Commons Sitting of 3 June 1985

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

PRIVATE BUSINESS
C-POULTRY COMPANY LIMITED BILL
Considered; to be read the Third time.
DURHAM CITY COUNCIL BILL [Lords]
Read a Second time, and committed.

Oral Answers to Questions
  ENERGY

    British Gas Corporation
    Mr. Wallaceasked the Secretary of State for Energy when he next expects to meet the chairman of the British Gas Corporation to discuss the proposed privatisation of the corporation.
    Sir William van Straubenzeeasked the Secretary of State for Energy when he expects to be in a position to announce a target date for the privatisation of British Gas.
    Mr. Nellistasked the Secretary of State for Energy what representations he has received on the future of British Gas.
    Mr. Parryasked the Secretary of State for Energy if he will make a statement on progress with the proposed privatisation of British Gas.
    The Secretary of State for Energy (Mr. Peter Walker): I have regular meetings with the chairman of the British Gas Corporation Government policy on the privatisation of BGC was set out in my statement to the House on 7 May.
    Mr. Wallace: Does the Secretary of State accept that many of us fear that if, and when, the British Gas Corporation is privatised it will seek to maximise sales and push up demand to increase profits? Will the right hon. Gentleman discuss with the chairman of the corporation possible statutory duties on any privatised board to take full account of conservation efforts and, in particular, to consider demand management as much an option as other sources of supply?
    Mr. Walker: The British Gas Corporation would have a vested interest in ensuring that there were sensible policies to ensure that the supply of gas was always available. That would be very much in the corporation's mind.
    Sir William van Straubenzee: Does my right hon. Friend appreciate the fact that my request for a target date illustrates the impatience that many of us feel and our hope of seeing his industry in the private sector? Will he therefore do all that he can to bring the date forward, in the hope that there will then be widespread ownership among those who work in the industry?
    Mr. Walker: I very much admire my hon. Friend's volunteering to serve on the Committee stage of this legislation. I know that he will help us to expedite the passage of the measure. The proposal has been widely welcomed by employers, customers and others. I hope that it will reach the statute book and be implemented as quickly as possible.
    Mr. Nellist: Is this not just the latest action in all the all-too-long line of handouts and bribes to the millionaire backers of the Tory party and which has absolutely nothing to do with increased efficiency, increased democracy or a better deal for gas consumers? Is it not a fact that £5 billion has been raised through special gas price increases and that it is due for transfer from the public purse to the bank balances of the sharks and speculators represented by

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    the Secretary of State for Energy? Those people will lose that money on renationalisation of the British Gas Corporation.
    Mr. Walker: In my reply to the previous question I expressed the hope that my hon. Friend the Member for Wokingham (Sir W. van Straubeneezee) would remain a firm supporter of the proposal. I also hope that the hon. Member for Coventry, South-East (Mr. Nellist) will remain a firm opponent of it. The hon. Gentleman's opposition is, as always, primitive and totally incorrect. He should talk to some of the employees of industries which have been privatised and see how many of them have any desire to go back to nationalisation.
    Mr. Skeet: I congratulate my right hon. Friend on his privatisation proposals. However, will he bear in mind, as the monopoly moves into the private sector, the need to safeguard the raw materials of the chemical industry— ethane and other materials—so that they have a ready flow and are competitive on world markets?
    Mr. Walker: I do not think that there will be any difficulties about that. The British Gas Corporation is anxious to do that in connection with its customers. The 1982 legislation and the proposed legislation will enable such organisations to make those supplies.
    Mr. Hoyle: Has the Secretary of State any plans to meet the chairmen of other nationalised industries, especially the chairman of the United Kingdom Atomic Energy Authority? Will he discuss with the authority's chairman the Exclusive Office Cleaning strike? Women cleaners' wages are being reduced by 21p an hour and their holidays are being reduced from four weeks to one week. Will the right hon. Gentleman take up this question with the authority?
    Mr. Walker: That question is clearly a wide abuse of Question Time.
    Mr. McQuarrie: While I delight with my right hon. Friend in the fact that privatisation is to go ahead as quickly as possible, may I ask whether he intends that Scottish gas should be a separate entity within that privatisation?
    Mr. Walker: No, Sir.
    Mr. Wrigglesworth: Does the right hon. Gentleman agree that the regulatory arrangements for the prices charged by a denationalised corporation are of great importance not only to consumers but to the whole of the energy industry? Will he give a clear statement of how the regulatory framework and criteria for prices will work? Will they, for instance, be similar to those applying to British Telecom?
    Mr. Walker: I hope the hon. Gentleman will understand that at this stage it is not possible to give detailed proposals, but there will be an effective regulatory system that will both protect the consumer and encourage the industry to improve its efficiency.
    Mr. Watts: As no gas has been supplied direct from producer to customer making use of the common carrier provisions in the 1982 Act, is my right hon. Friend satisfied that no further measures are required to make those provisions more effective before the corporation is privatised?
    Mr. Walker: I have said that we will keep this matter under review. Certainly the 1982 provisions are important
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    and can be used to advantage, and I believe that that will happen in a number of cases. However, there is no doubt that the bulk of gas distribution will be through the present system operated by the corporation.
    Mr. Orme: As this is a highly controversial matter, is the Secretary of State contemplating producing a White Paper before he produces a Bill?
    Secondly, what consultation has the right hon. Gentleman had with employees of the corporation through their trade unions?
    Mr. Walker: The answer to the first point is no.
    On the right hon Gentleman's second point, representatives of an organisation representing all the unions involved asked to see me when our proposals were first made known, I wrote to them immediately after my announcement and asked if they would like to have a meeting—I should be only too delighted to have such a meeting—and I am awaiting a reply.

    Heysham and Torness Power Stations
    Mr. Proctorasked the Secretary of State for Energy what are the anticipated commissioning dates of the Heysham 2 and Torness power stations; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad): The anticipated commissioning dates for the two reactors at Heysham 2 power station are mid-1987 and mid-1988, respectively. Matters relating to electricity supply in Scotland are for my right hon. Friend the Secretary of State for Scotland.
    Mr. Proctor: Will my hon. Friend consult our right hon. Friend the Secretary of State for Employment concerning the disposal of Her Majesty's Nuclear Installations Inspectorate to Bootle against its wishes, which coincides with the receiving of the station safety reports from the CEGB to the inspectorate? Will he ensure that the safety aspects are considered in depth and that there will be no delay in the commissioning of power stations, because any delay will cost the nation about £250,000 per day per station?
    Mr. Goodlad: I am advised by the Health and Safety Commission that dispersal of the inspectorate will not have any implications for the anticipated commissioning dates of Heysham 2. The Government are conscious of the need to maintain the high standards of the inspectorate. The detailed arrangements for dispersal are a matter for the Health and Safety Executive. I understand that it does not believe that dispersal need have serious consequences for the effectiveness of the inspectorate.
    Mr. Crouch: Will my hon. Friend assure us that before the Government reach a decision on the type of nuclear generation for the future they will wait to see the successful results of those two power stations in operation?
    Mr. Goodlad: The relative merits of the AGR and PWR were exhaustively rehearsed at the Sizewell inquiry. In view of my right hon. Friend's quasi-judicial position, it would be wrong for me to comment further.
    Mr. Andy Stewart: Can my hon. Friend confirm that the National Coal Board took into consideration the commissioning of those two nuclear power stations when it set its target for the production of coal last year?
    Mr. Goodlad: I believe that that was the case.

    Wind Power
    Mr. Yeoasked the Secretary of State for Energy what steps his Department has taken to promote the use of wind power for energy purposes.
    The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith): My Department has spent over £13 million, since 1979, on research and development into the use of wind energy for electricity generation.
    Mr. Yeo: Can my right hon. Friend say whether the expenditure has revealed any useful applications for wind energy and, if so, whether such applications have any export potential?
    Mr. Buchanan-Smith: Yes, it is one of our most promising areas in using a renewable energy source. The work done so far in the Orkney Islands has proved effective. In relation to the second medium-sized aero-generator that we have there, the firm concerned is already exploring the possibilities of selling its equipment overseas, so there are good opportunities.
    Mr. Colvin: Is my right hon. Friend aware that there are firms in my constituency which are now well into wind power technology, both ashore and afloat, through wind-assist schemes for ships? Will he take the opportunity to pay credit to Gifford Technology, which is already exporting epoxy timber composite windmill blades to the United States of America, where it is said that one of the main incentives to people buying the new technology is the tax credit system which the Americans use, which might be a better form of encouragement to British firms to invest in wind power than the present encouragement given by our right hon. Friend the Chancellor of the Exchequer?
    Mr. Buchanan-Smith: A considerable number of firms are involved in the Orkney Islands development and in Carmarthen Bay, and the developments are of benefit to them. My hon. Friend's point relates to the responsibility of the Chancellor of the Exchequer, but I take note of what he said.

    Coal Industry
    Mr. Beithasked the Secretary of State for Energy whether, when he next meets the chairman of the National Coal Board, he will discuss the future potential for coal extraction under the sea off the north-east coast of England.
    The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): I am aware of the prospects for further development of coal mines under the sea in north-east England, and expect to discuss these with the chairman of the National Coal Board from time to time as the board's plans develop.
    Mr. Beith: Does the Minister agree that the closure of old pits with expensive production costs will prove to have been a disaster if it is not accompanied by new investment in areas with high potential, such as the North sea? Will he note that the sinking of a new pit in the Amble area could give access to enormous reserves and be of tremendous value in creating employment in that area?
    Mr. Hunt: I agree with the first part of the hon. Gentleman's question. I was very pleased when, on 26 April, the north-east area of the NCB announced approval for a £3 million drilling rig for Westoe, Wearmouth and
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    Ellington collieries. I was very pleased to hear about that when I went underground at Ellington just over two weeks ago.
    Mr. Kenneth Carlisle: Does my hon. Friend agree that there is good potential for the extraction of coal in the north-east only if there are markets for that coal? In that respect, the coal conversion scheme is very important. Can he say how that scheme has been progressing since the strike, in the hope of expanding markets?
    Mr. Hunt: Sadly, the shadow of the NACODS position still hangs over the coal industry. Nevertheless, there is still a very good argument for industry to convert to coal, and there is still a useful amount of money in the coal conversion scheme. My hon. Friend is absolutely correct in what he said.
    Mr. Mason: When the Minister next meets the chairman of the National Coal Board, will he draw his attention to the severe breakdown in industrial relations in the coalfields, caused particularly by the stupid and outdated attitude of the chairman and his deputy, Cowan? Will the Minister also mention the reports that local trade union officials are working five days a week underground and are put on a three-shift system, which makes it difficult to have good trade union relations at the pithead?
    Will the Minister note that, having disturbed and misled NACODS, the country is now hovering once more on the brink of a national strike? What will the Minister and the Secretary of State do to rectify and get a grip on the position?
    Mr. HuntI hope that when the right hon. Gentleman is able to consider carefully what he has just said he will recognise that it was extremely wrong and in bad taste for him to use that inflammatory language at such a crucial stage—[Interruption.]—in the present situation. I ask him to take time to go underground, as I have done at Point of Ayr, at Ellington and at Selby—[Interruption.]—and he will hear from the men underground that all that they want to do is to put the tragic strike behind them and to work together for the future of the industry.
    Mr. Speaker: Order. It would have been more appropriate if the right hon. Member for Barnsley, Central (Mr. Mason) had asked his supplementary question after the next question. However, he has his answer now.
    Mr. Dormand: Is the Minister aware that the multi-million pound drilling project in the north-east has been generally welcomed? Will he urge the National Coal Board, when it talks about pit closures, to give full consideration to the fact that the reserves in the Durham coalfield have been established for some time? Some of that coal will easily be obtained. When the chairman of the National Coal Board talks about the economic aspects of pits, surely that is a matter that should receive the utmost consideration before further pit closures are thought about?
    Mr. Hunt: The hon. Gentleman is right to talk about extensive coal reserves, because last year the National Coal Board located at least 200 million tonnes of new reserves off Westoe and Wearmouth collieries and has spent about £15·5 million in the past 12 years drilling for coal in the North sea. A further £3 million will be spent this summer. He is also right to stress that the coal industry's future lies in the development of low-cost

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    productive pits, such as the massive Ellington complex. Of course, that has to be taken into account when allocating resources in the future.

    National Coal Board
    Mr. Pikeasked the Secretary of State for Energy if he has any plans to change the membership of the National Coal Board.
    Mr. Peter Walker: No new appointments to the board are imminent.
    Mr. Pike: Does the Secretary of State not recognise that, despite the answer given a few moments ago, most people in the industry and in the country are convinced that the National Coal Board was largely responsible for causing last year's dispute and is likely to cause a further dispute because of its apparent failure to comply with agreements that it has reached? Is it not time that changes were made so that the industry can start to go forward again?
    Mr. Walker: No. I believe that most people agree that last year's strike was politically motivated and that it was one for which no ballot of miners took place.
    Mr. Bowen Wells: Is my right hon. Friend aware that it is essential for the present membership of the NCB to be maintained and supported by him and the country in order to put the industry right? Will he take this opportunity to explain the difficulties which have arisen between the National Coal Board and NACODS?
    Mr. Walker: After NACODS had a meeting last week, I was asked whether a meeting could take place with the National Coal Board. I conveyed its message to the NCB and a meeting took place at the invitation of the NCB. In accordance with its wishes, the matters that NACODS had asked to have clarified at its meeting with me were clarified completely at the meeting with the NCB. I hope, therefore, that NACODS members will quickly return to work.
    Mr. Foot: Does the right hon. Gentleman appreciate that what was said by my right hon. Friend the Member for Barnsley, Central (Mr. Mason) represents the widespread feeling throughout all the coalfields that Mr. MacGregor, the chairman of the NCB, is utterly distrusted and that he is making a major contribution to the present dispute? We are all aware of the fact that the Secretary of State has had his disputes with Mr. MacGregor. Mr. MacGregor was insulting at the end of the dispute when he said that the Secretary of State had had nothing to do with the conduct of the dispute. That was misleading the country. We know that the Secretary of State never wanted him. Therefore, can he not now intervene and get rid of him?
    Mr. Walker: No. At the majority of coalfields production has returned to normal levels and at many of them it is high. It is giving a completely distorted picture to say that there is great discontent throughout the coalfields. I am pleased to say that coal production and deliveries are reaching good levels at present. I am only sorry that damage is being done to the full recovery of the industry, which is necessary if we are to persuade industrialists and others to convert to coal in the future.
    Mrs. Kellett-Bowman: Will my right hon. Friend acknowledge the excellent work that the chairman of the NCB has put into securing export orders upon which a long-term future for the coal industry can be founded?
    Mr. Walker: The marketing of coal is immensely important both at home and abroad and is something to which I hope the board will give ever-increasing attention.
    Mr. Benn: Is not the truth that during the dispute the Secretary of State allowed pledges to be given on almost any terms to NACODS to get the dispute ended? Now that the current dispute is more than three months old, NACODS feels entirely betrayed by the chairman of the board and by the Government. The result of victimisation of miners and some of the savage sentences is that more and more people think that the NUM was correct in the defence that it mounted last year.
    Mr. Walker: No, Sir. The opposite is the truth. The reality is that the agreement on modified procedures was virtually reached before the NACODS overtime ban took place and was entirely in accordance with procedures. It is also true that I met the NACODS leaders for two hours, when they asked for two matters to be fulfilled, both of which have been fulfilled.
    Mr. Nellist: What sort of vindictiveness is it that causes the Secretary of State to refuse to allow the 700 sacked miners—11 of them in the area of Warwickshire which I represent—to return to their jobs? Is it not a fact—
    Mr. Speaker: Order. There is a related question on this issue.
    Mr. Nellist: Let me finish my supplementary question, Mr. Speaker.
    Mr. Speaker: The hon. Gentleman must read the questions that appear on the Order Paper. Question No. 9 is about membership of the National Coal Board.
    Mr. Nellist: Is it not a fact that the sackings—
    Mr. Speaker: Order. That is just the point. If the hon. Gentleman will read the question and relate it to the board, he will be all right. I shall give the hon. Gentlman one more chance.
    Mr. Nellist: Is it not a fact that the board's membership means that the sackings were targeted at union organisers and that many of those who were sacked have been found not guilty in courts of law? Does that mean that the present membership of the board and the Secretary of State are setting themselves up as judge, jury and executioner?
    Mr. Walker: There is a right of appeal in all cases. It would be pleasing if occasionally the hon. Gentleman showed some concern about the vindictiveness of some of those who have been sacked.
    Mr. Orme: Does the Secretary of State agree that the NCB is responsible for the present NACODS' dispute? The board has violated the agreement and is demanning pits, such as Horden in the north-east and St. John's in south Wales. It is therefore getting round the agreement and allowing pits to be run down so that they can be closed. Is that not another example of the board's dubiety?
    Mr. Walker: I wish that the right hon. Gentleman, with his keen enthusiasm for the future of the industry,

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    would recognise that when a pit has been virtually destroyed, because of the coal strike, and the majority of the men at the pit want to be transferred or to take voluntary retirement, it would be right for him to criticise the board if it ignored the views of the majority at that pit.

    Coal Industry
    Mr. Nichollsasked the Secretary of State for Energy how many miners have taken voluntary redundancy since 1 March.
    Mr. Peter Walker: I am encouraged by the levels of production attained since the end of the strike, although damage to coal faces has had a lasting effect. Between the beginning of March and 4 May over 2,000 miners took voluntary redundancy, reducing the number of men on colliery books to approximately 169,000.
    Mr. Nicholls: May I take that answer as meaning that working miners are now satisfied that their applications for voluntary redundancy or transfer are being processed speedily? Does my right hon. Friend agree that if earlier reports that miners were not satisfied that such applications were being processed speedily were justified, that would have reflected a substantial betrayal of a brave body of men?
    Mr. Walker: It is up to the management to take decisions on the applications of individual miners. All the individual cases forwarded to me have been taken up by the board and have been dealt with satisfactorily by the management.
    Mr. Ray Powell: Is the Minister aware that at the St. John's colliery 350 miners have volunteered for redundancy payments as a result of two years of threatening closure by the National Coal Board and the Minister? The Minister, in response to an Adjournment debtate that I initiated, said that investigations would take place. Is he aware that the chairman of the board condones actions by the board and by its officers to put pressure on miners to volunteer to become redundant?
    Mr. Walker: I do not agree. Any closure will be dealt with under the proper, agreed procedure.
    Mr. Peter Bruinvels: Does my right hon. Friend agree that, as about 14,000 miners have now accepted voluntary retirement, there was no need for the dispute in the first place, Arthur Scargill was completely wrong, and the Government were right in supporting the National Coal Board in getting good value for money and ensuring that the miners did a decent day's work. Does he further agree that the industry is in a better position now than it was 12 months ago?
    Mr. Walker: It is not true that the industry is in a better position. Considerable damage was done by the dispute to markets, coal faces, mining machinery and by delaying substantial investment programme. It is certainly true that a good investment programme, much higher than that of the rest of Europe together, is the best way to guarantee a good future for the industry.
    Mr. Eadie: Why does the Secretary of State allow the chairman of the NCB to walk all over him? Regarding redundancy payments, is it not a fact that the NCB is instituting by stealth the closure of collieries without negotiation, and that miners are losing their jobs as a
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    consequence? is the Secretary of State aware that the NACODS' dispute is costing the nation about £24 million a week? He should be worried about that, instead of answering, as he has been doing today, by saying that everything in the garden is lovely. We know that the garden is not lovely.
    Mr. Walker: The main cost of the present dispute is the potential loss of markets for the industry to which the hon. Gentleman has devoted his life. The loss of coal production has been minute, as the hon. Gentleman knows, and there have been only small delays in starting production. The damage to the reputation of the industry has been considerable. With the guarantees given by the NCB, there is no need for the overtime ban to continue.

    Nuclear Power Establishments
    Mr. Adleyasked the Secretary of State for Energy if he will list the nuclear power establishments which Ministers in his Department have visited in the last three years.
    Mr. Goodlad: During the past three years departmental ministers have on various occasions visited all the principal Atomic Energy Authority and British Nuclear Fuels sites and a number of nuclear power stations. I shall give details in the Official Report.
    Mr. Adley: I thank my hon. Friend for that answer. During the visits, has he been made aware of a concerted campaign which is being waged and seeks to imply that the presence of these establisments in a locality is itself a primary cause of cancer for those who live nearby? Is there any medical evidence to support that? If not, will my hon. Friend please take this opportunity to destroy those scaremongering techniques, which are causing a great deal of unnecessary anxiety to many people?
    Mr. Goodlad: As my hon. Friend knows, this is primarily a matter for my right hon. and learned Friend the Minister for Health. However, the radioactive discharges from Winfrith, about which my hon. Friend and others have written to me, are strictly controlled by the Department of the Environment and the Ministry of Agriculture, Fisheries and Food. Monitoring carried out by both MAFF and the operators confirms that the radiological impact of discharges is well within internationality recommended limits and is insignificant in relation to naturally occurring radioactivity. It is most unlikely that Winfrith discharges could have given rise to increased levels of leukaemia. Variations in the local incidence of leukaemia are found throughout the country. Studies are being carried out by the local health authorities to identify the incidence of leukaemia throughout east Dorset, and are still at a preliminary stage. There is certainly no evidence that connects any increase in leukaemia with Winfrith.
    Mr. Donald Stewart: Is the Minister aware that the announcement in a written answer on a Friday of the new nuclear development at Dounreay is regarded as an affront to Scottish opinion? Since, in the words of Sir Christopher Hinton, the chairman of the Atomic Energy Authority at the time, that installation went there originally because there was an element of danger, is the Minister aware that the new development is regarded in the same light in Scotland?
    Mr. Goodlad: My understanding is that the announcement has been widely welcomed in Scotland.
    Mr. Teddy Taylor: Is there not a need for the Government to mount a major campaign to put across to the largely uninformed public the basic point that that nuclear power is by far the safest form of energy conversion? Will he at least get across the simple point that one gets more radiation from having a colour television set in one's house than from living beside a nuclear power station?
    Mr. Goodlad: I agree with my hon. Friend that reiteration of the facts can do a great deal to dispel misconceptions.
    Mr. Wallace: If, in the near future, a Minister visits Dounreay, will he also take the opportunity to take the short trip across the water to my constituency in Orkney, where many people are worried that the new reprocessing plant may well cause difficulties and dangers to farming and marine interests? Will he reassure the House and my constituents that there will be a public inquiry so that these genuine anxieties can be fully expressed?
    Mr. Goodlad: I understand that my right hon. Friend the Secretary of State for Scotland has today announced his intention of calling in the planning application for his own decision and that a public inquiry will be held. As the hon. Gentleman will know, no one in the House is more alive to the interests of his constituents than I am.
    Mr. Rowlands: Is the Minister aware that there is genuine concern about aspects of nuclear discharges? For example, in Winfrith there is genuine local concern about unusually high levels of leukaemia, which are as yet unexplained? In order to allay these fears and worries, will he pull some of the information together and produce a comprehensive statement about the issues and problems arising from Winfrith so that those concerns and worries can be met?
    Mr. Goodlad: When the result of the investigations to which I referred is available, I shall make sure that it is properly disseminated.
    The following are the details.
    Nuclear power establishments visited by Department of Energy Ministers during the past three years are:

    United Kingdom Atomic Energy Authority

    Harwell Atomic Energy Research Establishment

    Dounreay Nuclear Power Development Establishment

    Risley Nuclear Power Development Establishment

    Springfields Nuclear Power Development Laboratories

    Winfrith Atomic Energy Establishment

    Culham Laboratory

    British Nuclear Fuels plc

    Sellafield Plant

    Capenhurst Plant

    Springfields Plant

    Headquarters, Risley

    Central Electricity Generating Board

    Berkley Nuclear Laboratories

    Heysham I and II Power Stations

    Hinkley B Power Station

    National Nuclear Corporation

    Headquarters, Knutsford

    Electricity Prices
    Mr.Greenwayasked the Secretary of State for Energy if he will make a statement on the report on two-tier pricing of electricity.
    Mr. Goodlad: The Central Electricity Generating Board and the National Coal Board have put to my Department ideas for reducing further the price of electricity to the largest users. These ideas will be discussed with the industries.
    Mr. Greenway: Does my hon. Friend agree that it is quite wrong for landlords to be able to surcharge tenants for electricity above the rate that they would pay themselves? Will he bring that practice to an end?
    Mr. Goodland: I know that my hon. Friend has taken a great interest in this matter, which has been the subject of a number of inquiries by my right hon. Friend the Secretay of State for Trade and Industry. The Department of Trade and Industry is currently studying a report produced some months ago by the Office of Fair Trading, and I understand that no decisions have yet been taken. I shall ask my right hon. Friend to write to my hon. Friend in due course.

    Coal Industry
    Mr. Teddy Taylorasked the Secretary of State for Energy if he is satisfied with the steps taken by the National Coal Board to protect miners who worked during the recent dispute from intimidation and harassment.
    Mr. Peter Walker: I am confident that the National Coal Board has made strenuous efforts to deal with the problem of intimidation in the coal industry. Firm action, including dismissal, has been, and will continue to be, taken against those indentified as offenders.
    Mr. Taylor: In view of the complaints from the NUM about the need to avoid victimisation, may I ask whether my right hon. Friend has had any indication of support and co-operation from the NUM in order to avoid the intimidation and harassment that have been applied to a number of working miners?
    Mr. Walker: Not exactly, but in the great majority of pits working conditions have very quickly returned to normal and no intimidation is taking place. However, instances have taken place in a minority of pits, and they have been dealt with firmly by the management.
    Mr. Eastham: If there is a genuine desire to protect the rights of miners, may I also remind the right hon. Gentleman that many miners have been dismissed even though they have been tried in courts or have appeared before industrial tribunals which have found in their favour? Is it not about time that the Secretary of State made representations to Mr. MaGregor to reduce the number of such cases?
    Mr. Walker: A considerable review has taken place and management decisions were taken. There are procedures to be followed if anyone considers that such decisions were incorrect. Those procedures are taking place.
    Sir Peter Emery: Will my right hon. Friend have words with the chairman of the NCB to ensure that, in the context of continuing and increasing NCB productivity,

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    those who worked throughout the whole of the strike are given absolute preference to allow them to play a major role in the future success of the coal industry?
    Mr. Walker: They did play, and are playing, a very major role. I am sure my hon. Friend will also agree that a large number of miners were kept out of work by various methods although they have the same desire for their industry to succeed. We need to support them as well.
    Mr. Skinner: Is the Secretary of State aware that those who suffered the greatest intimidation and harassment are the 720 miners who did not get their jobs back after the strike ended? Is it not strange that in some NCB areas intimidation and harassment are occurring involving those who have not got their jobs back, whereas in other areas, where seemingly the strike was almost solid, almost every sacked miner has been given back his job? Perhaps someone at NCB level is involved in serious intimidation and harassment on an area basis. Why does not the right hon. Gentleman put that right?
    Mr. Walker: I believe that that is inaccurate.
    Mr. Orme: Does the Secretary of State agree that industrial relations are at an extremely low level following the dispute, and that the NCB has deliberately stirred this matter up and done nothing to ensure that normal relations are resumed? What is the Secretary of State doing about that?
    Mr. Walker: The facts are that at the majority of pits normal relations have been resumed and production is at a high level, as are deliveries of coal. I am sorry that the right hon. Gentleman is not being more positive in encouraging all working to return to normal.

    Energy Audits
    Mr. Hannamasked the Secretary of State for Energy what steps he is taking to introduce a system of energy audits.
    Mr. David Hunt: My Department's energy efficiency office continues to make grants of up to 50 per cent. towards the cost of energy surveys of non-domestic premises under the energy efficiency survey scheme. The energy efficiency office has supported the development of home energy audits, some of which are currently available to the public.
    Mr. Hannam: I congratulate my hon. Friend on his successes in the industrial and commercial sector. Will he accept that we need a similar system to that operated in the United States, whereby anybody in the domestic sector can get a home energy audit done for only $15 through local electricity and gas companies? Would it not be desirable to introduce this system here? Pending the time when it is introduced, will my hon. Friend look at the position of local authorities and exert maximum pressure on them to ensure that their stock of housing is brought up to a reasonable standard?
    Mr. Hunt: My hon. Friend is right to stress the need to learn lessons from others, and I have been able so see at first hand in Sweden and Denmark the progress made there in energy efficiency in the domestic sector. A number of lessons still need to be learnt, and my hon. Friend is right to stress the importance of encouraging
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    home energy efficiency labelling and to show our acceptance of the fact that it is in the local authorities that considerable savings can be made.

  HOUSE OF COMMONS

    River Traffic (Noise)
    Mr. Greenwayasked the Lord Privy Seal if he will make representations to the Port of London Authority about the level of noise from vessels passing close to the Palace of Westminster; and if he will make a statement.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): The authorities of the House keep in touch with the directorate of marine services of the Port of London Authority with regard to river traffic. If my hon. Friend has any particular point in mind, perhaps he would let me know.
    Mr. Greenway: Is it not unnecessary for certain pleasure steamers to come so close to the Terrace, with the result that noisy bands and sometimes raucous singing drown the proceedings of Committees, sometimes for minutes on end? Cannot something be done about this?
    Mr. Biffen: I must confess that this has been going on for some years and a bit of good-natured commentary from the river does not necessarily do any harm. However, I shall look into the point that my hon. Friend raises.
    Mr. Skinner: Has the Port of London Authority sent the right hon. Gentleman any complaints based on the noise emanating from this place and disturbing the people travelling up the river?
    Mr. Bifffen: Again, in terms of entertainment, it is a good two-way traffic.
    Mr. Dickens: Does my right hon. Friend agree that if the Palace of Westminster were built in Trafalgar square or Hyde Park comer we might have something to worry about? However, as it is situated alongside Old Father Thames, with just a few vessels, tugs and motor boats going by, which is rather lovely, I agree for the first time with the hon. Member for Bolsover (Mr. Skinner) that there is much more noise from this Chamber than from the River Thames.
    Mr. Biffen: Whatever supernatural force has joined those two together, let me put not asunder.

    Parliamentary Procedure
    Mr. Nicholas Bakerasked the Lord Privy Seal if he has received any representations about improvements in parliamentary procedures.
    Mr. Biffen: Yes, Sir. The latest report of the Procedure Committee — the Second Report from the Select Committee on Procedure, Session 1984–85 — includes major recommendations for changes in the Standing Committee procedures of the House.
    Mr. Baker: My right hon. Friend will be aware that the private Member's motion to be moved on Friday to ensure the debate of a Bill that has the support of the House is within the rules of order, and it is proper that it should be debated. However, does he agree that there is a procedural loophole here, at which both he and the Select Committee on Procedure should look, to see whether action can be taken to stop it? [HON. MEMBERS: "Why?"]
    Mr. Biffen: My hon. Friend identifies that the procedures that are for debate in Friday are both in order and of general interest. I shall not now anticipate the remarks that I intend to make then.
    Mr. Pavitt: Does the Leader of the House recall that, on a number of occasions, on a Friday, objections have been made and there have been requests from hon. Members on both sides of the House that the hon. Members concerned should be identified in Hansard and not remain anonymous? Has he looked at that, and will he try, with the Procedure Committee, to right that patent wrong?
    Mr. Biffen: The Procedure Committee has reported on public Bills. But the hon. Gentleman is right to say that there are aspects of private Members' legislation which have given rise to anxiety in the past. I have no doubt that the hon. Gentleman's point will have been heard by the Chairman of the Procedure Committee.
    Mr. Maxwell-Hyslop: Would it not be for the convenience of the House if my right hon. Friend made available in the Vote Office the report of the Procedure Committee which led to both the starting and the terminal hours on Fridays being brought forward one and a half hours, which was not done with the object of undoing it by sitting later?
    Mr. Biffen: I shall look into that.
    Mr. Peter Shore: In respect of this Friday's innovation, to put at its lowest, and major misuse of parliamentary procedure, to put it another way — [Interruption]—does the right hon. Gentleman not think that it would be wrong to allow this proposal to go ahead without first referring it to the Select Committee on Procedure, so that we might have a proper report on what would be a most dangerous precedent?
    Mr. Biffen: The very remarks of the right hon. Gentleman and the way that they have been received in the House today suggests that it is a topic far better dealt with within the parameters of the debate rather than at Question Time.
    Sir Peter Emery: I refer to my right hon. Friend's original answer about the last report of the Procedure Committee. As it has considerable importance for the House, may we have his assurance that we shall debate it before the House rises for the summer recess?
    Mr. Biffen: I have said already that the Committee's proposals will be debated. I do not want to be specific about the precise time. But since I am always under pressure for the House to rise before getting too far into August, my hon. Friend will understand that any debates which might occur with advantage in the autumn are considered prime candidates for that treatment.

    Members' Secretarial Allowance
    Mr. Dubsasked the Lord Privy Seal what recent representations he has received advocating an increase in the Members' secretarial allowance.
    Mr. Biffen: The Members' secretarial allowance has been the subject of parliamentary questions and, more recently, of an early-day motion.
    Mr. Dubs: Is the Leader of the House aware that nearly 200 hon. Members of all parties have signed that early-day
    16
    motion? Is that not a remarkable sign of the strength of feeling in the House, given that the signals from the Government are that they are not sympathetic to the idea? I appeal to the right hon. Gentleman, whose job it is to protect the interest of ordinary hon. Members and not those of the Cabinet, to show sympathy to a reasonable request to enable us to do a better job for our constituents.
    Mr. Biffen: The hon. Gentleman will know that the Government are committed to periodic reviews of these allowances. That remains the position. If we are to play the numbers game, I remind the hon. Gentleman that he could get only a little more than a score of his supporters to vote when he tried to persuade the House to move to a secretarial allowance of £17,000.
    Sir John Biggs-Davison: If more hon. Members made good use of the superb facilities of the House of Commons Library, would there not be less need for research assistants and the money to pay them?
    Mr. Biffen: My hon. Friend makes a fair point. I am anxious not to be drawn into the controversy about the adequacy of the secretarial allowance, other than to say that it is only 12 months since the figure was voted by the House of Commons and that the Government made it clear that it was subject to periodic review. I do not think that it would be wise to depart from the present arrangements so shortly after they have been concluded.
    Mr. Beith: When considering this matter, was the Leader of the House influenced by the Prime Minister's remarks just before the recess, which implied that there had been a disproportionate increase in the costs of the House of Commons? If so, or if he believes what the Prime Minister said, does he believe that he has in some way neglected his duties to contain that expenditure or that he has properly stood up for the needs of the House to challenge the Government and what they are doing?
    Mr. Biffen: Before getting into that type of debating exchange, the hon. Gentleman should remember that a great deal of the House's expenditures are not cash limited and that there have been substantial increases in the costs of running the House, which might well be merited but which still have to be justified.

    Research Assistants
    Mr. Peter Bruinvelsasked the Lord Privy Seal how many research assistants were employed by hon. Members as at 1 May; and how this compares with those employed on the same date in each of the past 10 years.
    Mr. Biffen: The number of Palace of Westminster photo-identity passes on issue to Members' research assistants on 1 May 1985 was 469. This figure compares with a total of 452 on 1 May 1984.I regret that the records which are held by the athorities of the House do not enable me to give comparative figures for the other years requested.
    Mr. Bruinvels: Does my right hon. Friend agree that it is ridiculous to have so many research assistants working in the House? Is he aware that 102 hon. Members have two or more research assistants, one hon. Member has eight research assistants, two have nine, nine have four, three have five and four have six? Should we not try to tie the number down so that. Members have no more than one research assistant and that research assistants on the books are paid?
    Mr. Skinner: The hon. Gentleman was a half of one himself.
    Mr. Biffen: In that case my hon. Friend speaks from experience. My hon. Friend makes an interesting point, but perhaps it would be better elaborated in the debate that has been promised on the second report of the Services Committee, dealing with research assistants.

  CIVIL SERVICE

    Unions (Meeting)
    Mr. Teddy Taylorasked the Minister for the Civil Service on how many occasions he has met representatives of the Civil Service unions over the past 12 months.
    Mr. Winnickasked the Minister for the Civil Service what recent meetings he has had with trade unions representing Civil Service staff.
    The Minister of State, Treasury (Mr. Barney Hayhoe): Other than informally, I have met the unions on six occasions in the last 12 months. The last occasion was at a meeting on 30 April held by my right hon. Friend the Secretary of State for Employment to discuss the question of arbitration with the general secretaries of four Civil Service unions in relation to their 1985 pay claims.
    My right hon. and noble Friend the Chancellor of the Duchy of Lancaster most recently met representatives of the Institution of Professional Civil Servants on 2 April to hear their views in favour of extending unified grading in the Civil Service.
    Mr. Taylor: Does my hon. Friend agree that the pressure of work in some local Departments, especially the Department of Health and Social Security and Customs and Excise, is probably greater now than ever before? In view of the rather low morale of the Civil Service, will my hon. Friend make it abundantly clear at his next meeting that the Government fully appreciate that Britain has an extremely loyal and efficient Civil Service, which is one of the best in the world, and the least corrupt?
    Mr. Hayhoe: I willingly and wholeheartedly endorse my hon. Friends comments.
    Mr. Winnick: Is it really intended that disciplinary action be taken against those at GCHQ who refuse to give up their union membership? Is the Minister aware that the Opposition would deplore any such action?
    Mr. Hayhoe: I note what the hon. Gentleman says. He will know that questions on this matter should be directed in the first instance to my right hon. and learned Friend the Foreign Secretary.
    Mr. Dickens: A civil servant wrote to me this morning stating that, during the past 60 years, access to arbitration had been turned down by the Government 10 times, three times by the present Government. Civil servants feel very sore about the Government's denial of arbitration, but I do not know whether my information is right. Can my hon. Friend say whether it is?
    Mr. Hayhoe: Post-war Governments of all persuasions have maintained that access to arbitration can be refused by the Government on grounds of national policy. I can confirm that the Government have refused access to arbitration.
    Mr. Wrigglesworth: As it is the Government's view, as stated by the Chancellor of the Exchequer and his predecessor, that pay awards in the Civil Service should not fall consistently below awards in the private sector, what steps does the Minister propose to take in the forthcoming year to rectify what has happened in this year's pay award and other recent ones in which civil servants have fallen a long way behind the private sector?
    Mr. Hayhoe: I confiim that both the present Chancellor of the Exchequer and his predecessor made such clear statements to representatives of the Civil Service unions. The hon. Gentleman will know that in the context of this year's pay negotiations the Government have made it clear once again that they are very anxious and willing to proceed to negotiations, with the aim of establishing an agreed pay system which will have long-term implications for the determination of future pay settlements.
    Mr. Ashby: Does my hon. Friend not think that many of the Civil Service problems over pay and conditions would be resolved if the Ombudsman dealt with these matters?
    Mr. Hayhoe: That is highly unlikely, but I am prepared to consider my hon. Friend's novel suggestion.
    Mr. Janner: Has the Minister considered the answers given by each Department of State to my question about the ethnic origin and sex of its equal opportunities officer? In each case the reply was that the equal opportunities officer is white and male, except for the Secretary of State for Transport, who replied that his equal opportunities officer is a British citizen and that he does not understand the relevance of sex.
    Mr. Hayhoe: The hon. and learned Gentleman's question goes very wide indeed of the question on the Order Paper. However, if he cares to pursue it with me in other ways I shall try to give him a definitive answer.
    Dr. McDonald: Does the Minister think that the letter from the chairman of the Inland Revenue to his staff, threatening that those who engaged in industrial action were likely to have their career prospects blighted, is a sensible way to conduct industrial relations within the Civil Service?
    Mr. Hayhoe: As ever—no, not as ever, but as so frequently happens—the hon. Lady has got it wrong. I have here the text of the letter that was sent by the head of the Inland Revenue to his staff. It begins:
    "The first point I must make is that there is not, nor has there been, a ban on the promotion of those who have taken industrial action."
    He then went on to make the points that I covered in the House when I answered questions on 18 February. I refer the hon. Lady to the answer that I gave then.

