House, through its Standing Orders, has made specific provision that if an EEC document is sent upstairs to Committee any Member of the House, even if not a member of the Committee, can participate in that discussion although he may not vote? I mention that because it is a procedure that gives some safeguard—but not, as my right hon. Friend said, as great as having a debate on the Floor of the House.
    Is my right hon. Friend further aware that there has been an increase in frequency in the work of the Scrutiny Committee where there has been an early proposal that is changed quite drastically at a fairly late stage in the deliberations in Brussels, providing the sort of situation facing the House tonight? I have one caveat—frequently that is done by other institutions in Brussels because other nations do not have the sort of scrutiny of their national Parliaments that we have instituted in this House.
    Mr. Williams: I am most grateful to my hon. Friend for that additional information. I fully appreciate his point about hon. Members being free to attend Committees. I strongly suspect that, in the context of the earlier order to which I referred, the hon. Member for Southend, East (Mr. Taylor) found that in his notification of business for the coming week the relevant item had been erased with one of his perfumed erasers.
    We must recognise that there is a difference of interest, inevitably, and also a community of interest between
    824
    consumer and producer. A consumer wants a product that is safe and as cheap as he can get it, and also wants to be sure that he can be adequately compensated—he does not care who compensates him—if the product should, unfortunately, be defective.
    The producer wants maximum productivity. He wants to be able to innovate his product and to have predictability in the marketplace. The Community wants the best of all worlds. It wants the maximum wealth production that can be obtained from the manufacturing sector.
    For the consumer, the position has become increasingly difficult. That is not a recent development—it has been the inevitable development of the economic system and the system of production. Products have become more complex—scientifically and technologically and in content and composition. It is therefore virtually impossible for the consumer to assess a product when he buys it.
    As a result of the use of sampling techniques in product quality control, there is a risk of errors slipping through the productive system and the consumer becoming the tester of the product—something with which the purchasers of new cars have become thoroughly acquainted. As companies become more international, it becomes increasingly difficult for the consumer to mount an effective case, especially if he has to prove negligence, as he currently must do under our system. Not only is he up against a massive multinational, but one that has, possibly, most of the expertise in the field, the ability to pay for top lawyers and the resources to mount such an expensive law case that it frightens away potential claims. Therefore, the consumer is at a massive disadvantage, something with which the legislation is intended to deal.
    It is a little nonsensical that, if a woman purchases an electric kettle and suffers a severe electric shock, she has a strict claim against the seller of the product. Yet if a member of her family, who did not actually purchase the kettle, experienced a similar shock and injury, he would not have the same rights.
    Therefore, the law that gives a consumer any defence against the provision of defective products is paradoxical, anomalous and unfair. Thalidomide was the spur that triggered the investigations that led to the current proposal.
    As the Consumers' Association has pointed out, because of the escape clause that the Government are providing, even after this legislation is enacted, in the event of another thalidomide tragedy, there will still not be an easier case for the consumer than there was when the concern arose more than 10 years ago. It will be of no help to the victims of Opren who—with 65 dead and more than 3,500 having suffered side effects—are still trying to obtain compensation and recognition from the producer of that defective drug.
    There is, clearly, a difference between the Government Front Bench, the Back Benches and the CBI on this issue. The CBI has said that insurance will be a major factor which will add massively to costs. That seems to differ from the view of the insurance industry. Insurers have suggested that they could cope perfectly well with a system of strict liability, even if it meant doubling producers' insurance costs.
    "It is estimated by the insurance companies that this would only increase the actual cost of insurance from 0·01 per cent. of turnover to 0·02 per cent."

    825
    That was stated in evidence by the Commercial Union Assurance Company in March 1979 to an international conference on pharmaceutical product liability. Further, the Royal Commission on Civil Liability concluded:
    "we have no reason to believe that the total effect of introducing strict liability would be more than a small proportion of product costs as a whole. We think this is a justifiable price for consumers and producers to pay for the benefits which the victims stand to gain by it."
    We may be told to consider what happens in America, where cases involving massive sums have occurred. The Minister did not go into the detail on that, but there are valid points to bear in mind, such as the fact that the Americans operate a different system. Damages in that country are set by juries, which are notoriously generous to victims. Here, the reverse occurs, with damages set by judges, who are notoriously mean to victims and their dependants.
    Mr. Teddy Taylor rose—
    Mr. Cash rose—
    Mr. Williams: When I have finished making this point, I shall give way to both hon. Gentlemen, who can, if they wish, jump to the defence of the CBI.
    The second difference between this country and the United States is that there is an inducement for people there to take action because of the contingency fee system that operates in their legal system. There, it is in the interests of a lawyer to look for a wrong and then find a victim of it, in the knowledge that the lawyer will get a cut if he manages successfully to claim from a company or any other defendant, and the more he gets, the bigger his share.
    Nor must we forget that in America much of the extra cost has arisen because of what has happened in the medical sphere. Because of the existence—while it is allowed to survive—of the National Health Service in this country, that is less of an element in manufacturers' costs. However, as the Government achieve success with the spread of private medicine—inadequate though it has proved to be, with its lack of back-up and so on—that aspect will cause manufacturers more concern than has been the case in Britain in the past.
    Mr. Teddy Taylor: If the right hon. Gentleman is saying that insurance costs are a negligible part of overall costs, he should consult overseas. Will he accept that every insurance company and every underwriter would agree that to increase insurance costs to the extent that the right hon. Gentleman has described would not have a great effect on articles such as shoes, books and hats? However, it would have a devastating effect on products such as aircraft or anything involving advanced technology. The increase in costs would be enormous. The increase in costs might be such that the market might not be able to carry the load. This is being said by underwriters and by the industries that will have to bear enormously increased costs. I ask the right hon. Gentleman to accept that there is a danger of a substantial increase in insurance costs for companies that manufacture complex products.
    Mr. Williams: I am interested in the hon. Gentleman's argument. If the information is available, it is a pity that it was not put before us this evening so that we could judge it for ourselves. The findings of the Royal Commission and the evidence that has been given by insurance companies seem to conflict with what the hon. Gentleman is saying, but no doubt he knows better than they.
    Mr. Cash: I remind the right hon. Gentleman that awards made by judges recently have been increasing significantly. There is something slightly unreal with the American analogy. There is a tendency for a significant increase in the amounts that are being paid out by our courts. This is a factor that will have to be taken into account in future.
    Mr. Williams: I am only too happy for consumers that there is such a trend. Even if the hon. Gentleman considers comparisons at the higher levels, as he describes them, he will find that there is an enormous gap between levels in the United Kingdom and those in the United States. In fact, there is no basis for comparison.
    I recognise that it is difficult to advance an argument on development risk. However, the Minister eloquently argued on behalf of manufacturers running small businesses. He did not argue on behalf of those running small retail businesses. When referring to the impact of the proposals on small manufacturers, he was describing the fate of small retailers, which will continue until the measure is introduced. That seemed to cause him no deep concern.