  ENERGY

    Coal Industry
    Mr. Willie W. Hamiltonasked the Secretary of State for Energy if he will make a statement on the financial resources available for use in the Scottish coalfield in the light of pit closures and the consequent employment problems.
    Mr. David Hunt: NCB (Enterprise) Ltd., the National Coal Board's job creation subsidiary, is active throughout

    19
    the British coalfields. The funds available to the company are not allocated between areas but may be used in support of schemes wherever there is the opportunity to create real jobs. The House has been informed that the funding of the company will be kept under close review as operations progress.
    Mr. Hamilton: Is the Minister aware that there is acute and growing concern in Scotland about the future of the coal mining industry? Is he further aware that in the area of the Seafield colliery in Fife male unemployment already stands at over 30 per cent. and that unemployment there would be considerably worsened if Seafield colliery were to close? Why does the Minister not do the same trick as was done by the Secretary of State for Scotland when he obtained £150 million from somewhere to get himself out of a hole over rates? If he can do it, why cannot the Secretary of State for Energy do it to create new jobs for miners who are to be thrown out of work because of pit closures?
    Mr. Hunt: As I have already pointed out to the House, the funding of NCB (Enterprise) Ltd. will be kept under review. However, the hon. Gentleman must realise, referring in particular to Seafield, that in Scotland we are seeing the result of damage caused by an unnecessary and tragic strike. Scotland suffered great damage during that dispute and, as a result, lost 11 coal-producing faces.
    Mr. Wilson: Does the Minister not understand, first, that many people in Scotland believe that damage was caused by the manager of the National Coal Board in Scotland and, secondly, that if the Government, instead of creating NCB (Enterprise) Ltd., had, together with the NCB, put additional investment into new coal faces in Scotland, the unemployment problem would have been taken care of? What proposals does he have to authorise investment in the Musselburgh extension?
    Mr. Hunt: First, may I put the record straight. There is no question but that Polkemmet was flooded as a direct consequence of the NUM strike, and I much regret the disgraceful suggestion made by the hon. Gentleman. As to investment, four major projects in Scotland are under way with an estimated capital cost of £91·8 million. In real terms, investment in the Scottish coalfield is 43 per cent. higher under the Conservative Government than it was under the Labour Government.

    Coal Industry
    Mr. Eadieasked the Secretary of State for Energy, following representations to him for reinstatement of sacked miners arising from the miners' strike, how many have been reinstated as a consequence of inquiries to the National Coal Board.
    Mr. David Hunt: I understand from the National Coal Board that of the 1,013 employees dismissed for offences related to the dispute, 373 have subsequently been re-employed.
    Mr. Eadie: Will the Minister tell us about the cases that have been referred to him? He made great promises to the House that he would take up the cases of victimised miners. How many cases did he take up, and in how many cases was there reinstatement? In Scotland he has failed abysmally, because no miner has been reinstated following a request by the Minister.
    Mr. Hunt: I have taken up every case that has been referred to me. I should tell the hon. Gentleman that all of us have been impressed by the responsibility of the vast majority of miners, who are now working together to repair the damage caused by the strike.

European Cup Final (Brussels)
3.30 pm
The Prime Minister (Mrs. Margaret Thatcher): With Permission, Mr. Speaker, I shall make a statement about the events at the European Cup Final in Brussels last week and the measures which have been put in hand in this country to deal with football violence.
Last Wednesday, television viewers throughout Britain and the world witnessed the appalling scenes of violence at the European Cup Final in Brussels, which resulted in 38 deaths and a much larger number of injuries; 27 people are still in hospital. I know that the whole House will share the nation's profound sympathy for the bereaved and injured, and the sense of outrage and shame at the behaviour of some of our citizens which led to the tragedy. The House will also wish to associate itself with the message of sorrow and condolence sent by Her Majesty the Queen to President Pertini of Italy and King Baudouin of Belgium. I have sent similar messages on behalf of the Government to Signor Craxi, Mr. Martens and President Mitterrand. The immediate contribution that we have announced of £250,000 for the families of the victims is an expression of our deep sympathy and support for those involved.
The Belgian authorities and UEFA are conducting formal inquiries into the arrangements for the match and into the disaster. They will no doubt report on the extent to which the internationally agreed guidelines and precautions for spectator safety were followed. We cannot prejudge the outcome of those inquiries, but we must recognise that there has been a terrible record of violence at European football matches in which, I regret to say, English supporters have played a large part over many years.
In those circumstances, the Government welcomed the initial decision of the Football Association to withdraw English clubs from participation in European competitions next season, and we fully understand the subsequent decision of UEFA to ban English clubs from European competition for an indefinite period, and we believe it to be right. This withdrawal gives English football authorities the opportunity to introduce effective measures to combat violence and to convince other countries that they have done so.
Last week, I was able to have discussions with several people, including the chairman and secretary of the Football Association, who returned immediately from Mexico after receiving news of the tragedy, the chairman of Liverpool football club, my hon. Friend the Parliamentary Under-Secretary of State for Employment, who happened to be present at the match and was an eyewitness to the events, and a number of football correspondents, who were also present at this and similar occasions in the past.
The following measures will be taken, or are already in hand, to put our own house in order.
First, we shall introduce as soon as possible legislation similar to that contained in the Criminal Justice (Scotland) Act 1980. That Act makes it an offence to be drunk or to possess alcohol on football coaches, on entry to grounds and in most areas of grounds. It also makes it an offence to be in possession of containers that could be used as missiles. Subject to discussions through the usual
22
channels, it is our intention to have this legislation on the statute book by the summer recess, in time for the coming football season.
Second, we shall proceed next Session with the legislation envisaged in the Government's White Paper on the review of public order. The proposals on assemblies in the open air will considerably strengthen the powers available to the police to guard: against the risk of disorder. Wherever they have reason to expect disorder at a football match, the police will, in effect, be able to limit the gate and impose other conditions. Under this provision, the police should be able to stipulate whatever steps they judge necessary to minimise the risk of disorder.
Third, Mr. Justice Popplewell will continue with his inquiry into the events at Bradford City and Birmingham football grounds on 11 May. His terms of reference are already wide enough to allow any lessons learnt from Brussels to be taken into account. I understand that Mr. Justice Poppelwell hopes to submit an interim report before the beginning of next season.
Fourth, my right hon. and learned Friend the Home Secretary has set in hand the procedure for designating under the Safety of Sports Grounds Act 1975 all clubs in the third and fourth divisions. We have, in addition, agreed with the football authorities on a number of measures, including acceleration of the introduction of closed-circuit television, with the help of the Football Trust. I have been informed today that the trust is proposing to allocate £500,000 for this purpose as a first step. That would give cover in more than 30 grounds, in addition to the 11 at which experiments are already taking place.
Events at Brussels last week have, however, made it clear that more is now needed. I shall be discussing urgently with the football authorities proposals for the introduction of a practical scheme of membership schemes, either on a club or national basis, proposals for far more all-ticket matches and stricter controls or, in some cases, a ban on visiting spectators.
I recognise that such measures would mean a radical change in the way in which football is conducted in this country, but radical change is needed if football is to survive as a spectator sport and if English clubs are once more to be acceptable abroad.
Fifth, in parallel with our own action, we shall continue to co-operate in developing international measures to deal with hooliganism. Next week, my hon. Friend the Minister with responsibility for sport will be attending a meeting of European Ministers for that purpose.
In the meantime, we are anxious to give the Brussels authorities every possible assistance in bringing to justice and dealing appropriately with people from this country who have committed offences in connection with last Wednesday's match. My right hon. and learned Friend the Home Secretary has sent a message to the Belgian Minister of the Interior offering the assistance and co-operation of British police forces. The Mersey side police and the Metropolitan police are examining television film closely to see whether they can identify those responsible for last Wednesday's violence.
We also want to do everything within our power to remove any possible difficulty in the way of any charges that the Belgian authorities may decide to bring. Arrangements already exist between the United Kingdom and Belgium for the extradition of those accused of serious offences of violence such as murder, manslaughter,

23
wounding or serious assault. If the Belgian authorities were to seek the extradition of someone accused of such an offence, we should naturally give them every assistance to meet our requirements on evidence.
One disincentive for the Belgian authorities may be that it is less trouble simply to expel Britons who may have committed offences rather than to prosecute and sentence them appropriately. We intend to offer the Belgians the opportunity, in accordance with the Repatriation of Prisoners Act, of removal to prison in this country of anyone who may be given a prison sentence in Belgium.
I hope that last Wednesday's sickening events will unite all decent people in helping to eradicate hooliganism. To curb violence requires effort and commitment from us all. If English clubs are to play football in Europe again, they can do so only when their good name, and that of their followers and supporters, has been restored.
Mr. Neil Kinnock: First, I should like to repeat my complete condemnation of the violence that led to the deaths and injuries at Heysel stadium last Wednesday. Naturally, we in the official Opposition join all others in offering our deepest condolences to the relatives of all those who died and of those who were injured. As I have already said, we agree with the Government's decision to give £250,000 to the relief fund set up by the Italian Government. I welcome the assistance being given, and announced in the Prime Minister's statement, in bringing to justice the criminals of any nationality and of any affiliation who were responsible for the tragedy in Brussels.
As to today's statement by the Prime Minister, I should like to tell the right hon. Lady that the Opposition support the Government's decision to bring in legislation similar to the Criminal Justice (Scotland) Act 1980. However, we are frankly surprised at the rather restricted action proposed by the Government, and disappointed at the decision to extend Mr. Justice Popplewell's inquiry beyond its already stretched limits. Does the Prime Minister really consider that the learned judge, with all his vigour and undoubted thoroughness, has the resources and facilities necessary for yet another major area of inquiry? Surely it is not enough to hope, as the right hon. Lady said in her statement, that Mr. Justice Popplewell will produce an interim report in time for proposals to be implemented before the beginning of the next football season. We need a firm assurance now that the report will come in time for proposals to be implemented before the season begins, and that any necessary resources will be available for practical implementation.
I refer to the problems of football and football hooliganism. May I specifically ask the right hon. Lady whether she will bring forward proposals to ensure that some of the revenue taken out of the game is returned in the form of improved safety and security at football grounds? That is clearly necessary to assist with the cost of better accommodation and effective policing. Frankly, the proposals that we have heard so far do not begin to match the scale of the crisis in British football, both in and near to British football grounds. When we consider that it is now 12 weeks since the awful scenes at the Luton ground in the Cup match against Millwall, and that it is exactly the same period—12 weeks—until 24 August, the beginning of the new football season, that shows how
24
much speed and effectiveness is necessary to tackle the problem directly before we are afflicted again next season by the scenes that we have witnessed in this and previous seasons.
In the official Opposition and, I think, in the House generally, we are and must be intent on securing arrangements by both the Government and other relevant authorities, which will help football clubs and genuine football supporters, who are in the vast majority, and the police, to defeat the criminals who are destroying the game, terrorising spectators and inflicting misery on people who live near football grounds or who travel when football games are taking place. In the Opposition, as a basic principle, we seek properly to maintain the civil liberties of the decent and innocent majority to go to games in safety, and to live in peace. To that end, I say to the Prime Minister that our responses to this matter cannot relate simply or solely to punishment or to policing; neither can they relate only to a period of probation for English football.
On 14 March, I asked:
"Will the right hon. Lady agree that we need action to identify and deal with the causes of these afflictions and the breakdown of behaviour in society?"—[Official Report, 14 March 1985; Vol. 75, c. 431.]
We want the thugs caught and punished, but does the Prime Minister agree that in addition it is essential to discover not only those who commit the crimes but why they commit such crimes? Therefore, can we look forward to a quick and thorough investigation with that in view, which would involve the police, youth and social workers and others with direct practical experience from week to week of dealing with the issues posed by the spread of thuggery? [Interruption.] If it is the case, as Mr. John Smith and hon. Members have suggested and as others have noted in years gone by, that any of this thuggery is related in any way to political organisation by racists, Fascists or anyone else, that must be among the areas to be inquired into so that the menace to democracy is taken out.
We have witnessed a terrible tragedy in Brussels, and we now know UEFA's response. The thuggish minority, who are a stain on British football and British society, are the cause of both. It must be our determined purpose now to ensure that they have had their day once and for all. On football grounds and anywhere else in society we shall never permit them to show their ugly and thuggish face again.
The Prime Minister: If I may reply to some of the right hon. Gentleman's points. I am grateful to him for saying that the Opposition will support legislation similar to the Scottish legislation. As I said, we shall be in touch through the usual channels on this matter.
I did not say that Mr. Justice Popplewell will inquire into the matters at Brussels. I said, and drafted this point very carefully:
"His terms of reference are already wide enough to allow any lessons learnt from Brussels to be taken into account."
I cannot speed up the rate at which Mr. Justice Popplewell will report. I understand that he intends to make an interim report before the beginning of next season. In the meantime, the Football Association and the Football Trust are active. Each of the football clubs is responsible for the safety of people on its ground. Fire officers are now looking at the stands. The Football Ground Improvement Trust and some surveyors are

25
looking at the stands to ascertain the changes that can be made. Those changes cannot all be made in time for next season. But the numbers of people that the clubs allow into the grounds must take into account the condition of the stands already on the grounds because the clubs are responsible for safety.
On finance, there is already a working party under the chairmanship of my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane), consisting of the Football Association, the Football League, the Football Trust, the Football Grounds Improvement Trust, the Pools Promoters Association and the Sports Council to make an assessment of the moneys that are needed to make the grounds safe. This assessment will be made in view of the numbers of spectators many of those grounds now have, and not in relation to the stands that they had for higher numbers of spectators in the past. Of the money that is available at the moment, £7 million a year goes from the football promoters to the Football Trust and £3·3 million was distributed retrospectively in 1984 from the Football Ground Improvement Trust — not for new applications for safety provision but because there were no applications for safety provision. The £3·3 million was distributed retrospectively for work that had already been done. A further £5 million a year is received direct from pools promoters as payment for the copyright on the fixtures list, without which the pools could not operate and £3·5 million a year is received from television. That is apart from the proceeds from the gate. Considerable sums are already going into football. We are prepared to allocate more, should the committee's findings show that that is necessary.
The right hon. Gentleman suggested that there should be an inquiry into crime and hooliganism. That could go on for years and find as many answers as there are people on such an inquiry. There is violence in human nature. There are only three ways of trying to deal with it— persuasion, prevention or punishment. We shall try to operate all three.
Mr. Eric S. Heffer: Is the right hon. Lady aware that the two grounds of Liverpool and Everton are in my constituency? Over the weekend I went round my constituency and spoke to people who were on the Z,Y and X terraces at Brussels? Is the right hon. Lady aware that there is a deep feeling of grief among the people of Liverpool? They are crying for the dead and for their families; they are crying for the city, because they never expected, with their record, that such an event could occur; they are crying for football both in Britain and internationally; they are crying because the truth has been a casualty; and they are crying because they believe that the time has come to face up to the political elements that were involved in that and other matches—incidentally, from both ends. Mr. Brian Moore, the ITN correspondent, was the only person who clearly explained that the forces involved were trying desperately to create trouble and cause problems for our people.
I have today told the Italian ambassador, on this Italian day, that my people in Liverpool have as much grief in their hearts as the people of Milan, Turin or elsewhere in Italy.
I ask the right hon. Lady not to become involved in a cover-up of the terrible events. Other questions must be asked. What about the fact that many people have run away from their responsibilities? What about the position
26
of the Belgian authorities, the fact that the ground was unsuitable and that police action was insufficient to deal with the outbreak of violence? What about the fact that UEFA has been quick to introduce action but has not dealt with the situation?
I say to the right hon. Lady that whatever is being suggested must not be used as a further attempt to undermine our civil liberties. We must deal with the individuals and groups concerned; we must root out and isolate them. We have to say who they were and explain why they did it. We must find the reason—that is the important factor. I hope that the right hon. Lady will not be misled in other directions.
The Prime Minister: I think that the whole nation shares the grief expressed by the hon. Member for Liverpool, Walton (Mr. Heffer). Indeed, we are united in sharing and expressing that grief.
We cannot prejudge the results of the inquiry in Belgium. Some of the matters to which the hon. Gentleman referred would not be necessary unless there were soccer hooliganism. It is appalling that supporters of one club cannot stand alongside supporters of another club without the fear of violence. That used not to be so in football, or in any sport in this country. It is that that we must try to eradicate. In the meantime, we must tackle the situation by a mixture of prevention, above all, and of punishment when these events; occur.
Mr. David Ashby: As someone with the closest possible connection with the town of Turin, may I speak of my great shame at the events of last Wednesday? There should be no cover-up and no excuses for the disgrace of those events.
We talk about giving help to the police in Belgium, but why on Thursday morning were there not hundreds of police officers at all points of entry into this country finding out the names and addresses of those returning from Belgium and what they had been doing, so that we could discover exactly who was responsible for that outrage?
Does my right hon. Friend agree that the responsibility should be placed firmly on the football associations and on the clubs themselves, and that clubs and stadiums should be licensed in the same way as public houses, so that, if clubs failed to meet the requirements of good order, they could be closed until they could met them? Then we would not export our violence to the continent of Europe.
The Prime Minister: With regard to police help, the police are giving all the assistance that they possibly can. In addition to looking at videos, they have been active at some of the ports of entry of football supporters on their return, as my hon. Friend would expect.
The question of drink at football clubs will be dealt with under the legislation that will shortly be brought before the House. There are one or two ways in which English clubs differ from Scottish clubs, and my right hon. Friend the Home Secretary is in consultation with the police about any differences in legislation that may be advisable.
Several Hon. Members rose—
Mr. Speaker: Order. I understand that the House feels very deeply about this matter, but I must have regard to the subsequent business. Therefore, I ask for brief questions, and I shall allow them to run until 4.15 pm.
Mr. David Alton: I associate myself and my hon. Friends with the expressions of sympathy and with the condolences which have been offered to the bereaved and to those who were injured in the terrible events of last Wednesday.
May I also tell the Prime Minister and the House that the people of Liverpool feel not only acute grief but a profound sense of shame at the mindless acts of a minority who dragged the name of a great foolball club and city into the dust by their actions? Those actions cannot be forgiven by people trying to sweep aside the blame and pass it on either to the Belgian authorities or to UEFA.
Will the Prime Minister consider extending the ban on alcohol to areas around football grounds? When matches are played away from home, alcohol should be banned not only on the coaches taking people to matches but on the duty-free ferries.
I ask the Prime Minister to urge those who witnessed the scenes in which there was a breakdown of personal responsibility last Wednesday, and those who have some say in running the affairs of the city of Liverpool at this critical time, not to break the law or to elevate mob rule to some sort of cult, but to endeavour to achieve the highest levels of personal responsibility which are necessary if we are never again to witness the kind of scenes that we saw last Wednesday.
The Prime Minister: I am grateful for what the hon. Member said. There are, I believe, no excuses for what happened, and we must not try to find any.
With regard to the hon. Member's comments about alcohol being available in areas around football grounds, the police can already apply to the magistrates, so that public houses and places where alcohol is sold can be closed on a particular day for a particular time. Use can be made of that power.
I echo the hon. Member's suggestion that we should all attempt to ensure that there are the highest levels of effort and commitment to stamping out violence, because we all have some part in setting the standards by which our society lives.
Mr. John Carlisle: I have been particularly interested in the subject since the Luton and Millwall game. Does my right hon. Friend accept that there will be some disappointment at her statement?
The remedies that she has put forward in regard to legilsation concerning alcohol, club membership tickets and all-ticket games will not necessarily eradicate the problem. I listened in vain for some hint of the severe penalties that might be imposed upon hooligans. Nowhere in my right hon. Friend's statement was there any suggestion about penalties that would impose on hooligans the sort of physical pain that they so readily impose on other people.
In addition to the legislation that my right hon. Friend intends to bring before the House, which will receive all-party support, could not some amendment be made to the Criminal Justice Act 1982 to enable hooligans to be punished so severely that they will not commit such crimes again?
The Prime Minister: The penalties available for these serious crimes are already severe. The penalties meted out at Cambridge about a fortnight ago were of the order of five years' imprisonment, and we all thought that they were appropriate sentences. There could, indeed, be even
28
more severe sentences. The Court of Appeal has already said that severe crimes of that nature should in general meet with a prison sentence. Recent events will probably mean that heavier sentences are meted out, and I think that that would be right.
Mr. Merlyn Rees: Is the Prime Minister aware that, of course, it is right to act against violence? Does she recall that it was Frank McElhone, a junior Minister at the Scottish Office, who did the research upon which the Scottish legislation was based? I speak as someone who lives alongside Elland road football ground. We know that violence occurs outside the ground—in city centres and on the trains— and that people are afraid. Violence does not just occur in the grounds. Has the Prime Minister considered—it is what I asked myself when I was Home Secretary—what has gone wrong? On 3 September, 40 years ago, the Welsh Guards went into Brussels as its liberating force and anyone with a daffodil in his hat was well received. Then we saw what happened last week. Something has gone wrong in this country and the right hon. Lady as Prime Minister must give some thought as to what it is.
The Prime Minister: The right hon. Gentleman is aware that there has been what one of the newspapers called at the weekend
"a chronicle of violence in soccer"
for over 15 years. There has been violence elsewhere also. Violence is frequently caused by people who have quite a bit of money. Violence is caused partly because there is now more money and far more mobility than there was in the past, and that enables people to move from one soccer club to another much more quickly. In the meantime, we must act on prevention and punishment. Punishment is part of prevention. I do not believe that it would help to have an extended, indefinite inquiry into the causes of crime which has been with us as long as man has existed.
Mr. Eldon Griffiths: Is my right hon. Friend aware that amid all the shame and humiliation to which our country has been subjected abroad, the only reaction so far that has cut any ice overseas is her clear condemnation of the atrocity, her outright apology and the announcement that she has made today that we intend to put our own house in order? Will she nevertheless accept that no words and no legislation will be effective unless the police can enforce that legislation? The police are fed up with being used as the "poor bloody infantry" in such disputes. They are fed up with asking for powers and being denied them. In particular, they need to be able to search for weapons, liquor or drugs under the clothing of those who enter football grounds. That power was denied them in the Police and Criminal Evidence Act 1984. They need the power to ban a football match if those going to it pose a clear threat to public order.
The Prime Minister: I have made it clear many times that there are no excuses for what occurred. There is only shame that it should have occurred. With regard to legislation, under the proposed public order legislation, we shall try to see that the police have increased powers to decide what goes on in football grounds if they apprehend that there might be public disorder. I have said that that legislation will come forward during the next Session. I understand that the Police and Criminal Evidence Act 1984 does not prevent the police from searching for weapons in any case where that is considered necessary.

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I hope that my hon. Friend will take the view that we are increasing the available powers. In the proposed legislation we shall be implementing measures similar to those contained in the Scottish legislation and we shall be prohibiting the supply of alcohol on trains.
Mr. Jack Ashley: Is the Prime Minister aware that the despair and disaffection of so many young people in Great Britain today is the breeding ground for the mindless and appalling aggression that we saw in Brussels last week? However, that is no excuse for it. I agree with her that we must not try to find excuses.
However, she must face the fact that aggressive economic and social policies exacerbate the problem and that, unless those policies are softened or modified, what happened in Brussels last week may well be a tragic and chilling prelude to what may happen in Britain in the future.
The Prime Minister: I accept a good deal of what the right hon. Gentleman says. I think that this nation has done something creditable, which shows its underlying and overwhelming sense of decency, by accepting that there are no excuses and by feeling a national shame. That shows that civilisation and civilised values in this country still run strong. I believe that we have the overwhelming majority of people behind us when we take rather sterner action than we might have previously thought necessary. I believe that people expect that action to be taken now.
Mr. Stefan Terlezki: People in Wales are shocked and horrified by what happened in Brussels. Wales has only four professional clubs. We understand the horror of what occurred in Brussels, and we hope that such a thing will not happen in Wales or the rest of the United Kingdom.
I agree with the proposals that my right hon. Friend has announced this afternoon, but I was somewhat perturbed when she mentioned membership cards. I should like to see a membership card with a photograph issued to young supporters aged between 12 and 20. I am convinced that that would go a long way to help. When I was associated with Cardiff City football club, such passes were issued to young supporters. I remember one evening when Cardiff City played Hereford United. There were 35,000 people watching, but there was not one arrest or prosecution. I should like to see such passes introduced by every football club before the kick-off in the autumn.
The Prime Minister: A number of views are held about membership cards. Unfortunately, they are different. Some believe as fiercely as my hon. Friend that there must be club membership cards containing a photograph. Others say that there should be national membership cards. I am assured that with modern technology either is technically feasible. I shall be discussing that point again with the Football Association which, before the events in Brussels, was resistant to the idea of membership cards. I shall be doing my utmost to persuade it that club membership cards are necessary to achieve the requisite control.
Mr. John Maxton: As the Member representing Hampden park who has seen the Scottish experiment in operation, may I ask the Prime Minister to consider the closure of all licensed premises within a radius around a football ground as well as banning the taking of alcohol into football grounds in the
30
legislation that she intends to introduce? Secondly, and more positively, may I suggest that when she studies the Scottish experiment she reads the report produced by the late Frank McElhone and considers the positive ideas that he proposed — in particular, all-seat stadiums and that there should be more community facilities within them to make football grounds part of the community, not just part of the football scene?
The Prime Minister: With regard to the hon. Gentleman's first point, it is already possible for the police to apply to the magistrates for the closure of licensed premises near to grounds. I agree with the hon. Gentleman that that is necessary. We have already discussed with the Football Association seating in stadiums, the provision of family enclosures, to which the Football Trust frequently makes special subsidies to the various clubs, and more all-ticket matches. All these things are under discussion already with the Football Association. I take note of what the hon. Gentleman has said.
Mr. Barry Porter: Does my right hon. Friend accept that the majority of people on Merseyside do not and will not attempt to justify or excuse the actions of the drunken and homicidal hooligans in Brussels the other night? Does she accept also that Merseysiders, who were so disgraced in Brussels, will support whatever measures are necessary — the measures which are announced or measures which are suggested in future — to ensure that what took place in Brussels never happens again?
The Prime Minister: I am grateful to my hon. Friend. I believe that there is a national sense of shame and that the people of Liverpool feel especially deeply about what took place in Brussels. We shall be introducing appropriate legislation to deal with the drink problem. However, I think that it would be a mistake to believe that that will solve all the problems. The term "mindless violence" is used frequently, but my worry is that it is often calculated and mindful violence, which is an important factor. We must try to apprehend and punish severely those who commit acts of violence wherever violence occurs.
Mr. Eddie Loyden: The Prime Minister will be aware that there has been universal condemnation in Liverpool of the actions of those who were responsible for the violence last Wednesday. Liverpool does not abrogate responsibility for the part played by so-called Liverpool supporters. I hope that the right hon. Lady will make every effort to ensure that we seek out those who were responsible and that our actions do not amount to a universal condemnation of the city. As I have said, Liverpool has profound sympathy with the families which have been bereaved. Indeed, that sympathy was reflected in a service that took place in Liverpool on Saturday.
Will the Prime Minister recognise that the violence which we saw on Wednesday has been developing over the past decade and is not an overnight phenomenon? That is my view as a Liverpool supporter of many years' standing who has stood on the terraces. Little attention has been give to those who now occupy the terraces, which used to be occupied by those who wanted to watch a sporting game. The present occupants are those who go to matches for purposes that are limited to violence, thuggery and

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hooliganism. Will the right hon. Lady ensure that proper access is given to all those who witnessed certain events at the Brussels match so that the fullest and most comprehensive inquiry can take place? Only that approach will lead to the elimination of violence at football grounds.
The Prime Minister: I agree very much with the hon. Gentleman's contribution. Given the scenes that we saw on television and the terrible consequences, it is something of a disappointment that so few have so far been apprehended or arrested. The anonymity of the crowd is one of the deeply disturbing factors in such crimes, and that is why we are trying to do so much with closed circuit television. We are going through the photographs to ascertain whether we can identify those who were responsible for what took place. That is why we are so anxious to see the introduction of identity cards and other means by which we can readily identify those who attend football matches. Everything possible will be done to apprehend those who were responsible and to bring them to justice. That would be the best thing possible, and for that we need the co-operation of those who were present who know those who were responsible.
Mr. Kenneth Warren: I accept that there is no excuse for the violence that took place in Brussels. Will my right hon. Friend give an assurance that every co-operation will be given by her Ministers and by our police to the Belgian police, especially in the light of evidence that has come before me today and which I intend to place before Ministers? The evidence suggests that there was inadequate policing at the stadium before and after the match and that Belgian police officers were seen selling tickets at random outside the stadium before the match.
The Prime Minister: I think that these matters will emerge as the inquiry into the events which took place in the stadium, which the Belgian authorities are conducting, continues. My hon. Friend is aware that the inquiry is taking place. We must have the right arrangements to prevent these violent events from taking place and these must include seating and limitations of crowds and of who shall be present. The matters to which my hon. Friend has referred would not have been harmful if there had not been a tremendous streak of hooliganism within the stadium.
Mr. John Cartwright: Does the Prime Minister accept that the anti-hooligan measures that she proposes make sense but involve major financial problems for the less wealthy football clubs in the lower divisions? Does she accept that pool betting duty is now raising £220 million a year for the Government and that a 2·5 per cent. reduction of the duty would generate £15 million? If that sum were distributed throughout the Football Trust there would be enough money to bring all league clubs up to acceptable safety standards and to pay for the anti-hooligan measures in the lower divisions which she proposes. Will she consider that as an urgent measure?
The Prime Minister: The football pool betting levy is a tax on gambling, not on football. The Government must have income to carry out the many social and other services for which they are responsible. We are prepared to find more money if the committee which is now sitting says that that is necessary. As I have said, £7 million goes to the Football Trust each year and £5·5 million goes to
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football league clubs for the copyright of the matches which are played. Television rights amount to £3·5 million. Last year, in the absence of further applications for improvements to grounds, the Football Ground Improvement Trust disbursed £3·3 million in support of improvements which had already taken place. We must direct ourselves to the money which is available and is being used for safety purposes and to the new rules which the Football Association, after discussion, may think fit to introduce. There is no point in re-doing up old stands which are far too large for the numbers of spectators who now attend matches.
Mr. Jim Lester: I am sure that we all accept that football should not be a vehicle for violence, that there are no excuses for violence and that violence has become a disgrace for teams, towns and the country. Will my right hon. Friend accept that there are millions of football supporters who watch matches every week and that many of them organise supporters' clubs? Is she aware that the supporters' clubs have a great deal to offer in terms of prevention and identifying the hooligans? Will she ensure that the supporters' clubs have a full part in all the discussions that take place?
The Prime Minister: I take note of my hon. Friend's remarks. I am sure that we shall have the overwhelming support of all members of supporters' clubs who love football and who wish to see an end to hooliganism and violence. I am sure that these supporters want once more to be able to take their families to football matches to see the game played as it used to be played.
Mr. Kinnock: The Opposition want to co-operate as much as possible with the improvement of legislation and with other measures which are intendedd to combat hooliganism at football grounds and elsewhere. However, I listened intently to the right hon. Lady and I heard no effective proposals for co-ordination between the various interested bodies. She has given no undertakings of adequate finance being made available, despite the fortunes that are made out of football. She has given no undertaking to investigate the causes of violent criminality. Instead, we have heard the Prime Minister confine herself almost entirely to addressing the symptoms of the sickness, and only as they relate to football, which is only a part of the problem afflicting our society.
I ask the Prime Minister further to reflect on these matters and to reconsider her attitude so that we can get directly to the sources of the savagery and by that means find real answers. I plead with the right hon. Lady to do that before she commits herself irrevocably only to dealing with a small part, albeit a horrific one, of the problem.
The Prime Minister: I said in reply to the right hon. Gentleman's earlier contribution that there is already a co-ordinating committee on finance under the chairmanship of the Minister with responsibility for sport, my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane). On his working party there are represent-tatives of the Football Association, the Football League, the Football Trust, the Football Grounds Improvement Trust, the Pools Promoters Association and the Sports Council. The committee is considering the very finance to which the right hon. Gentleman refers.
Regarding the right hon. Gentleman's desire for a general inquiry into the causes of violence, there are books

33
and books, papers and papers, and courses and courses upon it. They have not found the answer and they never will. I do not intend to ask for yet another inquiry.

Social Security Review
4.20 pm
The Secretary of State for Social Services (Mr. Norman Fowler: I will with permission, Mr. Speaker, make a statement on the review of social security.
During the last 18 months the Government have been examining the major areas of social security provision. In that time more than 40,000 consultation documents were issued, 4,500 pieces of evidence were received, and 62 organisations and individuals gave oral evidence at public sessions. The Government are today publishing a Green Paper which sets out their proposals. We will now be seeking comments on the proposals from interested organisations and will be providing an opportunity for the House to debate them.
The social security system in the United Kingdom owes a great deal to the report of Sir William Beveridge in 1942. Although much of what he proposed was changed when it came to implementation, and more has been changed since, many of the principles on which his proposals were founded remain sound. The Government remain committed to the concept of a national insurance system, under which entitlement to the major benefits is earned by the payment of contributions during a working life. The Government also believe that our tradition of state support for those in need is one which should be maintained and developed. However, social security is not a function of the state alone. It should be a partnership between the individual and the state—a system built on twin pillars.
Any review of social security must recognise its considerable achievements, but the review has shown that there are several major causes for concern. By common consent the social security system is too complex. That is to the disadvantage of both the public and the staff. In particular, the research evidence shows that substantial numbers of supplementary benefit claimants do not understand how their entitlement is worked out, in spite of the fact that 38,000 staff are now working exclusively on supplementary benefit. With the pressures now being faced there is a danger that some parts of the system will break down. It is, therefore, a matter of urgency that we devise a simpler and more coherent system.
The social security system also needs to be modernised. It is not properly co-ordinated with the tax system and operates with outdated equipment. We now need a major computerisation strategy for social security, which can link effectively with other Government systems, including that of the Inland Revenue.
In terms of spending, the cost of the social security system has increased fivefold in real terms since the war and now totals some £40 billion a year. That is over 30 per cent. of all public spending and represents over 11 per cent. of gross domestic product compared with only 4·7 per cent. after the war. Nor has the pressure for growth in spending ended. In the first part of the next century we need to provide for an extra 4 million pensioners. That, taken together with the state earnings-related pension scheme, means that spending on pensions will at least treble. We must ensure now that we have a soundly based social security system which the country can afford.
Above all, perhaps, the social security system does not always help those most in need. More than half of those living on the lowest incomes are in families with children. This affects not only the unemployed, but families where

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the head is working. Yet, under the present system, low income working families can face both the difficulty of escaping the poverty trap, where they may get no increase in total income when their earnings rise, and the unacceptable position that they can be better off out of work. That position must be changed.
To make better provision to meet the needs of poor working families with children has been a major priority of the review. We therefore propose to introduce a new benefit, to be called family credit, to provide better help for such families. Family income supplement will be abolished. Family credit will have three main features. First, it will be paid on the same basis as help to unemployed families, in that help will be related to the age of children. That means that families with children cannot generally be better off out of work than in work.
Secondly, family credit will be related to take-home pay, not to gross earnings, as is family income supplement. The worst effects of the poverty trap will be eliminated by making it impossible for people to face a marginal tax rate of more than 100 per cent. Thirdly, it will be paid by employers through the pay packet. Families will see their benefit as part of their income from work, whether as an offset to tax and national insurance, or, in the case of the lowest paid, as an addition to gross pay.
Family credit will be paid in addition to child benefit. The Government believe that the extra responsibilities carried by all those bringing up children should be recognised. Child benefit will, therefore, continue to be paid for all children, irrespective of the means of the family.
Family credit will be part of a coherent system of income-related benefits. That system, covering basic income support, assistance with housing costs and help for low income families, will be based on a common income test and a common structure. It will be simpler, fairer and easier to administer, and it will provide the same level of help at the same level of income for those in and out of work.
We propose to replace supplementary benefit with a new income support system. The central concept of the income support scheme is that the regular extra payments, now made on the basis of detailed individual assessment, should be absorbed into the main rates of benefit. Those rates will provide a special higher level of benefit for pensioners, the long-term sick and disabled and lone parents. Families with children will not only receive assistance for each child, but a premium to reflect the extra pressures that they must cope with. At the same time, the capital rule will be eased by introducing a taper between £3,000 and £6,000, instead of the present inflexible £3,000 cut-off. We shall also ease the earnings rule for the long-term unemployed and the disabled.
The income support scheme should provide for the needs of almost all claimants, but we recognise that the system must be ready to cope flexibly and quickly with particular problems. Instead of the present single payments system, we propose to set up a social fund which will be operated on a discretionary basis by specially trained staff at Department of Health and Social Security local offices. It will provide emergency help where needed, and help those who face particular difficulties. We also expect that
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the social fund will, in time, provide a better basis for contributing cash help to enable people to be cared for in the community rather than in institutions.
Today I am also publishing the report of the housing benefit review team, and have accepted most of its recommendations. The review team found that housing benefit was excessively complicated, involving six different tapers applied to different groups at different income levels. It is also expensive and poorly targeted, with more than one third of all households, some with incomes up to average earnings, receiving benefit.
We intend to move to a simpler and clearer system. It will be based on the same net income assessment basis as the income support and family credit systems. It will also provide help on the basis of rent and rates together rather than separately, as at present.
For the poorest families, housing benefit will meet 100 per cent. of rent. At present 100 per cent. help goes only to those on supplementary benefit. In future, it will apply equally to those in and out of work.
We believe, however, that the basis on which help is provided with rates needs to be changed. At present some 7 million householders receive help with some or all of their rate bills and over 3 million householders pay no rates. As a result, a large proportion of people live in households in which no rates are paid. This means that there is no effective link between payment for and use of local services. The whole structure of rates is currently under review, but the Government believe that, so long as domestic rates remain, all householders should be directly responsible for making some payment towards them. The Government have in mind a figure of the order of 20 per cent.
The review also examined the contributory national insurance benefits for unemployment, maternity and widowhood. As I have already made clear, the Government remain committed to the principle of basic provision for these contingencies organised by the state through the national insurance system. We propose no change in unemployment benefit, which will continue to be paid for 12 months.
For widows under 60, we propose to replace the widow's allowance currently payable for the first six months after bereavement by a single lump sum payment of £1,000 to give them more help when it is most needed. In addition, widowed mother's allowance will now be paid from the time of bereavement rather than after six months as at present. Widow's pension will also be paid from the time of bereavement, but the rules of eligibility will be modified to concentrate help more on older widows who are least likely to be able to resume work. The changes will not affect the benefit paid to any existing widows.
In maternity, we propose to adjust the rules governing materinity allowance so that the mother can have greater freedom in choosing when, around the time of her confinement, she wishes to be paid the allowance. We also intend to change the qualification period so that the benefit is more likely to be paid to women who have had to give up work in order to have their babies.
The maternity grant and the death grant have been left at their present level—£25 and £30 respectively—for many years and are now quite inadequate for their purpose. The average cost of a funeral is now over 10 times as much as the death grant, and it costs £20 in administration to pay out each £30 grant. We propose instead a new maternity grant of £75—three times the level of the present grant

37
—available to all low income families. Help with the full cost of funerals will also be made available more widely than at present to anybody who has responsibility for a funeral and lacks the resources to pay for it. Help will be provided through the social fund to ensure that it can be given quickly and flexibly and with the minimum of detailed inquiry. These changes will concentrate help where and when it is most needed instead of providing a token contribution to everybody when it may be of little practical use.
The largest single area of social security spending is on pensions. The basis pension alone accounts for over £15 billion a year and is paid to 9 million people. That pension accounts, on average, for half the income of pensioners and has been a major factor in raising pensioners' living standards since the war. It is, and must remain, the basis on which individuals can build additional pension provision. The question is how that extra provision should be made.
At present only about half the working population belong to occupational pension schemes. The develop-ment of occupational pension schemes has been an important factor in improving living standards since the war, but the coverage of schemes has not increased since the mid-1960s. The development which it was hoped would follow the Social Security Pensions Act 1975 has not taken place. Nor has the forecast of cost on which the 1975 scheme was based proved sound. The analysis undertaken during the review has shown that the number of pensioners for whom we will eventually need to provide is 3 million greater than was recognised in 1974 and 4 million higher than it is today. It is clear, therefore, that the long-term costs of state pensions are set to rise steeply in the first 30 years of the next century. If the basic pension was uprated in line with prices, its cost would increase in real terms by half to £22 billion. If it kept pace with earnings, the cost would treble to nearly £45 billion. On top of that, the cost of the state earnings-related scheme will add another £23 billion. Thus, the total pensions bill will at least treble and could increase by over four times. At the same time the ratio of contributors to pensioners will worsen, and it is estimated that there will be only 1·6 contributors for each pensioner compared with 2·3 now.
As a country we cannot ignore these emerging costs. If the best estimates available to us lead us to question whether we will be able to afford the promises we are making, we have a duty to re-examine the position. It would be an abdication of responsibility to hand down obligations to our children which we believe they cannot fulfil.
The real question is not whether action should be taken on the state earnings-related scheme, but what action. There are those who argue that we should restrict the emerging cost of the state scheme by changing its provisions. The difficulty of that course is that contributions would remain the same while benefits would be reduced. There is no reason to believe that there would be any increase in occupational pensions to fill that gap. The Government have concluded that it would be better to adopt a different approach. This would be based on the aim of ensuring that in addition to the basic pension everyone has his own pension with his job—whether it be an occupational pension, membership of an industry-wide scheme or a personal pension. In all cases every employee would have the right to a contribution from his employer.
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We recognise, however, that relatively older workers would have difficulty in building up adequate occupational pension cover. We have decided, therefore, not to make any changes for those within 15 years of retirement. For men aged 50 or over and women aged 45 and over at the time of implementation, the existing state earnings-related arrangements will continue. This means that no one retiring during the rest of this century will be affected by the change and nor will any existing pensioner.
All rights built up in the state scheme at the time of the change will be honoured. In addition, we also intend to give a special enhancement of rights for men aged between 40 and 49 and women aged 35 to 44. They will be given a bonus of added years of entitlement, which will give them higher pensions when they eventually retire.
For those to be covered by the new arrangements the Government will lay down a minimum contribution level of 4 per cent. of earnings, at least half of which must be provided by the employer. The new arrangements will be phased in over three years. These changes will mean that in due course all employees will be contributing to their own additional pension through their jobs. This will represent the biggest ever extension of occupational pension coverage in this country and will add to the reforms of occupational pensions, involving improved rights for early leavers and transfer of pensions, currently in legislation before Parliament.
The Government must also ensure that the social security system is managed as effectively as possible to provide the best possible service to the public. The Government's benefit proposals will in themselves make the system simpler, but we are now to embark on the largest programme of computerisation ever undertaken in this country to modernise and improve its operation.
The benefit changes and the computerisation both of my Department and the Inland Revenue will provide opportunities to achieve better co-operation and closer working between the tax and benefit systems. The Government intend to take advantage of those oppor-tunities and will be considering this further in the context of the Green Paper on personal taxation.
Meanwhile, we have decided to take a major step towards better harmonisation by aligning the tax and benefit years. Instead of benefits being uprated in November each year, the uprating date will be moved to April. This means that all tax and benefit changes will be implemented at the same time. It will also be of considerable assistance to local authorities which at present have to reassess housing benefit cases twice a year.
The change in the benefit year will be brought in at the time of implementation of the major structural reforms. We expect this to be in April 1987. After the uprating of benefits due at the end of November 1985, there will, therefore, be a 16-month period before the change in April 1987. It would clearly be wrong to allow such a gap between upratings, but it would not be practicable to have upratings both in November 1986 and April 1987. Accordingly, the Government have decided that, following the November 1985 uprating, there will be two upratings at eight-month intervals, the first in July 1986 and the second in April 1987.
The programme of reform that I have announced will provide a system which is easier to understand and simpler to administer. It will mean the most substantial changes in income-related support for 50 years, and for the first time give equal support for those in and out of work. It will

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provide more help for low income families with children.It will establish a better partnership between state and individual provision, especially in pensions, giving everyone the right to his own pension with his job. Above all, the reforms will provide a modern social security system to take us into the next century.
Mr. Michael Meacher: Is the Secretary of State aware that, behind all the rhetoric about restructuring, this statement represents the erosion of the fundamental principle of a welfare state for all citizens? [Interruption.]
Mr. Speaker: Order. The Secretary of State was given a fair hearing.
Mr. Meacher: Is the Secretary of State further aware that the statement represents the reintroduction, for the first time this century, of Victorian values in an invidious distinction between deserving and undeserving poor? Is he also aware that this package as a whole will bring about a net loss in the next few years to pensioners and the unemployed of at least £1,000 million a year even before the huge losses from the abolition of SERPS begin, and that the main beneficiaries, whom he did not mention, will be the rich, who will receive even bigger tax handouts in future Tory Budgets?
We welcome the Government's limited reprieve on SERPS, in response to our demand.[Interruption.]
Mr. Speaker: Order. We have a full day ahead of us.
Mr. Meacher: It is patently clear that the Government lost their nerve after their original intention had been made clear in repeated leaks. Is the Secretary of State aware that the Government's longer-term abolition of SERPS, which is the central arch of the welfare state, is still a betrayal of an unequivocal pledge by the Prime Minister three weeks before the last general election, when she said:
"nor are there any plans to change the earnings-related component of the State pension."
Is the Secretary of State aware that if SERPS were to continue it would roughly double the pension in the next 13 years, and that if it is abolished millions who would have enjoyed dignity and security without a means test in retirement will be forced into poverty? How does the Secretary of State justify the fact that women, low-paid workers, and the longer-term sick and disabled and the millions of carers who look after them will be shifted compulsorily into private schemes to which they will be forced to make higher contributions for less benefit?
Is the Secretary of State aware that there can be no justification for claiming that SERPS cannot be afforded in the next century, when the Government's own Social Security Advisory Committee said explicitly less than two years ago:
"At this distance of time we do not think there can be solid grounds for altering the scheme now for fear of all the worst outcomes occurring steadily for 40 years."
Is the Secretary of State aware that any allegations that SERPS cannot be afforded reflect not adverse demographic trends but an admission that the Government's policies will lead to longer-term economic stagnation?
Secondly, is the Secretary of State aware that the huge cuts in the housing benefit package will bring a loss to tenants of about £750 million a year, forcing up rents for
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tens of thousands by £7 to £12 a week? Is he aware that the poverty trap will be enormously intensified by his decision to increase the loss of housing benefit as wages rise from 38p in the pound to 70p in the pound? Is it not harshly unjust that the 7 million people receiving housing benefit, of whom 4 million are pensioners, will for the first time have to pay 20 per cent. of their rates and all of their water rates? Is he aware that nearly 2 million households now receiving housing benefit, of which the great majority are owner-occupier pensioners, especially widows with small occupational pensions, will lose it altogether?
Thirdly, this statement virtually makes the unemployed into the outcasts of society—the new undeserving poor in the Prime Minister's vision of this new Victorian poor law. Not content with clawing back £650 million a year from the unemployed by taxing unemployment benefit for the first time over the past three years, and not content with ending, three years ago, the earnings-related supplement to unemployment benefit, worth £16 a week to an average paid worker, the Government are now proposing to force the unemployed on to the lowest rate of the new income support scheme. Is the Secretary of State aware that that will take about £5 a week from those who are 25 or younger, will deprive them of all help with heating bills and of single payments for clothing and furniture, will force them, for the first time, to pay 20 per cent. of then-rates and all of their water rates, and will replace the present basic benefit safety net by a discretionary and recoverable loan? The Government have trebled unemployment. With these cuts, they are now gratuitously twisting the knife in their victims.
Fourthly, families across the nation will be hit. Will the Secretary of State confirm that child benefit will be frozen or uprated by less than inflation, so that the benefit for 7 million mothers and 12 million children will begin to decline in real value? Will he confirm, too, that the new, vaunted family credit will begin to be phased out when earnings exceed £40 a week, which is lower than for the family income supplement, and that the rate of withdrawal will be 60p in the pound, which is higher than the 50p in the pound under FIS, so that the poverty trap will be worsened? Will he also confirm that benefit will be transferred from the woman to the man, which is not publicly supported, and that entitlement to free school meals and school milk will be ended? The Prime Minister has not only become the pensions snatcher — she remains the milk snatcher that she always was. Changes such as this will not strengthen family life, but will undermine it.
Fifthly, will the Secretary of State confirm that the death grant will be abolished and that the discretionary help will be available to the deceased's relatives only on the basis of a means test? Is he aware that this means bringing back for hundreds of thousands of our poor elderly the shame and indignity of a pauper's funeral, which no civilised society should inflict on its citizens?
This is a black day for the people of Britain — a monument to six harsh years of Thatcherite rule. The themes of this statement are more means testing, bigger cuts, penalising pensioners, the unemployed and low-paid in order to enrich still further the already rich, and the privatisation of the welfare state on the American model, which the people of this country want no more than they want the Prime Minister's fancy for the Americanising of our hospital management. There is no shred of political mandate for the proposals, since they derive from partisan

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committees hand-picked by a partisan Government for pre-determined ends. Today's statement opens up the central issue which will dominate the next general election and, because the Government have profoundly misunderstood the commitment of the British people to the welfare state, it will pave the way for the election of the next Labour Government.
Mr. Fowler: Not on anything that we have heard from the hon. Gentleman today will it pave the way for the election of any Labour Government. We have had from the hon. Gentleman a typically hysterical response. He cannot even get his shadow Cabinet to back his own proposals, and it was clear from the response of his Back Benchers that he could get very few of them to back what he was saying.
However, I am grateful for what I took to be the endorsement of my proposals on the state earnings-related pension scheme for the rest of this century. I am grateful to the hon. Gentleman for the generous way in which he endorsed them.
The hon. Gentleman asked about the overall cost of pensions. The 1975 Act was based on the assumptions, which the then Labour Government were making, of 3 per cent. growth and 2·5 per cent. unemployment and, above all, that there would not be an appreciable increase in the number of pensioners. It is now clear that between 2010 and 2035 we shall see an increase of about 3 million in the number of pensioners, and that over the period to 2035 there will be an increase of about 4 million pensioners. In 1975 the Labour Government did not have that information, or, if they had it, they ignored it. The question before the House is whether to ignore the best advice and the best estimates that can be made today of the emerging costs of pensions.
As for the case for change, it is clear that the cost of the state earnings-related pension will increase very substantially.
In terms of income support, the new system gives a guaranteed weekly income, with higher rates for disabled people, pensioners and children. The hon. Gentleman is wrong about families, because, in addition, there will be a family premium, which families with children do not get at the moment.
At present, one in three households receives housing benefit—7·5 million households altogether. Costs have risen from £1·2 billion in 1979 to £4·2 billion today. I have made it clear, and I do so again, that we shall be looking to housing benefits to make significant reductions in the social security budget.
The hon. Gentleman asked about the social fund. I am sure that in his calmer moments he will agree that the present system of supplementary benefit is not serving well those who need special help and special care. One of the ways in which I hope that the social fund will be able to develop is to give special grants to people coming from institutions into the community, but also to pay to keep people at home and to support them, rather than their going into institutions.
The hon. Gentleman's comments on the death grant were a total travesty of our proposals. The death grant was last increased in 1967. It has remained at £30 since then. Surely no one will claim that that is adequate. The choice that has to be made is whether the country is prepared to go on with a token gesture of that kind or whether it makes
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more sense to give help directly to those who need it— to give full help and better help. That is what the Government want to do.
Mrs. Jill Knight: Bearing in mind that this is the most far-reaching and fundamental statement on social security benefits for many years and that its soundness and sense will be apparent to everyone once it is properly explained, will my right hon. Friend assure the House that he will make a similar statement to every sector of the media which makes itself available and even consider the production of leaflets for the separate groups of people involved? Will my right hon. Friend also shoot down the myth put forward once again by the hon. and boringly predictable Member for Oldham, West (Mr. Meacher) that means tests should not be employed, because unless we employ means tests we cannot be sure that the maximum benefit will go to where the maximum need exists?
Mr. Fowler: We are not means testing, but seeking to test incomes. In addition, we are making help available to people on the basis of their income, and not according to whether they are in or out of work. That is a very significant change in approach. It means that the 100 per cent. marginal tax rates, which at the moment are a scandal, can come to an end. That is one of the most significant changes in the review.
Mr. Michael Foot: In view of the far-reaching nature of the proposals, and in view also of the cuts and additional means tests which they impose on some of our poorest people, will the right hon. Gentleman say, first, when the proposals were forecast and explained by the Prime Minister at the time of the last general election, and, secondly, exactly what is the saving on the social security budget which he aims to secure by these measures?
Mr. Fowler: When the inquiry into social security was set up we made it absolutely clear that the Government intended to have a fundamental review of the social security system. That has been the position throughout.
The right hon. Gentleman asks about the savings. The emphasis in the Green Paper is on the new structure. Until that is settled it is impossible to provide a detailed analysis, because clearly it depends on the benefit rates set in April 1987. However, the main direction of savings is clear. The major savings will be the long-term savings in the next century resulting from the phasing out of the state earnings-related pension scheme.
Changes in supplementary benefit structure are not intended to reduce the overall help provided. As a result of the structural changes in supplementary benefit, we shall ensure that as far as possible there are no cash losers. Support for low-income families will be increased by family credit. The Green Paper makes it clear that we expect spending on housing benefit to be reduced considerably. This will not be at once. We expect spending to be reduced eventually by about £500 million.
Several Hon. Members rose—
Mr. Speaker: Order. I know that this is a statement of great interest to the House, but I have to bear in mind that there is another statement to follow it and that we are to have further debates in what will be a long day. The Secretary of State said that there would be a debate on this matter later. I shall allow questions to go on until 25

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minutes past five before we move to the next statement. If those who are called put short questions to the Secretary of State, I hope that I shall be able to include most hon. Members who are seeking to catch my eye.
Mr. David Howell: Does my right hon. Friend agree that his proposals are skilfully targeted at the changing and future shape of society and that he should ignore the ridiculous cries from the past from the Opposition? Does he further agree that, whether we like it or not, there is an increasing trend towards part-time work, which inevitably means part-time incomes, and that his proposals, by concentrating on improved social provision as part of income for the low-paid, is in line with that trend and reinforces those who are most dispossessed by the trend towards part-time work? Does he agree that the change will make a major contribution to the expansion of occupation and employment?
Mr. Fowler: I am most grateful to my right hon. Friend. He is right. Family credit will bring direct help to low-paid families with children. It will prove a substantial base on which to build even further.
Mr. Archy Kirkwood: Does the Secretary of State agree that it is difficult to form a detailed judgment without the figures? My colleagues and I cannot support his proposals on pensions, because they do not tackle the present problems. The pension is too low, and we would not counternance any change unless there was some recognition of that. As for supplementary benefit, we are worried that we are drifting away from the Beveridge system, which applies to all, to a service exclusively for the poor. That would be wholly wrong. We are worried that if the Green Paper is fully implemented it will fracture the all-party consensus. We must consider the detail before making final decisions.
Mr. Fowler: I accept that my documents are long and detailed, and also what the hon. Gentleman says about his party's view. Lord Banks, the Liberal spokesman on social security in the other place, has said that the Liberal party consistently opposed the introduction of an earnings-related state pension scheme. It is not clear from what the hon. Gentleman said whether that remains Liberal policy.
Sir David Price: In view of my right hon. Friend's declared intention to modernise our social security system and to make it more responsive to changing social needs, will he introduce flexibility of retirement age and equality between men and women in eligibility? He will recall that that was proposed by the Select Committee and by me in a private Member's Bill in the previous Session of Parliament.
Mr. Fowler: My hon. Friend will find that in the Green Paper we deal with flexibility in retirement. I do not pretend that there are easy answers to that matter, but, like him, I should like there to be more flexibility. We invite comments on what we have set out in the Green Paper as a decade of retirement.
Mr. Frank Field: As the Secretary of State has boasted that the four reviews will result in nothing less than a new Beveridge, will he give two pieces of information so that we can see to what extent the reviews live up to that self-imposed objective? If the Government enact all of these proposals, how many
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people will cease to be poor? Secondly, as the hon. Gentleman acted as co-ordinator for all four reviews, can he say how many people will gain and how many people will lose? Will he give a commitment that those who bear unemployment will not have their benefits cut further?
Mr. Fowler: For various reasons, I cannot give the figures for which the hon. Gentleman asks. As I explained to the right hon. Member for Blaenau Gwent (Mr. Foot), no detailed analysis of cost can be made until benefit rates have been set in April 1987. [HON. MEMBERS: "HOW much will it cost?"] My answer is entirely frank and reasonable.
As for help to the poor, family credit and other proposals in the review will reduce poverty. The social security system must be capable of coping with changes in the pattern of poverty. We have proposed family credit because we have considered the pattern of poverty in detail and it is clear that, in the past 15 years, families with children have been most in need.
Mr. Robert McCrindle: Will my right hon. Friend accept from one who has expressed reservations that there is a great deal to commend in these proposals and much that is long overdue? Will he confirm that those who are most likely to be affected by changes in housing benefit include widows and occupational pensioners? Is my right hon. Friend open to some suggestions on that matter, because the changes in housing benefit seem to lie strangely with his commendation of occupational pension schemes? My right hon. Friend said that on the phasing out of the state earnings-related pension people would have a right to opt for a private pension scheme. What happens if people choose not to exercise that right and reach retirement age with nothing but the basic pension?
Mr. Fowler: I am grateful for my hon. Friend's comments about the review. I hope that the Green Paper will go some way to meet the issues that he has in mind. Housing benefit goes further up the income scale than any other benefit. On that basis, it is more reasonable to look for economies there, bearing in mind the scale of the increase in expenditure on housing benefit in the past six years. There will be minimum requirements for individual pensions. Employees and employers will be required to make provision. There is no question of people in work reaching pension age without having an additional occupational, personal or industry-wide pension.
Mr. Jack Ashley: Is the right hon. Gentleman aware that the Government are making social security a scapegoat for the failure of their economic policies and that, instead of caring more for the growing number of casualties of their incompetence, they are planning to care less? That means that the Government are incompetent and insensitive to the poverty, degradation and suffering caused by the unemployment that they have created.
Mr. Fowler: I do not accept that for one moment. We all respect the right hon. Gentleman's knowledge and experience in these matters, and I hope to dissuade him from that view. Few people in the country or the House believe that the present social security system is capable of continuing without major change. This is the first Government to tackle that problem for 40 years. The Government and the country have a responsibility to

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change the social security system to provide a modern system which can be sustained by present contributors and our children.
Mr. Andrew Bowden: I am delighted to support much in my right hon. Friend's statement, but will he confirm that the Green Paper is not a White Paper in disguise and that no decisions have been made? How will the income support system affect pensioners who do not claim a supplementary pension? As to housing benefit, may I stress the grave anxiety for pensioners, the value of whose savings has been destroyed and whose financial circumstances have been undermined by their not having inflation-proof pensions? They must not be worse off as a result of these proposals.
Mr. Fowler: This is a Green Paper. The purpose of the review has been to consult the public. We shall continue to consult the public and to listen to issues that are raised with us. The simplicity of the income support scheme will bring immeasurable benefit to all. I remind my hon. Friend of what we are doing to preserve the interests of people approaching pension age. Nobody who retires this century will be affected by the changes in the state earnings-related scheme. It goes without saying that rights which have accrued and which are in payment will be honoured fully. That includes inflation-proofing.
Mr. Gordon Brown: Will the Secretary of State confirm that today he has praised the Beveridge report only to bury it, and that he is ratting on promises made not only about the state earnings-related pension scheme but about child benefit and help for the unemployed? Will he confirm that under these new poor laws 7 million people will receive less in housing benefit, and that 1·8 million people — 3,000 in every constituency — will lose help with rent and rates? Will the Secretary of State tell us by how much the basic pension and the supplementary pension will have to rise to compensate for the loss of heating, dietary and clothing additions and the death grant, and for his demand that the poor should pay 20 per cent. of the rates? Why is it that the poorest, the weakest and the most frail in our community have to pay the price for his Government's economic failure?
Mr. Fowler: That is not the case, and the hon. Gentleman is too intelligent to believe that it is. I have made it clear that there will be reductions in housing benefit, but I have to point out to the hon. Gentleman a fact which he probably knows well enough in any event —that housing benefit expenditure has increased from £1·2 billion in 1979 to £4·2 billion in 1985–86.
The hon. Gentleman also knows that housing benefit expenditure goes further up the income scale than any other benefit. We are spending £40 billion a year on social security. Furthermore, spending on social security by this Government has increased by about 30 per cent. The majority of that increase is spent not on unemployment benefit but on making improvements in real benefits. It helps absolutely nobody to believe that expenditure of this kind can continue in a totally uncontrolled manner. I believe that our proposals are fair to the public and will help to bring about the recovery of the economy that we all want.
Mr. Roy Galley: My right hon. Friend will be aware of the wide welcome that there will be for the
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better targeting of benefits, for the concentration of help on families in need and for basing benefit on take-home pay and reducing the poverty and unemployment traps. Does my right hon. Friend agree that one aspect of the poverty trap has been the way in which supplementary benefit has been the gateway to a plethora of other benefits? Will he elaborate upon how far these various additions will be consolidated into the income support system and upon how free school meals Will be related to the family credit system?
Mr. Fowler: As a general aim, the Government are trying to make benefits available equally on the basis of income. In other words, rather than having the distinctions that exist now between those on supplementary benefit and those in work—as my hon. Friend points out, having passports which take one to particular benefits — we shall make the same benefits available on the basis of equality of income, whether people are in work or out of work. I should make it clear that we intend to include some of the extra benefits in family credits and to pay those benefits in cash rather than in kind.
Mr. Donald Stewart: Is the Secretary of State aware that the United Kingdom is lagging behind a number of other European countries in providing this type of benefit and that these proposals will push us further down the league? Is he also aware that some of the poorest people in our society will experience the rigours of the Victorian workhouse? As maternity and death grants will be means tested and paid for out of a so-called discretionary fund, does the Secretary of State not realise that people will be means tested literally from the cradle to the grave?
Mr. Fowler: There is a profound misunderstanding of the Government's proposals. They are based upon a test of net income. If one believes in trying to target help on those who need it most, it is impossible to devise any other way to bring that about. Therefore, I ask the right hon. Gentleman to study with greater care the proposals in the Green Paper. As for the social fund, I do not think that anybody would defend the present position under which additional payments are made. It does not work. It has not worked for some time. The social fund will enable us to provide a more sensitive and better targeted way of providing help for those in need.
Dr. Brian Mawhinney: Does my right hon. Friend accept that his concentration of help on families with children and the testing of incomes is very welcome and will be widely supported in the country? Can he confirm that the contributions to SERPS of those who will not be retiring this century will, nevertheless, be inflation-proofed against price rises, to cover the time when they will receive the benefit of the contributions that they have made?
Mr. Fowler: The position of any man over the age of 50 and of any woman over the age of 45 is preserved. The accrued rights of people generally are also preserved in the same way.
Mr. Derek Foster: Is it not outrageous that the Secretary of State should come to the House this afternoon and claim to be proposing a new Beveridge and yet be quite unable or unwilling to tell us how many will gain and how many will lose under these proposals? Out of the many thousands of poor people who

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will lose under these proposals, will the right hon. Gentleman tell us how many pensioners with small occupational pensions will have their heating and dietary additions removed?
Mr. Fowler: I dealt with that question in some detail when I answered the right hon. Member for Blaenau Gwent (Mr. Foot). The purpose of the social security review is to put forward a new structure and to seek the views of the House and the public on that structure. It is impossible to provide a detailed analysis of the cost until the benefit rates have been set. I have been entirely frank in saying that we expect there to be significant savings in housing benefit. I gave that figure to the right hon. Gentleman.
Mrs. Edwina Currie: Given the huge size of the social security budget—£40 billion a year—and given also the growth of that budget, its complexity and the muddle and confusion which appear to be rife within it, does my right hon. Friend agree that it would be a thoroughly irresponsible Government who did not undertake these long overdue reforms? Does he accept that we shall all benefit — taxpayers, recipients and particularly the less well-off—and that the people of this country will have cause to give thanks to my right hon. Friend, particularly after several upratings in 1987?
Mr. Fowler: There is no question but that a re-examination of the social security system was long overdue. There is also no question but that the majority of the public share that view. I believe that many Opposition Members secretly share that view, too. This Government have had the courage to undertake that review. The hon. Member for Derby, South (Mrs. Beckett) laughs, but the only thing that the last Labour Government did was to ask a team of officials to look at the supplementary benefit scheme. That is not the way to reform social security, and that is not the way in which this Government propose to reform it.
Mr. D. N. Campbell-Savours: Is it not clear that the Secretary of State is refusing to give these figures for singularly party political advantage? Has he forgotten what was contained in the Conservative party's manifesto at the last general election? The Conservative party gave a solemn undertaking to the British people that it would protect pensions and other linked long-term benefits against rising prices. Has not that solemn undertaking been broken today? Is it not clear that the Government do not have a mandate for pursuing this policy? Their only reason for pursuing it is that they cannot make their economic strategy work. They cannot make the nation pay the bill. They have failed.
Mr. Fowler: The hon. Gentleman has not understood a single word of what has been said today. We stand entirely by the words to which he referred. We have kept pensions up with prices, and we have also tackled inflation. Under the Labour Government inflation increased by 110 per cent., which was a cruel blow to pensioners.
Sir Brandon Rhys Williams: Will my right hon. Friend accept my warmest congratulations on his decision that occupational pensions should be based on real funding, and on his courage in slaying the Hydra of
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the state earnings-related scheme, which is not even an honest system of repartition? With regard to benefits that will still be based on a redistribution of the national income, would it not have been more logical and practical to integrate the income tax wholly with the contributory system, so that the residual welfare state, which is still concealed inside the income tax system, could be integrated into a logical new system of benefits?
Mr. Fowler: I have much sympathy with what my hon. Friend says, but we are still some distance from that position. First, we must computerise the DHSS system. We are taking several steps in a direction which my hon. Friend would support. The alignment of the tax and benefit years is a major improvement. Family credit will prove a natural system for bringing together social security and tax affairs, and computerisation will undoubtedly help. Some of the further points put forward by my hon. Friend can be examined in the Green Paper which my right hon. Friend the Chancellor of the Exchequer will introduce later this year.
Mr. Robert N. Wareing: Is the Secretary of State aware that his statement is a kick in the teeth for all disabled people, especially for the non-industrial disabled, who do not receive disablement benefit? They depend for 20 per cent. of their incomes on the additional allowances, such as the heating allowance, which, at a stroke, he is abolishing. Have the Government considered compulsory euthanasia as a way of solving their monetary problems? It seems to me and to millions of disabled people that they are being sacrificed on the altar of Conservative monetarism.
Mr. Fowler: That is a very silly intervention. The hon. Gentleman must understand — if he does not, he had better read the document — that the income support scheme will include a special premium for the disabled. I advise the hon. Gentleman to look at that.
Dr. John G. Blackburn: As someone who represents 70,000 pensioners, may I ask my right hon. Friend to accept that they will welcome his proposal for a review of the housing benefit scheme, which will be to their advantage? Does he further accept that the widow's grant of £1,000 will be widely welcomed? Will he, as he said earlier, accept further representations?
Mr. Fowler: Yes, indeed. On any of the proposals made in the Green Paper, the Government will wish to hear representations from interested organisations outside the House and from hon. Members. The widows' arrangements are more flexible and better targeted than the present ones, but I am open to suggestions on how to improve them.
Mr. Hugh Brown: Does the right hon. Gentleman accept that almost everyone in the House accepts the need for some reform—[Interruption.] I shall put my question in my own way. From so many proposals, there must be one or two that can be accepted by us all. Is not the real indictment that the Government seem to be incapable of creating a society without 4 million unemployed? In those circumstances, there is no possibility of obtaining a consensus on the broad approach to social reform. Will the right hon. Gentleman confirm that the poorest section of the community—those in

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receipt of supplementary benefit — will not be cash losers? He used the phrase. Can he explain what he means by it?
Mr. Fowler: Exactly what I said. We shall ensure that the structural changes will not result in cash losses by those who are now in receipt of supplementary benefit. I accept the hon. Gentleman's more general point. The aim is not to increase and improve social security benefits. The aim is to reach a position whereby we can reduce unemployment and dependence on those benefits.
Mr. Roger Freeman: Is my right hon. Friend aware that his proposals on SERPS will be widely welcomed because they are founded on common sense? Will he confirm that the required mandatory contribution for additional pension provisions, which is set at 4 per cent.—half of which will be paid by the employer—is only one third of the contribution rate normally applicable in occupational pension schemes and, therefore, should be financially acceptable and is basically sensible?
Mr. Fowler: Yes, I can confirm that. I can also confirm — I know that my hon. Friend has expressed anxiety about this — that the contribution will be available for personal pensions as well as for occupational pensions or for membership of industry-wide schemes.
Several Hon. Members rose—
Mr. Speaker: Order. I shall take two more questions from each side, and in the debate that is to follow I shall give preference to those hon. Members who have not been called today.
Mr. Charles Kennedy: On the question of alleviating family poverty, will the Secretary of State explain why, under the proposed family credit plan, payments will go direct to the pay packet? Given that that represents a major redistribution of wealth in the family away from mothers, would it not be better to adapt that proposal before the White Paper is published so that mothers can claim it if they wish? As to the income support scheme, is not the most glaring omission the fact that the right hon. Gentleman has firmly set his face against an extension of the rate to the long-term unemployed, who are the new poor under the Government's policies?
Mr. Fowler: The hon. Gentleman must remember that we are adding a family premium to the income support scheme. The family premium and children's rates will be added to the standard rate, which will provide help where it is needed—among low-income families with children. As to the argument about the purse to the wallet, it is more sensible to make family credit part of the total income from work. That will improve the present poor take-up of family income supplement, which has caused us anxiety for a long time. Although initially it will be assessed by the DHSS, there is no reason why it should not go into the pay-as-you-earn system, which is something that the hon. Gentleman might welcome.
Mrs. Elaine Kellett-Bowman: I warmly welcome my right hon. Friend's efforts to rebuild personal incentive, and especially his help to families with children, who are by far and away the largest proportion of people with below accepted nutritional standards. The new family credit scheme will help to equate those who work with those who do not, and the £1,000 grant to widows at a
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difficult time in their lives will be welcomed. May I also congratulate him on his efforts to co-ordinate the tax and benefits systems, which was recommended to the Chancellor of the Exchequer by the Select Committee on tax credits 13 years ago?
Mr. Fowler: I am grateful for my hon. Friend's generous welcome for the proposals. One area that caused those who conducted the review most anxiety was that of low-income families with children. That is what the proposals try to tackle, and I believe that family credit will make a great contribution.
Mr. Andrew Faulds: Should not this supposed Green Paper be simply titled "Dismantling the Welfare State"? As the right hon. Gentleman claims that he cannot give figures — that has been a persistent theme of his responses today — will he publish an assessment, based on demographic developments and Treasury forecasts, of a range of likely benefit payments in the April 1987 Budget, so that the people of this country can judge for themselves the damaging implications of this developement before the next general election?
Mr. Fowler: There will be no difficulty in finding out the implications of the proposals before the next general election. In the Green Paper we have tried to set out the structural reforms and changes that we are making. That is an entirely proper and right course to take in a Green Paper. A White Paper and a Bill will follow and go into even more detail.
Mr. J. F. Pawsey: As my right hon. Friend's Department is responsible for 43 per cent, of all Government spending, will he confirm that help will continue to be concentrated on those who are most in need and that his proposals will result in a more efficient service, which, in turn, will mean that resources are used more adequately and efficiently?
Mr. Fowler: I very much hope that we shall be able to achieve the last part of what my hon. Friend has set out. There is no doubt that we need a modern system of social security which provides a better service. The present system does not achieve that, and I believe that it is common ground on both sides of the House that we should move towards that goal.
Mr. Meacher: Is the Secretary of State aware that he was wrong when he said that the majority of increased spending on social security since 1979 has been devoted ' to improve benefits?
Will the right hon. Gentleman give the House an assurance that, given the magnitude of this exercise, we will have not merely a one-day debate, but a two-day debate, so that we may explore fully the implications of his statement?
On the funding of SERPS, does the Secretary of State recall that in 1954 the Phillips committee said that the pension could not be afforded over the next 30 years? If we had listened to that committee, the pension would be about £15 a week today and retirement ages would be 63 and 68. Does that not show the folly of making drastic decisions now about unknowable circumstances 50 years on?
Are we seriously expected to believe that the Government are launching this massive exercise without being able to estimate any costs until the benefit rates are

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fixed in 1987? Is that not utterly irresponsible, or is it that this Treasury-dominated cuts exercise still has a long way to run and that, given pressure from the Treasury, the overall cuts may turn out to be £2 billion or more?
Mr. Fowler: The hon. Gentleman is getting carried away again. I have already given the figure and, like everyone else, the hon. Gentleman listened to it. Since 1979 the majority of increased spending has gone on extra benefits and beneficiaries.
Mr. Meacher: Ah!
Mr. Fowler: I should point out to the hon. Gentleman — just in case he should have other ideas — that additional beneficiaries have to be paid for.
I cannot commit my right hon. Friend the Leader of the House to a two-day debate. Certainly, we are committed to a debate. The hon. Gentleman made the classic dud point about the Phillips committee. I ask him to go back to the committee. The one figure that it was able to predict with almost total accuracy was the future number of pensioners. That is the great difference between the situation in 1975 and the situation now. On the best predictions that can be made, we shall need policies for dealing with between 3 million and 4 million more pensioners in the first half of the next century. That is the best estimate, and I advise the hon. Gentleman to accept it.