    Does industry have the right to use the consumer as a guinea pig or as a testing area? The hon. Member for Southend, East shakes his head. I shall present him with an exact example. It is easier to carry out medical experiments on animals in the United States than it is in Britain. On the other hand, it is easier to carry out experimentation on humans in Britain than in the United States. That is the result of the United States strict liability legislation. The Germans have recognised that and they do not want Germany to be used as the test ground for large drug companies. That is why they have introduced strict liability legislation for the manufacturers of pharmaceutical products.
    Some of the scare stories do not always bear close analysis. The Japanese Government, for example, have introduced legislation that leads to the withdrawal of products that are deemed to be unsafe. At the beginning of a 10-year period, the Japanese were producing 1 per cent. of new drugs but now, 10 years later—this is despite tighter legislation—they are producing 20 per cent. of new drugs. I suspect that the purpose of many scare stories is to try to frighten us rather than describing what is likely to arise.
    The proposals before us would impose a duty on manufacturers to improve the quality of their products. Manufacturers will always tell us that they cannot meet higher quality standards. I remember an occasion when the British television industry was trying to secure sales of components to Japanese television producers in Britain. The British industry argued that the Japanese were sheltering behind a restrictive practice in demanding such high quality of product and component. Eventually, the British manufacturers met the revised standards. That has helped their own component manufacturing. I question whether the consumer should be used as an alternative to proper quality control and quality testing.
    First, where does the responsibility lie when a component of a product is defective? Is the case against the producer of the component or against the producer of the consumer product? I assume that it is against the latter, who in turn will have a fall back against the component manufacturer. I do not know, and it is important that we should have an answer. Secondly, if, for example, a

    827
    product is produced in Taiwan, the British consumer will have no case against the producer. However, will he lose the protection that he has at retail level against those who supply the Taiwanese product?
    In France, there is a strict liability. Does the British consumer who suffers damage from a French component get the benefit of the French system and therefore have a claim against the producer of an advanced technology product that in this country would use the state-of-the-art defence, or does the British consumer suffer the disadvantages of the system that we shall be operating?
    In saying that we give this proposition a fair wind, we recognise that there is a right of derogation and the possibility of review after 10 years. The Government have, however, been rather ham-handed in the way that they have steamrollered this through the House. Had they had proper consultation with the industry and their Back Benchers, there might have been better good will in the House.
    9.17 pm
    Mr. Fletcher: With the leave of the House, Mr. Deputy Speaker, may I say that I welcome the views expressed by hon. Members on both sides of the House. As the right hon. Member for Swansea, West (Mr. Williams) said, this directive has been around in some shape or form for about 10 years. Industry and other interests have been consulted extensively during this period and, following a comprehensive consultation on the 1979 draft, informal exchanges of view have taken place periodically as discussions on the directive progressed. I had a further meeting with the CBI just a few weeks ago.
    Although a formal round of consultations on the latest version of the draft was not possible, the points made by the industries consulted over the years were taken into account in the recent redrafting of certain details of the text. Further consultation with interested parties will take place before the implementation legislation is introduced. No one who has been involved in consultation over the years should have been taken by surprise by the contents of the draft.
    We have had repeated meetings with the Society of British Aerospace Companies. My hon. Friend the Member for Southend, East (Mr. Taylor) asked me to confirm that, and I do so. The Scrutiny Committee has already considered this subject more than once and a full explanatory memorandum, together with the revised text of the directive, was provided to the House on 1 July, as the right hon. Member for Swansea, West, will know.
    I am surprised that the hon. Member for Yeovil (Mr. Ashdown) does not support the development risks defence. I cannot understand his unwillingness to accept that companies should not be expected to carry responsibility in cases where the extent of technical knowledge at the time the product was distributed could not have detected a defect in the product.
    As I understand from my hon. Friend the Member for Portsmouth, North (Mr. Griffiths), he and the hon. Member for Yeovil share the Westland company. I do not know what consultation the hon. Gentleman has had with that firm, but I should be surprised if it had not urged him to support the development.
    Mr. Ashdown: The Minister will know that we are all subject to a good deal of lobbying, which we accept or
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    reject according to judgment. Does he agree that the state-of-the-art defence is not seen to be required by the German pharmaceutical industry, and that even the German compensation laws are stronger than ours in that they require proof that it was not the manufacturer's defect? Does he further agree that the state-of-the-art defence, which he has allowed to be included, would not protect consumers or those who suffer in cases such as those involving thalidomide or Opren? Is he aware that that is the black hole to which we object?
    Mr. Fletcher: I was about to deal with pharmaceuticals in Germany. A defective drug in this context will be one which does not provide the safety which can reasonably be expected of it, taking all of the circumstances into account, including its presentation—labelling, warnings, instructions and manner of marketing. My hon. Friend the Member for Stafford (Mr. Cash) talked about reasonable use, although not just in terms of pharmaceuticals. Unreasonable use of a product would be a defence.
    A drug would be judged by many factors in addition to its intrinsic chemical and physical properties. It would be for the courts to decide whether a drug is defective in the circumstances of each case. Factors such as the seriousness of the disease being treated and the correlation between estimated benefits and estimated risks will be relevant.
    Some people might argue that development risk defence emasculates the directive's provision for strict liability in respect of drugs and that it would let a modern thalidomide off the hook. It should be remembered that the test of the state of scientific and technological knowledge at the time is tough and dynamic. Given our existing knowledge, the manufacturers of thalidomide or of any other product likely to be given to pregnant women and which had not undergone adequate pre-clinical tests for teratogenic potential could not claim the development risk defence if they were to be on the market today. That is the best advice that I have and that I can give the hon. Member for Yeovil.
    The regime in Germany does not have development risk defence, but its definition of a defective product contains some of the elements of the state of the art. It is not quite such a black and white comparison as might be suggested.
    Mr. Ashdown: I apologise for pushing the Minister further about thalidomide, but I am sure he is aware that it is a matter of great concern. He carefully applied two different time contexts and said that we now have better means of checking products. If another thalidomide case came up under the state of the art, would not those who suffered be covered? Yes or no?
    Mr. Fletcher: The hon. Gentleman is presenting his argument starkly and somewhat alarmingly. The directive would go a considerable way to prevent a recurrence. I cannot give a yes or no answer in such circumstances. The directive goes some considerable way to meet the alarm which the hon. Gentleman mentions—an alarm which should not be lightly raised in such matters.
    My hon. Friend the Member for Stafford mentioned a provision on contributory negligence, especially when warnings are properly given. There is a provision in article 582 for contributory negligence. The importance of warnings and other aspects relevant to the presentation of

    829
    the product is pointed out in the definition of "defective product" in article 4. I hope my hon. Friend finds that helpful.