Sri Lankan Tamils
5.34 pm
The Secretary of State for the Home Department (Mr. Leon Brittan): With permission, Mr. Speaker, I wish to make a statement.
On 20 May, in reply to a question from my hon. Friend the Member for Lewisham, West (Mr. Maples), I announced my future policy towards Sri Lankan Tamils who expressed a fear of return to Sri Lanka. In the week following that statement, more than 500 Tamils arrived here seeking asylum. I decided that further measures were necessary to reduce the influx and, after consultation with my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs, I announced on 29 May the imposition of a visa requirement for Sri Lankan citizens, to come into effect the following day. The need for such a measure was demonstrated by the fact that 244 Tamils arrived on 29 May. A further 76 Tamils arrived shortly after the visas requirement came into effect, but there have been no further arrivals over the weekend or so far today.
The imposition of a visa requirement will not prevent the entry of those Sri Lankan citizens who qualify for admission in the normal way—for example, as visitors or students — although they will, of course, have to obtain visas before travelling. It will save the cost and disappointment of wasted journeys for those who would not be allowed to enter because they do not qualify under the immigration rules. If a Tamil not qualifying under the rules and seeking in present circumstances to leave Sri Lanka wishes to come to this country, he will be able to apply for a visa. Such applications will, however, be granted only if the individual can show that he is suffering severe hardship and the circumstances—including, for example, family links with this country — warrant the exercise of discretion in his favour outside the normal immigration rules.
The position of all the Tamils who have recently arrived will continue to be considered individually on the basis set out on 20 May. Where an application for asylum is refused, there will be an opportunity for the United Kingdom Immigrants Advisory Service of the United Nations High Commissioner for Refugees to consider the case and representations from Members of Parliament will continue to be considered.
It was only with great reluctance that I decided that it was necessary to impose a visa requirement on a fellow Commonwealth country. The need for it will be kept under review and I hope that it can be lifted in due course.
Mr. Alfred Dubs: Is the Home Secretary aware that his statement represents a major departure from two important traditions? For the first time, Commonwealth citizens — albeit from only one Commonwealth country at the moment—will require a visa to enter this country. Secondly, the British tradition of offering haven and hospitality to those seeking asylum has been breached.
Does the Home Secretary agree that some Tamils who came here were very much in fear for their safety in Sri Lanka and that that was the motive which prompted them to seek asylum in this country, as it prompted many of their fellow countrymen to seek asylum in Germany and other countries in Europe? Is the Home Secretary aware

53
that we are asking that the tradition of granting temporary admission for those in fear for their safety which has operated for many years should be continued?
How long will those applying for a visa in Sri Lanka have to wait before it is granted? Have those who are fearful for their safety any chance of being granted a visa to come to this country and seek temporary admission while their claims for asylum are being considered? How many Tamils arrived in this country seeking asylum in May?
My final point was not mentioned by the Home Secretary: What is the reason for the diminution of the rights of hon. Members to make representations on behalf of our constituents or relatives of our constituents? Why has the tradition of making such representations been whittled away to a 24-hour period? Will the Home Secretary explain the reasons for that and tell us how the system is to work? In fact, will he drop that provision?
Mr. Brittan: With regard to the alleged major departures, the hon. Gentleman is right to say that up to now visas have not been required for Commonwealth citizens coming to this country. I regret the fact that it should be necessary to impose such a requirement for the first time. However, other Commonwealth countries, such as Australia, Bangladesh, Nigeria and India, require British citizens to have visas. It is also the case that most Western European countries require persons from Sri Lanka to have visas.
With regard to a breach of our tradition of haven and hospitality, I cannot accept that the position is for a moment as the hon. Gentleman said. It seems to me to be far more sensible that the question whether someone is likely to suffer severe hardship should be considered in Sri Lanka itself by appropriate representatives of the British Government than that people should simply come to this country, having nowhere to go to, and have to be dealt with at Heathrow or Gatwick. There is nothing in the slightest bit more humane than a policy that allows people to come in, provided that there is machinery for considering whether they would suffer severe hardship and whether this country is the appropriate place for them to go. Let us not forget that large numbers have gone to India and not been refused admission.
With regard to coming here to seek temporary admission, that is inconsistent with the changes that I announced on 20 and 29 May. For the reasons that I gave just now, it is preferable for the question whether someone is suffering the sort of severe hardship that would lead to them being admitted to the United Kingdom to be considered in Sri Lanka itself. The number of officials dealing with the matter is being strengthened—two have gone out, two more are being transferred by the Foreign Office and another two are going there on 1 July. I cannot say how long it will take to consider applications.
I can give the numbers coming to Britain during the month of May. From 1 May to 15 May, approximately 240 arrived. From 16 May up to and including 20 May, when I made the previous statement, 218 came. But between 21 May and 27 May, a total of 532 came; 26 came on Tuesday 28 May; and on the day that I made the announcement about visa requirements, 244 came. Therefore, the number was accelerating. Of that there is no question.
Referring to the rights of Members of Parliament, the hon. Gentleman has, I am sure unwittingly, misrepresen-ted the situation. There was never any question of these
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cases being considered within 24 hours. I made that clear in my statement. I said that in the process of proper consideration, which of course will be given to people whether they are here or applying for a visa in Sri Lanka, it was reasonable, in the case of those who are here, to ask Members of Parliament to make their representations, which are only a part of the process, within 24 hours if at all possible.
A delegation of hon. Members came to see me about that matter, and I made it clear to them that if, in a particular case, there were special difficulties that made it impossible for them to make their representations as quickly as that, they should inform the Home Office and we would consider a short extension of the time during which the representations could be made. However, I believe that it is reasonable, in the interests of the Tamils as much as anything else, that the representations should be made quickly, and that it should not simply be possible for Members of Parliament to take an indefinite period of time to make representations, particularly when, as I have made clear, the machinery for considering all the points in an individual case, whether put forward by the individual, UKIAS or the United Nations High Commissioner for Refugees, was fully in place.
Mr. Roger Sims: Is my right hon. and learned Friend aware that, when I had the opportunity of visiting Sri Lanka earlier this year, I formed the view that the Tamils in the north of the country lived in fear of their lives because of the possible over-reaction by the army to Tamil terrorist incidents, such as the recent one at Anuradhapura, where a number of Sinhalese were not only in fear of their lives but were killed? Elsewhere in Sri Lanka, where the Tamils are in a minority, they are nevertheless active and involved members of the community, but some of them naturally fear the possibilities of a backlash against them, with rioting and bloodshed such as has occurred in the past.
However, does my right hon. and learned Friend also accept that we are talking of a population of about 3 million people, and it is unrealistic to expect this country to open its doors to a number of people approaching that figure who believe that they are in fear of their lives? This is a serious and worrying internal problem. It may well be one that other people will have to help the Sri Lankan authorities to solve. It will not be solved by us opening our doors to anything up to 3 million Tamils.
Mr. Brittan: I am grateful to my hon. Friend for his analysis of the situation. I had the benefit of talking to him about it shortly after he returned from Sri Lanka. He is right; I do not in any way underestimate the gravity of the problem. It is complex and must have a political solution. I welcome the fact that there have been recent discussions, as the House will be aware, between President Jayawardene and Mr. Rajiv Gandhi. I hope that such contacts can lead to a solution of the problem.
There has been disorder in Sri Lanka. As my hon. Friend said, the position will vary from one part of the country to another. But it is not the case that we have a situation that is in any way analogous to that of Amin's Uganda, for example, where the Government were seeking to persecute a particular minority, because, as the House will be aware, prominent members of the Tamil community hold extremely prominent positions in Sri Lanka. It is worth mentioning that the Minister of Home

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Affairs, the Minister of Rural Industrial Development, the Chief Justice and the governor of the Central Bank are all Tamils. Such a situation would have been inconceivable for Ugandan Asians during Amin's regime.
Mr. Michael Meadowcroft: Is the Home Secretary aware that, whatever the cause of the internal problems in Sri Lanka, his view of the reality in that country is greatly different from that of the Tamils, who are outnumbered by about four to one by the Sinhalese, and who clearly need some help and sympathetic refuge? Why was there no mention in the right hon. and learned Gentleman's statement of talks with the Commonwealth? Is it not important for the Commonwealth to be involved corporately with this urgent problem, which involves two of its members? Will the right hon. and learned Gentleman support the moves for an early debate on the Floor of the House on the Liberal prayer against the changes in the immigration rules?
Mr. Brittan: I hardly think that the hon. Gentleman seriously expects me to give an answer to his final point. My right hon. Friend the Leader of the House will consider it. Of course, it is a general problem of an international nature. The most able and best placed countries to deal with it are, of course, Sri Lanka and India. However, if my right hon. and learned Friend the Foreign Secretary can assist in any way, of course he is ready to do so.
Mr. Terry Dicks: Does my right hon. and learned Friend accept that many of my constituents are concerned that any Tamils have been allowed into the country at all? Many people in my constituency and, I am sure, up and down the land feel that this country has done enough. Enough is enough. We have our own problems across the board, from unemployment to social services. When will the first Tamils be sent back, because the Government of Sri Lanka have clearly said that there is no threat to their existence in that country?
Mr. Brittan: Ten Tamils were returned not to Sri Lanka but to European countries and, I believe, in one case, to India, over the weekend. With regard to the others, the process outlined in my statement of 20 May and today's statement will be followed. Careful consideration will be given. However, my hon. Friend is right to draw attention to the fact that on 31 May President Jayawardene gave our high commissioner a formal personal assurance that no Tamils returned to Sri Lanka would be harassed or persecuted in any way. That is something that we shall certainly seek to build and rely on as the situation develops.
Mr. Dave Nellist: Will not this disgraceful change in the appeals procedures and visa requirements result in many Tamil refugees in Britain being sent back to arbitrary arrest or even death? The Home Office says that only 1 per cent. of Tamil refugees in Britain are genuine refugees. Is the Home Secretary aware that Germany has accepted 95 per cent. of its 10,000 Tamil refugees as genuine? Does the right hon. and learned Gentleman realise that his remarks give credence to the crude racism coming from some of the gutter newspapers and Tory Back Benchers who talk of stemming a flood when 1,300 refugees spread equally
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across the country would mean that a city the size of Coventry could absorb eight more people out of a third of a million? Where is the flood there?
Are not the arrangements which have been announced today — which were made during a recess so that Parliament could not question them and which were announced in a written answer of 20 May—just the kick-back from this Government to repay the discussions that the Prime Minister had in April with President Jayawardene and in exchange for a new naval base for America and Britain in Sri Lanka and for influence in the Indian ocean?
Mr. Brittan: The hon. Gentleman's observations are extravagant and inaccurate. There has been no change whatsoever in the appeals procedures. The hon. Gentleman's reference to the statement that 1 per cent. of Tamil refugees are genuine shows that he has not distinguished between refugees under the convention and persons who might be subject to severe hardship and who would be considered outside the rules. There is a complete difference between the two. The German rules and appeal procedure are quite different. There is a clear distinction between the very small number of people who are counted as refugees and those who might qualify under the policy which I announced on 20 May and reaffirmed today.
Mr. Jeremy Hanley: The United Kingdom has an honourable record in giving refuge over the years to hundreds of thousands of people who have suffered from persecution in their own countries. Does my right hon. and learned Friend agree that we must continue to give that refuge and that it is vital for care to be taken in assessing those who are genuine refugees so as not to dilute the status of refugees, past, present and future? Will he assure the House that once a person has proved his status as a refugee, fleeing from a totalitarian regime, we shall still treat him with humanity and not as part of immigration control?
Mr. Brittan: I agree with everything that my hon. Friend has said. There is no question but that we will honour to the full in spirit and in letter our obligations under the convention relating to refugees. My hon. Friend is absolutely right in saying that no useful purpose is served by seeking to muddy the waters, as the hon. Member for Coventry, South-East (Mr. Nellist) does, and to confuse the position of genuine refugees and others for whom one may have a considerable degree of sympathy, but who are not necessarily refugees.
Mr. Max Madden: Is it not shameful that a Home Secretary whose family sought refuge in this country has slammed the door in the face of those coming from a Commonwealth country who believed that their lives were in jeopardy? Will the right hon. and learned Gentleman give a clear assurance that no Tamils who have sought entry to Britain will be returned directly to Sri Lanka? Does not the right hon. and learned Gentleman understand that Tamils awaiting entry clearance in Colombo — for a month or even longer — face harassment, injury and possible death? Will he give a clear assurance that no Tamils will be returned until there has been a proper opportunity for full inquiries to be made? Does not the right hon. and learned Gentleman recognise that it is an insult to hon. Members and to parliamentary democracy for these shameful decisions to have been taken when the House was in recess?
Mr. Brittan: The hon. Gentleman's personal references are wholly inaccurate, but I do not think that he greatly worries about that. The initial statement of policy was made on 20 May in a written answer to the House. It was capable of being challenged in the normal way. The subsequent change was necessitated by escalating numbers of people who were arriving on our doorstep. I do not believe that there would be anything in the least humane in allowing that process to continue unimpeded. Today's statement was made at the earliest possible opportunity after the recess.
Sir John Page: The calm and moderate Tamil community here realise that this country is in a difficult position over the possibility of a mass immigration of Tamils. They will understand that it was necessary for my right hon. and learned Friend to take some steps. Will regular visitors to this country — business men, politicians and others—who are Tamils, coming from countries other than Ceylon, have the opportunity to obtain a visa in a much shorter time than two months? 1 shall write to my right hon. and learned Friend about a particular case.
Mr. Brittan: I appreciate my hon. Friend's statement. I should like to take this opportunity to pay my tribute to the Tamil community in this country who, faced with a tremendously difficult situation, have been able in a very short period to look after a large number of people. It is not our intention to prevent people who would be eligible in the normal way from coming to this country. Obviously, within the context of the visa regime, we shall want to do everything that we can to ensure that that happens as quickly as possible.
Several Hon. Members rose—
Mr. Speaker: Order. An application under Standing Order No. 10 will be made immediately after this statement and, in fairness to Scottish Members who are concerned with the following business, I shall take two further questions from each side.
Mr. Jeremy Corbyn: Does the Home Secretary accept that his performance since 20 May on this issue has been one of disgraceful subterfuge of the House and Members of Parliament? Why, when a delegation of three hon. Members—my hon. Friends the Members for Newham, North-West (Mr. Banks) and for Coventry, South-East (Mr. Nellist) and myself—met him on 29 May, did he not tell us that he was planning to announce visa restrictions the following day? Will the right hon. and learned Gentleman confirm that last week the United Nations High Commissioner for Refugees, Mr. Hartling, had an extended meeting with representatives of most European countries and many others and discussed this and many other matters? The statements of that meeting which came from Mr. Hartling's office suggested that he was highly critical of the attitude taken by the British and Dutch Governments.
Should not the right hon. and learned Gentleman look once again at the reports that he received from Sri Lanka which suggested that improvements were taking place? There is no evidence whatever to support that idea. Indeed, all the evidence points to a deterioration and danger to the Tamil people because of the position in Sri Lanka. Is it not incompatible for the right hon. and learned Gentleman to make statements such as the one he made
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this afternoon while the British Government continue to supply arms and to train army officers in Sri Lanka, showing exactly on which side of the communal divide in Sri Lanka they have placed themselves?
Mr. Brittan: Neither the hon. Member for Islington, North (Mr. Corbyn) nor anyone else has said anything to suggest that there has been a subterfuge. The policy was announced first in a statement on 20 May, then in an announcement on 29 May, and today a statement has been made in the House. At least the hon. Member for Islington, North was good enough to state that the strictures of the United Nations High Commissioner for Refugees covered the Dutch Government as well. The fact is that virtually all the countries of western Europe have found it necessary to operate a visa regime. I therefore feel no need to apologise for taking action which was necessitated by circumstances that were not the making of Her Majesty's Government.
Mr. Bowen Wells: I congratulate my right hon. and learned Friend on his action to protect Britain from this type of immigration through the excuse that some Tamils are—
Mr. Nellist: Excuse!
Mr. Wells: It has been used as an excuse on a type of immigration which should not take place and which protects them through the visa requirements. I congratulate my right hon. and learned Friend also on jealously guarding our proud reputation of providing a political refuge for those who are genuinely in danger in their own country. Will he ensure that his requirements apply equally to Tamils and Sinhalese who apply to this country for entry? The Sinhalese are also under attack from the Tamil guerrillas in many parts of southern Sri Lanka and their lives are in danger. Has my right hon. and learned Friend made strong representations to the Indian Government to prevent further Tamil aggression and the supply of Tamil guerrillas from India? If preventive measures were implemented, they would put an end to this immigration and the need for Tamils to try to enter this country.
Mr. Brittan: I am grateful to my hon. Friend for what he said at the beginning of his remarks. I shall draw his latter remarks to the attention of my right hon. and learned Friend the Foreign Secretary.
As far as I am aware, there have not been any applications from Sinhalese, as opposed to Tamils, seeking refuge or asylum. If there are, I shall keep in mind my hon. Friend's points.
Mr. Sydney Bidwell: Will the Home Secretary be more trenchant in rejecting the attitude expressed by the hon. Member for Hayes and Harlington (Mr. Dicks), who believes that this country can be insulated against its responsibilities for refugees out of line with other European countries that subscribe to refugee responsibilities?
Should we not be ultra careful in handling these matters on an individual basis? I have experience in these matters, and I ask the right hon. and learned Gentleman to consider one particular aspect. It appears to be mostly single young men, rather than families, who are seeking refugee status. They have many anxious relatives both in this country and in northern Sri Lanka, who are scared that they may become involved in terrorist activities in southern India or

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elsewhere. They have combined their efforts to ensure that these young men came to Europe to escape that. Will the right hon. and learned Gentleman keep that in mind when deciding on individual cases? The majority of such young men are asking for refuge for only a limited period, not for all time.
Mr. Brittan: I recognise what the hon. Gentleman says and respect his great experience in these matters. However, I do not really think that someone subject to pressure to become involved in Tamil terrorism could regard that as a reason to come to Britain. It is possible to avoid being involved in Tamil terrorism, as evidenced by the many millions of Tamils wo have succeeded in doing just that and have not had to resort to coming to Britain.
Mr. John Stokes: Is my right hon. and learned Friend aware that there has been a massive misrepresentation of his actions, especially in the press and on television? It has been suggested that many Members of Parliament have asked him to allow more Tamils into Britain. The truth is that the majority of hon. Members are against that, as are the large majority of people in the country. My right hon. and learned Friend has acted moderately and responsibly. Britain is no longer a colonial power, and the main responsibility lies with India. He should stick to his guns.
Mr. Brittan: I am most grateful for my hon. Friend's support.
Later—
Mr. Harry Greenway: On a point of order, Mr. Speaker. I seek your guidance in relation to the very important statement on the Tamils. There are about 2,000 Tamils living in Ealing, which has within it the excellent weekend Tamils' school. Therefore, I represent a considerable number of them. It would be helpful, in advance of statements such as this, if hon. Members with particular concerns could notify you, Mr. Speaker, of their interest so that you would know of their anxiety to catch your eye.
Mr. Speaker: That was a good try by the hon. Gentleman. My feeling is that he does fairly well. It would be ideal if I could call every hon. Member who rose. I allow as good an opportunity as possible for hon. Members to put questions on statements. However, with the best will in the world, and in fairness to other hon. Members, it is not possible for me to call everyone who wishes to question a Minister.

Immigration (European Court Judgment)
6.4 pm
Mr. Gerald Kaufman: 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 urgent need to re-examine the cases of those husbands and male fiances whose refusal of admission to Britain is placed in question by the decision of the European court."
The matter is specific because it relates to a judgment delivered in the European Court of Human Rights six days ago, during the recess. It is extraordinary that the Home Secretary has not come forward with a statement today, and that makes this application all the more necessary.
The matter is important because the European court has on two counts found that the British Government are in violation of the European Convention on Human Rights, and accordingly have been acting unlawfully for almost six years. First, the Government have been acting unlawfully because the applicants to the court have been victims of discrimination on the ground of sex, in violation of article 14 taken together with article 8. Secondly, there has been a violation of article 13 of the convention, which provides that everyone whose rights and freedoms as set forth in the convention are violated should have an effective remedy before the national authority, notwithstanding that the violation has been committed by persons acting in an official capacity.
The matter should have urgent consideration for two reasons. First, the law as embodied in the 1983 immigration rules — which continues and, indeed, exacerbates the sexual discrimination of which this Government have been found guilty—clearly must be changed speedily. It is essential that this House should be able to express a view on how that law should be changed before the Government reach an irrevocable conclusion. It is essential that the Government accept the spirit of the European court's judgment, rather than seek to avoid their responsibilities arising out of the judgment by changing for the worse the immigration status of wives and female fiancees. It is essential that the Government give an unambiguous commitment to abolish the sexually discriminatory primary purpose rule.
Secondly, the House must debate the matter urgently to safeguard the 3,350 husbands and male fiances whose applications have been refused since November 1979, and who share with the menfolk of the successful applicants at Strasbourg the injustice that the Government have committed. In all justice, those men must have their rejected applications urgently considered afresh in the light of their legal rights as established by the Strasbourg judgment. After some of them have had their rights withheld for nearly six years, and thousands for a substantial, if lesser, period, it would be wrong if they and their female partners, who are suffering injustice with them, should have to apply afresh and wait a further long period for interviews and decisions.
It would be wholly unacceptable if those unjustly treated men were made to wait in suspense until the Government changed the rules — and did so in a restrictive manner which would extinguish the legal rights established by the European court's judgment.

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Major principles of justice are involved. Within those principles, the individual rights of thousands of men, women and families are at stake. It is the right and the duty of this House of Commons to debate and consider how best properly to safeguard those rights before the Government act in the way that the Secretary of State acted, precipitately and without notice last week, and without the House being given an opportunity to debate the issue.
In the light of those considerations, Mr. Speaker, I request that you grant my application.
Mr. Speaker: The right hon. Member for Manchester, Gorton (Mr. Kaufman) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the urgent need to re-examine the cases of those husbands and male fiancés whose refusal of admission to Britain since 1980 is placed in question by a decision of the European court."
The right hon. Gentleman and the House know that the decision that I have to take is whether to give this matter precedence over the business set down for today or tomorrow. I listened carefully to what the right hon. Gentleman said, but I regret that I do not consider the matter that he raised appropriate for discussion under Standing Order No. 10 and, therefore, I cannot submit his application to the House.
Mr. Kaufman: On a point of order, Mr. Speaker.
Mr. Speaker: Order. No point of order can arise on that matter.
Mr. Kaufman: It is a new point of order, Mr. Speaker. I am in no way seeking to challenge your decision, but wish to put a point to you. Prior to my application there was a statement by the Home Secretary on his decision relating to Tamils, which was not a voluntary statement, but arose from your decision to allow a private notice question, as advertised to the House on the Annunciators earlier today. Therefore, no confidences are involved. The Home Secretary never intended to make a statement. He did so only because you, in your wisdom and discretion, allowed a private notice question. Because of your decision, the House was able to question the Home Secretary.
The right hon. and learned Gentleman has not volunteered a statement on the matter that I raised in my application under Standing Order No. 10. There are thousands of people whose personal situations are at stake and who have no idea of where they stand. Can you advise the House on how we are to obtain some explanation from the Government on how they intend to proceed as a result of the Strasbourg judgment?
Mr. Speaker: Order. What the right hon. Gentleman said may or may not be true, but I do not control statements that are made by the Government. That is entirely a matter for them. I am sure that the Home Secretary listened to what the right hon. Member said. With regard to opportunities for discussing this important matter, it is not for me to advise the right hon. Gentleman on tactics, but I suggest that it would perhaps be a good topic for an Opposition day.

Orders of the Day

  Rating (Revaluation Rebates) (Scotland) Bill
  Order for Second Reading read.
  Mr. Speaker: As the debate is starting fairly late, I appeal to hon. Members for brief contributions.
  6.11 pm
  The Secretary of State for Scotland (Mr. George Younger): I beg to move, That the Bill be now read a Second time.
  Before detailing the provisions of the Bill, it is important to set out something of the background. Events in this field have moved very quickly indeed in the past few months, and the Government have responded quickly and flexibly to meet exceptional circumstances by exceptional measures.
  There are two main questions which have been asked over the past few weeks. First, why did we have to have a revaluation? In Scotland, the law clearly lays down that there should be regular revaluations every five years to ensure that properties continue to bear appropriate shares of the overall rating burden. No one has argued against that in principle. While we have a rating system, it is only just that the relative values on which the tax is levied should be kept in line with reality and reasonably up to date.
  In August 1983 the Government confirmed in the White Paper on rating reform in Scotland, Cmnd. 9018, that there would be a full Scottish revaluation to take effect from April 1985. Again, that was approved by all parties and by the Convention of Scottish Local Authorities. Indeed, it would be fairly difficult for anyone to argue in favour of perpetuating indefinitely a set of old and increasingly out of date relative values. There was no further justification for postponement, and the time when the 1985 revaluation could have been postponed in an orderly manner came and went.
  The second question with which I must deal is: why could special help not be given earlier and in one tranche instead of several?
  Mr. Robert Hughes: There is a third question to which I hope that the Secretary of State will give an answer. Why was there a change in relationships between industrial ratepayers, commercial ratepayers and domestic ratepayers?
  Mr. Younger: I shall come to that point. The hon. Gentleman is very perspicacious in these matters.
  It was in the autumn of last year that the results of the assessors' work over the preceding months first began to become available. By the time of the rate support grant announcement on 7 December I had been made aware of the very substantial shift of rateable value away from manufacturing industry and towards domestic property. This was not, as some have suggested, an arbitrary or a political judgment of the assessors. It reflects the fact that over a period of seven years, in which there has been substantial economic change, the heritable assets of Scottish industry have not risen in value in the same proportion as the homes of the Scottish people. It was not

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  surprising, and the Government's reaction to it was to use both the instruments available to me to moderate the general effects of the shift.
  In December, therefore, taking account of the benefits that revaluation would bring to this sector, I made an order adjusting the level of industrial derating down from 50 to 40 per cent., and at the same time announced that the level of domestic rate relief would be increased from the equivalent of a penny in the pound to 5p in the pound. Those decisions were taken on the basis of indications from the assessors of what the average effect of revaluation on the different sectors would be: that domestic subjects would lose, commerce would neither gain nor lose, and industry would by and large gain.
  In mid-February the assessors were required by law to deliver the new valuation rolls to the local authorities for publication, and swiftly thereafter it became clear to us that there would be some very large increases involved for domestic ratepayers once the local authorities set their rate poundages. In the few weeks between the publication of the rolls and the last date for setting of rate poundages, we decided exceptionally to increase the domestic rate relief yet further, from 5p to 8p in the pound, at an extra cost of £38·5 million. This was announced early in March.
  Up to this point, we had been concentrating on the effects of broad movements of rateable value in terms of the averages for the different sectors. It seemed that, with the action already taken, domestic, commercial and industrial ratepayers could now be expected to live with the results of the revaluation as we saw them in terms of those average sectoral figures. We must bear in mind that it is the precise purpose of having a revaluation to reflect changes in values both upwards and downwards. It never was the purpose to ensure that nobody had an increase and nobody had a reduction. That would merely perpetuate the unfairness which revaluation is designed to reduce.
  However, by the time everyone had received his valuation notice and then his rate demand, it became very clear that, whatever the average might be, there were still very many ratepayers whose valuation increases were so steep as to lead to unacceptably large increases in their rate bills. Many of these were in the commercial sector where, as I have said, we were aware that the overall effect of the revaluation was neutral. It is, however, of little help to know that the average effect of something is neutral if its effect on one's own business is fatal.
  During March and April the evidence built up that the sudden effect of the more extreme valuation changes that 1985 had brought would be damaging and unacceptable. The Government decided that a limit should be set. With the average revaluation multiplier for all property being 2·33 times, the limit was fixed at three times. We are in no doubt that there are many in Scotland who, even after the new rebates, will continue to face hefty rate increases this year, especially in areas where the local authorities have been less than responsible in their budgeting. The measure before the House today is not able to, not is it intended to, bring down all high rate bills. It is, I repeat, an exceptional measure intended to tackle selectively the exceptional hardship which would be suffered by those individuals and businesses facing extrememly high increases in the rates that they would have to pay.
  I now deal with the Bill itself and what is in it. It is deliberately short. It creates two new statutory duties.
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  First, there is a duty on rating authorities to give rebates to those whose valuations have increased more than three times between the most up-to-date version of the "old" roll, which was valid on 31 March this year, and the new roll which came into force a day later. The essence of the Bill is that it applies to properties for which this comparison can be made. If the comparison is not possible, the property cannot benefit.
  The exclusions—listed in clause 1(2)—are: properties which are already valued by a statutory formula approved by Parliament, properties which benefit from their valuations being already reduced by statutory derating, and local authorities' own properties.
  Properties occupied by the Crown — hospitals, Government offices and the like — are technically not liable for local authority rates as such, and the Bill does not therefore need to exclude them. The usual procedure whereby the Treasury valuer arranges for payments in lieu of rates will operate, unaffected by the Bill.
  The second new duty created by the Bill is laid upon me, to reimburse the rating authorities the amount of all the rebates that they pay. The amounts of such rebates granted to ratepayers, and liable for reimbursement by the Scottish Office, will not be relevant expenditure by the local authorities and will not count against their guidelines.
  The Bill is an enabling measure. I intend immediately after its enactment to bring to this House an order which will contain all further necessary provisions for operating the scheme, including the ceiling of £10,000 on the rebate on any one property. This order is being discussed with COSLA, whose representatives have already made several useful contributions. In particular, they have argued that it would be preferable for the rating authorities in the first instance to calculate and grant rebates rather than for ratepayers to send in individual claims. Only if someone feels that he has been missed out will there be a claim procedure to fall back upon. I agree with COSLA that this would seem desirable. As well as making for more economical administration, it will be less trouble for qualifying ratepayers.
  I might add that it would be helpful if ratepayers did not write to their assessor or rating authority about this scheme at present. The assessors have plenty to do, with the many appeals against valuations now being lodged, and the Scottish Office intends to make sure by giving suitable publicity to the fact that those who may qualify for the new rebate will not lose out through inadvertence. Meanwhile, if a ratepayer judges that, because he may qualify for rebate when the Bill is enacted, he will be better off not paying his 1985–86 rates by instalments, he may of course opt for that, but he then becomes liable to make a lump sum payment at the end of September of the whole of his year's rates, less any rebate which his authority should have calculated by then.
  The Bill does not limit the laying of such an order to this year alone.
  Mr. Barry Henderson: I have one slight anxiety about the possible use of clause 1 in future years. My right hon. Friend may not wish to deal with the matter now and it could perhaps be dealt with in the reply to the debate. It is a technical point. The clause obliges rating authorities to grant rebate. I am not clear whether that provision could be used by a Secretary of State in

  65
  future to be selective about which rating authorities would be obliged to do so, or whether the provision would always apply to all rating authorities.
  Mr. Younger: I take my hon. Friend's point. The important thing is that the Bill makes it possible in future years to lay an order which is similar, or slightly different if such should be deemed necessary. I am not sure—I shall make inquiries—whether, if the Bill were passed by the House, it would be in order for a future order to be selective in its application. I should have thought not, but I shall check and write to my hon. Friend, or my hon. Friend the Under-Secretary the Member for Edinburgh, South (Mr. Ancram) might be able to deal with it in replying to the debate.
  Mr. James Wallace: The Secretary of State referred to the number of appeals received by the assessors. Will he say something about the psychological effect that the Bill might have? People might not now be disposed to appeal, and that could have long-term consequences. It could mean that money was being paid out under an order which would be unnecessary if an appeal were allowed.
  Mr. Younger: The hon. Gentleman's main point is right. The point of appealing is not, principally, to alter the amount that a ratepayer pays this year. The object of appealing is to ensure that the basic valuation upon which the rate is based is correct and just. If ratepayers feel that their basic revaluations are too high or in some other ways defective, they should still appeal, irrespective of the aid to be provided this year under an order which I hope the House will approve later.
  Mr. Robert Hughes: To follow up the point made by the hon. Member for Fife, North-East (Mr. Henderson) about whether an order might discriminate between one authority and another, the Secretary of State must surely intend that all rating authorities as specified in the Bill — "Regional and Islands Councils" — will be treated equally. I hope that he will therefore make it clear that, however the wording of the Bill might be construed, he intends to treat all rating authorities equally with regard to rebate.
  Mr. Younger: I appreciate the hon. Gentleman's point. I shall check to ensure that this is correct, but the Bill discriminates between classes of ratepayer, not between authorities. I believe that that is the answer, but I shall ensure that it is correct. I hope that my hon. Friend the Under-Secretary will be able to let the House know about that.
  Finally, I come to the figures in the explanatory and financial memorandum. There has been a good deal of public interest in the likely cost of the revaluation rebate scheme and I should therefore like to say a word or two about that. At the time, a few weeks ago, when evidence was coming in about the effects of certain steep valuation increases, and the Government were deciding that these were not acceptable, we did not have direct and confidential access to the data banks or the data handling facilities of the Scottish assessors, and had perforce to make estimates of the prevalence and the nature of such extreme valuations on the basis of quite a small sample. Nevertheless, once I had announced the threshold multiplier of three, the rating authorities were enabled to use their computers to begin calculations of rather more
  66
  accurate figures by matching up the entries on the old and new roles. We have consulted the convention, and the figures that it has given us are not yet complete.
  While it looks as if the total cost should indeed be contained within the £50 million figure attached to the Bill, and may be a bit less, it is not possible yet to be sure what it will amount to, and not at all certain that the lower estimate of £30 million which has been mentioned in the press would be enough to cover all the rebates.
  Whatever the outturn figure, the Government take the view that it is surely right in principle that ratepayers in Scotland should not suffer through sudden and unexpected changes in the tax base raising their valuations to levels greater than three times last year's. That is, and always was, the purpose of the scheme that we are debating today.
  While there will be a number of details in the Bill which hon. Members will wish to question and scrutinise today, I am grateful to the Opposition for their undertaking to facilitate the passage of the Bill through the House.
  Mr. Bruce Millan: As we are rushing this measure through, why does the Bill provide that it only comes into effect two months after the Royal Assent?
  Mr. Younger: That seems to be the normal procedure. As the right hon. Gentleman knows, there are procedures to be followed between Royal Assent and the coming into effect of the Act. I do not believe that that will cause any great difficulty, but if the right hon. Gentleman feels that it will I should be glad to hear any points that he would like to make. He may have a sensible point to make.
  As I said, I am grateful to the Opposition—
  Mr. Millan: In other words, the Secretary of State does not know the answer to my question. Could he perhaps answer another question? When will we have the statutory instrument?
  Mr. Younger: The right hon. Gentleman will be aware from having read the Bill that various things have to be done between those two points. For instance, there has to be an Order in Council. That is bound to take some lime. If the right hon. Gentleman had been listening, he would have heard me say that I would bring in the order as soon as I could after the Bill had been passed by the House. I hope that he will feel that that is satisfactory.
  Mr. Robert Hughes: Is the Secretary of State aware that if the Bill comes into effect two months after the Royal Assent, and the order cannot be laid until the Bill comes into effect, that will take us into the middle of the summer recess? Surely he will not introduce such an order during the summer recess. As I understand it, the Bill requires an affirmative order, and that could not possibly come in until about October or November.
  Mr. Younger rose—
  Mr. Millan: The Secretary of State mentioned an Order in Council. Where is there a provision in the Bill for an Order in Council?
  Mr. Younger: It is a statutory instrument that must be produced. I am sorry if I misled the right hon. Gentleman.
  As there is plainly some anxiety about this matter, I shall lay out a clear schedule of the likely timing. I understand that this measure is generally supported, and I hope that with the agreement of the House we can get the legislation through reasonably quickly. There will then be

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  no delay in putting forward the necessary further procedures so that local authorities, assessors, and ratepayers can be in no doubt of their position. I hope that that is helpful.
  It will be welcome to ratepayers in Scotland to see that their real concerns are being acted upon generously and decisively by the Government, and that Parliament can act quickly and with general agreement when there is a clear need to do so.
  6.30 pm
  Mr. Donald Dewar: Monday is not the best of days for the Second Reading of a Scottish Bill but I do not think that there will be too many complaints from Conservative Members. One feature of Scottish politics is that the Conservative party, which used to campaign with some elan and enthusiasm on rating, now finds the issue a deeply embarrassing one. It was clear that the Secretary of State did not have his heart in the job this afternoon. His arguments were cursory and simplistic.
  The Bill provides a measure of relief for the hard-pressed Scottish ratepayer and that is why we are allowing it to go through on an expedited timetable. I was surprised when the right hon. Gentleman explained to my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) that a delay of two months is normal. We are using abnormal procedures to expedite the Bill's passage and to help the Government and for the right hon. Gentleman to plead that it is normal to have delay against that background is remarkably irrelevant.
  If the Bill is to give anything to the ratepayer in Scotland, we shall give it a helping hand. However, the measure has been born out of a great deal of indecision and confusion. It is the product of a good deal of disordered panic in the Scottish Office, which over the past few months has become the mark of this Administration.
  The Secretary of State took us through the history of the Bill. He seemed to suggest that there was almost a master plan. He implied that the necessity for the Bill had been seen months ago. It is usually the hon. Member for Edinburgh, South (Mr. Ancram), the Under-Secretary of State for Scotland, who comes up with that sort of earnest alibi, which he utters implausibly. The Secretary of State has rather disappeared from the Scottish political scene of late. However, both the right hon. Gentleman and the hon. Gentleman agree that the provisions in the Bill were all foreseen. That alibi is implausible. First, the domestic element was set at 5p. The Government admittedly produced £19 million and £31 million had to be produced by local authorities. The £31 million was clawed from the already reduced services provided by the authorities. The Government's attitude at that time was "Not a penny more".
  The heat came on and suddenly and mysteriously £38·5 million was added to the domestic element. That sum was ripped out of the Scottish Office budget. Again the Government said, "Not a penny more". However, another £50 million has been found to save the Secretary of State from the wrath of his own supporters. The week at Perth must have been one of the most expensive weeks for the country and the Treasury for a long time. However, the result appeared to offer some help and much needed relief
  68
  for the Scottish ratepayer. I suppose that we were all supposed to go home happy at the end of that little performance.
  We have seen Ministers being driven from pillar to post. They thought at each step that they would get away with it but at each step the public's wrath mounted and each time Ministers had to produce something else because they had it lamentably and politically wrong. Once a Government lose control—there is a lack of confidence and grip in the Scottish Office—it is extremely difficult to re-establish any form of authority.
  Mr. Younger: Who wrote that?
  Mr. Dewar: I did and I am proud of it. I think that it has the ring of truth for most people in Scotland, who are not impressed by what has been happening in the Scottish Office. For a long time the press machine of the Scottish Office was telling us that the Secretary of State had earned a glittering prize and that he had done so well that he should be promoted. However, his friends, with endless ingenuity, are now saying that the right hon. Gentleman must be moved because he is a liability. At least that has a kernel of hope for most of us.
  As I have said, any help for the Scottish ratepayer is welcome but the help which the Government are providing is on the margin. There is no doubt that the scheme that the Secretary of State has introduced will result in many inequalities. There will be rough justice and much discontent when it is seen in operation.
  I accept that the scheme is based upon rateable values and is designed to take the peaks out of the effect of revaluation, but the public think very much of what they have to pay at the end of the day. It is no doubt well known to the Secretary of State that some domestic properties which had a rateable value of £300 have had that valuation increased to £900. The threshold in Glasgow will be 39 per cent. and in Aberdeen it will be 19 per cent. A similar picture emerges for commercial property. An increase of 53 per cent. in Glasgow will not qualify for relief but in Aberdeen relief will be triggered by an increase of 37 per cent. I recognise that there may be a logic in the Government's argument but it turns on rateable value and has nothing to do with what people pay at the end of the day. It is the effect of the Bill that the public will judge. The examples that I have given can be extended to other areas, including Tweeddale. There will be problems and the right hon. Gentleman should address himself to them.
  The Secretary of State has a better case on the commercial side than on the domestic. I reckon—I have been helped by COSLA—that the concessions in the Bill will amount to about 4 per cent. of the total bill for the commercial sector. There will not be a great deal of gratitude from anyone for that because many people will still face substantial increases. However, I accept that there is something of consequence in the Bill.
  I understand that slightly more than 50,000 commercial properties will benefit following the Bill's enactment. That sounds pretty impressive but it must be put into perspective. I have no doubt that the Minister has been giving some thought to what has been happening. In Tayside, for example, about 12,700 commercial properties will benefit from this form of rate relief. That is the good news. The not so good news is that 8,000 of those properties are lock-up garages. Does that suggest to the right hon. Gentleman as it does to me that the scheme