    I should like to refer to my hon. Friend the Member for Southend, East and his attack on the agriculture industry, or the fact that it is not included in the directive. In my opening remarks I gave the reason why. The exemption was considered necessary because farmers could not be expected to take responsibility for the vagaries of the climate, the soil and pollution caused by extraneous factors outside their control, all of which can cause the product to be defective. However, if it goes through any industrial processing, it comes within the terms of the directive. The producer of processed foods would have recourse against the supplier of defective meat, not under those terms, but under the normal contract. For example, if someone canning salmon or beef received a consignment that was off, he could take action against the supplier under normal contract terms.
    My hon. Friend was also firm in his comments on the aerospace industry. We accept that there are good arguments for a common regime without any derogations. That is what we are trying to achieve. We can see its importance, not least in the aerospace sector itself, which is international. The composition of the product, like the market, is almost certain to transcend national frontiers. However, the same can be said of other sectors that are dealt with in the directive, such as shipbuilding, drugs, computers and so on.
    I have to disagree with my hon. Friend when he says that the increase in insurance on aircraft would be devastating. If that were the case, the United States aircraft industry would have gone to the wall a long time ago. I see no reason why he should assume, in terms of insurance costs, that anything devastating would happen to our aircraft industry. That is one of the reasons why I criticised the comments made by the CBI about the cost of insurance. I do not believe that those exaggerated comments are justified.
    Mr. David Mudd: Can my hon. Friend help us in establishing the truth on the likely increase in insurance costs for the aerospace industry? Has he had any discussions with insurers and can he give us an idea of his views on that?
    Mr. Fletcher: I shall make some further comments on insurance in a moment. I wanted to refer to the point made by my hon. Friend the Member for Southend, East.
    Our evidence on insurance and the evidence collected by the European Commission came from 35 industrial sectors and conflicts with the remarks made by the aerospace industry itself. We believe that we have gone round all the industries with which we could reasonably discuss the matter and obtained their views as well as the views of the insurance industry, taking into account the situation in other countries and the regimes in those countries affecting product liability.
    My hon. Friend the Member for Southend, East also referred to the absence of proper harmonisation creating uncertainty. We believe that the proposed package provides greater harmonisation and certainty and that it is the only realistic alternative to continuing to debate the matter, as we have done for many years, or taking the path of no harmonisation at all. That may suit my hon. Friend, but the Government could not support that view.
    Mr. Teddy Taylor: My hon. Friend said that he was not creating uncertainty. Does he accept that the derogation can be overturned by a majority vote in the Council of Ministers in 10 years' time, whether or not the Government want it, and whether or not 630 Members of Parliament vote against it? If that is not uncertainty, what is?
    Mr. Fletcher: I do not accept that the derogation could be overturned by a majority vote in the Council, because under article 100 of the treaty a unanimous vote is required. [HON. MEMBERS: "Will the Minister stick to that?"] Yes, of course I stick to that. I cannot foretell what changes will take place in the Community during the next 10 years, but any changes would require a unanimous decision. Clearly, my right hon. and hon. Friends, who will consider these matters at a conference which will take place shortly, will take into account, not merely the immediate position of the United Kingdom, but matters concerning our future.
    Mr. Cash: As my hon. Friend says, the directive is introduced under article 100, which deals with the harmonisation and approximation of laws, as set out in the title to the debate. I am puzzled that harmonisation under article 100, which requires unanimity, could be changed only if at a subsequent date the voting arrangements in the treaty were amended. What is the point of introducing a provision under article 100 in an attempt to achieve harmonisation when, by virtue of what my hon. Friend has said, it is clear that many member states are not prepared to accept the provisions of the directive? It leaves me with a degree of disquiet that we are following the route of article 100 when the objectives of the directive are not accepted by member states.
    Mr. Fletcher: The objects of the directive are accepted by other member states. Two derogations hav e been agreed—one on financial limits, and one on development risks. My hon. Friend will not wish to exaggerate the position, because the directive achieves considerable harmonisation on product liability within the Community.
    Mr. Teddy Taylor rose—
    Mr. Fletcher: I am trying to answer all the questions that my hon. Friend the Member for Southend, East asked.
    Mr. Taylor: This is my last question. My hon. Friend explained that at present article 100 regulations are subject to unanimous vote, which is an important safeguard. The Government put forward proposals to the Council of Ministers about reducing the impact of the veto and said that we would agree to remove the veto on many issues, except those involving a supreme issue of national importance. Will he assure us that article 100 of the treaty will still require unanimous consent? Is that the Government's position?
    Mr. Fletcher: That is the present position. My right hon. and hon. Friends are probably going into discussions on these matters, and I cannot say during this debate what position they will take.
    My hon. Friend the Member for Southend, East asked what would happen in the next 10 years if there were a change of Government. I am sure that he can think of many actions which a Labour or Lib-Lab Government could take which would be much more damaging to British industry than changing this directive, which they could do.

    831
    Indeed, if one is producing a list of the damage that such a Government could do to British industry, one would not begin with the subject under discussion this evening.
    My hon. Friend the Member for Portsmouth, North supported the directive, and I am grateful for that. He was worried about what might happen during the next 10 years. I believe that I have just answered that point. He and my hon. Friends the Members for Cannock and Burntwood (Mr. Howarth) and for Birmingham, Northfield (Mr. King) asked whether there might be a burden on business. I answered that point in my opening speech, when I said that it is not an unnecessary new burden on business. It merely corrects an anomaly in existing law and puts the large manufacturer and the importer on the same footing as the small retailer. That point was made by the right hon. Member for Swansea, West. My hon. Friends seem to have forgotten that the small retailer is already subject to strict liability under the law of contract.
    The question which the House will wish to address in concluding the debate is: who benefits from the directive? The consumer will benefit from the injection of certainty into this area of the law throughout the Community, and will benefit especially from the ability to claim compensation without having to prove negligence. Retailers will benefit, to the extent that consumers will now be able to sue the manufacturer of the product, or the importer, direct, whereas at present only the immediate supplier—usually the retailer—is strictly liable for defective products.
    British industry will benefit from the clearly stated development risks defence. Although it will not be given the protection of that defence in export markets, where the
    832
    importing country does not have such a defence, British industry may have a slight advantage over its competitors in that it will be protected from development risk liability in its domestic market.
    Question put and agreed to.
    Resolved,
    That this House takes note of European Community Document No. 9427/79, draft Directive on the approximation of the laws, regulations and administrative provisions of all Members States concerning liability for defective products and of the Explanatory Memorandum by the Department of Trade and Industry dated 1st July 1985; and supports the Government's intention to have the Directive adopted at the earliest opportunity.

    Liability for Defective Products
      STATUTORY INSTRUMENTS, &c.

        TOWN AND COUNTRY PLANNING (SCOTLAND)
        Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committee on Statutory Instruments, &c.)
        That the draft Town and Country Planning (Fees for Applications and Deemed Applications) (Scotland) Amendment Regulations 1985, which were laid before this House on 25th June, be approved.—[Mr. David Hunt.]
        Question agreed to.

        AGRICULTURE
        Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committee on Statutory Instruments, &c.)
        That the draft Agricultural Products Processing and Marketing (Improvement Grant) (Amendment) Regulations 1985, which were laid before this House on 27th June, be approved.—[Mr. David Hunt.]
        Question agreed to.

    Chile
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. David Hunt.]
    9.37 pm
    Mr. Jeremy Corbyn: I hope that this debate will finish in good time so that my good and hon. Friend the Member for Linlithgow (Mr. Dalyell) can explain the effects of monetarism in Britain, as I hope to explain the effects of monetarism in Chile during the past 12 years.
    In two months' time, we shall commemorate the 12th anniversary of the coup in Chile, when the democratically elected Chilean Government were removed in one of the most vicious and bloody coups that there has been for many decades anywhere in the world. The ramifications of the coup continue to be felt by the people of Chile, and they have had a grave effect on relations between Britain and Chile. That is the subject of my debate.
    It is worth recalling that, during the three years before the coup which removed the Government of Salvador Allende from office, there was a process of destabilisation of the Government by multinational companies and by the Central Intelligence Agency of the United States. A consistent programme of attacks was made on that Government by many Western European and other Governments, which did nothing to support them and everything to try to remove them from office. Indeed, towards the end of their life, that Government were faced with impossible problems as the military prepared for a coup.
    I can quote from an interview between Orlando Saenz and President Allende just before the coup, and published in 1980. When they discussed whether there could be some rapprochement or relationship with the armed forces, he said to the President:
    "But, Mr. President, you have nothing to offer. It's a waste of time to make a pact with you. You're a living corpse, you're useless. No politician with a minimal degree of skill will make a pact with you, for the simplest of reasons: he doesn't need to."
    He went on to say there was going to be a military coup against the Government, a Government which had been elected by 43 per cent. of the people of Chile and which had gained a great deal of support during their lifetime.
    The relationship between the coup, the life of the people of Chile and the Government of General Pinochet is close to the people of this country. Many Chileans sought refuge in Great Britain after the coup in 1973. Many Chilean people live in this country as asylum-seekers and refugees, and they read with horror about the mounting violence and the horror of life that many of the poorest people of Chile face all the the time.
    It is worth recalling that the former Minister for Trade visited Santiago in October 1980. In a report which was widely circulated in El Mercurio Weekly Report, a Chilean newspaper, he said on his visit to Chile that his experience of the Chilean economy was that it
    "is very similar to what we are trying to develop now in Great Britain."
    He was asked what aspects of the economic policies he found so similar and he went on to describe his Government's belief in cutting state expenditure, state bureaucracy and taxes on profits, and removing controls and restrictions on prices and wages, the exchange rate and investment overseas. The Minister went on to say that he
    834
    wished to "break up the monopoly of nationalised enterprises" and he wished the Chilean Government well in their economic experiment.
    In many ways, that encompasses a lot of the thinking of the present Tory Government's concern with Chile. A 12-year experiment in monetarism was going on in Chile and the cost to its people has been high. In 1974, just after the coup, the unemployment rate was 9·2 per cent. By 1982 it had risen to 28·3 per cent. The index of real wages was taken as 65·1 in 1974. It had gone down from 100 at the time of the coup and had risen to only 82 in 1982. In other words, the Chilean people were 20 per cent. worse off at the end of a 12-year experiment. Consumption in the richest households in Chile had gone up by 15 per cent. but for the poorest people consumption had gone down by 31 per cent. That again is the result of 12 years of monetarism.
    What is the relationship between Britain and this murderous dictatorship in which so many people have died during the 12-year period? There have been states of siege, there has been unrest, and at one stage questions were asked about whether or not the British ambassador should have been restored to Chile in 1980, as he was. The Conservative Government which restored the ambassador to Chile said, and I quote from the then Minister of State at the Foreign Office who is now destroying our railways:
    "We have used our ambassadors wherever appropriate or necessary to follow up particular cases involving human rights in a large number of countries: this is an important reason for having an ambassador in Chile. When it comes to human rights. this Government prefers action to words."
    If they prefer action to words, why is it that this so-called constructive dialogue has been so monumentally ineffective in influencing the Government of Chile and their behaviour? I can give figures which show the deterioration of human rights in Chile between 1982 and 1984. In 1982, there were 1,789 political detentions in Chile. In 1983, there were 14,515 detentionss in one year. If the equivalent figure of detentions were applied in this country, it would be between 75,000 and 100,000 people detained in one year. In the six months between January and June 1984, there were 2,981 detentions.
    I could go on through a whole series of statistics of this kind—for example, the number of people killed either by the police or in so-called confrontations, the number of people who disappeared, and the number of certified tortures, which rose to 432 during 1983, the year when the British Government were supposed to be maintaining a policy of constructive dialogue with the dictatorship of General Pinochet in Chile.
    There are specific cases and specific quotes. Many cases have been referred to the Foreign Office and to various Ministers, and I should like to raise the case of Pedro Fernandez Lembach, who is a political prisoner in Chile. His companyẽro is a member of my union, the National Union of Public Employees, and the British Government have given entry clearance for Pedro to come to this country when he is released from prison. I raise his case not because his life is very different from the lives of many others but because it is a case about which there is great public concern.
    I quote the statement made by Constanza, who is also a political refugee. She says:
    "Pedro and I were arrested together in May 1980 by the CNI"—
    the secret police force—

    835
    "on trumped-up charges of illegal possession of arms and manufacture of explosives. I saw him tortured, but managed to get released from prison and leave Chile. Pedro is still in jail and is seriously ill. After waiting for three years for his case to come up, he was sentenced to ten years' imprisonment and four years' exile."
    Although he has been granted his visa, he has not been able to come here because he is still held.
    Merely to quote the violations of human rights which are so common, so appalling and so tragic in Chile is one thing. The reason that I raise this matter on the Adjournment is not just to give some emphasis to the appalling statistics to which I have been able to refer. It is also to emphasise what I believe is a very close working and constructive relationship between the British Government and the Government of Chile.
    During the past few months, a number of documents have been released secretly from the Foreign and Commonwealth Office, one of which was sent to me. It was later reprinted in the New Statesman. It demonstrates two facts. First, British Government Ministers have a clear policy of maintaining arms sales to Chile. I quote as an example the sale of the Centaur, which is made by Laird (Anglesey) Limited—a part of the Laird group—and which is an armed vehicle used for crowd and riot control. Its purpose is to kill people, yet the British Government expect us to believe that the Centaur is part of the arms trade which is normally restricted to weapons that cannot be used for internal repression.