  69
  has produced an unintended consequence, or is it a piece of careful Conservative planning? If that example is projected throughout Scotland — I do not suppose that there is anything particularly unusual about Tayside—a picture emerges that is different from the one that might be expected.
  The concession for the domestic ratepayer is extremely thin. There will be marginal assistance for a few but there will be nowt for the vast majority. There is an air of unreality about many of the arguments that have been advanced. For example, there was a pompous announce-ment by the Scotish Office in the text of a reply to my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen). The impression was given that the Government were introducing an important concession by means of the £10,000 cut-off on individual properties in the domestic sector. Is there a property in Scotland that will benefit from that cut-off? If there is —perhaps the right hon. Gentleman is more expert than I am on stately homes—I have no doubt that we shall be told when the Under-Secretary of State replies. Perhaps there is a marquis or duke somewhere who will benefit from the concession. Who knows, there may be a more humble chatelaine who is saying his prayers and counting his blessings.
  Mr. Younger: Surely the fault lay in the form of the question, or is the hon. Gentleman suggesting that the question should not have been answered?
  Mr. Dewar: We have said consistently to the right hon. Gentleman that he might want to consider a cut-off, but we did not consider a cut-off of £10,000. Surely that concession has the air of a make-believe figure. There is little in the Government's concession for the owner-occupier at the bottom end of the market. I suspect that there is even less for the council house tenant.
  There are houses in the Garscadden constituency that will benefit from the Government's scheme. There are some that will enjoy an advantage but not very many. I have taken some examples of houses in Knightswood. I do not claim that it is an enormously rich and sensitive sample but it is one that produces some interesting facts. It is a scatter of individual examples of rateable values that have increased by a factor of more than three. The greatest saving will be 6·6 per cent. on the new rates bill. The smallest saving in my constituency is 0·5 per cent. in the sample that I have considered. The greatest cash reduction will be £31·71 on a bill of £591. However, I have considered only a handful of properties and the majority of my constituents will get not a penny piece. The bleak reality is that many will face increases in their rate bills of 30 per cent. or 40 per cent. and will receive no help from the changes that are being introduced.
  Mr. Younger: I am sorry to keep interrupting. The hon. Gentleman is an advocate of revaluation and, indeed, supported and pressed for it. What does he suggest should happen? He says that the Government are giving help to people with exceptionally high increases, and he supports revaluation, so what does he want?
  Mr. Dewar: I shall come to that, and the right hon. Gentleman will no doubt await my reply with interest.
  I am establishing the simple point that large numbers of people who rightly feel hard pressed by the increases in their rates bills will not be assisted. We shall wish to ask many questions in Committee on Wednesday. I was
  70
  delighted to notice in the Daily Express of 30 May, for example, a direct quote from the Secretary of State, which stated
  "Mr. Younger admitted that the figures for the original calculations were hurriedly produced.
  'They were necessarily speculative,' he said. 'But the whole matter will be thrashed out in Parliament next week."
  I look forward to the exciting Wednesday that we shall have. Today, I shall give the right hon. Gentleman a taste of some of the points that we shall raise on Wednesday, and which will be the subject of specific amendments.
  The first relates to the take-up. I recognise that there is an element of error and that there may be some minor changes. I have examined the figures from COSLA, which were produced by running the new and old rules through all the major rating areas to extract the properties that are eligible for benefit. COSLA is confident that the pay-out will be, not £50 million, but £29·5 million or near to it. It will not do for the Secretary of State to say in a lordly way that the figure may be less than £50 million. Any reasonable calculation shows that it will be a hell of a lot less.
  It is remarkable that COSLA was consulted about this rickety scheme for the first time only last week. A shortfall of £20 million is unacceptable. The Secretary of State is trying to buy peace, and if he does that he must pay the price for it. If £50 million is to be shaken from the piggy bank of the Chancellor of the Exchequer, it should be spent as was advertised at Perth. We shall want assurances that that money will be devoted to relieving the pressure on Scottish ratepayers.
  I accept that there may be difficulties in simplistically dropping the multiplier, because if we reduce it by even a small amount we include an enormous slice of the total properties in any one sector. However, we shall certainly table an amendment to give the power to include other classes of ratepayer, and to vary the present rules. If that is impracticable, the right hon. Gentleman may consider whether he should put a further l½p on the domestic element, which would benefit every domestic ratepayer, and which would be covered by a figure short of £20 million, which it appears will become available.
  Mr. Norman Hogg: Has my hon. Friend seen the Glasgow Evening Times of 29 May, which states that the hon. Member for Strathkelvin and Bearsden (Mr. Hirst) threw his weight behind the campaign to ensure that the full £50 million is taken up? Is he encouraged by that?
  Mr. Dewar: I do not know how much weight there is there. The hon. Member for Strathkelvin and Bearsden (Mr. Hirst) has always struck me as being a slight figure in every sense of the word. 1 certainly welcome his help, for what it is worth. To be fair to the hon. Gentleman, he is right to say that it would be unacceptable to hon. Members if £20 million were returned to the Treasury as some sort of baksheesh for the mandarins there. It should be used for Scottish ratepayers, and on Wednesday we shall want the Secretary of State to deal with that issue.
  Secondly, there is the question of the future of the assistance during the latter part of the quinquennium. Obviously, this is a rescue package designed for 1985–86, but what will happen in the second, third, fourth and fifth years when the revaluation is in operation? The right hon. Gentleman is a reluctant Samaritan in the first year, and there will be a great deal of disappointment and anger if

  71
  he allows the victim to be sandbagged in the second year and leaves everyone to meet the full impact of revaluation. It is important that we move away from the present provisions which permit the continuation of the system in the latter part of the quinquennium, and that we receive guarantees from the Secretary of State.
  I do not like raising unpleasant subjects, but recently there was an unpleasant incident in Scotland when the Chancellor of the Exchequer visited Perth. The Glasgow Herald of 11 May quoted the Chancellor as saying that
  "he… had bailed out Mr. George Younger… in his crisis with… 'exceptional extra funds'."
  The Guardian of 11 May stated that the Chancellor said:
  '"No more money is likely for Scotland next year. I don't think he (Mr. Younger) will find me in the same compassionate, open-handed and generous mood next time'."
  From that, it appears that we must help the Secretary of State in his fight against the Chancellor over what will happen in future years. I hope that Conservative Back Bench Members will support us in that fight. I cannot think of anything that would put their marginal seats in more jeopardy than, having mounted the rescue bid for the coming financial year, abandoning it in future. They should join us in tabling amendments, which will buttress the Secretary of State's efforts by placing on him a statutory duty to continue this system at some level during the remaining years. That would help the right hon. Gentleman greatly in his fight against the Chancellor. I genuinely hope that there will be all-party support for the amendments, and that Conservative Members will join us in the Lobby on Wednesday.
  The third question relates to administrative expenses. The financial memorandum suggests that they will amount to £1 million. I do not know whether that is accurate, but the figure will be substantial. It will be necessary to identify the people who will be entitled to some form of rebate. In many cases it will be necessary to call in and adjust or issue new payment books for those who pay on a 10-instalment basis. Despite the strictures of the Secretary of State, there will be a great volume of work dealing with inquiries from disappointed and enraged people, who find that they are entitled to nothing. As the Secretary of State said, at least by implication, there will inevitably be a considerable delay in collecting rating revenue compared with a normal year, and, as a result, interest charges for local authorities will rise.
  By operating the formula we have the power to reimburse the money given to the ratepayers. Perhaps the Secretary of State will tell us when that reimbursement will take place. It will not be satisfactory if local authorities must wait until the start of the next financial year. I hammer the point that there is power to reimburse, but no power to reimburse the expenses which, according to the explanatory memorandum, will fall entirely on local authorities. I am grateful to the Secretary of State for what I believe to be an assurance—I shall read what he said —that we shall not be in the black farce in which that will be counted against guidelines, and prayed in aid in evidence of excessive and unreasonable expenditure. We want a guarantee. It would be perfectly fair for administrative expenses to be refunded to local authorities. They should not be asked to foot the bill for the Secretary of State's incompetence.
  We would normally discuss at length an enormous number of further points. I am glad that the Secretary of
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  State has shifted his ground regarding whether there should be individual applications or whether the onus should be on local authorities. In his statement of 14 May he made it clear that he was thinking in terms of individual applications. I welcome the fact that he has written to COSLA on that point.
  At present there is no appeal mechanism in the Bill, and presumably anyone with a grievance will have to go to judicial review, which means to the Court of Session. I suspect that effectively there can be no appeal. The right hon. Gentleman should also consider that point.
  The whole thing is shot through with anomalies which will cause difficulties. The amount of money, while not very large, will cause irritation. For example, it will be somewhat anomalous if someone buys a house half way through the year without paying the rateable value in the previous year. In a row of houses under completion, there could well be cases—I can think of some in Glasgow— where one of them will have been occupied in time to get on to last year's roll and will qualify for assistance, while others with identical rateable values on the new roll will not qualify. That is bound to cause problems.
  Difficulties could also arise over disabled persons' rating relief. If there is a variation in the discount on the rates payable during the previous year, it could well be that the payment has gone up by more than a factor of three whereas the rateable value has not. In such circumstances, will a person qualify for this relief? An enormous number of detailed points such as those can arise, and I have no doubt that the Parliamentary Under-Secretary will do his best to deal with them.
  The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): Is the hon. Gentleman saying that he envisages a situation in which the revaluation goes up by less than three times while the rate of payment increases by more than three times?
  Mr. Dewar: Yes, because of a change in the special discount allowed to disabled persons. I have quoted cases where that could happen. I concede that it is a marginal problem, but it could arise. I instance that as an example of the rough justice that could result from the Bill.
  Many of my hon. Friends will want to take up general points during the debate, but I am sure that I speak for all of them when I say that we take very little satisfaction from what, on the whole, has been a sad and sorry tale. The whole thing began with the revaluation saga, and the Secretary of State is never blate in suggesting that I pressed for the revaluation to go ahead. Initially, revaluation was on; then it was partially on; then it was off. Ultimately, it proceeded with the maximum of confusion.
  I certainly agree that there must be revaluation in a rating system, otherwise anomalies will grow. But we cannot have a rating system or revaluation when that is combined with ruthless and relentless cumulative cuts in the rate of central Government support—where there is a determined effort, as there has been over recent years, to shift the burden from the Treasury to the individual ratepayer.
  The figure that we have used again and again is central to the argument. COSLA has calculated that had the percentage of rate support grant been held at its 1980–81 level in the intervening years since then, local authorities would have had another £1,000 million of central Government support. Revaluation has been the final

  73
  insult. It has certainly been a tremendous blow to individual householders. But the real problem and complaint is that the amount of money to be paid has been rising, directly reflecting the policy of the Secretary of State. In that sense, he has been his own executioner.
  Ministers have been ambushed, and realise that they are in mortal danger. That is why we have had a rout and scramble for safety over the last few months. Indeed, the difference a few weeks makes is extraordinary. On 5 March, in an article in The Scotsman, the Parliamentary Under-Secretary, the hon. Member for Edinburgh, South, said:
  "we had to accept that the routes"—
  to rating reform—
  "which had been examined were unacceptable and that for the time being we would have to continue with the rating system".
  He was asked specifically if he favoured changes in the rating system and whether he ruled them out. He replied:
  "I do not think you can rule out anything for ever".
  Three weeks later his political master was sounding a retreat, and the hon. Gentleman was duly spinning on his heels and heading in exactly the opposite direction.
  It is worth remembering the reason why that was done. Indeed, the right hon. Gentleman was engagingly frank about the matter. He said:
  "We have had one go at trying to reform rates and everyone was against the alternatives. This time we have to deliver. Not acting at all means there will be severe political consequences".
  That was the great pilot's statement of principle. The Minister knew that the political ground under his feet was shifting and that he had to scramble to save not only his seat but those of his hon. Friends. We are now committed to we know not what. All we know is that a manifesto pledge will not be enough. We know from the right hon. Gentleman's speech at the Tory party conference that there will be a scheme by the end of this year, but I suspect that when that pledge was given Conservative Members, including the Secretary of State, did not have a clue about what they would do or how they would do it.
  Mr. Ancram: Perhaps the hon. Gentleman will use this opportunity to answer a question that I put to him previously. Does he and his party favour finding an alternative to the rating system, and, if so, will he clearly say so?
  Mr. Dewar: I am happy to state our position. We will look very hard at the alternatives — [Interruption.] Conservative Members laugh at responsibility. I suppose that they must, because they are strangers to it. I believe that there is a very strong case for local income tax because it meshes with our plans for a Scottish Assembly and the financing of it. We shall look carefully at that. However, we shall not go in for some hastily cobbled together solution based on expediency and political opportunism and, I suspect, a strong dash of fear, and which will not provide any real basis on which local democracy can flourish.
  Mr. Albert McQuarrie rose—
  Mr. Dewar: No, I shall not give way.
  We want to see a sensible reform of the system, but we shall not adopt the silly course of promising something without knowing exactly what it should be. That has been a mark of recent months. We at least shall try to keep in touch with reality, responsiblity and our duty to local democracy and the system in Scotland.
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  The responsibility for the present problems lies squarely with the Secretary of State. The disarray and distress behind him is a mark of that. A few moments ago the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) said that as a result of present incompetence in the Scottish Office she predicted that only four Scottish Conservative Members of Parliament would be left after the next election. The hurried and ill-prepared scheme which is now being talked about will reflect that calculation rather than any real basis of principle. This is all too obviously a deathbed repentance on the part of the Secretary of Sate, and deathbed repentances are seldom convincing. He and his hapless friends will not be saved, because he has not brought forward the kind of relief for the hard pressed ratepayers of Scotland that the crisis demands.
  6.58 pm
  Lord James Douglas-Hamilton: I am glad that the hon. Member for Glasgow, Garscadden (Mr. Dewar) said that he welcomed the Bill. He said that any help is welcome, and this measure will be very welcome to the large number of my constituents who are affected. The hon. Gentleman also referred to years two, three and four. The reform of the rating system may have gone through well within that time scale, and I for one very much hope that it has.
  I welcome the Bill and regard it very much as a stage in the continuing process. After all, the Secretary of State increased to £88 million the domestic element of the rate support grant. That means relief of £40 on a value of £500, and more on higher values. I take as just one example shopkeepers in my own constituency. One lady selling clothes found that the rateable value of her shop went up from £650 to £2,800. A great many like her will benefit from the Bill. It is encouraging that relief will be at least 100 per cent. in respect of that part of the rates bill relating to total valuation that is more than three times the revaluation for this year.
  The upper limit on total relief will relate to the property concerned to allow maximum help both for successful small businesses and for businesses in general throughout Scotland. That will be important to many people. I hope that my hon. Friend the Under-Secretary of State will do everything within his power to identify those concerned as soon as possible so as to make it certain that those who are entitled to claim are aware of their rights.
  This morning I received a letter from the National Federation of the Self-Employed and Small Businesses, which raises a question about appeals that has already been touched on by the hon. Member for Garscadden. It says:
  "We also urge you to ensure that this relief will not act us a disincentive to the ratepayer exercising his right to appeal".
  I ask my hon. Friend to look at this matter bearing in mind expenses. For most appeals, costs are probably minimal. They start off with a letter, which the assessor may accept. In one case in my constituency, where a railway stop has just been established, the assessor has automatically accepted the appeal at no more expense to the appellant than a postage stamp. However, if appeals mean substantial expenses and having to go through a long detailed court case, it might become counter-productive for the person to go ahead with the appeal. I hope that, before the Bill is finally passed, some guidance will be given.

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  The federation has said that in one case an assessor increased the rate from £1,100 to £13,000. This means that rate relief can be claimed on £9,700 and as local rate poundage is 70p, relief will be £6,790. On the federation's advice, the person concerned was appealing, but in that case the assessor had already offered to reduce the valuation from £13,000 to £5,000.
  The assessor may act reasonably in most cases, but I can give an example of him acting unreasonably. When Edinburgh airport established a new runway, the assessor refused to accept that there should be any difference in rateable value, although the new runway was pointing straight at the citizens concerned. They had to go through an expensive case, at the end of which the rateable value on their properties was reduced.
  Mr. McQuarrie: My hon. Friend has quoted an example of an assessor in Edinburgh reducing an assessment from £13,000 to £5,000—a cut of £8,000. Does my hon. Friend accept that this answers the case that we have been endeavouring to put forward, that assessors have merely been taking figures out of their heads and applying them to anybody's household, to such an extent that the increases are unacceptable to most people?
  Lord James Douglas-Hamilton: I cannot tell my hon. Friend about the exact circumstances as the case was put to me by the National Federation of the Self-Employed and Small Businesses. However, I think that in most cases the assessors tried to act professionally, although in some cases they were way out. I invite my hon. Friend the Under-Secretary of State to give some guidance about appeals if there is any danger that substantial expenses may be involved.
  When the statement about this Bill was originally made, I flew straight up to attend a large meeting of ratepayers at which one of the assessors was speaking. He said that what we would be doing today represented a distortion of the system, and in a sense it is. However, that serves only to underline the need to reform the rating system generally. I was glad to see that, as part of the transitional arrangements, clause 1(6) makes it clear that the Secretary of State will be enabled to continue these arrangements next year, should the necessity arise. By then we shall know a great deal more about how successful in giving assistance this has been. We may need to modify the scheme depending on the representations that we have received from interested parties.
  Recently, I tried to discover the difference in rateable value between properties north and south of the border. A few days ago, I received an interesting reply from my right hon. Friend the Prime Minister. She said:
  "It is in the nature of a system based on evidence of local rental values that the valuation of similar buildings will vary both within a locality and from one area of the country to another. The detailed legal basis for the valuation differs in Scotland and more importantly Scottish figures are now shown at the levels of 1985–86 revaluation while those for England and Wales are set in relation to the 1973–74 revaluation."
  The significant part of the letter says:
  "On the domestic side, it may be reasonable to look at the average rate bill for a domestic property. The Scottish figure including the domestic water rate is £397 in the current year as against around £430 in England when water charges are included. Even with these figures there is the difficulty that the mix of properties may not be comparable as between houses and flats, urban and rural property, owner-occupied and local authority owned housing."
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  As there are far more local authority houses in Scotland, it is difficult to get a comparison, but I can say with certainty that in Edinburgh the rateable values for commercial, industrial and domestic properties have increased far more than in East Lothian, Midlothian and West Lothian.
  Mr. Robert Hughes: What about Aberdeen?
  Lord James Douglas-Hamilton: I shall look up the facts and try to answer the hon. Gentleman's question. The same may apply in the countryside outside Aberdeen.
  John Lewis, the large department store in Edinburgh, has compared the rates that it has to pay with the rates that John Lewis in Oxford street, London has to pay. It says that the rates paid per square foot in Edinburgh are 20 per cent. higher than those in Oxford street. The store fears that it may soon have to pay twice as much in Edinburgh as it does in Oxford street. In a letter to me, the managing director says:
  "I need scarcely point out that Oxford Street is perhaps the finest trading pitch in the world and that our branch there enjoys an island site with extensive frontages at shopping level, whereas in Edinburgh we are in an essentially secondary location with no exposure to the principal shopping thoroughfare."
  My hon. Friend the Under-Secretary is bound to take into account the overspending of Edinburgh district council, which is 48·3 per cent. above the guidelines, which would increase the district rate by 79 per cent. I made inquiries as to what it had been spending on. More than £100,000 worth had been spent on propaganda.
  Mr. Donald Stewart: Might not the trouble be with the original assessor? The hon. Gentleman will no doubt have received, as most of us have, a letter from the Football Association in Scotland, with a copy of an article by the chairman of the Celtic football club. In it, he claims that his club paid more in rates in one year than a leading English club paid in 25 years. Are not the assessors to blame for the enormous discrepancies rather than local councils?
  Lord James Douglas-Hamilton: That may be so in certain cases and I am making inquiries into that case. However, in the case of John Lewis in Edinburgh, the rise in rates has had much to do with the expenditure by the council.
  I can give examples of the £100,000 that has been spent on propaganda. More than £10,000 was spent on a full page advertisement in the Edinburgh Evening News. Some £3,900 was spent on hand-painted banners and some £1,300 on the erection of the banners. One poster says, "Support Democracy". We all support democracy, but it is not necessary for us to spend more than £1,000 in doing so. Producing art work for posters cost £3,873, 48 sheet posters cost £4,810 and so on.
  When the interests of those involved in the local economy are at stake I hope that my hon. Friend the Under-Secretary will take such expenditure into account because selective action may become a necessity if the local economy is to survive. The director-general of the Retail Consortium spoke about the Bill in a letter that arrived today.
  Mr. Norman Buchan: What percentage of loss to the local economy will be caused by hand-painted banners, and what percentage will be caused by the proposals made by the Secretary of State for Social Services? Are not other, related matters involved?
  Lord James Douglas-Hamilton: I do not think that there is any connection between the two. If there is overspending of £100,000 on propaganda, that is not what the ratepayers want. There has also been £150,000 spent on a new women's committee. If one scrutinises the accounts carefully, which I have no doubt we shall do in a future debate, the position will become clearer, but I think that it is a pity that we should have to go over the same course as that followed by Lothian regional council a few years ago.
  Mr. Henderson: If the Labour party wants to indulge in propaganda, that is entirely legitimate in a democracy provided that it pays for it itself and does not expect the ratepayers to pay for it. For example, if Fife regional council wants to support striking miners, which bring disaster to the Fife economy, Labour party members should use their own money and not expect ratepayers to foot the bill.
  Lord James Douglas-Hamilton: I agree with my hon. Friend. The significance of this is felt by many shopkeepers, who will not benefit from this measure. For those who are affected by overspending of the sort that we have seen in Edinburgh, it must be taken into account.
  However, a much more fundamental issue is the reform of the rating system, and I am glad that a review has been set up to find a fairer scheme than the existing rating system and a fairer and clearer way of distributing rate support grant. At the Perth conference, the Prime Minister said:
  "We have reached the stage where no amount of patching up the existing system can overcome its inherent unfairness."
  There is a vital need to reform the system. In fact the director-general of the Retail Consortium said that there requires to be "a change of attitude by local and national governments, away from rates being regarded as a tax on the occupation of property to that of a reasonable payment for the value of services actually received and equitably allocated." I hope that the reform of the system will take place within the lifetime of this Parliament, finally and irrevocably in the interests of fairness and justice.
  7.12 pm
  Mr. Gregor MacKenzie: Like my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), I give a cautious welcome to the Bill. I put it no higher than saying that I am not opposed to it. It is born of the statement by the Secretary of State at his own party conference in Perth, although later he made a statement about it here as well. It reminded me of a Budget statement. I have listened to a great many Budget statements. They always seem good when they are first heard. But, after two or three weeks' reflection, doubts begin to emerge. That is my view of the Bill and of the statement by the Secretary of State at his party conference.
  At first glance, it seemed that a great many people would be assisted and that all would be helpful. But now we begin to wonder about the extent to which the average commercial and domestic ratepayer will be assisted and, more to the point, which of our domestic and commercial ratepayers it will help. That does not come through clearly to me either in the Bill or in the speech of the Secretary of State today.
  My third worry arises very much from what the Secretary of State said in his 16-minute speech because, only a few weeks ago, I was chided by the Parliamentary
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  Under-Secretary of State for saying that I thought that the Government's proposal had been hastily conceived. I was extremely worried when the Secretary of State said that even now he did not have all the information from the various assessors, computers and all the paraphernalia available to him. That proved what many of us had been thinking—that the Secretary of State only a few days before his party conference plucked a figure and a formula out of the air. It was all far too hastily conceived, and that does not make for very good government.
  Like my hon. Friend the Member for Garscadden and the hon. Member for Strathkelvin and Bearsden (Mr. Hirst), I hope that this £50 million will be spent fairly and squarely on domestic and commercial ratepayers. However, what is sometimes fogotten by many right hon. and hon. Members is that the £50 million will come not out of some fairy grotto beneath New St. Andrew's house, but out of taxpayers' pockets, and the taxpayers are entitled to a better report from the Secretary of State than they had in his 16-minute speech about how the Government's proposal will be administered. Certainly before I give the Bill unqualified approval, I want to hear a great deal more about how the money will be spent, because taxpayers are entitled to more information about it.
  My main concern is with the domestic ratepayer. I have spoken to dozens of my constituents and, as yet, I have not found one who will benefit from this proposal. Not one will meet the requirement specifying a threefold increase in the valuation of his property. Most of them come very near three times—2·7, 2·8, 2·9—but not three times. That means that they will not benefit in the way that many of them had hoped. I must stress that these are not crummy houses. They are houses in the Burnside or Kirkhill areas of my constituency which the hon. Member for Moray (Mr. Pollock) knows well. They will not benefit, so I wonder who will benefit.
  The people who give me great cause for concern are the young people who have been encouraged by this Government and others to buy their homes. They have bought three-roomed and four-roomed houses taking on huge mortgages, and they are now working on very tight budgets. Their valuations have been increased, but nothing like three times. They will still be asked to pay a great deal more in rates, and that will be very difficult for many of these young people. They are the people who concern me most of all because they will not get one penny piece.
  Many of us want to hear from the Parliamentary Under-secretary of State who among the domestic ratepayers will benefit in any way. Apparently only those with large and comfortable houses will benefit. We did not hear a great deal from the Secretary of State about that. However, we are sure that the people who will be paying the extra money in the form of tax to raise this additional £50 million are those young people who are buying their homes on huge mortgages. It is they who will be asked to pay extra tax to help those who are a great deal better off than they are. That does not seem to be right. These young people are being asked to subsidise those who are better off than they are.
  I shall not say much about the commercial sector, but I hope that in the weeks ahead the position will be made much clearer. From the correspondence that hon. Members have received from the National Federation of the Self-Employed and Small Businesses and the Retail Consortium it is clear that commercial ratepayers

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  themselves are not sure how their problems will be sorted out. The Secretary of State was kind enough to concede some months ago that the problem was being dealt with in a piecemeal fashion, which cannot be good for the rating system in Scotland. It appears to many people that the rating system is turning into a shambles.
  We do not know what will happen in the years ahead. Even the Secretary of State does not know. It appears that the only person who knows is the Chancellor of the Exchequer, judging by his comments at the Perth conference. However, most of us want to take a fundamental look at the rating system. Legislation such as this will not help Scottish ratepayers for ever more. We must examine the system fundamentally. I hope that the Government will iron out the anomalies in the systems in England and Scotland as Scottish people feel that they are being penalised. I should like there to be just one system for the whole of the United Kingdom. The Secretary of State has time to work something out with his Cabinet colleagues. I hope that they will come up with something better than this piecemeal approach.
  We were told recently at Question Time that the Government are considering how to raise local government money, whether by income tax or some form of poll tax, which would be reprehensible. I hope that the matter will be given much more thought than has been put into the Bill. I do not favour change for the sake of change. There are deficiencies in the present system, but it is better than some of the hare-brained notions that have been put about recently. I am merely asking the Secretary of State to give the matter a good deal of thought and to devise a sensible system which applies to the whole of the United Kingdom and is fair to the ratepayers of Scotland.
  7.21 pm
  Mr. Michael Hirst: I am grateful to you, Mr. Deputy Speaker, for calling me sufficiently early to enable me to host a dinner downstairs on behalf of a colleague who is not here today. I therefore apologise to the Front Benches and to the House if I am absent during the winding-up speeches.
  We were led to believe that the Opposition would give this welcome measure constructive support. The support given by the hon. Member for Glasgow, Garscadden (Mr. Dewar) was somewhat half-hearted. The Opposition's new found enthusiasm for the cause of ratepayers seems a little synthetic when we consider what the hon. Gentleman's comrades are doing in Edinburgh and Stirling. Unlike him, I have no hesitation in welcoming this measure to help those who are worst affected by revaluation.
  I congratulate my right hon. Friend on his success in getting money from the Treasury to provide relief. That success should be contrasted with his reception when he announced additional rate relief. The Opposition could only crib that it was a reallocation of the Scottish Office budget.
  I am pleased that it has been possible to assist commercial and domestic ratepayers who were hardest hit by revaluation. It is preferable that domestic ratepayers be helped selectively as indiscriminate rate relief would not target relief on those whose rates bills are highest. I hope that my right hon. Friend will continue to take a firm line on local government spending. I have heard some councillors, who are not of my persuasion, suggesting that
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  this is a safety net under ratepayers with the highest valuations and that they can continue to spend without conscience.
  I spoke to the finance director of Strathclyde regional council last week to discover how many of my constituents will benefit as a result of the Bill. I am grateful to Mr. Paterson and his staff for digging out the information for me. In Bearsden, 421 commercial ratepayers, or nearly 30 per cent., will benefit. In Strathkelvin, 658 commercial ratepayers, or 27 per cent., will benefit. Those are the highest percentages in Strathclyde region, and they confirm that rateable values in my constituency are excessively high. I hope that ratepayers will avail themselves of their right of appeal to get justice.
  The story is rather different for domestic ratepayers, 243–1·71 per cent.—of whom in Bearsden will benefit and 979–3·3 per cent.—of whom in Strathkelvin will benefit. I see that 36,000, or 12 per cent., of ratepayers in Glasgow will benefit. It is not fair for the right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie) to tell the House that he knows nobody who will benefit. I cannot believe that some of those 36,000 people do not live in his constituency. I am sure that 12 per cent. of my constituents will be pleased to qualify.
  Strathclyde regional council has advised me that £14·6 million will be available. I appreciate that my right hon. Friend is unable to announce the bill for Scotland, and I understand his difficulty in putting the scheme forward on the basis of insubstantial information. I am nevertheless glad that he was prepared to push for the scheme. However, it seems that there will be a shortfall which may be significant. I appreciate that eligibility should be set down in the Bill, but is the revaluation of three immutable? Could some other figure, which used up the money, be applied?
  Mr. John Maxton: That is not what the hon. Gentleman said last week.
  Mr. Hirst: I stand by what I said to the Evening Times last week when I was asked for an instant reaction to the news. I have no fear about saying one thing in Scotland and quite another here. I congratulate my right hon. Friend on persuading the Treasury to come up with an extra £50 million.
  Mr. Norman Hogg: The hon. Gentleman said that at the beginning.
  Mr. Hirst: It is worth repeating. I hope that it will be possible to ensure that the majority of the money is spent.
  I am glad that the Bill provides for the scheme to be continued. Although it is unrealistic to expect my right hon. Friend to give commitments about spending in the future, he will have the undivided support of this side of the House if he can continue this form of relief until a replacement for rates is found. I am sure that my right hon. Friends on the Front Bench know that the burden that this year seems to be so intolerable to those who will qualify under the scheme will not be lightened next year.
  There is one point upon which I should be grateful for clarification. I recognise the benefits of a simple Bill. I recognise also that certain categories will be exempted. However, I should be grateful if my hon. Friend the Under-Secretary of State for Scotland could deal with the position of the quarrying industry. I understand that quarrying is treated like any other normal industry.

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  However, certain quarries have experienced an enormous increase in their valuations. I understand that quarries qualify for industrial derating, but, in view of the references which have been made to legislation, I should be grateful if my hon. Friend could let me know whether the quarrying industry will qualify for relief.
  Mr. Norman Hogg: I strongly support the request of the hon. Member for Strathkelvin and Bearsden (Mr. Hirst). In my constituency, the rateable value of a quarry will rise 2·9 times—2·9 being a very significant figure — from £27,000 to £77,400. I hope that the Under-secretary of State for Scotland will answer the point made by his hon. Friend.
  Mr. Hirst: One of the interesting aspects when legislation comes before the House is that letters are sent to Members of Parliament. I expect that all Members have been bombarded with letters about the Bill from the Retail Consortium and the National Federation of the Self-Employed and Small Businesses, which, incidentally, were asking for a much smaller sum than is now on offer. One of the benefits of such letters is the constant reference by the retail sector to the damage that high rates do to businesses.
  During the past week I have spoken to a number of small business men, one of whom recently opened a second shop which is facing a rates increase of 96 percent. That man will benefit from the legislation, and he is very pleased about that, but he will still be faced with a significant increase in his overheads. His comment to me was, "Well, Michael, we hoped to take on a school leaver this year, train her in the business and provide a job for another person. Unfortunately, because of the rates increase, that will probably not be possible." I took the opportunity to remind him that the lion's share of the rates increase will go to Strathclyde regional council, which is still spending £43 million in excess of Government guidelines.
  Bearing in mind that comment, the Opposition seem to be showing synthetic concern for commercial ratepayers. Only a few months ago they wrote in their campaign briefing:
  "There isn't a single shred of evidence to show that rates force firms to lay off workers or deter new businesses from starting up."
  I welcome the conversion of the Opposition, whether on the deathbed or not. I hope that when they return to Scotland and redraft their campaign briefing, they will be prepared to acknowledge that high rates harm the commercial and industrial health of this country.
  Perhaps I ought to refer to the warped priorities of the Liberal spokesman. I am not surprised that the Scottish spokesman for the Liberal party has not had the guts to turn up today, nor that today its strength is only one eighth. Having accused the Secretary of State of adopting warped priorities in providing aid amounting to £40 million to commercial ratepayers, I am not surprised that he has stayed in his fastness of Gordon, albeit temporarily.
  Even with this scheme, many of my constituents will still be paying the highest rates in the country. I echo their demand for reform. Although this measure is welcome, it represents a further tinkering with the system and is no substitute for the radical reform which all of us want. Scottish ratepayers should take note of what is said in the debate. They will clearly see that it is the Conservative party which shows real concern for ratepayers and,
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  moreover, that the Conservative party is the only party with the political will to grasp the nettle and to introduce rating reform.
  7.34 pm
  Mr. Donald Stewart: I have only a few points to make, simply because the Secretary of State appears in the Bill to be forking out instead of clawing back. Therefore, it would be wise to take the money and run. Prior to the announcement of the rates relief which we are discussing today, the Scottish Nationalist party stressed that any relief given must be new money from the Treasury. We are glad to note that this will happen, but we are concerned that the full £50 million allocation may not be used. It would be scandalous if it were not used. Even the £50 million of relief represents only about one and a half days of Scottish oil revenues. Compared with the money pouring into the Treasury from Scotland, and compared with the amounts being spent on fortress Falklands and Trident, £50 million is small beer. It is essential that that sum of money should not be reduced.
  What will happen in subsequent years? We may assume that two or three years will elapse before a major reform is seriously discussed in Parliament. At the beginning of his speech the Secretary of State omitted to deal with a point which I subsequently put, while the right hon. Gentleman was absent, to his hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton), namely, the enormous discrepancies between the assessments in Scotland and England. I do not agree with the right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie) that there should be uniform rating throughout the United Kingdom. The situation in the two countries is different. However, the case that I mentioned earlier showed that there was a difference of 25 times between the rating of the Celtic football ground and the football ground of a team in England. Therefore, the Secretary of State ought to take into account such enormous anomalies.
  As the Government have promised that the rating system will be reformed, what plans have they made to take care of the position in Scotland during 1986–87? To help to spread the benefit that may be obtained through the rebates, the qualifying level should be set at a lower figure for the increase in the rateable value instead of the three times increase which is proposed in the Bill.
  I suggest that a limit of £10,000 should be placed upon rebates. This would ensure that as many businesses as possible, in particular small businesses, would benefit from the rebate. I hope that those with large revaluations will appeal before applying for a rebate. If their appeal is successful, the rebate may not be needed. More money will then be left in the kitty for those who are faced with greatly increased rates bills.
  The Bill will be enacted. Nobody shoots a one-legged Santa Claus. Today, however, the Secretary of State for Social Services said that the poorest people would be obliged to pay 20 per cent. towards their rates bills. This burden will have to be borne by those who are currently in receipt of rates relief. It shows the brazen effrontery of this Government. On the day that the Secretary of State for Scotland is giving away money with the one hand, his right hon. Friend the Secretary of State for Social Services is taking it back with the other. When looked at in these terms, one sees that Santa Claus does not have a leg to stand on.
  7.38 pm
  Mr. Nicholas Fairbairn: First, I congratulate my right hon. Friend the Secretary of State on having obtained a huge sum which will benefit the ratepayers of Scotland, both commercial and domestic. It is not good for the right hon. Member for Western Isles (Mr. Stewart) to pooh-pooh such a sum of money as small, when comparatively huge sums of money are spent on transport for his constituents. Indeed, at least a quarter of that sum is spent on transport in his constituency, so a little modesty might suit him better.
  Mr. Donald Stewart: The highest subsidies for transport in the United Kingdom are in London, where an enormous mass of rolling stock is needed to take in commuters in the morning and take them out again at night. Expenditure on transport in the Western Isles is peanuts compared with that.
  Mr. Fairbairn: I am not an expert on transport in London, but I am informed about the right hon. Gentleman's constituency. I assure him that the sums which it enjoys from other people's pockets are disproportionate to those enjoyed in any other part of Scotland.
  Mr. McQuarrie: The right hon. Member for Western Isles (Mr. Stewart) should have no cause for complaint. He should remember the integrated development programme, which is expressly suited to his constituency, and which injects massive sums into the Western Isles. It would be much better to spend that money in the Grampian region, and especially in my constituency of Banff and Buchan.
  Mr. Fairbairn: Yes, and if there is any left over, perhaps it could go towards transport in London.
  We have seen some remarkable schizophrenia in the debate. As ever, the hon. Member for Glasgow, Garscadden (Mr. Dewar) made a fluent and cogent speech, but Socialists and Socialist authorities have always believed that the people who should be milked are those who own houses and shops and run businesses—
  Mr. David Lambie: And castles.
  Mr. Fairbairn: Yes, indeed, and I think I am right in saying that it was a Socialist Government who said that ancient monuments such as myself and the house in which I live should be derated to some extent. I am grateful for that. It is strange for the Opposition suddenly to be on the side of those whom they have always regarded as the milch cows for their extravagance. Fortunately, I represent a constituency that is not of Edinburgh airport, and since Edinburgh airport is not of the capital city I have few reasons to go there, but I am horrified by the extent to which it is being defiled to advertise the extravagance in which the gauleiters of the Supreme Soviet of Edinburgh indulge.
  The system of rating taxation has never been fair, and it has always amazed me that the Conservative party should have tolerated it. It is a tax on everything which we believe the humblest, the poorest, the youngest and the oldest should be able to achieve and enjoy. The buying of a house probably represents the largest expenditure that most people will ever undertake.
  Mr. Robert Hughes: I am following the hon. and learned Gentleman's speech with great care. He seems to
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  be suggesting that only property owners pay rates, but that is untrue. Those who rent properties, whether from the private sector or from local authorities, also pay rates. That must be said repeatedly, because they get no credit for their contributions.
  Mr. Fairbairn: That is slightly inaccurate, because I understand that only 26 per cent. of those who pay rates do not receive some form of rate rebate.
  Rates are a tax on the home, which is the centre of family life. As it is normal for an ordinary family or an ordinary human being to wish to associate themselves with the home, unless they must move home for employment reasons, or unless they become more prosperous, they will not normally wish to change their homes. Although their children may marry and move away, the family home is still fundamentally important. Therefore, rates are a tax on the most important heritable object with which we are associated. I should tell the hon. Member for Aberdeen, North (Mr. Hughes) that the more homes are merely hired from some wretched local authority, the less significant they are to the family. The greater the influence of the home and the family, the greater will be social cohesion and decency.
  The tax does not take into account the ability of the occupant to pay. It is rendered on a property regardless of whether its inhabitants have a huge income or a petty one. That is unfair. It is especially offensive because domestic rating is a complete disincentive to improving one's property because one is punished for doing so. When one considers the GEAR scheme and the magnificent reconstruction of the tenements in Edinburgh and Glasgow, such as Georgie Dalry, Maryhill and Trongate, one sees that the improvement of property is a great social benefit. Therefore, it is extremely unfortunate to have a tax which is a disincentive to improvement.
  My right hon. Friend the Secretay of State has frequently said that the revaluation is all the assessors' doing. I agree, but the bases upon which the assessors do it are extremely unfair, arbitrary and inequitable in practice. The assessors must try to be like Pontius Pilate —absolutely fair between Barabbas and Christ—but it does not alter the fact that, in practice, the assessors and their staffs do not visit similar houses. They do not know what the differences are. They cannot make an intelligent comparison between a newsagent in Auchterarder and a newsagent in Aberdeen or in Ayrshire. Therefore, all that has happened is that a system based on appalling inequities and contrary to all the principles of Scottish law has been demonstrated to be even more unfair by revaluation.
  The myth about revaluation is that it is meant to make everything fair again. It is like saying that, in five years' time, the man who has made a million, the man who has made nothing and the man who has squandered a million will be equal.
  Mr. Robert Hughes: Will the hon. and learned Gentleman give way?
  Mr. Fairbairn: I have already given way to the hon. Gentleman.
  Mr. Hughes: The hon. and learned Gentleman shows such appalling ignorance of the rating system that he should give way.
  Mr. Fairbairn: I am sure that I cannot beat the hon. Gentleman for that.
  Mr. Hughes: The hon. and learned Gentleman should know that one guideline for revaluation which the assessors are supposed to follow is generally to ensure that the revaluations do not greatly change values in one part of Scotland as against another, except in exceptional circumstances—
  Mr. McQuarrie: That is not true.
  Mr. Hughes: It is true. The general understanding is that the assessors should ensure that valuations increase in broadly similar bands throughout the country, except where exceptional circumstances make it impossible.
  Mr. Fairbairn: I understand guidelines, and I have always been against them. I do not like the word "guidelines" and I shall give the hon. Member for Aberdeen, North an example of the effect of guidelines.
  The Socialist council in Glasgow has closed down almost every business in Jamaica street. If the assessor goes there, he will say, "This looks like Bhopal after the explosion. We had better decrease the rating valuation." However, if he comes to Perth high street, or Auchterarder high street, or Blairgowrie high street, and sees that the businesses that have been driven out of Glasgow have opened up in those streets, he will say, "These look like prosperous places." When one council has been extravagant, the guidelines will penalise places where the councils have not been extravagant.
  That is what happens because of the actions of the unneutral political masters of neutral assessors. Socialist councils take a sadistic view of properties and those who operate them and regard businessses as places to be looted.
  Mr. Dewar: May I divert the hon. and learned Gentleman — helpfully, I hope — from his somewhat ruminative look at the rating system?
  It has become clear, and will become clearer, that there will be a considerable shortfall on the payout under the Bill.It may not be £20 million, as I have suggested, but it will be substantial. What is the hon. and learned Gentleman's attitude to that? Will he be happy if £20 million of the £50 million is merely handed back to the Treasury?
  Mr. Fairbairn: I have always admired the hon. Gentleman's prescience, and he has made a point which I was about to develop. My regard for his intelligence has had corroboration from his intervention.
  Not only is the rating system unfair, but the Secretary of State's gallant attempts to make fair the unfairness of the revaluation will be even more unfair. Let us examine the microcosm of Braco, where the domestic rate increases throughout the village range between 25 and 40 per cent. in real terms. Not a single house will benefit under the Bill.
  It is all very well to say that inflation is 5 or 6 per cent., but people facing large increases in their biggest annual bill cannot budget for or afford such extra sums. It is not the fault of the Secretary of State, but it is an unfairness which we must correct, because the people involved have bought their own homes and are doing the best for their families, but they are being punished.
  Tourism is particularly important in Perthshire. Hotels and bed-and-breakfast establishments have to set their terms a year ahead. They cannot be altered because of a rating revaluation. A hotel in Comrie faces a rate increase from £7,900 to £10,000 a year—an extra £40 a week.
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  For those who are thirsty, let me give the example of a small company in my constituency that owns nine pubs. Prices in those pubs cannot be increased, because the Chancellor has already imposed increases of 2p a tot. To pay for those rate increases, the pubs will have to sell an extra 325,000 pints of beer, or 355,000 more whiskies. Even for the thirstiest—even for the right hon. Member for the Western Isles—that would be an awful lot of drinking. It is not a realistic burden to impose on people who are involved in tourism, which is one of our major industries.
  No one is a prouder Scotsman or less a nationalist than I, but I have to say that another major unfairness is the difference between Scotland and England. For example, a six-bedroomed hotel in St. Andrews will pay £32,000 in rates, but a similar hotel in St. Albans will pay only £5,000. Those hotels are supposed to be competing for the same tourists.
  The small businesses that have not quite qualified under the three factor will be hit hardest. If people's domestic rates go up, they can reduce the amount that they spend at the hairdressers or with the picture framer. The small businesses, which have already been hard hit, will be hit even harder because their customers will face bigger domestic rate bills. My picture framer has taken on a young man from the YOP scheme who is fully trained and an excellent employee. The increase in the picture framer's rates bill is exactly the same as the salary of that young man, whom he wishes to keep on. What does he have to do?
  The admirable efforts of my right hon. Friend the Secretary of State will demonstrate, by the chaotic and unfair comparisons that will reflect like magnifying mirrors the idiocies of the system, a great unfairness. I urge my right hon. Friend to think carefully about whether, if there is a shortfall, the money could be used to help those who are having to pay an extra 25 to 40 per cent. on their principal annual bill. People who budget carefully cannot afford such increases and, of course, there is next year and the year after to come. I do not know whether there will be appeals under the new system, but I know that the cost of appealing to the revaluation appeal court is considerable.
  Every time a defence has been made of this wretched revaluation, people have said, "The law of Scotland is different and we are proud to have a different law. It has compelled us to have a revaluation." I have an answer for the Secretary of State. Let us change the law on our own; let us not wait for objections from the Home Office, the Department of the Environment and the rest who are screaming for different systems because their empires are affected. Let us just have a new system in Scotland. Let us show them. After all, we have shown them how to deal with football hooliganism and a whole lot of other things recently.
  Let us have a new rating system set out in the Queen's Speech for Scotland only, and if England thinks that it is a rotten system it need not follow us. Let us do what suits Scotland, because the penalty for the system that we have, the revaluation that we have done and the extravagance of the councils is that many businesses will go to the wall and many families will not be able to pay their principal bill. So let us tackle the problem ourselves. I congratulate the Secretary of State, but let him go further and do for Scotland what ought to be done for Scotland. Let England do what it wants in its own time.
  Mr. Deputy Speaker (Sir Paul Dean): Mr. James Wallace.
  8.1 pm
  Mr. James Wallace: I shared some of the conclusions—
  Mr. Robert Hughes: On a point of order, Mr. Deputy Speaker. At the risk of incurring your displeasure, I should like to say that, while members of minority parties have rights, so have majority parties. So far only one Back Bencher from the majority party in opposition, the Labour party, has been called.
  Mr. Deputy Speaker: I hope that the hon. Gentleman is not criticising the difficult job that the Chair has in calling hon. Members to speak. Mr. Wallace.
  Mr. Wallace: While I agree with some of the conclusions reached by the hon. and learned Member for Perth and Kinross (Mr. Fairbairn), I do not agree with some of his reasoning. However, the time is ripe for the rating reform that he called for. I agree that there is no reason why Scotland should have to wait for England to catch up.
  I welcome the legislation, although it does not contain everything that one would wish to see. None the less, it is generally to be welcomed. As might have been expected, there has been some self-congratulation on the Government Benches. It would be churlish not to acknowledge the success of the Scottish Office in prising a significant sum out of a Chancellor of the Exchequer who is not renowned for his open-handed generosity. Indeed, it is reassuring to know that if an argument is good enough, and if the Secretary of State fights his corner, new money can be found. I am sure that that message and particularly the fact that the Secretary of State fought his corner will have been noted by the teaching profession in Scotland.
  Equally, if self-congratulation is fair on Conservative Benches, Opposition parties, too, can take some of the credit for keeping up pressure on the Government to make some of the changes. It is only fair to say that my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) and other of my right hon. and hon. Friends, even before the full effect of revaluation on the commercial sector dawned upon the Government, were making representations. Those have been continued both in correspondence and on the Floor of the House.
  I wish the Bill a fair wind and confirm that we shall co-operate in getting it on to the statute book. It is not the Opposition's role to be blindly uncritical of what the Government are doing. My first point of criticism is that to date we have not had a reassurance that the additional money will be forthcoming next year or in subsequent years of the present quinquennium. The rates that will be levied in forthcoming years will be based on the same rateable values that are causing concern and anxiety this year. The only idea as to future plans that we have had was given by the Chancellor of the Exchequer at the Scottish Conservative conference, in the passages that the hon. Member for Glasgow, Garscadden (Mr. Dewar) quoted. He hinted that he would be reverting to his more typical tight-fistedness. Without the reassurance that that sum will be repeated in future years, what is being offered to the ratepayers, particularly to the commercial ratepayers, is not so much a lifeline as a short stay of execution.
  When I met several retailers in my constituency last month, what caused them considerable anxiety was not
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  simply the size of the rate increases that they faced— some were about 600 or 700 per cent. — but the uncertainty about whether the Government would provide relief for them. They had business decisions to make. They had to decide whether to cut staff and what overheads could be cut or dispensed with. Some of them even had to consider whether they could continue trading at all. At that time such decisions could be made only tentatively. It might be fair to excuse the Government this year for some delay as they assess the situation, but if we are to treat our small business sector with proper respect we cannot impose the same uncertainty on it next year. The hon. and learned Member for Perth and Kinross made that point graphically in the examples that he gave.
  Many small business men are operating on narrow margins. Their rates bill, particularly after revaluation, forms a large part of their annual expenditure. If small businesses are to exercise financial responsibility in budgeting and planning ahead, and if they are to show the enterprise that many of us would like to see, it is only fair that they should know at a relatively early stage where they stand vis-á-vis next year's rates bill. We should like reassurances from the Minister during the passage of the Bill. If that is not possible, I think that it would not be unfair to seek an announcement — a favourable announcement—before the summer recess, or, at least, early in the autumn.
  My second point is about qualification for payment. There is no doubt that the across-the-board approach that has been adopted has administrative simplicity. No doubt some of the larger chain stores are adversely affected and feel the pinch of rate increases, but they are not affected in the same way or threatened as much as several of the smaller businesses. Larger chain stores with branches in many towns throughout Scotland could reap the benefit many times over, whereas small businesses that fail to qualify under the multiple of three would not receive any assistance.
  Mr. Fairbairn: While I agree that chain stores will have more resources, stores that have moved into country towns, which will be operating on much smaller margins, and which have had huge increases, must ask themselves whether they will stay there. Again, that has a big impact on local employment.
  Mr. Wallace: I take the hon. and learned Gentleman's point that in many smaller towns the introduction of those stores has been worthwhile, and their head office will have to consider the matter. However, many of the larger stores could qualify for assistance, and the viability of many such stores is not threatened, so there appears to be some rough justice. One might have to consider the cut-off point and whether it should be linked to the number of premises, and what the total amount should be that any firm throughout the length and breadth of Scotland could claim back as a rebate.
  In introducing the Bill, the Secretary of State admitted that there would still be higher rate bills for several domestic and commercial ratepayers throughout Scotland. He said that the Bill would not necessarily help them. High rate bills will be faced by many who qualify for assistance, and particularly by those who just fail to qualify. I have a list of the revaluation and rate payment increases of many of the retail outlets in the Shetland part of my constituency. There are rateable value percentage increases of 300 per

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  cent., 500 per cent., and 600 per cent. Many, indeed all of those outlets will qualify for assistance under the Bill, and I am sure that they will be grateful for it. Nevertheless they will still be paying a substantially higher amount in rates this year than last year. The same applies to the Orkney part of my constituency, where people face rate bills that are 30 per cent., 40 per cent., and 50 per cent. higher, which is many times the average rate of inflation.
  The Secretary of State and other Conservative Members have tended to put the blame for increased rate bills, as opposed to what may be attributed to revaluation, on high-spending authorities. However, it is not many months since the Secretary of State, from the Dispatch Box, praised Orkney Islands council for having kept within guidelines. Yet commercial and domestic ratepayers in Orkney are also having to pay considerably higher rates this year. That cannot be attributed to a high-spending authority. It can be attributed in part to the reduction in central Government assistance and, in some cases in my constituency, to derating of external plant and equipment. This has resulted in a multi-million pound handback of money which would otherwise have been paid by the oil companies. The oil companies will not feel the pinch if they do not have that amount of money. I am sure that many ratepayers in my constituency would have benefited far more if that derating measure had never been taken, for the spurious reason that it would bring Scottish law into line with English law. It did not do that. Indeed, should one attempt to bring Scottish law into line with English law? The measure has had a serious impact on rating levels in Orkney and Shetland. Oil companies have benefited at the expense of smaller businesses and domestic ratepayers.
  What happens if the Government do not use the £50 million that has been set aside for this purpose? I join with those who say that the balance should be applied to give relief to ratepayers and should not be handed back to the Treasury. Perhaps a sliding scale should be introduced for those who pay the highest increases. Perhaps there should be a sliding scale for those whose rate increases are between 2·5 and 3 times the previous level so that that important sector of the small business community is given some relief.
  The exemptions in clause 1 mean that the whisky industry will not receive any advantage in the Bill. Conventional wisdom has it that the industrial sector has benefited from revaluation. Indeed, the cut in derating occurred in the light of that. Nevertheless, the whisky industry seems to be an exception to the rule. Revaluation generally has increased the amount of cash that is paid. The Scottish Whisky Association claims:
  "Revaluation has increased the amount of cash paid in respect of rates on distilleries and warehouses by an average of 36 per cent."
  In my constituency, there has been one cash increase of 100 per cent. and an average increase of 82 per cent. The average increase in the Lowlands is 75 per cent. and on Speyside it is 41 per cent. These high additional sums must be found in an industry that cannot be said to be prospering.
  The Chancellor made a specific point in his Budget statement of helping the industry by pegging the duty on whisky to the inflation rate. He recognised the industry's plight. Although that measure was welcome, it was not enough, especially after the abolition last year of stock relief. The increased rates are a further substantial blow. I have written to the Secretary of State about it. I know that
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  the Under-Secretary of State will look into the matter. Has the hon. Gentleman been able to make any progress in providing assistance to this important industry which makes a valuable contribution to the Scottish economy?
  The Bill underlines the extent to which radical reform of our rating system is needed. I welcome the fact that the Government have again put reform of the rating system on the agenda. It is no secret that my right hon. and hon. Friends favour a system of local income tax, especially one that is made more administratively easy with computerisation. In the past, we have heard pledges to reform the rating system. Today we have heard a more specific statement, that a proposal will be brought forward by the end of this year. I recall reading about Ministers making the same statement at the Dispatch Box about the road equivalent tariff. We were told that it was a complex matter involving many problems but that the Government would come forward with a solution at the end of the year. That statement was made in 1981 and 1982 and, eventually, in 1984 the Government told us that they had examined the problem and had decided to do nothing. Many of us fear that we are slipping into a similar pattern with rates. My right hon. and hon. Friends will continue to press the Government to ensure that, this time, they meet their commitment to undertake the much-needed and long overdue reform of the rating system.
  8.14 pm
  Mrs. Anna McCurley: I am happy to congratulate my right hon. Friend the Secretary of State for Scotland on the speed of his response to the most pressing problem for Scottish householders and small business men. The amount that my right hon. Friend has given during the past few months is no small beer. He began his measures when it was obvious that revaluation would affect ratepayers. He increased by £19 million the domestic element of rate support grant provision, increasing domestic rate relief from lp to 5p in the pound in post-revaluation terms. Subsequently, an additional £38·5 million was granted. We now have a total rebate of £50 million. I hope that the Government guarantee that amount.
  The actions of the Secretary of State have finally convinced the Government that rating reform is necessary. I refute the challenge of the hon. Member for Glasgow, Garscadden (Mr. Dewar) that this is just a matter of expediency. It is a matter not of expediency but of commitment. The Government have always been committed to rating reform and assisting the ratepayer. If anyone should be thoroughly ashamed of expediency it is the Opposition, who talked earlier about devolution and the establishment of a Scottish assembly. They know that, during the 1970s, that was their expedient response to what was happening in the Scottish national camp at that time.
  I hope that the firm stand taken by my right hon. Friend the Secretary of State means that many of the small businesses in my constituency will remain viable. Many shop doors have already closed. I hope that some, which were about to take that step, will remain open. It cannot be assumed, however, that this relief which is offered in part to commercial enterprises will serve to assist all these people. That worries me greatly because, although the proposals will have great merit, we must take account of the fact that those to whom the multiple factor of three does not apply will still pay much more than last year. There are some small businesses in villages in my

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  constituency that cannot tolerate the excessive increases of the past year. It is less noticeable in the cities when premises change hands or shut down, but when shop premises in villages and small towns lie empty or are neglected because rates are too high there are deleterious effects on the spirit and fabric of life in those areas.
  I am pleased that additional finances will be given to help householders. Although there was exhilaration at the press conferences because of the announcement of help to our commercial firms, some individuals were still reticent about the measures. Domestic ratepayers are still paying a great deal more than previously. The real problem occurs when rates are of more worry than markets. Even the choice of moving down market is closed to many because of the sheer costs of moving.
  Another problem which I have encountered goes slightly beyond the terms of the Bill. I have discovered on travelling round my constituency that the arbitrariness of these increases in rateable values has been remarkable.
  I want to explain how the assessor was completely out of touch with the accurate position for one of my constituents who had established a small market garden business. It will take two or three years to get the business going fully, and during that time he will receive subsidies. Surely that should explain to any assessor that agricultural premises are involved. But no, the assessor demanded that my constituent pay rates on his property being classed as a luxury bungalow. I do not know how many hon. Members know my constituency, but it includes a few areas with so-called luxury bungalows. The bungalow in question is in a conservation area, and meets the minimum standards required. It has three rooms—two bedrooms— and houses two adults and a child. That hardly constitutes a luxury bungalow. When my constituent challenged the valuation and told the assessor that a much larger house up the road had been given a lower valuation, the assessor uprated the valuation of the other house. That caused fearsome strife in the village.
  Assessors do not appear to know the difference between a garage and a store. My constituent was angered when, having demonstrated that the shed next to his house was not a garage, he was told, "That is only because you do not choose to use it as a garage." That is ridiculous, because the shed is used to store his business equipment.
  Mr. Michael Forsyth: I am intrigued by the use of the term "luxury bungalow." I have experience of assessors talking about good and bad areas. Does my hon. Friend share my concern that there is a little too much subjectivity creeping into assessments because there is no rental evidence? I wonder what rental evidence there is for the sort of place that she has described.
  Mrs. McCurley: I could not agree more with my hon. Friend that an element of subjectivity looms large in assessments. I hope that my right hon. Friend the Secretary of State will take that point on board.
  I am disappointed that my right hon. Friend the Chancellor of the Exchequer is not here this evening. When he was at Perth, he took credit for the new money that had been made available. It would have been nice had we had the opportunity to thank him — and also to remind him that until there is a new rating system he must honour in full the commitment to the ratepayers embodied in this Bill.
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  Under the Bill, the Secretary of State can continue the scheme, and will no doubt wish to do so during the next few years of the quinquennium. I wish him all the best in determining the allocation of resources. I hope that the Treasury appreciates the seriousness of the position for ratepayers in Scotland. No doubt the dexterity demonstrated by my right hon. Friend will hold him in good stead. However, I admit to having the same concern as that expressed earlier by my hon. Friends about whether the full £50 million allocation will be used. I am not as scrupulous as my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst). I would use any surpluses for additional relief for commercial ratepayers.
  I am worried that we are asking Scottish authorities to administer the cost of the rebate, which will amount to about £1 million. It is not a great deal of money, but a principle is involved. Perhaps the bulk of that financial burden will be placed on the more prudent authorities, some of which are Conservative controlled. I am aware of the deep division between local government and central Government about continuing financial restraints. However, I remind the House that only one third of the increase in rates concerns revaluation, while two thirds arises because of excess spending by local government. I want the rift to be healed so that we can obtain co-operation from local government in being accountable for its spending, and not simply using the prevailing conflict to be bloody-minded at the expense of the ratepayers.
  I have more respect for local authorities than simply to regard them as purveyors of bins, bogs and burials— indeed, I have served on a local authority—but I wish that they would confine their activities to those for which they were established. I have a dossier of what I would term political abuses by local authorities amounting to many thousands of pounds. It upset me when the Opposition quibbled with my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) when he mentioned that. Since May 1984 the city of Edinburgh district council has made political use of council funds amounting to more than £70,000. That includes donating money for public meetings on behalf of the Chile Democratico. That may be legal, but there is something very wrong when most of the councillors were elected not to act as the next Secretary of State for Defence, but to ensure that bins were emptied and roads were repaired. It appears that the Labour candidates' selection process now throws up the type of councillor who believes that his mandate makes him responsible for national defence, foreign affairs, civil liberties, national if not global ecology and anything else one can name.
  If we are to believe the constant call of the Left— that housing is in an awful state, that education is being decimated and that cuts in finance are causing hardship — it is reasonable to inquire how Labour councillors find the time to take on national tasks. It is difficult to explain to an electorate how they can attend the second international nuclear-free zone conference in Cordoba in Spain but not find the time to attend a tenants' association meeting. That is particularly hard as the Cordoba conference lasted only three days, but many of the Scottish Labour councillors stayed there for a week—no doubt at the ratepayers' expense.
  Mr. Robert Hughes: I accept that there are differences of opinion about what should and should not be done by councillors, but if the hon. Lady is suggesting that certain

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  councillors received expenses for staying in Spain longer than was necessary, I hope that she will name them and take to task the financial officers of the local authorities that sanctioned such expenditure.
  Mrs. McCurley: I shall happily take on that task.
  The new breed of Labour councillor — [HON. MEMBERS: "Name them."] As I said, I shall be happy to take on that task. I shall be in correspondence about that matter.
  Mr. Robert Hughes: That is not good enough. The hon. Lady should be prepared to substantiate her charge with names, dates and local authorities, either in or outside the House. She should not make a general smear on councillors which goes far beyond the reasonable partisan politics of this House.
  Mr. Bill Walker: My hon. Friend will be aware that I have in the past done exactly what the hon. Member for Aberdeen, North (Mr. Hughes) has been asking for. I have reported to the local authority auditor the city of Dundee and its councillors. Had they not stopped doing what they were doing, they would have been prosecuted. They had been printing a news sheet and did not even—[Interruption.] The principle is the same, and the hon. Member for Falkirk, East (Mr. Ewing) knows it. He has friends serving on councils who do not always obey the law.
  Mrs. McCurley: I should like now to continue with my own contribution.
  The new breed of Labour councillor is quite prepared to spend ratepayers' money to further his own causes. That is sad, because many decent people in the old Labour party are now prepared to support some of the nonsense on which Labour councils are spending our money. It is obvious that local authorities are finding legal ways to fund organisations which support their own political viewpoint. In that way, those councillors enjoy benefits which are not available to their political opponents. That gives them a clear advantage in financial terms and also in regard to the scale and effort of any campaign. If little or no time is required to organise funds for a campaign, more time and effort can be devoted to the campaign proper. It seems to be only the Left that is abusing the system at present. However, if no action is taken, it is likely that before too long every party may start to make use of this new system of finance. That is why it is extremely important to alter the rating system to exclude those abuses.
  It is to be hoped that the findings of the Widdicombe committee will strengthen the demand to ensure a fairer and more democratic system, and one which reflects the proper functions of local authorities. If local authorities behave themselves, we might just be able to manage with the system that we have; but as they have abused the system, changes are now urgent. Any money that we expend at the moment to help our hard-pressed ratepayers will be reimbursed suitably in the future when those changes are introduced and implemented.
  8.34 pm
  Mr. Robert Hughes: I very much regret the fact that the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) made such disgraceful allegations of illegality without one shred of evidence to
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  back them up. It is no use the hon. Lady waving a news sheet which she has received from the Conservative Central Office.
  Mrs. McCurley: It is not a news sheet.
  Mr. Hughes: If the hon. Lady has names of councillors who she believes have broken the law with regard to expenses, she has a duty to name them, either in this House or outside it, otherwise she is an accessory after the fact in breaching the law.
  Mr. Fairbairn: Will the hon. Gentleman give way?
  Mr. Hughes: No.
  Whenever Conservative Members have an inadequate case, they use the grossest smears to cloud the issue. I thought much more highly of the hon. Member for Renfrew, West and Inverclyde before she made her speech. I hope that she will do me the courtesy of naming names, or withdrawing her general allegation.
  Mr. Fairbairn: The hon. Member makes a strange case. Socialist councillors went to Cordoba for a fatuous conference which had nothing whatever to do with local government. If a councillor can get to a place such as Cordoba at the expense of the ratepayers, it is not very expensive for him to have a holiday while he is there.
  Mr. Hughes: With respect, that is not what the hon. Lady said. Her allegation goes much wider and much deeper than that.
  Mr. Henderson: Will the hon. Gentleman give way?
  Mr. Hughes: No. Several of my hon. Friends want to take part in the debate, so I must get on with my speech.
  There has been a general welcome for the Bill, in so far as it helps commercial and domestic ratepayers, and I share that general welcome to some extent, especially as it is now clear from clause 1 that it is at least possible for the rebates to continue for more than one year if the Secretary of State thinks fit. The Secretary of State was pressed on that issue, very largely by the Opposition, and eventually the provision appeared in the Bill. Whether he will allow the rebates to continue after next year is another matter. I suppose that, even if it is for only one year, we should be grateful for small mercies, but there is one vital question that must be answered by the Secretary of State.
  As the £50 million—whether it is used this year or not is not the point at this stage—is available as new money this year, is it committed for as long as the transitional system lasts, until we have a new rating system, or are we to revert next year to £20 million, £30 million or £40 million being removed from the health budget, the education budget, or some other budget to meet the demands of the rebate system? The Secretary of State must give a clear answer to that question. Unless we have a clear answer, he will be guilty of deception. He has our consent for the Bill to go through without challenge, on the basis that it is to last for a considerable time. I hope that he will put our minds at rest on that.
  Mr. Michael Forsyth: Will the hon. Gentleman give way?
  Mr. Hughes: No, I must continue with my speech.
  I am sorry that the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) is not here. He pontificated about the rating system and seemed to labour under the illusion that only house owners pay rates. When I

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  challenged him on the point and told him that all householders were eligible to pay rates and were eligible for assessment, his reply was that most of them live in local authority houses and do not pay rates because they get a rebate. That showed that the hon. and learned Gentleman knows little or nothing about the system. All householders are eligible to pay rates. The fact that some of them do not pay full rates and that some of them pay no rates is a reflection of their circumstances.
  It is interesting that in the statement by the Secretary of State for Social Services today he pointed out that 7 million householders receive some help with rate bills and that 3 million householders pay no rates. That simply reflects the poverty of people. The Secretary of State is to compound that poverty by saying that everyone now has to pay a minimum of 20 per cent. of his rates. Where is the compassion and the care that we hear so much about from the Government? They are making the poorest of all people—those who under their system cannot afford to pay any rates whatever—contribute at least 20 per cent. The contempt of Conservatives for local authority tenants is revealed by the way in which they speak about ratepayers as though ratepayers were only those who own their own property, and deny any rights whatever to those who are in rented property.
  Before coming to the generalities of the Bill I have one or two technical points to make. I understood the Secretary of State to say that automatically local authorities will examine all ratepayers in their area and decide whether they are to get a rebate under the Bill, and that ratepayers will not have to make application for it. I wonder how that is to be done. It will be a major administrative task. I do not see how it can be done within the cost of £1 million that is mentioned in the Bill. It is grossly unfair that local authorities should be expected to meet the administrative cost.
  The difficulty arises very largely because the balance as between one class of ratepayer and another has been disturbed. The Secretary of State comes to the Dispatch Box and blithely tells us that there has been a change in the relative gross annual values. The reason why the industrial ratepayers' gross annual value has gone down is that business is in such a parlous state. That is the state to which the Government have reduced industry in Scotland, and it is not able to pay the share of the rates that it used to pay.
  The Secretary of State should re-examine the timing of the Bill. It does not come into effect until two months after it has been enacted. He cannot produce a statutory instrument until the Act has been brought into force. That means that we shall not see an order—an affirmative order according to the Bill — until the middle of the summer recess. The House has never been known to sit beyond that glorious day, 12 August, and therefore it will be September or October before we return to this matter. We shall be at the end of the financial year before the right hon. Gentleman tells the local authorities what the rebates will be and before they are paid. That is nonsense.
  I reiterate what my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said. The Bill is supposed to deal with an abnormal situation and is to be passed at great speed. I therefore do not see why the Secretary of State should not bring the Bill into force at great speed.
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  If all the values had remained relative one to another, and if the proportion paid by industrial, commercial and domestic ratepayers had remained broadly in balance—I do not know how three different things can be balanced, but never mind—the rates paid by the different classes of ratepayer would have been much the same but for rate increases. I accept that.
  The problem is that we have all been aware for a long time that the rating system provides rough justice. It is not fair. The system has been generally palatable because it has meant that rates have not been increasing enormously. The problems of the rating system have been accentuated by two factors. The first is the greater demand on and greater responsibilities of local government. I reject the idea that local government has somehow decided to spend as much money as it can just because it wants to spend more money. That is not true. Local authorities spend more money because they have greater responsibilities to meet.
  The second reason why the problems have been compounded is the inexorable reduction of the central Government share of financial support.
  I hope that we shall have a general debate about the future of the rating system, long before the Government are ready to produce a Green Paper. Whatever the faults of the rating system—I accept that it has many, and I could speak for an hour on its different faults—the one advantage it has is that local authorities are reasonably certain about their income. With local income tax, sales tax or some other such system, a local authority will not know what its income will be. It needs some certainty, and a least the present rating system provides that.
  The certainty of income is diminished by the way in which the Secretary of State constantly revises his provision downwards. I saw the Secretary of State for Scotland on "Weekend World" a few weeks ago. It is not often that I pay compliments, but I am bound to say that he dealt with the difficult situation extremely well. He defended his case well. One of the most significant concessions that he made on that programme was that he accepted that there had to be an element of central Government support to provide for local authority services. At the heart of the argument about the rating system—-the provision for people and the amount of rates to be paid—is the size of that element. So long as central Government reduce their element of the provision, the more rates paid locally will have to increase. That is an obvious truism. That is the main reason why we have problems.
  There must be a great deal more planning and thought than has gone into the Bill. Local government is there to provide a service. I do not defend abuses in local government or those who spend money illegally. I do not concede the case made by the hon. Member for Renfrew, West and Inverclyde and all the other hon. Members who go on about "political purposes". The actions are legal, but even if I were to concede that they may be inadvisable, which I do not, the amount of money involved is a small proportion of the gross amount of money paid by local authorities. That is not the problem.
  The problem is that neither the Secretary of State nor any of his hon. Friends has ever said a decent word about local councils and the needs that they have to face. Instead of being constantly at loggerheads with local government, the Secretary of State should be in constant dialogue with it about providing for people's needs. The Government are

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  not interested in ratepayers. They are interested only in one class of ratepayer. They are not interested in the services that ratepayers expect to receive — decent housing, education and other local services. All that the Government wish to do is to whine about the rates, but the objective of local government is to provide the best services available for those in need. I commend local government for that.
  I wish that the Government would pay tribute to the many local councillors who give hours and hours of their unpaid time and in many cases sacrifice their careers merely to receive brickbats, and not commendations, from Conservative Members, who should be ashamed of their narrow-minded and bigoted attitude towards local government.
  8.46 pm
  Mr. Michael Forsyth: May I say to my right hon. Friend on behalf of 3,100 domestic ratepayers and 700 non-domestic ratepayers in my constituency who will benefit from the Bill, for this relief much thanks. Businesses in Callendar blazed the trail for an event which turned out to be happening in other parts of Scotland such as St. Andrews and elsewhere.
  We must be clear tonight about what the Bill is about and what it is trying to achieve. It is not about reducing the excessive rate burden that ratepayers have to face. It is about protecting those people who have found themselves with a completely unexpected and sudden increase in their rates bill which they cannot meet. There is a clear distinction there. There are many people with large and intolerable rates bills whose rateable values will not have increased more than threefold.
  Opposition Members have ritualistically asked about what will happen next year and whether my right hon. Friend the Chancellor of the Exchequer will be the bogy-man or whether my right hon. Friend the Secretary of State will be St. George, or perhaps St. Andrew, on his charger and win the extra £50 million. There is no reason why the scheme could not be continued next year and be funded from the overall rate support. I commend that to my right hon. Friend as a possible way of dealing with the problem.
  May I also thank my right hon. Friend for having acted against Stirling district council? He has required it to rebate 3p to the ratepayers in my constituency because of its outrageous proposal to keep council house rents well below the Scottish average and to ask ratepayers to foot the bill. It is a matter of deep regret to me that members of the Labour party—I assume that the people who nan Stirling district council and Opposition Members who seem to have found sympathy for the ratepayer are in the same party—propose, if I am to believe what I read in the Stirling Observer, to obtain counsel's opinion and go to the courts, no doubt at vast expense to the ratepayers, to try to stop that 3p rate being returned to the people in whom Opposition Members have shown such great interest.
  The other argument we have heard has been about the rate support grant and the fact that reductions in rate support grant are to blame for the problem. I hope that I shall be forgiven for being parochial and talking about my constituency, but the cuts in rate support grant in Stirling have occurred because of the financial irresponsibility of the district and regional councils. They have decided to spend vast sums. We have heard about trips to Spain but my lot seems to go on trips to eastern Europe. The Central
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  region has spent £10,000 on a brochure to tell everyone what a marvellous job it has been doing over the past 10 years. Stirling district council is spending £100,000 a year on a scheme which is called "Stirling Future World". It is a world that is very much in the future and far removed from the real world. The authority has given more than £250,000 to miners in the region and more than £150,000 to those in the district.
  Mr. Henderson: Fife has given £2 million.
  Mr. Forsyth: My hon. Friend the Member for Fife, North-East (Mr. Henderson) reminds me in an aside that Fife has given £2 million to the miners. The authorities have made these donations despite the fact that they are overspent on their budgets and incurring penalties and loss of grant that amount to 85 per cent. for Stirling district council and 75 per cent. for the regional council.
  There are those who argue that my right hon. Friend the Secretary of State for Scotland has been ungenerous. I remind them that he could have taken much more back in reduced rate support grant. He gave every local authority the opportunity to reduce its spending and thereby to get its full rate support grant entitlement. To be fair to the Central region, from being £3 million in excess of its budget it has managed to reduce that sum to about £900,000. Last year Stirling district council started off with £600,000 in the bank and at the end of the year was £600,000 in debt. Its rent subsidies and spending beyond its budget have led the council to seek a rate of 23p whereas it should be only 18·p, as Conservative Members have said. That rate could be set without cutting £10,000 a year on the women's committee and all the other items that are the symbols of the Left. The loss of rate support grant in my patch is due entirely to local government extravagance.
  The hon. Member for Glasgow, Garscadden (Mr. Dewar) tried to explain that he was against the consequences of revaluation. He told us that he considered revaluation a good idea at the time but added that there has been too much chopping and changing and that he now wants to be certain of the current position. I am sorry that the hon. Member for Dundee, East (Mr. Wilson) is not in his place. I enjoyed reading the report of his recent speech, in the course of which he argued that Scotland would be disadvantaged if revaluation did not take place. He cited England as an example, and said that Scotland prides itself on quinquennial revaluations.
  It is rather disingenuous always to seek to place on the front pages of newspapers examples of Scotland at a disadvantage when set against other parts of the United Kingdom and to fail to draw attention to examples of differences in Scottish law that do not suit popular opinion.
  I hope that my right hon. Friend will recognise the injustice of the position that we now face. In the past only a tiny minority have been able successfully to appeal against the rateable value of their property. Thousands appeal and only hundreds are successful. The successful appellants tend to be those who employ expensive professionals, who know all the tricks. If an ordinary man cannot pay his rates bill, he has only the prospect of embarking on a long and arduous appeals procedure and the incurring of professional fees without any guarantee of success at the end of the day. As my hon. Friend the Member for Renfrew, West and Inverclyde (Mrs. McCurley) said, he will have the prospect of never having