    I ask the Minister to say what the Centaur project is for if it is not for internal repression. One vehicle has been sold, and it is clear from answers in this House and answers to questions from Lord Hatch in the other place that it is the intention to sell more of those armed vehicles to Chile.
    Recently a letter was published in The Guardian about this matter. During a meeting with the Minister of State at the Foreign Office it was said that any weapon could be used as a weapon of aggression; a pen could be used as a weapon of aggression if someone cared to use it to attack someone else. Mr. Graham Davy said in his letter published in The Guardian on 24 June:
    "Quite so. And the 300 Centaur half-track vehicles which the Government is considering selling to General Pinochet might be used for taking old ladies on picnic outings in the countryside round Santiago."
    They might well be, but their purpose is repression. They are repressive vehicles.
    The issue of the sale of arms was raised by staff within the Foreign and Commonwealth Office after the state of siege was imposed in November 1984. I quote from a document sent to the Minister by Mr. Coates in the South America department of the Foreign and Commonwealth Office. He says:
    "In response to the recent deterioration in the political situation in Chile, in particular the declaration of a State of Siege on 6 November, the Secretary of State has called an office meeting to consider a policy on our bilateral relations."
    That was to be held before the Minister's departure.
    "I should … be grateful for your comments on … the extent to which we can dissuade the commercial banks from making further loans to Chile; the extent to which ECGD can be asked to withdraw existing offers of cover and review its market limits downwards; whether our delegation to the World Bank…could be instructed, on political grounds, to refuse approval for new loans to Chile; whether approval given to Fairey Engineering to tender refurbishment of a civilian research reactor
    836
    could be revoked and future applications refused, on grounds of other than non-proliferation considerations; whether any other trade sanctions could be envisaged."
    It also asks whether defence sales to Chile could be stopped. It lists them, and they are very substantial. They include the Centaur, Blowpipe, Seacat, Rapier, ex Royal Navy survey ships, land-based Harriers, Jaguars and naval Lynx helicopters. What will they be used for, if not for internal repression against the people of Chile? Or is it because the Britsh Government wish to have a close relationship with a well-armed Chilean junta that can be used as part of the south Atlantic strategy and the Falklands enterprise? I believe that to be very much the case. It is one of the two reasons why the British Government are prepared to continue to sell arms to Chile and to soft pedal on the considerable abuses of human rights in Chile.
    These are very serious matters and it is regrettable, to say the least, that there can be only a fairly short Adjournment debate on this subject. However, in the near future there will have to be a full debate. The British Government will have to answer for their policy towards Chile and all Latin American countries, particularly the Latin American dictatorships. It is significant that the British Government are the only Government to hold back. It is only the British embassy in Santiago that does not condemn the violation of human rights. It is only the British Government who do not condemn the violation of human rights in the strident terms in which it is condemned by so many other European Governments.
    The general secretary of the Transport and General Workers Union wrote recently to the Foreign Secretary and asked for an undertaking from the British Government that they would cease arms sales to Chile because of the violation of human rights in Chile. The general secretary at that time, Moss Evans, mentioned a number of people who had been murdered recently by the Chilean armed forces. In his reply the Foreign Secretary said:
    "I can assure you that we have repeatedly expressed our concern about human rights violations to the Chilean authorities. There can be no doubt about our views … You also ask about arms sales: it is indeed our policy not to allow British companies to sell arms to Chile which in our judgment are likely to be used for internal repression."
    In 1973 the Moneda palace in Santiago was bombed and strafed by Hawker Hunter jets made in this country and flown by pilots trained in this country. The training of the Chilean armed forces continues in this way. British arms have been used to gun down the Chilean people. It is an absolute disgrace. The British Government should end all arms sales to this odious regime which is destroying the lives of so many people.
    A visit was paid recently to this country by a very remarkable woman, Maria Maluenda, who has suffered so much and who has seen so much violence. During the Allende Government she was the ambassador to Vietnam and saw what the B52 bombers were doing to the people of Vietnam. She witnessed the coup in Chile in 1973. More recently she suffered the terror of hearing and seeing her son being murdered at point blank range, his body being mutilated afterwards by the armed forces. She came to this country to seek support for what she is trying to achieve for Chile, which is a peaceful future. When asked what could be done she said:
    "I think you can do a lot. If you see the resolution of the European Parliament passed unanimously a short while ago, there are suggestions in that resolution that should be taken up not only by the governments and official organisations but by

    837
    people in different countries … I would like to say that I am here because I decided to travel to denounce these latest assassinations, these latest crimes. I speak in the name of thousands of women—not only women, but fathers, brothers, sisters, children who have suffered in my country just as we are suffering at this moment. I pray that you do not take my words as the words of one person, but as the words of thousands and thousands of people. The wife of my son had her father arrested eight years ago and it has never been possible to find out what has happened to him."
    It is the daily life of many people in Chile to see their friends and loved ones removed from them, to hear of beatings, tortures and rape.
    I received a letter recently from Santiago—I shall not give the name for fear of reprisals against that person, which in itself is an indictment—in which that person says:
    "They kidnap and make marks in the body of the people after advising them not to say anything to anybody. Fortunately the people have denounced those threats. The new modalities with women are to rape them, as the case of the law student, who was raped and three times kidnapped. To live in this atmosphere is not easy."
    I trust that the Minister will tell us why the Government continue to supply arms to Chile, why they continue to allow members of the Chilean armed forces to be trained in this country and why they do not take seriously the many denunciations of the Chilean regime and break our arms link with it. The Government should make sure that our embassy in Santiago takes up violations of human rights rather than the promotion of arms sales by so many private sector arms companies in this country.
    9.55 pm
    Mr. Robert Jackson: Chile is an important country, both in itself and in what it stands for, so I welcome the opportunity that the hon. Member for Islington, North (Mr. Corbyn) has provided to discuss the country, although I do not agree with everything that he said.
    The Chilean situation must be seen in the wider Latin American context and I should like to take the opportunity to report to the House on a three-week visit to Central America from which I have just returned.
    My companions on the trip, which was sponsored by War on Want, were the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) and Mr. Campbell Christie, the general secretary-elect of the Scottish Trades Union Congress. We visited Cuba, Mexico, El Salvador, Honduras, Costa Rica and Nicaragua, and we had planned to visit Guatemala, but I regret to have to say that we were told that we would not be welcome there.
    In politics, as in life generally, one's conclusions tend to follow from one's starting point, so where should we begin our analysis of the vast and complicated imbroglio in Central America?
    Should one start, as does the Kissinger report, by remarking on the depth and gravity of the economic and social tensions that grip the region? Should one begin, as do many in Washington, by emphasising the novelty of the intrusion of Soviet, East European and Cuban influences into a formerly undisputedly American sphere of influence? Or should one rather refer as a starting point for our inquiries to that sphere of influence and to the economic, social and political structures that it has created, sustained or merely permitted? I am sure that that
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    would be the starting point of the hon. Member for Islington, North, who has emphasised the importance of the American role in Chile.
    I am not sure that it is possible to generalise about those different factors affecting the five republics of Central America. The states share a common origin—
    Dame Judith Hart: Is the hon. Gentleman proposing to direct his remarks to the issue of the debate, which is Chile, or to Central America?
    Mr. Jackson: The right hon. Lady will find that I will make frequent references to Chile. The states share a common origin in the Spanish colonial kingdom of Guatemala and each country displays on its arms the image of five volcanos—remarkably apt symbols of their politics as well as their sense that they have something special in common.
    The reality of the situation is that these countries are as different from each other as were, say, the city states of ancient Greece—
    Mr. Roland Boyes: Is the hon. Gentleman absolutely sure about the title of the debate? I understand that it is
    "United Kingdom relations with Chile".
    That is a specific title and wonder whether the hon. Gentleman is aware of that fact. He seems to be covering a number of states that are unrelated to the debate
    Mr. Speaker: Order. It may' help the House if I draw the attention of the hon. Member for Wantage (Mr. Jackson) to the subject of the debate. It is on the Adjournment motion, which is traditionally rather wide, but the subject is
    "United Kingdom relations with Chile"
    and not with Central America generally.
    Mr. Jackson: I took the opportunity of discussing with your colleague who was in the Chair before you, Mr. Speaker, my handling of the subject.
    Mr. Tony Banks: Order. The hon. Gentleman is challenging the Chair.
    Mr. Speaker: Order. I am grateful for the protection of the chairman of the GLC—
    Mr. Corbyn: On a point of order, Mr. Speaker. The debate has a specific title which is
    "United Kingdom relations with Chile".
    If the hon. Member for Wantage (Mr. Jackson) is trying to delay the House, perhaps he should tell us why. Alternatively, will he direct his remarks to the subject of the debate?
    Mr. Speaker: I have already said that. We must stick to the subject chosen by the hon. Member who was successful in the ballot.
    Mr. Jackson: I do not propose to delay the House. I think that the hon. Gentleman will not disagree with my conclusions if he will allow me to explain them. I shall make constant references to Chile, but I am talking about the wider Latin-American context, in which the Chilean problem must be seen.
    I return to my argument. These countries have something in common, but they are different from one another, as were the city states of ancient Greece.
    It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. David Hunt.]
    Mr. Jackson: Politically the crucial differences between these countries seem to flow from the varying degrees to which the central American republics have been able to transfer their power to the civilian middle classes. Costa Rica, a country of purely European settlement with no history of Indian serfdom, is at the most advanced end of the scale. It is a stable, bourgeois democracy, established in 1948, and it dealt with the problem—
    Mr. Speaker: Order. The hon. Gentleman is straying widely now and I must ask him to direct his speech to British relations with Chile and not with the rest of central America.
    Mr. Jackson: I shall cease to speak in this debate because I should like the opportunity to report on the visit. I am sorry that Opposition Members have taken exception to my remarks. I do not think that they would have been dissatisfied with what I had to say. I did not intend to delay the House, and I look forward to discussing these matters on another occasion.
    10.1 pm
    Dame Judith Hart: I sympathise with the hon. Member for Wantage (Mr. Jackson), but some of my right hon. and hon. Friends wish to speak to the subject of the Adjournment. The hon. Gentleman must look for his opportunities at another time.
    I wish to speak briefly in support of my hon. Friend the Member for Islington, North (Mr. Corbyn). I had the great privilege of speaking from my Front Bench when we had our first debate in November 1973, following the coup in Chile, when I was able to quote the last speech by Salvador Allende.
    We are now 12 years on. Government Members are comparatively uninformed about some of the aspects of julian history. The Government should bear in mind that Chile was a democracy from 1830 onwards. The Government who were brought down by military force and assassination in 1973 were elected within the democratic constitution of Chile.
    Mr. Gerald Howarth: Will the right hon. Lady give way?
    Dame Judith Hart: Of course I will, if the hon. Gentleman is better informed than I.
    Mr. Howarth: I am aware that the right hon. Lady is very knowledgeable about these matters. I know how well informed she is about human rights violations since 1973. Perhaps she can tell us all about the violations before then under the regime of San Salvador Allende, whom she worships, how land was confiscated and how the Allende Government flouted the constitution and congress. Perhaps the right hon. Lady and her hon. Friends, who view everything through their Marxist spectacles, will tell the House about those matters.
    Dame Judith Hart: The hon. Member for Cannock and Burntwood (Mr. Howarth) is not only uninformed, but he is trivial and cheap. I do not know whether he went to a public school, but he sounds like a typical Right-wing public schoolboy.
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    There were no political prisoners at any time during the Government of Unidad Popular. Chile led the way in land reform. I sympathise with the Minister, because he has to cope with a small but vociferous element on his Back Benches.
    I am sure that the Minister will say that he sympathises with the human rights cause. He will say that it is good that the siege has been lifted but that many gross violations of human rights continue.
    I am sure that the Minister will tell us that the Government have supported all the EEC resolutions condemning the abuses of human rights in Chile. I am sure that he will also tell us—as the Government frequently do—that the Government will not supply arms intended to be used against the civilian population. He will tell us all those things.
    But I do not know what the Minister will say to the fact that the Finance Minister of Chile is said to be in London now, or shortly to be so, to discuss with Barclay's Bank the financial assistance that could be made by British banks to Chile. I do not know what he will say about the general reaction from a number of delegations that have been to see the Minister of State, who does not impress those delegations with her deep sympathy for the violations of human rights in Chile.
    The Government's attitude has been at least partly influenced by the relationship between Chile and Argentina. Because of the Falklands fracas, the Government are suspended in ambivalence between the EEC's utter condemnation of the abuses of human rights in Chile—and along that front the Government have always followed reluctantly, several days behind—and the American enthusiasm, and, perhaps, our Government's earlier enthusiasm for the monetarist experiment in Chile.
    I was fortunate enough to have a meeting today with someone whom I imagine the Minister may know—the vice-president of the National party in Chile who is on a visit to London and who will be meeting the Minister of State tomorrow or the day after. The message from every element in Chile is that there is tremendous progress in building up a unanimity of opposition to Pinochet and that the effort to achieve a return to democracy at this point demands much stronger support from the democracies of the north and the west.
    I hope that the Minister, who will no doubt say what he has to when he replies, will take a message to his officials and the Foreign Secretary that we demand more. If we believe in democracy and freedom, more is needed from this Government on behalf of democratic human rights in Chile than we have seen so far.