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  his neighbours speak to him again if his appeal is successful because the consequence of that will be an increase in their rates. The appeal process is a daunting task and is one upon which the majority are unwilling to embark, for understandable reasons.
  Assessors are answerable to no one and those of us who have been involved in correspondence with them recently have had that fact underlined effectively. The rental evidence on which they supposedly make their judgments is non-existent, thanks to the Rent Acts, which we hope the Government will find time to deal with during the next Session. It is too often said, for example, that Falkirk is a bad area and Killearn is a good one and consequently rateable values in Killearn were increased accordingly. Why is it that council houses in my constituency have incurred an average increase of 2·57 times whereas the average increase in the private sector is 2·75? I hope that the assessor is not using the rental evidence that is produced by the fact that council house rents are depressed as a result of subsidies that are paid, in effect, by ratepayers in the private sector because their properties' rateable values have been increased.
  How do we explain the extraordinary differences in rateable values throughout Scotland? A massive number of businesses and domestic ratepayers are benefiting in the Borders, for example, but other areas have benefited to a lesser extent. Are we to conclude that the assessor for the Borders made a terrible mistake last year or that the Borders region is booming and that there has been a sudden hike in rents? There is no evidence to support the second theory. Either the assessor got it very wrong this time or he got it very wrong last time. None of us can say what has happened because none of us can obtain the criteria on which the assessor acted in the first place.
  Injustice is done to those in my constituency who have seen the rateable value of their property increase by more than 2·4 times. I was canvassing in Stirling on Saturday and in doing so I was knocking on doors of newish houses. Many of these houses were about 10 years old. I found that they had rate bills of £800, £900 or £1,000. When I told colleagues who represent constituencies south of the border about this, they were stunned. They thought that I was quoting exceptional examples. Such rate bills are intolerable and we must not fool ourselves into thinking that because we are dealing with the problem facing those who have been exceptionally hard hit we are dealing with the basic problem.
  There are a number of specific issues within the compass of the Bill which worry me. These include the anomalies to which the hon. Member for Garscadden rightly drew our attention. I understand, for example, that if I erect a new sun lounge, conservatory or extension, it will be rated in the following financial year. If there are two houses that are identical in every respect, one of which has had its rateable value increased by three times and the other by three and a half times because of the sun lounge that was built in the previous year, the owner of the house with the sun lounge will qualify under the scheme and enjoy a 100 per cent. rebate whereas the owner of the other property will not. Such a result would be intolerable. I hope that provision will be made in the statutory instrument for real changes arising out of revaluation and that the measure will not restrict itself to additional building works, for example.
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  What is the position when there is a change of use, from industrial to commercial, for example, that involves the 40 per cent. derating? If a factory becomes a warehouse and the owner loses the benefit of 40 per cent. derating, will that be regarded as a rating increase of more than three times? Surely that would be wrong. Worse still, what about the new housing estate with identical houses, some of which have been occupied prior to 1 April, and where rateable values have increased following that occupation by more than a factor of three? People who buy the identical house after 1 April will not get the rebate received by the neighbour who moved in prior to the new rule coming into effect. What is worse, assuming the scheme continues, when the person who benefits sells the house, the house will continue to be eligible for subsidy. Therefore, two people in identical houses will pay different rates because of the scheme. I hope that provision will be made to deal with that anomaly.
  I am not a great champion of hunting, shooting and fishing, but I have those interests in my constituency. I understand that the present practice is for beats on rivers and shooting interests to be lumped in aggregate and rated as a whole. Can people who have found that the aggregate has increased by 2·9 times on six or seven stretches of a river say that on one stretch it increased five times and on another two times? What is the position of the assessor? Can those people ask for information on each individual beat, and would they qualify?
  It is unusual for me to speak in defence of local government, but if we have this scheme, is it fair to ask local government to bear the administration and manpower costs? We cannot continue to tell local government to cut its cloth yet give it extra duties without making resources available. It is also unfair to the ratepayers who will not qualify for support because at the end of the day they will have to meet the bill for paying the extra allowance to more lucky neighbours and fellow citizens.
  I ask the next question in the expectation of receiving an answer to it on Wednesday. Will my hon. Friend tell me what the effect has been of the Valuation (Deductions from the Gross Annual Value) (Scotland) Order 1984? I understand from the regional assessor that it has altered the tables so that the difference between the gross annual value and the net value has been reduced because the allowance for maintenance on higher rated property was reduced and the allowance for maintenance on lower rated properties increased. I am told that the net effect — I would be grateful for my hon. Friend's guidance on this—is that in villages in my constituency, such as Killearn, the effective amount knocked off the rates, in crude terms the rateable value, was reduced, which adds about £75 a year to their rates bill. Could we re-examine those tables, and offer some help?
  My final point relates to the scheme. It is complicated, although I accept that it is as simple as is possible. It is vital that it is well publicised and that people understand what their rights are and what the effects of revaluation have been. My hon. Friend should counter some of the propaganda that has been funded at ratepayers' expense —the misleading attempt to blame overexpenditure and extravagance on revaluation — by setting the facts straight and explaining how the scheme will help ordinary domestic ratepayers. Far be it from me to incite my hon. Friend to indulge in political propaganda at taxpayers' expense. The Civil Service, unlike local government, has such high standards of professionalism that it would not

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  allow him to get away with it, if he were so inclined, which I am sure he is not. Has my hon. Friend thought of delivering through every letterbox a leaflet explaining the scheme and its background? That would help those of us who seek to do that through correspondence.
  The rating system has always been unjust, and the burden has now become intolerable. I have people who are now putting their houses on the market because they cannot pay their rates bill. We must regard the Bill as a palliative, and proceed urgently to get rid of the domestic rating system altogether and to tackle the problems facing commercial ratepayers. If we do that, we shall receive the widespread support of Scottish people, whether their local authority bills are higher or lower than at present. There is widespread recognition that the present system is unjust. In bringing the scheme into being, I hope that my hon. Friend will try to minimise the injustices and anomalies that we face.
  9.4 pm
  Mr. David Lambie: Unlike the hon. Member for Stirling (Mr. Forsyth), I am here to speak not on behalf of my constituents who this year are facing massive rates increases and who will not benefit one iota from the Bill, but on behalf of the small number of my constituents who will benefit, and for them I am grateful to the Government.
  This is the Government's second attempt this year to deal with the effects of revaluation. Had they taken my advice at the end of last year and halted the 1985 revaluation before it was announced, we would not be wasting the time of the House dealing with the £38·5 million given to domestic ratepayers or the £50 million that will be given through the Rating (Revaluation Rebates) (Scotland) Bill.
  It was all very well for the Secretary of State for Scotland to ask the Labour Front Bench their opinion on revaluation. He should be fair and recognise that over a period of years voices have been raised in all parts of the House against this revaluation and the one in 1978. Those voices said that Scottish revaluation must be stopped so long as similar revaluations did not take place in England and Wales. The right hon. Gentleman has never listened to those voices. He has always gone ahead on advice from his civil servants — the same civil servants who gave similar advice to the previous Labour Administration and Labour Secretary of State for Scotland.
  Given the uproar in Scotland over the effects of the 1985 revaluation, I hope that the political parties in Scotland will look realistically at the whole rating system and try to introduce a system that is fairer to everyone, be they domestic, commercial or industrial ratepayers.
  The Bill will give £50 million—although earlier we were told it might be £30 million—to certain categories of domestic and commercial ratepayer. In areas such as mine large industrial complexes will experience great difficulty because of the increases they face in their rates bills, yet they will get no help from the Bill. We should not fall over backwards to congratulate the Government on the small amount of help that they have been forced to give because of opposition from Members of Parliament representing all areas of Scotland. The Government have been forced to do so because they were stupid in continuing with the 1985 revaluation.
  One may sometimes think that one is a voice in the wilderness, and if one continues to shout about something
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  like this, people often say, "He is speaking on his own behalf. He does not have the support of his party. He is a wee bit eccentric. If the Labout party says something, he might well say the opposite." However, the political eccentrics are sometimes correct. Tonight the Government have been forced to act because of pressure over the last five and a half years from people such as myself.
  Mr. McQuarrie: The hon. Gentleman had made great play about the Government's decision on this revaluation. However, he must accept that during a previous debate on rating and valuation in Scotland the hon. Member for Glasgow. Garscadden (Mr. Dewar) said:
  "To push the revaluation back by two years will considerably disadvantage the ordinary ratepayer."
  He went on to say:
  "I hope that the Minister will tell us what will happen in 1985-86. Will he guarantee a full revaluation then?" — [Official Report, 28 July 1982; Vol. 28, c. 1194–95.]
  Therefore, the Labour party wanted to ensure that there was a full revaluation in 1985-86. If the hon. Gentleman feels that it was only on the Conservative Benches that there was a desire for revaluation, he should remember the facts stated by the hon. Member for Garscadden.
  Mr. Lambie: The hon. Gentleman cannot have been listening to what I said, because I made that point. The hon. Gentleman has been trying to make that intervention since half past five, but no other hon. Member would let him in. I have given him the chance because, like me, he is an eccentric and he does not bow down whenever the whip is cracked.
  The right hon. Member for Western Isles (Mr. Stewart), who unfortunately is not present, spoke about an article in a recent edition of the Glasgow Evening Times by Desmond White, the chairman of the Celtic football club. He outlined the serious problems facing the ratepayers of Scotland. He drew attention to the anomaly in the rating of football grounds in England and Scotland. The present rateable value of Ibrox park, the home of Glasgow Rangers, is £176,2:50, and Celtic park has a valuation of £120,750. However, the Manchester United ground, which includes a substantial restaurant, has a rateable value of only £37,000, and Arsenal has one of £30,500. I might be accused of distorting the picture by quoting only valuations, and it could be said that I should be quoting the amount of money that the clubs actually pay, but Mr. Desmond White points out that the Glasgow club paid almost £50,000 more in rates in 1984–85 than Manchester United, a club with approximately two and a half times Celtic's income.
  Mr. Dewar: My hon. Friend will remember that when we debated the Rating and Valuation (Amendment) (Scotland) Act, we received an assurance from the Minister that, by virtually abolishing the contractor's principle and allowing comparability with England when there was not sufficient local comparable property, the problem could be cured. Unless the Minister fails to live up to his advertisement, there is now no differential between English and Scottish grounds under the new valuation law.
  Mr. Lambie: I am glad that my hon. Friend has made that point.
  Desmond White wrote a similar article in a Scottish newspaper at about the time we debated the Rating and Valuation (Amendment) (Scotland) Act. He again wrote

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  to Scottish Members of Parliament on this subject. I replied that I thought that he and all the other football clubs in Scotland were being conned into accepting the assurance given by the Secretary of State for Scotland that the Act would deal with these anomalies. That Act has not dealt with the anomalies, and from the figures that I am quoting it is clear that the anomalies are greater than they have ever been because of the effects of the 1985 revaluation.
  Mr. Ancram: I am sure that the hon. Gentleman wants to be accurate in what he says. He will be aware that, as a result of revaluation, a number of Scottish football grounds, including Parkhead and Hampden, will pay less in rates this year than they did in 1984ߝ85. As for comparability, he will also be aware that the legislation provided that it could be done during the course of an appeal.
  Mr. Lambie: We are discussing the anomalies in valuations which have always existed between properties in Scotland and similar properties in England and Wales. We are not discussing whether they paid more last year or are paying more this year. Glasgow Celtic is paying £50,000 more this year than Manchester United is paying for much better facilities and on the basis of a greater income.
  Desmond White makes the valid point that he is concerned not just about the anomalies between similar places in Scotland and in England; he is also dealing with what he considers to be the special case of Scotland. He says:
  "If the Government wished an immediate partial solution it could very well drop the requirement that the Scottish local authorities require to pay 44 per cent. of their total expenditure to a figure of 40 per cent. This would have the immediate effect of reducing the rate burden of everyone north of the border by approximately 10 per cent."
  If the Government had tabled an order to increase the rate support grant in Scotland by 4 per cent., every ratepayer—not only those whom the hon. Member for Stirling was discussing earlier but thousands of my constituents who are ratepayers—would benefit to the tune of 10 per cent. I put it to the Government and their supporters that the problem has been accentuated by the 1985 revaluation. The real problem is the continuing reduction in the rate support grant to Scottish local authorities.
  Between 1977 and 1981—the period of the last Labour Government running into the first two years of the present Conservative Administration — the amount of local government expenditure paid by the Government was 68·5 per cent. In the orders that we have debated—and, unfortunately, passed by a majority — this year the amount paid by the Government to Scottish local authorities has been reduced to 56·6 per cent. of relevant expenditure. That is where the real problem arises. Unless the Government increase the rate support grant to local authorities, we shall never deal fairly with Scotland's ratepayers.
  I am disturbed that we are spending the time of the House, as we have on similar orders in the past, discussing this problem when the people whom I represent were telling me last weekend that we should be discussing unemployment in Scotland. The latest unemployment figures were published at the end of last week. In my
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  constituency, every third man is now unemployed, and, of those who are unemployed, every second one has now been unemployed for more than a year and in many cases for more than two years. That is the problem that the House should be discussing, and it is the problem that my constituents would like the House, Scottish Members especially, to discuss instead of wasting our time tinkering with the effects of a system which should have been altered years ago.
  All those hon. Members who have spoken so far have concluded their comments by saying what they thought was the real solution to the reform of the rating system. The only way in which to solve the problem of the rating system in Scotland quickly and fairly is to introduce a 100 per cent. Government grant. The days of the traditional idea of local democracy have gone. Local people can no longer pursue policies opposed to those of the Government. That is true to some extent even of Labour Governments. We cannot go back to the good old days before local government reorganisation. If we were to introduce a 100 per cent. Government grant for relevant local authority expenditure, we should have no more debates on the rating system in Scotland. Moreover, the people of Scotland would not have to face rates increases and we would be able to deal with the immediate problem of mass unemployment.
  9.20 pm
  Mr. Barry Henderson: We all know that the hon. Member for Cunninghame, South (Mr. Lambie) has consistently opposed anything to do with the rating system. He is one of the few hon. Members— perhaps the only one—who did not think that we should go through with the 1985 revaluation. These matters are of considerable importance to unemployment. High rates hurt unemployment. That fact should never be lost sight of, and I hope that the hon. Gentleman will encourage his friends in local government to keep it in mind.
  I welcome the Bill because it gives direct help to ratepayers who are most severely affected by the revaluation. It gives a full rebate to those whose valuation has been increased three times. That, combined with previous measures to give an eightfold increase in domestic rate relief, has gone a long way to reduce the effects of revaluation on ratepayers. The problem is that there are wide variations, even within districts, and to talk about averages is dangerous. However, as revaluation would affect domestic ratepayers more severely this year, the increase in relief has been of great help.
  I am glad that my right hon. Friend has introduced a Bill to deal with wildly increased valuations, but many ratepayers — possibly most — will face substantially increased rates bills. The best thing about the Bill is that it highlights the fact that it is not revaluation but the spending policies of local authorities that determines the size of most ratepayers' bills. Rate increases in my constituency could have been within the rate of inflation if it had not been for the spending policies of local authorities, especially Fife regional council. The product of 10 years of Labour effort in Fife regional council is that the area has gone from being one of the lowest rated in Scotland to one of the highest.
  What have the Liberals done to help to produce that result? They have not even voted for the last four budgets of Fife regional council. They were content literally to sit on their hands when these crucial votes were taken. The

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  Liberals were prepared to allow a 20 per cent. rates increase to be imposed on Fife ratepayers, when on average the increase could have been only 2 per cent. if they had voted at the right time. The cost of spending beyond guidelines by Fife regional council is hitting our ratepayers to the tune of 8p in the pound—interestingly enough, exactly the same amount in the pound that was provided by my right hon. Friend to help domestic ratepayers who were affected by the results of revaluation.
  Although the Liberals are far from perfect, I must congratulate north-east Fife district council, under its Liberal administration, on keeping its expenditure within guidelines. However, if one removes the effect of the rate support grant distribution formula, about which I should have had a few things to say to my hon. Friend the Under-secretary of State for Scotland if I had had more time, one sees that in one year the Liberal council in north-east Fife has increased the rates by twice as much as the Conservative council increased them in the previous four years. It does not, therefore, have a perfect record, either.
  The Labour party has tried to suggest that it is the Government's policies which have caused the substantial rates increases. Local authority expenditure is still higher than it was in 1978–79. The measures taken by my right hon. Friend represent a tiny reduction in rate support grant distribution, but a substantial increase in the direct help that is given to ratepayers. This means that total central taxpayer support for local government is no less than it was last year. Most of it has gone towards providing direct help for hard-pressed ratepayers. Therefore, I warmly welcome the Bill. I very much look forward to the proposals for fundamental reform which we are told can be expected at the end of the year.
  9.27 pm
  Mr. Jim Craigen: I have no doubt that the speech of the hon. Member for Fife, North-East (Mr. Henderson) will go down well in the East Fife Mail. However, the Bill has to be viewed in the context of the announcement by the Secretary of State for Social Services this afternoon: that many more Scottish people will have to pay rates because of the changes that are to be made in the housing benefits system.
  When he introduced the Bill, the Secretary of State for Scotland outlined some of the problems which followed the 1985 revaluation because of the shifting of the rates burden among the various sectors. My hon. Friend the Member for Cunninghame, South (Mr. Lambie) is not so eccentric as he makes out. It was the first time that I have heard him admit that he might be eccentric. I knew that to be the case with the hon. Member for Banff and Buchan (Mr. McQuarrie), but my hon. Friend the Member for Cunninghame, South has his head screwed on the right way. He knows that because the Secretary of State for Scotland cut back on rate support grant during the last five or six years, many revaluation difficulties have been created with which the right hon. Gentleman is now faced. The right hon. Gentleman went too far over the last cut-back in rate support grant. That is why the revaluation exercise upon which he embarked has come back to him with a vengeance.
  My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said that about £1 billion had been taken by central Government during the last five years from local authority services. There was a clear problem of hardship for many small businesses. We should remember the
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  different categories in the commercial sector. We heard earlier about the tourist industry and the importance of hotels, and we have discussed the problems of shops, although less reference was made to offices. Many small businesses face real hardship as a result of the sudden upsurge in their fixed costs arising from the revaluation exercise, compounded by the reduction in rate support grant. Those problems were especially acute in the Borders and in Dumfries and Galloway, and many problems emerged in Central region, Strathclyde and Lothian.
  Last month, I wrote to the Secretary of State asking for clarification about the amount of take-up under the scheme, because the evidence suggested that it would be nothing like the £50 million that has been allocated. The National Federation of the Self-Employed and Small Businesses, after conducting a survey of its members, reckoned that, of the £40 million for the commercial sector, the take-up might be about £22 million.
  The self-employed, who represent about one tenth of the work force, have become a significant sector of the economy. The Secretary of State was right to recognise the special hardships that would be caused to many of the self-employed. It was in the context of those figures that my hon. Friend the Member for Garscadden assured the Under-Secretary of State for Scotland last month that there was no statutory machinery whereby the Government could assist people in this predicament. My hon. Friend had every right to expect that the Scottish Office would do its homework and get the figures right. I wonder whether the Secretary of State would have got such ecstatic applause at the Tory party conference in Perth—
  Mr. Dewar: He did not. It was loyal applause.
  Mr. Craigen: My hon. friend points out that it was loyal applause. Indeed, my hon. Friend got the ecstatic applause on at least two occasions, when the Secretary of State said that the Opposition would help the Government with the passage of the legislation. I was about to suggest that the Secretary of State would have got a slow handclap if the delegates at Perth had known what we now know about the way in which it appears the scheme will operate.
  Scotland has been allocated £50 million, and we wish to ensure that we get that £50 million for the benefit of Scottish ratepayers. I know that in Committee we shall have the support of the hon. Members for Banff and Buchan and for Strathkelvin and Bearsden (Mr. Hirst) and the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) in making a useful amendment by varying the threshold so that the whole £50 million is taken up.
  Preliminary work in Dumfries and Galloway suggests that a change in material circumstances could be a factor in some properties going over the 300 per cent. threshold. This is where the appeals machinery comes in. Will there be a shortfall as a result of successful appeals? We shall have two problems of take-up. One will be caused by the 300 per cent. threshold and the other will be caused by the unquantifiable number of appeals.
  The hon. Member for Stirling (Mr. Forsyth) must have held a constituency surgery on Friday, because he spelt out a number of anomalies in the new scheme. I can imagine a Maryhill ratepayer asking me, "How is it that the man next door will get relief because his valuation has gone up 320 per cent. and he had central heating put in last year,

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  but my valuation has gone up 299 per cent. and I am getting nothing?" My answer will be, "Speak to the Secretary of State for Scotland."
  The Secretary of State mentioned the cash flows of local authorities. I met representatives of COSLA recently and they were apprehensive about the delays that may result from people holding back until they see how the scheme works. Cash flow problems will inevitably lead to higher interest charges for local authorities. I am glad that the Secretary of State seems to be coming round to the idea that it would be administratively more convenient if, instead of shoals of letters being sent to rating authorities, those authorities identified the people who should qualify under the scheme. The Secretary of State expressed caution about a letter-writing campaign, but can he tell us how soon people will know when the scheme will come into operation? The scheme will depend on the statutory instrument that is to follow the primary legislation. Therefore, there will be a period of considerable uncertainty while people are expecting a benefit.
  New St. Andrew's house will be relieved of the responsibility, but I suspect that the computers of quite a few rating authorities will get overheated while trying to identify who will benefit from the new system. I suspect that many people will be disappointed when they find out how much they are to get from the new system. We are talking only about the margin over 300 per cent., and some figures that I have seen suggest that there may be some relatively small rebates, particularly for domestic ratepayers.
  I have a continuing curiosity as to which chairman of a Conservative party constituency organisation will benefit most from the scheme. After all, it is open-ended. We know that it is not Fordell castle. However, it will be interesting to see who benefits most from the scheme, on the domestic side.
  I should like the Minister to clarify a point that the Secretary of State made about the guidelines. Am I right in thinking that the administrative costs of the scheme, as presently intended, will not affect local authority guidelines? It would be ironic if the Scottish Office, which has so bungled this £50 million relief scheme, yet is in charge of a £3·4 billion local authority budget in Scotland as a whole and exercises rate-capping powers over the 65 local authorities, created a situation which meant that some of them got into trouble in the operation of the small scheme and the administrative charges that are to be imposed on the local authorities.
  The Opposition hope that the Government will come round to the idea of accepting the administrative costs for the scheme—in other words, reimbursing the rating authorities for the costs and the payments that will be made under the scheme. Moreover, I wonder whether we shall get a value-for-money scheme. It will be quite a costly exercise. Clearly, the less that is spent on its administration, the more that will be available to benefit ratepayers.
  I notice from recent parliamentary answers that the Minister has given to me that the cost of rates collection in Scotland as a whole is only 1 per cent. of the total amount collected, which next year is estimated to be £1·6 billion. I wonder whether this scheme will cost just 1 per cent. of the £50 million. I suspect that it will be fairly costly. When does the Minister expect the regulations to
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  be introduced under the scheme? Although we shall touch on these matters on Report on Wednesday, it is essential that we get some idea of when the regulations will come into force.
  The Opposition wish to give the Bill a proper launch. We were a bit apprehensive over the past few weeks at some of the uncertain noises emerging from the Scottish Office about whether the scheme would capsize before it was properly afloat. On Wednesday, our aim will be to make it an improved measure. As my hon. Friend the Member for Garscadden has said, it is a rough justice scheme. It will generate a postbag full of anomalies and complaints. I hope that they will find their way to the Secretary of State.
  I cannot but conclude that more Scottish ratepayers will be disappointed by the scheme and at their exclusion from it than will benefit from its introduction. The Secretary of State probably knows this, but he may expect little thanks from those who will be assisted, because the relief that they obtain under the scheme will probably be less then they bargained for much less than they were led to expect.
  I hope that the Under-Secretary of State will spend a little time explaining the intricacies of the scheme in relation to commercial ratepayers. They rightly feel considerable consternation about how the scheme will operate. They would like to know why the threshold cannot be brought down below the 300 per cent. mark.
  9.45 pm
  The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): On 17 April this year during Question Time the hon. Member for Glasgow, Garscadden (Mr. Dewar) said:
  "In respect of the commercial ratepayer, the Minister"—
  I believe that he was referring to me—
  "has managed to give the impression that the only factor stopping help for at least those hardest hit is the lack of any statutory machinery' for doing so." — [Official Report, 17 April 1985; Vol. 77, c. 255.]
  I assure the hon. Gentleman that if he wishes to create that statutory machinery the Government will give that measure every facility and speed it through the House. The Bill provides that machinery and fulfils the commitment made by my right hon. Friend the Secretary of State to provide a mechanism to bring exceptional relief to commercial and domestic ratepayers, who, as my hon. Friend the Member for Fife, North-East (Mr. Henderson) rightly said, have been hardest hit by the effect of revaluation. The hon. Member for Glasgow, Maryhill (Mr. Craigen) says that those who have not been helped by it will be disappointed. I am sure that when the hon. Member for Garscadden was offering help to the hardest hit he appreciated that those people would be at the top of the scale.
  My right hon. Friend the Secretary of State has outlined how the scheme will work. In a sense, the Bill gives us the power to grant relief to domestic and commercial ratepayers in the circumstances outlined. It defines the class of ratepayer who will be eligible for such relief and the trigger of that eligibility. To that extent it fulfils the wish of the hon. Member for Garscadden, and I look forward to his co-operation during the remaining stages of the legislation. The speeches of the hon. Members for Garscadden and Maryhill tended to give a slightly new meaning to the word "co-operation".
  Mr. Dewar: The hon. Gentleman is being a little less than gracious. If he wished a withdrawal of co-operation, we could happily have promised him several months of consideration in Committee. We have not done that.
  Mr. Ancram: I think that the hon. Gentleman is aware of what I mean. In terms of welcoming this machinery, some of the points that he raised were not as gracious as he might have liked them to be.
  During the past few weeks the Opposition parties have been delighted to take advantage of what they have seen as a politically disruptive situation in Scotland. In political terms, I find it hard to criticise them for that. It is interesting to look at their record. I was interested to see tonight that the Liberals had decided to send forward not the hon. Member for Gordon (Mr. Bruce), who believes that any help to ratepayers is a warped priority, but an hon. Member who believes that helping ratepayers is a priority — the hon. Member for Orkney and Shetland (Mr. Wallace). It never ceases to amaze me how the Liberal party, with its small numbers, always seems to have a man for all seasons.
  I believe that we were all delighted to hear the right hon. Member for Western Isles (Mr. Stewart) tell us that, as a Scottish nationalist, he wished the position in England to be identical to that in Scotland. We welcome his conversion to unionism, which we have long been pressing on him.
  Mr. Donald Stewart: I merely expressed the view that I did not want to see that. I spoke about the appalling anomalies between the assessments in the two areas.
  Mr. Ancram: If the right hon. Gentleman reads the Official Report tomorrow, he will find that he called on the Government to ensure that the positions were similar. He neatly avoided the fact that, on 28 July 1982, the hon. Member for Dundee, East (Mr. Wilson) pronounced these exciting words:
  "There is nothing wrong with revaluation. In fact, there is much to be gained from it."
  I have listened with interest to some of the criticisms that his party has made since then about revaluation. — [Interruption.] The hon. Member for Glasgow, Cathcart (Mr. Maxton) points out that the SDP is not represented tonight. I did not mention that because it happens with such regularity that it is not worth commenting upon.
  I listened carefully to what the hon. Member for Garscadden said. He rightly pointed out that during the debate on 28 July 1982 he called for a full revaluation this year. He said:
  "The Minister should make it clear now that there will be no more flirting with this halfway house"—
  that is, partial revaluation—
  "and parboiled non-solution. He should tell us that there will be a proper revaluation in 1985-86."—[Official Report, 28 July 1982; Vol. 28, c. 1195-97.]
  The hon. Gentleman placed no qualification on that. He did not say that we had to provide mechanisms to bring relief to those who might be hardest hit by revaluation.
  The hon. Gentleman may say that he did not expect the sort of multipliers that have occurred during revaluation. If that was the reason why he was so keen to have a full revaluation without any qualifications, I must tell him that that does not hold water. When his party was in government, it experienced revaluation in 1978–79. He may remember the multipliers on that occasion — the domestic multiplier was 2·8, the industrial multiplier was
  110
  4·2, the commercial multiplier 4·1, and the category described as others 4·9. Therefore, the overall revaluation average multiplier was 3·6.
  What happened under the Labour Government to relieve the ratepayers' suffering because of the multipliers? Precisely nothing, other than that the domestic relief element of the rate support grant was reduced by 75 per cent. It is interesting to note the Labour party's new-found support for the ratepayers whom it was not prepared to help when it was in charge of revaluation in 1978.
  The hon. Member for Garscadden will never concede that any of the rating effects this year have been due to overspending by councils. I wish to put a serious question to him. He spoke earlier about the effects of RSG reductions. He knows that both I and my right hon. Friend have spoken about the effect on rates of overspending throughout Scotland. There is one example that he cannot ignore, and that is the one mentioned by my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) about Edinburgh district council, which, by its own hand and by its spending decisions, has increased its rate poundage by almost 80 per cent. He knows full well the direct effect that that will have on ratepayers in Edinburgh, both domestic and commercial.
  I hope that the hon. Gentleman will take this opportunity to tell the House whether he supports that council's spending decision, and whether the report in today's Glasgow Herald that the executive council of the Scottish Labour party has sent messages of support to the council is correct.
  Mr. Fairbairn: I can give my hon. Friend one good example of Edinburgh's rating policy. Jenners has a turnover which is 500 times less than that of Harrods, but has to pay to Edinburgh district council twice the rates,
  Mr. Ancram: I am grateful to my hon. and learned Friend. I am disappointed chat, once again, the hon. Member for Garscadden has failed to answer my question about rating reform.
  A number of specific questions were asked by hon. Members, and I shall do my best to answer them.
  My hon. Friend the Member for Fife, North-East, in an intervention during my right hon. Friend's speech, asked whether clause 2(2) could be used selectively in terms of the authorities to whom the rebate is paid on a future occasion. My answer is no. The subsection is drafted so that that cannot happen.
  The hon. Member for Garscadden asked whether we would consider paying the rating authorities some of their reimbursement "up front", as I think he put it. The Bill provides for flexibility in our repayment, and I should like to consider what evidence would be acceptable for making some early payment to the rating authorities before an audited certified claim can be prepared.
  The hon. Member asked about disabled persons' relief, and I think he appreciated that I was not altogether clear about it. I am still puzzled as to how it can arise. If the hon. Gentleman will write to me about it, I shall look into the matter.
  My hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst) asked about mines and quarries. [Interruption.] I shall deal later with what hon. Members call shortfall. Quarries are formula-valued and will not qualify for relief under the measure.

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  The hon. Member for Orkney and Shetland asked about the whisky industry. As he knows, whisky distilling is manufacturing and benefits from industrial derating. Thus again, under the Bill as drafted, the industry will not qualify for relief.
  My hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn), together with my hon. Friends the Members for Renfrew, West and Inverclyde (Mrs. McCurley) and Stirling (Mr. Forsyth), rightly pointed out that the lesson of the revaluation has been in underlining the anomalies and iniquities in the present system. Those have been highlighted by the revaluation, and that is precisely why the Government have been looking, for some years now, for a better way of financing local government.
  I must say to the right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie) that the suggestion that we are being panicked into a solution or are rushing to find one has to be judged against the vast amount of work that has been done in this regard in the last Parliament and since November last year. It remains our intention to produce in the near future proposals which we believe will be acceptable as a better and fairer system of financing local government.
  My hon. Friend the Member for Renfrew, West and Inverclyde asked about the problems of market gardening. Market gardens other than the house are generally treated as agricultural subjects and therefore do not appear in the valuation roll. Obviously I cannot comment on a particular case, but if there is any doubt obviously the occupant should appeal in circumstances such as those mentioned.
  The hon. Member for Aberdeen, North (Mr. Hughes) asked why there was to be a delay of two months before the measure was brought into force. The answer is that it is not needed before that. The order can be laid and debated immediately. If Royal Assent is given in June, we would have that order by the summer recess. That would be in plenty of time for the authorities to make payments of the rebate before the due time when the rate bills have to be paid.
  My hon. Friend the Member for Stirling asked several questions, and I may have to write to him on some of them. With regard to fishing, if there is a separate entry in the new roll for a fishing beat which can be matched against a similar entry in the old roll, the property can possibly
  112
  qualify, but if the beats have been amalgamated or divided between the two rolls there can be no comparison and thus no rebate.
  With regard to change of use from industrial to commercial purposes, there has to be a comparison between lands and heritage before and after revaluation. If there is a difference of a kind to which my hon. Friend points, there will not be matching entries in the old and new rolls, and therefore there will be no rebate.
  Several hon. Members asked about the amounts of money involved. The scheme was devised by looking for a multiplier which we believed would deal with the harshest cases arising from revaluation and the effects on rate bills. The figure that we chose, which is very much in line with the figures for domestic relief which I quoted for 1978–79, was a multiplier of three. It is not easy to calculate how much that will cost, as hon. Members have realised. I believe that we shall not know the full answer to that question until all those who are eligible have been paid.
  The Bill fulfils the commitment that my right hon. Friend made to the House in his recent statement. It is good for Scottish ratepayers, and I call on the House to support it.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.
  —[Mr. Peter Lloyd.]
  Committee tomorrow.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Family Law (Scotland) Bill [Lords] may be proceeded with, though opposed, until any hour. —[Mr. Peter Lloyd.]

  RATING (REVALUATION REBATES) (SCOTLAND) BILL [MONEY]
  Queen's Recommendation having been signified— Resolved,
  That, for the purposes of any Act resulting from the Rating (Revaluation Rebates) (Scotland) Bill, it is expedient to authorise the payment out of money provided by Parliament of the expenses of the Secretary of State in paying rating authorities amounts equal to the total amounts of rebates granted by them under the Act.—[Mr. Peter Lloyd.]

  Family Law (Scotland) Bill [Lords]
  As amended (in the Standing Committee), considered.
  Family Law (Scotland) Bill [Lords]

    Clause 8
    ORDERS FOR FINANCIAL PROVISION
    10.1 pm
    Mr. Donald Dewar: I beg to move amendment No. 1, in page 6, line 20, at end insert—
    (2A) An order under subsection (1)(a) for the transfer of heritable property from one spouse to the other which is made by the court shall have no effect in relation to third parties transacting with the spouse against whom the order has been made unless it is registered in the Register of Inhibitions and Adjudications within fourteen days from the date on which it is made.'•
    Mr. Speaker: With this it will be convenient to take amendment No. 6, in clause 14, page 12, line 41, at end insert—
    (4A) An order under subsection (2)(d) which is made by the court shall not affect dealings relating to the former matrimonial home by the non-applicant spouse with third parties acting in good faith unless such order is registered in the Register of Inhibitions and Adjudications within fourteen days from the date on which it is made.'•
    Mr. Dewar: We come to what is on the face of it a fairly dry piece of law reform. I am not sure that I shall do anything to dispel that impression in the next 10 minutes or so. I am equally confident that the Solicitor-General will rise to a similar high standard when it is his turn to speak. This is a matter of some importance. I approach it with a good deal of caution because, although I am occasionally given to flamboyant claims of my expertise and virtue, I have never prided myself upon my knowledge of conveyancing law. A few obscure fragments are lodged in my memory. They have something to do with a mysterious Act which reached the statute book in—
    Mr. Nicholas Fairbairn: 1924.
    Mr. Dewar: Yes. The sight of the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) and I discussing conveyancing must be quaint and strange.
    These two amendments to comparatively simple matters in terms of principle, although the complexities would puzzle someone with a great deal more expertise than myself. We are considering clause 8. Most hon. Members will be aware that clause 8(1)(a) deals with the transfer of property between spouses. That is when, in an action for divorce, there is an application to the court for an order to transfer property.
    Clause 8(1)(c) relates to an incidental order. It is defined, as hon. Members will be aware, in clause 14. Clause 14(2)(d) and (e) refer to incidental orders which, among other things, may regulate occupancy rights or outgoings of the former matrimonial home. This is an unashamedly difficult subject for me and somewhat confused.
    The first problem is that there has been some sort of clash or competition between an incidental order under clause 14 and occupancy rights which are awarded under section 3 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981. That will to some extent be clarified by Government amendment No. 5. I had tabled amendments to the same end, but I shall give way to the Government's formulation. I am grateful to the Solicitor-General for having listened to the arguments that came
    114
    largely from the Law Society of Scotland and the professions and which were reflected by my hon. Friend the Member for Falkirk, East (Mr. Ewing), who raised the matter in Committee.
    I understand that once the Government amendment has been incorporated there will be a fairly neat demarcation, and occupancy rights under the 1981 Act will run to the point of divorce and will then, to use the fashionable terra, fly off. If there is any need for the enforcement of occupancy rights thereafter, it will have to be pursued through an incidental order under clause 14. That will arise only at or after the point of divorce. I hope that that is clear to those who are following the debate.
    Mr. George Foulkes: No.
    Mr. Dewar: I know that my hon. Friend is an honest trier and is not usually terribly discouraged by failing to understand what is happening. I look forward to one or more of his rumbustious speeches during the course of our exchanges.
    I turn now to the real issue behind the amendment, which is directed to how the new provisions will work. I am not clear about the way in which they will operate and their operation has not been explained to me by any of those learned in the law whom I have consulted. It is as plain as the nose on my face—it could not be much plainer than that—that the courts can make an order enforcing a transfer between the spouses. The timing is referred to in clause 12. The court can order that the transfer takes place on the granting of a decree of divorce or
    "within such period as the court on granting decree of divorce may specify."
    Even taking into account the provisions in clause 12, I presume that there will have to be a disposition. I presume that a formal document will be signed by the spouses transferring the property, which ultimately will give a good title that will be recorded in the register of sasines. I do not know how long it takes these days successfully to record a deed in the register, but I am told that it takes many months. I have been told that there can be a time lag of as long as nine months. I was rather surprised when I was told—this shows how much I am out of touch—— that the delay when land registration is involved can be as long as 18 months. That period can elapse before the new title is properly registered and, therefore, available for public inspection, or at least to the eye of a searcher who may be carrying out an examination on behalf of a prospective purchaser.
    If there is such a substantial gap between application and registration it has been suggested to me that a dishonest spouse may try to defeat the transfer by selling to a third party. How can the third party be expected to be aware of the fact that there is an order under clause 8(1)(a) in existence, which will presumably prevent the third party from getting a good title?
    The amendment suggests that when an order is made by the court under clause 8(1)(a) there should be a duty upon the parties — presumably upon the grantee, the person who will receive the property—within 14 days to register the order in the register of inhibitions and adjudications. If the grantee fails to do so, the theory is —I hope that it holds good in practice—that the third party sale would go ahead and would not be affected adversely by the existence of a section 8(1)(a) order.