    10.7 pm
    Mr. Tam Dalyell: My hon. Friend the Member for Islington, North (Mr. Corbyn) has done a great service to the House. I wish to ask one precise, specific question. On 7 June, the New Statesman, under the by-line of Patrick Forbes and Duncan Campbell, published what purported to be a Foreign Office document. My hon. Friend referred to it, and I shall read it as printed. It states:
    "Chile: contingency planning.
    1. In response to the recent deterioration in the political situation in Chile, in particular the declaration of a State of Seige on 6 November, the Secretary of State has called an office meeting to consider policy on our bilateral relations, to be held before his departure for Peking on 18 December … striking

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    political gesture on our part. But, it could also carry unacceptable penalties. The Chileans would regard an embargo as a major shift of British policy; and this could, in turn, hazard the defence and other cooperation we enjoy over the Falklands. Also relevant here is Chile's agreement with Argentina over the Beagle channel; this could, in turn, make it easier for the Chileans to reduce the level of their cooperation with us if they were so tempted."
    My question is, what precisely is the quid pro quo? Does not the House deserve to be told precisely what the agreements are mentioned in the Foreign Office document as between the odious junta of General Pinochet and our country?
    It is about time, once again, that there was a certain amount of candour from Governments on such issues. If there is a quid pro quo, if there is an agreement—and no one has suggested that it is not a Foreign Office document—to what are we referring? What exactly is the agreement? What is the quid pro quo? I hope that it is in no way to do with nuclear capability, because that has been said. We want to know precisely what the quid pro quo over the Falklands is and what has been kept from the House of Commons.
    10.10 pm
    Mr. Simon Hughes: I, too, am grateful to the hon. Member for Islington, North (Mr. Corbyn) for selecting this subject for debate, because he reflects the view of many people, inside and outside the House, that the British Government have not responded sufficiently to the events in Chile.
    The right hon. Member for Clydesdale (Dame J. Hart) will recall the occasion when I took part with her in a deputation—there has since been another which she attended, plus another in which I took part with her hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes)—to the Foreign Office, when we were grossly disappointed by the stone wall with which we were met by the Minister's noble Friend.
    We asked for a sign of recognition that we should be doing more and that we should be living up to the standards expected of us by our colleagues in the United Nations and the European Community. We asked, for example, whether the British ambassador to Chile could be recalled to review the state of human rights, following the lifting of the state of seige, to see what possibilities existed to bring influence to bear there through the churches, the opposition political parties and others.
    We were anxious to know that the British Government did not intend to go down the road—the hon. Member for Islington, North made it clear that they seemed to be prepared to go down it—of seeking tenders for arms exports to Chile, with the clear implication that they would be sent to Chile, when ordered, in considerable numbers.
    We must look to the Minister for assurances on those matters, because we received none from his noble Friend. In view of the nature of the regime there and the fact that arms that might be supplied could be used for suppression and continued violation of human rights, we must be assured that any question of such arms supplies will first be debated in Parliament. The Government must not just take executive action in the matter.
    As the hon. Member for Linlithgow (Mr. Dalyell) pointed out, the Government must be open with the House, not allow people to come to Britain for consultations—indeed, afford them quasi-official, if not official, recognition—and thereby show to the press of the world
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    that the British Government and the people of Britain are happy with what is going on because everything is being done in an open way. That is far from the truth now, and the Government are denying the people the ability to react in accordance with the standards that we have set ourselves.
    Mr. Corbyn: Is the hon. Gentleman aware that in the internal Foreign Office document of November 1984 the civil servants said that on every criterion—trade, aid, military sales, repression and loss of human rights—the Chileans came off badly? It seems, nevertheless, that that Government still enjoy the approval of the British Government.
    Mr. Hughes: Not only am I aware of the document, but the hon. Gentleman may be aware that when we, as a delegation, went to the Foreign Office recently, it was not denied that the document, which had been leaked—it was accepted that it had been leaked—clearly made the case that the action by the British Government could be influential, not only on the issue of arms, but on that of human rights. It was accepted that if the British Government said more clearly what they should be saying, that would have a clear political effect.
    The only fear, as reflected in that document, was that that would cause people—presumably hon. Members on the Opposition Benches—to ask for more action. That is no justification for saying, "We are not prepared to move at all because there might be demands for us to go further." I urge the Minister to show a chink of light to the families of the hundreds of people who, since Pinochet came to power, have lived with death and in fear.
    Mr. Tony Banks: The hon. Gentleman might be interested to know that when a delegation went to the Foreign Office this morning to present a petition containing about 35,000 signatures—I was a member of it—it was told by a senior civil servant that the arms trade was seen as being effectively neutral in terms of supplying Chile.
    Mr. Hughes: Nothing surprises me. One of the tragedies of the Government' s foreign policy in the eyes of some of my colleagues, and probably in the eyes of most Opposition Members of this place, is that we can condone trade in arms without realising that that has a direct effect on the human rights of individuals in the rest of the world. The sooner the Government understand that message, the sooner they might respond to their duties to fellow citizens and to those who are far less well off and far less able to express their feelings about these matters than we are here.
    10.16 pm
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton): I congratulate the hon. Member for Islington, North (Mr. Corbyn) on his success in obtaining the Adjournment debate and on choosing the subject of Britain's relations with Chile. I thank the right hon. Member for Clydesdale (Dame J. Hart) for contributing to the debate. Her interest in South America and human rights is very well known. I thank my hon. Friend the Member for Wantage (Mr. Jackson)—I note that he is no longer in the Chamber—for his wide-ranging contribution.
    The hon. Member for Islington, North referred to 12 years of monetarism in Chile and implied that thar was perhaps one of the main reasons for the economic

    843
    difficulties that Chile faces now. I do not think that we shall enter into a great debate about monetarism, especially international monetarism, in this debate. However, I put the thought to him that perhaps Chile is in economic trouble primarily because of weak copper prices—copper having always been Chile's prime export—and high international interest rates, and not so much because of Chicago-school policies. Perhaps those two factors are more fundamental reasons for Chile's economic difficulties than monetarist doctrines.
    The hon. Member for Islington, North chose to initiate the debate under the heading, as it were, of the United Kingdom's relations with Chile, but he elected to spend most of his time—this did not surprise me—on the internal situation in Chile and particular human rights cases. I wish to underline the areas in which the hon. Gentleman, the Government and I personally share agreement. First, the internal situation in Chile, especially human rights, must be of great importance to us in determining the manner in which our relations are conducted. Secondly, the Government fully share the hon. Gentleman's concerns, and those of others who have contributed to this brief but inportant debate, about human rights in Chile. We do not agree with every allegation in detail but we are extremely concerned about human rights in Chile and we regret that, against the current trend in other South American countries, Chile is not making the fast progress towards the return of democracy that the Government would like to see.
    The hon. Member for Islington, North and I differ on the means by which to achieve the end of helping to improve human rights in Chile. The Government do not believe that the isolation of Chile, an arms embargo or even the general economic sanctions for which the hon. Gentleman calls, would be effective. Nor do we think it effective or right to single out Chile for criticism that can be applied equally to other countries. We have normal relations with Chile—
    Mr. Tony Banks rose—
    Mr. Renton: I do not propose to give way. I do not think that it is normal to give way to interventions in the course of replying to an Adjournment debate. Furthermore, I believe that someone else wishes to catch Mr. Deputy Speaker's eye before the end of the debate.
    We have normal relations with Chile, and this allows us, in the way that the last Labour Government denied themselves the opportunity, to make our concern known, at the highest level, to the Chilean Government. As the hon. Member knows, we have had diplomatic relations with Chile since 1980, when we restored representations at ambassadorial level. My right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), who was then Minister of State, Foreign and Commonwealth Office, informed the House of the decision, and the hon. Member for Islington, North has already quoted these remarks. My right hon. Friend said then that one factor in the decision to restore diplomatic relations had been to enable us to present our views on human rights and on other matters at a higher level and with greater impact. This is a good reason—it was valid then, and it is valid today. I ask the hon. Gentleman to think of the reasons for it.
    844
    It is obviously important that our ambassador in Santiago should be in a position to speak frankly to senior members of the Chilean Government about all aspects of relations between Britain and Chile—including the impact that events in Chile itself can have on the nature and conduct of our bilateral relations. He has been able to bring home to the Chilean Government. in a quiet and reasoned manner, the very real concern in this country at recent events in Chile and the wish by all Chile's friends that the Government and democratic opposition in that country should get together to agree a programme for the restoration of Chile's traditional pattern of democratic government.
    I can give the hon. Gentleman a specific example. Following the lifting of the state of siege. we sent instructions to our ambassador in Santiago requiring him to call, as he did, on the Chilean Foreign Minister, on 11 July, to express our hope that the Chilean Government would be able to move beyond the lifting of the state of siege to more substantial progress in the restoration of full political freedoms. None of this would be possible if—as some hon. Members urge—we were to withdraw our ambassador from Santiago.
    The hon. Member referred to the particular case of Senor Fernandez Lembach. I have had representations about this case. As I told the hon. Member on 3 June, Senor Lembach is a Chilean national. We have no formal standing to intervene with the Chilean authorities on his behalf. We have made clear to the Chilean authorities that if Senor Lembach's sentence were commuted to one of exile, we would issue him with a United Kingdom visa. The Chilean Ministry of Justice unfortunately informed our ambassador in April. that it is not yet prepared to consider commuting the sentence. We shall continue to monitor the case carefully.
    We make our views known in other ways. When, in February this year, a senior Foreign and Commonwealth Office official visited Chile he made human rights a point of special concern in all his conversations. In March this year, we voted in favour of a resolution critical of Chile at the United Nations Commission on Human Rights. We also remain in frequent and close touch with our Community partners about the situation in Chile and take appropriate opportunities to set on record our joint position.
    Therefore, I cannot accept the statement that we do not do our part, as a country that has diplomatic relations with Chile, in making as carefully and fully known in Santiago as possible our feelings on the subject, representing the views of the people.
    The hon. Gentleman then hinted at the existence of some kind of secret defence treaty with Chile. However, I remind him of my right hon. Friend the Prime Minister's specific assurance to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on 28 January that no treaties have been signed with the Government of Chile since 1981.
    The hon. Member for Islington, North and the hon. Member for Linlithgow (Mr. Dalyell) referred to papers that have been leaked from the Overseas Development Administration. The hon. Member for Linlithgow quoted from a recent newspaper. The House would not expect me to comment on leaked documents. The documents in question were option papers prepared by officials. I am sure that hon. Members would want me to maintain the

    845
    constitutional distinction between Ministers, who decide policy, and civil servants, who submit advice and attend to the execution of policy.
    Our relations with Chile include a defence element such as training. visits by senior personnel and the supply of loan service personnel. Apart from a period in 1982—
    Mr. Corbyn rose—
    Mr. Renton: No. I am not proposing to give way—I do not think that it is customary in the winding up speech of an Adjournment debate. We have lent only one officer at any one time.
    The hon. Gentleman suggested that we should apply an arms embargo. We know that there are firmly held views on this subject in certain quarters. As the hon. Member for Newham, North-West (Mr. Banks) said, a delegation which included him visited the Foreign and Commonwealth Office this morning to hand in a petition. I have made clear previously, notably when answering the hon. Gentleman's parliamentary questions, that we do not believe that a total embargo imposed by Britain in isolation would be effective. We do not have plans for imposing such an embargo.
    Our policy on arms sales to Chile nevertheless reflects our concern about human rights abuses, and rightly so. We take great care not to approve the sale to Chile of items that we believe could be used for internal repression. All such equipment requires an export licence before it can be sold overseas. I assure the hon. Gentleman that we consider each item carefully and exercise our judgment prudently. The procedures are painstaking, responsible and, we believe, appropriate.
    The hon. Member for Islington, North asked me about Centaur. I am glad that he did. In the perhaps somewhat different circumstances of January 1984, a temporary export licence was granted for a demonstration Centaur vehicle. It was unarmed and unarmoured and no sale of a Centaur has ever been made to Chile. The vehicle is a half track Land-Rover especially suited to use in deserts such as Chile's Atacama desert. If a firm sale had resulted, a firm application for a new export licence would have had
    846
    to be made. In that hypothetical case, we should look into the request carefully, taking into account all the circumstances prevailing at the time. The hon. Gentleman has made a good fuss about Centaur. I understood from the company involved that arrangements are in hand to return the vehicle to Britain and that there is little prospect of an order.
    We also seek other means of influencing opinion in Chile. There has been some criticism of our recent contact with members of the Chilean National Academy of Political and Strategic Studies who visited Britain at the end of June. I should like to ask Opposition Members who might have been critical of that how they expect such officers to learn about the constitutional role of the armed forces in a parliamentary democracy if they never leave their country and are not exposed to democratic opinion. On the occasion of this visit our visitors' programme included lectures and discussions at London university—the Institute of Latin American studies—and at the Civil Service college.
    We should consider whether there is an analogy here with overseas students who come from non-democratic countries, but, when in Britain, have an opportunity to study parliamentary democracy, to see the effect of a free press and to study how our Parliament works. I suggest that there is an analogy. The visitors have an opportunity to explore a wide variety of issues, including the role of the Army in a democratic society. That can only be beneficial to their education and development.
    Chile has a long tradition of democracy. That is always brought home to us by visiting representatives of Chile's democratic parties. They have made it clear that, although they welcome our encouragement in keeping that tradition alive, it is for the Chilean people to decide the future course that their country will take. They appreciate contact—
    The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
    Adjourned at half-past Ten o'clock.