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    I hope that this issue has been explained reasonably clearly. I an sure that the Solicitor-General for Scotland follows it. Indeed, there has been some correspondence between us on these issues prior to the debate.
    Obviously, the Bill complicates conveyancing, but complication will undoubtedly abound in this matter. That is the fault of the House. For sufficiently good reasons we try to get more sensible property laws on the break-up of a marriage, and in so doing we complicate the life of a conveyancer in Scottish legal practice. if, for example, a wife were to get the transfer of the house, her legal adviser failed to register the order in the register of inhibitions and adjudications, alienation took place and a third party bought in good faith because there had been no registration in the register of inhibitions and adjudications, the third party sale could not be overturned, and presumably there would be a nice action for professional negligence against the solicitor. Perhaps I should not be laying up such a store of trouble for my colleagues, and who knows what the future holds for me?
    There is common sense in the proposal, and great danger in leaving the position in the somewhat unsatisfactory state in which a clause 8(1)(a) order may be made, the complicated and laborious conveyancing process may be in hand, and there is an apparent transaction with a third party, such as I have described. That is the simple part of the story.
    Amendment No. 6 deals with the same sort of point in connection with incidental orders, to which I referred earlier. They are the orders made under clause 8(l)(c) and further defined in clause 14. Clause 15(3) states:
    "Neither an incidental order, nor any rights conferred by such an order, shall prejudice any rights of any third party insofar as those rights existed immediately before the making of the order."
    That seems to be conclusive, but I am not entirely sure that it is. I hope that the Minister can help me on that.
    If an incidental order confers on one spouse occupancy rights and the entitled spouse sells the property to a bona fide third party and, therefore, there is competition about which occupancy rights take precedence and are preferred, what is the position?
    Some time ago the Minister wrote me a complicated letter—I do not complain about that—which to some extent deals with the problem. It would be convenient if he would summarise the letter and incorporate it in his speech. He stated:
    "The Bill as introduced sought to protect the right to occupy a matrimonial home under a court order by providing that provisions of sections 6, 7 and 8 of the 1981 Act should apply. That would have meant that the right to occupy would automatically prevail over the rights of third parties who acquired right to the property."
    That was the position in the Bill as originally drafted. Sections 6, 7 and 8 of the 1981 legislation were imported into the Bill. That made it clear that in those circumstances an incidental order would prevail over a sale to a third party.
    Mr. Barry Henderson: Did I understand the hon. Gentleman to say that he expects the answer of the Solicitor-General for Scotland to be even more complicated than the hon. Gentleman's question to him?
    Mr. Dewar: I fear that that may be so, but we must wait with bated breath. I am glad that the hon. Gentleman has followed the question with his usual—
    Mr. John Home Robertson: Perspicacity.
    Mr. Dewar: I thank my hon. Friend the Member for East Lothian (Mr. Home Robertson). The point, before I lose my thread, is that the position as outlined was perfectly clear as the Bill was originally drafted.
    10.15 pm
    However, the Minister goes on, fairly, to point out that sections 6, 7 and 8 are no longer imported into the Bill because there were amendments. Therefore, the clear position that there will be an automatic preference over the rights of third parties is presumably undermined. The Minister makes that point, but goes on to say:
    "This does not of course mean that the person who is given the right to occupy is left without protection. The court in a divorce action could be asked in advance by the spouse to protect her right to occupy against adverse dealings in addition to its common law powers and the specific power to interdict avoidance transactions under clause 18 the court has a very wide power under clause 14(2)(k) to make any ancillary order which is expedient to give effect to its orders. Thus the court could, having regard to these various powers, interdict the former husband from disposing of, or otherwise dealing with, the house while the right to occupy lasts."
    As I understand what the Minister is saying—I hope that we have this clear in our minds—it means that as the Bill was originally drafted, it was quite clear that an incidental order regulating occupancy rights took precedence over any sale of a property to a bona fide third party. The situation has now been thrown into the melting pot, but that preference for the occupancy rights could still be re-established if an application were made to the courts to use their powers to interdict the husband from disposing or otherwise dealing in the property, thus settling the matter by that specific court order and provision.
    That may be satisfactory enough, but there may be many occasions when the court is not invited—perhaps through inadvertence or because it was not thought necessary—to use those additional powers to make that specific order. The question still arises about what would happen in that situation, where the powers under clause 14(2)(k) have not been called into play. It seems to me that we are left with a somewhat doubtful query, where the clear superiority of the incidental order no longer automatically prevails and where that position has not been put right by some specific and special order of the court.
    In that situation, amendment No. 6 comes into play and commends itself, at least to me, as a perfectly sensible idea. The House will remember that amendment No. 6 states that unless there is a registration of the incidental order
    "in the Register of Inhibitions and Adjudications within fourteen days",
    the preference in any competition of occupancy rights will go to the third party who has purported to buy in good faith. That is sensible and clarifies the situation. Although the Minister has rejected the argument in his letter, I hope that he will be prepared to look at the matter again.
    One of our difficulties—I say this with regret, but there is nothing we can do about it — is that the Bill began its journey in another place. Therefore, it is now at the end of its parliamentary passage. So often in this House we are able to say, "Ah, but the Government can take this away, think about it and put it right later." On this occasion we must put it right tonight. There is no doubt that there is great anxiety, particularly among the legal profession. That was eloquently expressed by Mr.

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    Graham, president of the Law Society of Scotland, who corresponded with the Secretary of State about the Bill. He said in a letter dated 16 May:
    "The Council is convinced that unless the Bill is radically amended in relation to certain of its provisions, it is likely to have the effect of bringing the conveyancing process in relation to domestic property to a virtual standstill."
    In fairness, I ought to say that part of the Law Society's anxiety has been met by the neat demarcation which will be put into the Bill via Government amendment No. 5. Therefore, I do not suggest that the amendments I am proposing are essentially what is referred to in Mr. Graham's serious suggestion. I know from my personal contact with the Law Society that it feels strongly that my amendments will sensibly clarify the position. I hope that, even at this late stage, the Minister will be prepared to turn his mind seriously to them rather than accepting the fait accompli and saying that there is no room for further movement.
    I recognise that I have spoken at some length on this matter and that I may have confused myself and the House. However, I have tried to make a serious point and to put across a genuine difficulty, as it is seen by many people who have to deal on a daily basis with our conveyancing system. I hope that the Minister will be prepared to look at what has been said, and the arguments that have been advanced.
    Mr. Gordon Wilson: I do not intend to follow the hon. Member for Glasgow, Garscadden (Mr. Dewar) through the maze in which he took us, although we were all impressed by his ability to steer us into it. Whether he got us out of it is another matter. I do not intend to show my ignorance of these matters. It is many years since I did conveyancing and I shall not pretend that my knowledge is sufficient to allow me to speak with expertise.
    As the hon. Member for Garscadden elaborated his case, certain memories of what happened during the formulation of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 came back. The notice of warning to conveyancers and their clients first emerged then. Court orders that might have an effect on the heritable property were granted. However, nothing was available to warn everybody of what might be happening. I take it that this is what the hon. Member for Garscadden has been developing in the debate on this Bill.
    During the proceedings on the 1981 legislation, the Government had the opportunity to consider amendments that sought to make greater use of the register of inhibitions and adjudications, but turned down that solution on cost grounds. My readings of outpourings thereafter in various legal journals showed me that the profession was concerned that the Government, by bypassing the register, had made life more complicated. The great advantage of the register is that it gives an immediate warning of what might be happening. It is not subject to the delays that can be encountered in the register of sasines.
    I was struck by what the hon. Member for Garscadden said about delays. He spoke about nine months for a return of deeds duly recorded, and suggested that that might become worse under the new land registration procedures. In the days when I practised, six months was considered to be excessive, but it takes that length of time before any property can show up on the searches. During that period, many difficulties in the transfer of the property can occur.
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    In view of the complexity about which we have been talking, the fact that a greater number of people own their houses than did so a few years ago and the existence of the register of inhibitions and adjudications, why have the Government not thought of making better use of that register? It could be used to give fairly speedy notice to third parties and others that a problem might emerge. The register can give a reply quickly and it does not involve the technicality of registering deeds in the register of sasines. It always seemed strange that the Government should introduce new matrimonial provisions concerning the disposal of property in the most complicated way.
    If there is a simple way, we should try to follow it. Regardless of the argument powerfully deplored by the hon. Member for Garscadden — who knows his stuff, because none of us could follow it—would it not be desirable to try to make life as simple as possible? If these registers exist, they should be utilised. I do not believe that the cost would be all that great. In view of this amendment and thinking back to the 1981 Act, I recommend to the Minister that greater use should be made of those registers.
    The Solicitor-General for Scotland (Mr. Peter Fraser): Although both amendments cover much the same ground, the hon. Member for Glasgow, Garscadden (Mr. Dewar) will appreciate that in one sense they cover rather different areas although the remedies proposed by them are similar.
    The Government have sympathy with the objective of securing sufficient protection in the Bill against the disposal by the defender of property which is the subject of an order for transfer under clause 8. In the light of the representations received from the Law Society, we have considered carefully how far such additional protection is necessary or readily practicable.
    It is necessary to be clear about the nature of an order for the transfer of property. As the Bill stands, this is simply a personal order against one party requiring him or her to convey that property to another party. In itself, such an order cannot affect the rights of third parties. It is only after the property has been conveyed that the transferee acquires a real right to it. Therefore, there is no need for a specific provision that the order shall not affect the rights of third parties.
    The real question is whether there is sufficient provision to protect the interests of the person to whom it is proposed the property should be transferred against dealings with a third party before it is conveyed. It is my view that the existing powers available to the court under the Bill and at common law should be adequate and that it would not be justifiable to provide in addition a specific statutory requirement for the registration of orders for the transfer of property.
    Given the careful way in which the hon. Member for Garscadden advanced his argument, it might be helpful if I explained these powers.
    A defender who disposed of property in defiance of a court order for transfer could be punished for contempt of court. Under clause 14(2)(k), or clause 18, he could also be expressly interdicted from disposing of the property and punished for his breach of interdict. Most importantly, the transferor could be inhibited from disposing of the property. Clause 19 would enable a person applying for a transfer order, whether pursuer or defender in the divorce action, to obtain "on cause shown" warrant for inhibition on the dependence of the action, and such inhibition would

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    remain in force until the order for transfer was implemented. If a party had not obtained inhibition on the dependence of the action, he could still obtain warrant for inhibition at common law once the order for transfer of property had been made. Thus, by using the normal machinery of inhibition, the transferee could obtain the effects sought by the amendment, namely, publication to third parties and the setting aside of adverse dealings with such parties.
    Given this array of powers available to the court, both at common law and under the Bill, I am not persuaded that there is a clear need for additional protection against avoidance transactions in the form of a statutory scheme of registration. There is also the consideration that a statutory registration requirement would impose consider-able additional costs upon the Department of the Registers and would also increase the cost of searches in the register of inhibitions and adjudications and hence increase the cost of conveyancing generally. The delay in Scotland is no small consideration. To require additional work when there is sufficient remedy is undesirable. The Government's view is that it would not be justifiable to provide for the registration of orders for the transfer of property. On that basis, I ask the House to reject the amendment.
    10.30 pm
    Amendment No. 6 deals with circumstances in which there is what I might, in shorthand, call an occupancy order. It is important that a person who is given the right to occupy the former matrimonial home should be able to protect that right against dealings with third parties. It is also important that third parties who acquire the right to property should not have their rights prejudiced by finding that the property is subject to a right to occupy under a court order of which they have had no opportunity to learn.
    The Bill tried originally to protect the right to occupy a matrimonial home under a court order by providing that sections 6, 7 and 8 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 should apply. That would have ensured that the right to occupy would automatically prevail over the rights of third parties who acquired the right to property. The Law Society and the Department of the Registers have represented that that would impose an extremely heavy burden on conveyancers and the keepers of registers. In every transaction concerning residential property they would have to investigate whether a right to occupy under a court order existed. We have concluded that that would be difficult to justify, as there are only a limited number of cases, and other reasonable safeguards are available. On that basis, in Committee we deleted provision for including sections 6,7 and 8 of the 1981 Act.
    The result of that deletion is that court orders regulating the right to occupy the matrimonial home will have effect between the parties to the marriage, but there is no question of their having effect against third parties who acquire right to property in the absence of specific provision to that effect. Thus, third parties will acquire their right to the property free of the right to occupy. They will accordingly need no notice of the protection against that right.
    The question is whether the person who is given the right to occupy has the necessary protection. The hon. Member for Garscadden answered the question to some
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    extent. The court in a divorce action could be asked in advance by a spouse to protect his or her right to occupy against adverse dealings. In addition to its common law powers and a specific power to interdict avoidance transactions under clause 18, a court has wide power under clause 14(2)(k) to make any ancillary order which is expedient to give effect to its orders.
    The court could, having regard to those powers, interdict a husband from disposing of, or otherwise dealing with, the house while the right to occupy lasts. The ex-spouse would be liable to punishment for contempt of court if he or she breached such an interdict. The court could, in appropriate cases, circumvent this problem by ordering the property to be transferred into the joint names of both spouses or into the names of trustees. I refer the hon. Member for Garscadden to the power given in clause 14(2)(g). The Scottish Law Commission mentioned that possibility in its report. I am satisfied that the court has adequate powers to protect the interests of the person who is given the right to occupy.
    In Committee I also stated that we would consider strengthening these powers by giving the court power to grant a warrant for inhibition in respect of property which is subject to a court order granting the right to occupy. We have given this matter serious consideration, but have come to the conclusion that it is not desirable to amend the Bill in this respect. Inhibition is a remedy normally available against a creditor in an obligation to pay money or to transfer property against the debtor in that obligation. In this type of case there is no creditor, no debtor and no such obligation. We would thus for the first time be seeking to apply inhibition in a situation where it has not been applied before. It is uncertain how it would apply in these circumstances, and to provide adequately for its application could be extremely complicated.
    Another important consideration for those hon. Members who have been so concerned about this long-awaited report on diligence is that we hope it will be soon available. In these circumstances, it would be premature to extend inhibition to an entirely new area in advance of consideration of that report. The hon. Members for Dundee, East (Mr. Wilson) and for Garscadden referred somewhat tentatively to their experience of this law. I am sure that they recollect all too vividly their university lectures on the problems of future debts in such an area. It is important that on this point we should await the deliberations of the Scottish Law Commission.
    Mr. James Wallace: My recollection of warrants for inhibition on the dependence in a consistorial action is that one had to have allegations of the dependence being either vergens ad inopiam or in meditatione fugae. Clause 19 says:
    "the court shall have power, on cause shown, to grant warrant for inhibition … on the dependence."
    Is the Solicitor-General satisfied that the words "on cause shown" extend to causes which might be used to justify such a warrant for inhibition on the dependence beyond the narrow grounds upon which it is currently allowed by the courts?
    The Solicitor-General for Scotland: I compliment the hon. Member for Orkney and Shetland (Mr. Wallace) on his recollection of the Latin tags that have been put on these matters and, indeed, on the warrant which he doubtless put on many summonses during his practice in the courts. I concede that the phrase "on cause shown" is

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    potentially wider than either the prospect of vergens ad inopiam or in meditatione fugae. Nevertheless, on his more fundamental point, the application of inhibition to future debts is a matter which would be such an innovation in the law of Scotland that at this time its introduction would be undesirable.
    The amendment provides that an order giving the right to occupy may be registered in the register of inhibitions and adjudications and that unless it is so registered within 14 days the order shall not affect dealings with third parties. The amendment is not necessary or appropriate, since, as I have sought to explain, under the Bill as drafted the right to occupy would not affect the dealings with third parties. There is therefore no need for a system of publication to give notice of such a right to third parties.
    I should add that we have examined in considerable detail whether a system of registration of such orders is desirable. We have come to the conclusion that it is not. To provide adequately for such a system would require quite complex and detailed provision, quite out of proportion to any advantage arising from it. Such a system might also prove too rigid. It would prevent any dealings with the property, although in some cases the court might consider that dealings such as the grant of a security or the sale of surplus ground attaching to the property were reasonable. The arguments against allowing inhibition that I have mentioned would apply also to such a system if its effect were to place inhibition upon the dealings with the property.
    For those reasons, which I accept are somewhat complicated and specialised in the law of Scotland, I ask the House to reject this amendment as well as the first amendment.
    Mr. Dewar: I do not know whether my colleagues will be satisfied with that reply. Perhaps I watch "Weekend World" too much, but I have got into the habit of recapitulating an argument to make sure that I understand it. I am tempted to do so now, but I am sure that it would show my inadequacies and I shy away from the prospect. Besides, it might try the patience of my hon. Friends.
    I understand the Solicitor-General's point about the distinction between the two areas with which the amendments deal. The first is the section 8 order for the transfer of the property between spouses. If there is such an order and the spouse who is transferring decides to sell in defience of the order—one would hope that happens only rarely—he can be punished if there is an inhibition or an interdict to stop that. But assuming that there is not, and an order has been made simpliciter, if he then goes to a third party and says, "If you want a nice house, I will let you have it cheap," and the third party goes to his solicitor who proceeds to buy it in good faith, I wish to be clear about what will happen. Presumably, the sale is invalid because there is a court order. I did not understand the answer to that simple question. Perhaps the Minister will explain it.
    The Solicitor-General for Scotland: The example that the hon. Gentleman gave shows his difficulty. If he has in mind, to adopt the bankruptcy law provisions, a confident and conjunct person, clause 18 deals with orders relating to avoidance transactions, and, in general, the position that he postulates would be covered by the clause.
    However, if the court has ordered that the house should be transferred from the husband to the wife, one assumes
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    that, in the ordinary course of events, it will be advertised and there will be an opportunity for potential purchasers to inspect the property. I was trying to explain to the hon. Gentleman that, before the order was granted, the request for inhibition would have been within the action itself. Alternatively, if, subsequent to the decree of divorce, it comes to the attention of the spouse in favour of whom the order has been made that that is what is intended, under common law he or she would have the right to request inhibition from the court. In those circumstances, the hon. Gentleman's anxiety is misplaced, because the opportun-ity, which exists now, of using the common law powers of inhibition, would be available.
    Mr. Dewar: I am grateful to the Minister. It may be that I am making a mountain out of a molehill. I was thinking of the unlikely circumstances in which an order is made under which the husband is bound to transfer the property to the wife, who intends to live in the ex-matrimonial home and bring up the family there. The husband, perhaps cheesed off with the hardness of his fate, may decide to live on the Costa del Sol. He may therefore say to a third party, "I am going to Spain and I want to get rid of the house in a hurry. I will sell it to you." The purchaser then goes to his solicitor and says, "I have arranged to buy the house." Binding arrangements are then entered into, and the transaction goes ahead. However, unbeknown to the purchaser, there is a court order which says that the house must be transferred to the wife.
    Of course, if the wife was lucky enough, she could get her hands on the proceeds of the sale, if they were not already in Spain. However, she may not want the money; she may want to live in the house. I am simply asking the Minister what would happen then. Does the third party have a good title, or is the uncompleted order enough to defeat him in his attempts to buy?
    The Solicitor-General for Scotland: It is always difficult to deal with incomplete examples, but it seems that the more that the hon. Member for Glasgow, Garscadden (Mr. Dewar) elaborates, the closer he gets to a situation in which the provisions of clause 18 would apply.
    If it is anticipated on behalf of the pursuer spouse that the correct way to dispose of the property on divorce is a transfer of property order, it will be appropriate to seek for inhibition then. If that were not done at that stage, it would be appropriate, subsequent to the decree of divorce, to use the approach that is available under common law to seek for letters of inhibition.
    10.45 pm
    Mr. Dewar: I shall retreat. We shall have an opportunity to read what the Solicitor-General has said, and no doubt those with a particular interest in these matters will do so. I do not know whether they will be consoled.
    I do not wish to trespass on the time of the House by dwelling on the second amendment. It is clear that, with the Bill in its present form, the incidental order would not prevail and the third party's rights would be paramount. The question would be: what redress is open to the dispossessed spouse? I am not sure whether such situations will arise. Perhaps the best course is to hope that they will not.
    The Solicitor-General for Scotland has looked at the issues closely and I know that he has been pressed hard on

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    them behind the scenes. If he is sure that registration and a register of inhibitions and adjudications would be unnecessary, I must let the matter rest there. I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

    Clause 14

      Incidental orders
      The Solicitor-General for Scotland: I beg to move amendment No. 2, in page 11, line 24, leave out 'An' and insert 'Subject to subsection (2A) below, an'.
      Mr. Deputy Speaker (Mr Harold Walker): With this, we may take the following: Amendment No. 3, in page 11, line 37 at end insert
      'made after the granting of decree of divorce.'
      No. 4, in page 11, line 40 at end insert
      'made after the granting of decree of divorce'.
      Government amendment No. 5.
      The Solicitor-General for Scotland: The amendments are intended to ensure that incidental orders regulating the occupation of the matrimonial home, the use of furniture in it and so on, or regulating liability for outgoings in respect of a matrimonial home may be made only at the date of divorce or thereafter.
      The amendments were tabled in response to views first expressed by the Law Society, which suggested that it would be inappropriate for the power to make incidental orders under clause 14(2) (d)or (e) to be available to the courts while the parties are still married, as disputes about occupancy and furniture arising prior to divorce should be dealt with under the powers conferred by the Matrimonial Homes (Family Protection) (Scotland) Act 1981. The hon. Member for Falkirk, East (Mr. Ewing) raised the matter in Committee and the views expressed by him and, in supplement, by the Law Society, seem to be correct.
      The Scottish Law Commission said in its report that some of the incidental orders under clause 14 (2) might not be appropriate before divorce and, accordingly, clause 14 (6) would allow the Court of Session to make rules restricting the types of order that may be made before the granting of a divorce. I think that in such cases it would be desirable to have express provision in the statute rather than leave the matter to rules of court.
      Opposition amendments Nos. 3 and 4 are designed to achieve the same effect as the Government amendments, but I believe that it is preferable to make separate provision, on the lines of our amendments, than to write the limitations into paragraphs (d) and (e) of clause 14 (2). The paragraphs relate to the types of orders rather than the times at which they may be made. However, there is only a difference of drafting between us.
      Amendment agreed to.
      Amendment made:No. 5, in page 12, line 10, at end insert—
      '(2A) An incidental order referred to in subsection (2)(d) or (e) above may be made only on or after the granting of decree of divorce.'—[The Solicitor-General for Scotland.]

    Clause 16

      AGREEMENTS ON FINANCIAL PROVISION
      The Solicitor-General for Scotland: I beg to move amendment No. 7, in page 13, line 32 at end insert—
      (2A) Without prejudice to subsections (1) and (2) above, where the parties to a marriage have entered into an agreement as to financial provision to be made on divorce and—

      (a) the estate of the party by whom any periodical allowance is payable under the agreement has, since the date when the agreement was entered into, been sequesrated, the award of sequestration has not been recalled and the party has not been discharged;

      (b) an analogous remedy within the meaning of section 10(5) of the Bankruptcy (Scotland) Act 1985 has, since that date, come into force and remains in force in respect of that party's estate; or

      (c) That party's estate is being administered by a trustee acting under a voluntary trust deed granted since that date by the party for the benefit of his creditors generally or is subject to an analogous arrangement.

      the court may, on or at any time after granting decree of divorce, making an order setting aside or varying any term of the agreement relating to the periodical allowance.'•
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 8.
      The Solicitor-General for Scotland: These amendments are intended to ensure that where a periodical allowance on divorce is payable under a voluntary agreement, it will always be possible for a payer who is bankrupt to apply to the court to vary or set aside the provision for the periodical allowance as may be appropriate in the circumstances. Where a person becomes bankrupt, the trustee in bankruptcy will take possession of almost all his assets and probably a fair proportion of his income. In these new circumstances, the amount of periodical allowance payable by the bankrupt person to his divorced spouse may be quite unrealistic. Where the periodical allowance is payable under a court order, the bankrupt person could apply for the order to be varied or set aside as appropriate under clause 13(4). Where it is payable under agreement, and the agreement provides for variation, he could apply for periodical allowance to be varied or set aside as appropriate under clause 16(1).
      It is only in those cases—probably very few—where the agreement does not provide for variation that difficulty could arise. The bankrupt person could find himself liable to an obligation which is already unrealistic in the circumstances, which he has no means of paying and which the other spouse cannot in practice enforce. That is not satisfactory for anyone. It is to allow variation in those few cases that the amendment is proposed.
      The additional power to vary would last only — I emphasise this — while the bankruptcy itself lasted. I stress that the amendment merely gives the court a discretion to vary or set aside a periodical allowance. It would not be obliged to do so.
      Amendment No. 8 would have the effect of extending clause 16(3) to the new subsection (2A) so that any term of an agreement that purported to exclude the right to apply to the court in circumstances set out in subsection (2A) would be void.
      As I have explained, the amendments deal with a problem that should seldom arise, but could cause considerable difficulties if it did. I therefore ask the House to accept them.
      Amendment agreed to.

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      Amendment made: No. 8, in page 13, line 34, after '(1)(b)' insert 'or (2A)'—[The Solicitor-General for Scotland.]
      10.52 pm
      The Solicitor-General for Scotland: I beg to move, That the Bill be now read the Third time.
      The main provisions of the Bill achieve a comprehen-sive reform of the law of aliment, the introduction of statutory principles to be followed by the courts in making orders for financial provisions on divorce, and the clarification of the law relating to property rights and legal capacity of married persons. They are based, as Scottish Members will certainly appreciate, on the recommenda-tions of the Scottish Law Commission, the proposals of which were widely supported,. That was reflected in the general welcome accorded to the Bill by hon. Members.
      I am grateful to Opposition Members for the constructive contributions that have been made, which have resulted, I hope, in an improvement of the Bill in certain important respects, for example, to the incidental orders that we have just been discussing on Report. I commend the Bill to the House.
      10.53 pm
      Mr. Dewar: On the whole, the Bill is a useful addition to the law of Scotland. The Opposition took something of a battering from the Government for their lack of co-operation. We had examples earlier this evening. I am grateful that it was not the Under-Secretary, the hon. Member for Edinburgh, South (Mr. Ancram), but the Solicitor-General, who was in charge on this occasion.
      Question put and agreed to.
      Bill read the Third time and passed, with amendments.

      STATUTORY INSTRUMENTS, &c.
      Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments, &c.

      HOUSING (SCOTLAND)
      That the draft Scottish Special Housing Association (Limit of Advances) Order 1985, which was laid before this House on 23rd April, be approved.—[Mr. Neubert.]
      Question agreed to.

      Newham (Young Persons)
      Motion made and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
      10.54 pm
      Mr. Tony Banks: I have sought this short debate on the problems of youth in Newham because I have become disturbed by the amount of evidence that has been presented to me by various agencies and youth workers operating in the borough of Newham and the evidence before my own eyes daily as I live in my constituency. What is emerging is making me angry and considerably alarmed for the future.
      On many occasions, I and my hon. Friend the Member for Newham, South (Mr. Spearing), who has joined me here, have pointed out that the people of our borough face social, economic and environmental problems that are greater than almost anywhere else. The Under-Secretary of State for the Environment — the hon. Member for Ealing, Acton (Sir G. Young) — knows that from his own experiences, because all three of the Members who represent Newham have been with him on a tour of the borough. By his Department's assessment, Newham is second only to our neighbouring borough of Hackney as the most deprived local authority area in England. Whereas Hackney has partnership status, Newham is still denied it. I hope that the Under-Secretary of State will give us the good news which I and my hon. Friend the Member for Newham, South have been waiting so long to hear. What more evidence does the Under-Secretary of State and his colleagues require to convince them of the justice of our case?
      In Newham, 11,000 households are without their own bath or inside toilet, 6,318 households are overcrowded; there is the highest percentage in the whole of London of children living in poor housing; 58 per cent. of children live in overcrowded accommodation; and 15 per cent. of children live in households containing at least one unemployed adult. For the first time, 30,000 people in Newham are on supplementary benefit. Sixty five per cent of the council's tenants receive housing benefit. With 17,000 people out of work, the unemployment rate approaches 20 per cent. The Under-Secretary of State knows these statistics, yet we still seem unable to convince him and his colleagues that we need that extra assistance that only his Government can give.
      Youth unemployment is considerably higher than 20 per cent. A review citing the percentages of young people who were eligible to leave school at the end of the 1984 academic year shows that their destinations were as follows: 30 per cent. stayed on at school, 8 per cent. attended college, and 62 per cent. left full-time education. At the earliest opportunity, 62 per cent. left school. Of that percentage, 20 per cent. are known to be in permanent employment, 11 per cent. are known to be on the youth training scheme, 25 per cent. are registered for work at the careers office and the destination of 44 per cent. is unknown. Of the 62 per cent. of those who left school at the end of that academic year, 69 per cent. are either registered for work or seem to have dropped out of the system — 42 per cent. of the entire output of that academic year. That is a tragic comment on the state of the job market and the prospects facing youth in Newham.
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      High unemployment, a poor environment, housing stress, low educational achievement and a general lack of social amenities combine to brutalise people, especially the young. What sort of background is that for the youth of Newham to grow up in? Would the Under-Secretary of State want his children to face those miserable prospects? A whole generation is becoming increasingly dispossessed of those rights and opportunities that were established, improved or maintained during the past 30 years.
      Youth as a group in our society is damaged far more by unemployment than others. The Government's blind and tragic refusal to assist any growth in the economy, together with the imposition of cuts in public expenditure and the insidious rolling back of the welfare state, hit the young disproportionately in Newham and elsewhere.
      It is all very well to talk about voluntary redundancies, early retirements and natural wastage. They sound painless —perhaps for some of the workers involved they are— but for the young, these devices merely mean more jobs lost and further restrictions placed on their all-too-limited job propects.
      In Newham, as elsewhere, the young are being continually bombarded, on television, in newspapers and in shops, with all the tempting luxuries that money can buy —if that money were available. In our acquisitive and materialistic society, the expectations and the needs of the young are being continually excited—but for so many of them the means to meet those expectations are being cruelly denied.
      The Prime Minister is fond of talking about moral values, but, frankly, she gives no moral lead to the young in Newham or in the country as a whole. After all, her economic policies are deliberately geared to promoting self-interest, greed, selfishness and soulless materialism. If we add to that a concoction of mindless populism and a willingness to employ crude force rather then arguments, we have the creation of a social time bomb that could yet destroy what civilised norms are left in this country. The recent upsurge in violent behaviour among football crowds can and is being seen by some as a harbinger of future developments in the wider society that we all ignore at our peril.
      At a recent meeting that I attended in Newham of young people in receipt of DHSS board and lodging payments — soon to be hounded out of the borough and moved around the country because of the Government's changes in regulations — one youngster said that he would be better off in jail. What an indictment of our times for a young person to say that in a meeting and get agreement from so many other young people. Yet this Government are busily creating among the young an ever-increasing number who adopt just that attitude. Those young people cannot see what stake they have in our society. Indeed, they have no stake. For them there are no social norms, about which the Prime Minister keeps talking. They feel that they have nothing to lose by turning to violence, drugs and crime.
      It is a matter of some regret that Newham has a high crime rate. Tragically, it is growing fastest among the young. But in a society that rewards the strong and denigrates the weak, is it any wonder that so many of our young are being corrupted and led astray? Professional youth workers in Newham have told me of 18 and 19-year olds who are already long-term unemployed, gradually losing all self-respect and respect for others. Young people in my borough spend large amounts of time begging—

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      this is 1985 — and it is tragic that that is becoming socially acceptable among the young. There is also increasing evidence that teenage prostitution is on the increase, and many young women in Newham are deliberately entering into disastrously early relationships and pregnancies as a way of trying to achieve some form of adult status and their own accommodation. They regularly come to my advice surgery. The borough already has more than 5,000 single-parent households.
      Against that frightening social background, Newham council and the voluntary organisations working with young people are subject to increasing attacks upon their resources. Youth services have been forced to cut back on their provision and curtail badly needed building programmes while the Government deliberately redistribute support to the shire counties and pump money into face-saving and cosmetic training schemes — neglecting those experienced agencies that have tradition-ally supported the young people who have difficulty coming to terms with the adult world.
      Many of the professional youth workers in Newham feel that we are approaching a situation where the majority of young people will be unable to take the normal steps to adulthood. It has been suggested—and I tend to agree from my experience — that inner-city areas such as Newham will eventually be reduced to battlefields of warring gangs of youth. Already the police in the borough are overwhelmed by the sheer level of street crime, racist attacks and burglaries. Householders in Newham, as in other parts of London, are being encouraged to employ private security firms to patrol the streets and protect their properties.
      Inexorably we are moving towards no-go areas, where policing will either be absent or very limited—and that, of course, will be complemented by middle class enclaves where police effort will be concentrated. Those are existing or possible images of life in Newham in the 1980s and the 1990s, as ordinary, decent people in my community are gradually overwhelmed by the sheer scale of the problems confronting them. Those images are not the product of my over-stretched imagination but are based on statments made to me by responsible individuals who are growing both frightened and alarmed by what they see and hear around them in the borough of Newham.
      Much as I have time for the Minister—although he has taxed me in terms of my patience and my sympathy on many occasions — I expect little, if anything from him or his Government, because it is his Government who are responsible for the the rapid pace of social breakdown in Newham. The youth of my borough, not surprisingly, want real jobs and decent pay. They want homes. They want social and recreational facilities into which they can channel their energy and exuberance.
      Mr. Nigel Spearing: Is my hon. Friend aware that in the south of the borough, in the royal Victoria dock, the borough council has a lease with the London Docklands Development Corporation for recrea-tion on that mile-long stretch of water? But it is a lease for only five years with an unelected body. Does not that emphasise one of our problems—the existence of an unelected body which governs a very large area of the south of the borough?
      Mr. Banks: I could not agree more. The Minister and his colleagues are continually pointing out to us the
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      success, as they see it, of the London Docklands Development Corporation, but the LDDC has been given resources and powers that the borough councils in the docklands area and the GLC can only have dreamt of in past years. The difficulty is that so many of the activities of the LDDC take place behind closed doors. I have to keep asking the Minister questions to find out what is going on in docklands.
      The one thing we know is that after the next Labour Government are elected in a couple of years' time, the LDDC will be abolished, and the resources that it is currently squandering will be given to the docklands boroughs to deal with the problems of the people of Newham in the way that they would want them dealt with.
      We want action from the Government. We do not want lectures from the Prime Minister, coming from her wealthy and privileged background, about the respon-sibilities of youth. There is no way that Newham borough council can provide out of our own resources the sorts of things that we want. We desperately need a Government who will recognise the social time bomb that is even now being primed in Newham and other inner city areas. We want such a Government to act with speed and determination to eliminate the economic and social deprivation which is the root cause of the problems that I have been trying to discuss.
      I do not expect to see this Government being sympathetic or taking any action. I know that that can come only with the speedy election of a Labour Government. I hope that that Labour Government will appoint a Minister with special responsibilities for the young, since the young represent society's investment for the future. It is an investment that is being cruelly squandered in Britain at the moment. The signs of social collapse starting with the young are there in Newham and elsewhere in London for all who wish to see, but tragically that does not appear to include the Prime Minister and her Government.
      11.9 pm
      The Parliamentary Under-Secretary of State for the Environment (Sir George Young): During the course of his remarks, the hon. Member for Newham, North-West (Mr. Banks) accused me of taxing him and taxing his patience. For the past 12 months I have been answering the parliamentary questions churned out by his research assistant. I think that my patience has been taxed just as much as the hon. Gentleman's. On the LDDC alone, I have answered 102 parliamentary questions in the past 12 months. I think that the hon. Gentleman is running out of steam, because his four recent questions were identical to one that he asked me only a fortnight ago.
      The hon. Gentleman has tabled some interesting questions about the number of paper clips purchased by my Department. Information that has been released to us from the GLC indicates that it is part of his campaign to try to destroy the stamina and the enthusiasm of my officials. I have to tell him that his campaign will not work. The hon. Gentleman is riding his hobbyhorse again. The reality is that the LDDC has produced action. Towards the end of his remarks he asked for action. There was little action before the LDDC. There was a great deal of talk. The GLC had access to all the resources that it needed, if it had wanted to make substantial progress in docklands, but it did not make use of them. There was a rather unconstructive dialogue between the GLC and the

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      boroughs. Now there is action. If one goes around the docklands area one can see work being created and homes being built.
      Although the hon. Gentleman wants the LDDC to be wound up, in other parts of the country where we have LDDC-type operations in the form of the new towns, each time that the Government want to wind one of them up we receive representations from his colleagues asking us to keep for another year or so that quango, appointed by Ministers, which is unelected and not accountable to local people.
      I come now to the theme of the hon. Gentleman's speech. I welcomed the time that he and the hon. Members for Newham, South (Mr. Spearing) and for Newham, North-East (Mr. Leighton) took when they escorted me around the borough for a day last year. It made a great impression on me. I enjoyed meeting the people in the borough. I hope that some, if not all, of the decisions that my Department has taken subsequently have been of some help.
      I want to assure the hon. Gentleman that the plight of young unemployed people is a matter of deep anxiety to me and to the Government. We are, of course, aware of the problems facing young people, about which the hon. Gentleman spoke so eloquently, many of them from disadvantaged groups and ethnic minorities who are living in inner city areas such as Newham.
      In many ways, it is those young people who have been hardest hit by the recession. It is in recognition of that that the Government are pursuing some specific initiatives aimed at improving employment prospects and providing social and community support for young people. Young people in Newham want hope, self-respect and a job. In that they are the same as young people in Acton or anywhere else in London.
      Our first priority must be to reduce the level of youth unemployment. I accept that the rate in Newham is among the highest in London. Some measure of the importance that we place on that is the £2·25 billion that the Government spent in 1984–85 on employment and training schemes, many of them aimed at young people.
      The main initiative directed at improving the skills and training of school leavers is, of course, the YTS. In view of the figures that the hon. Gentleman deployed, that is of special relevance to Newham. However, it is important that young people take up that opportunity. I hope that the hon. Gentleman and those in the voluntary organisations with whom he is in contact will encourage young people to take up the places.
      I was dismayed to find that only 82 per cent. of the YTS places in Newham were filled last year, despite the fact that nearly 80 per cent. of those who completed the training subsequently found jobs.
      In 1985–86, 750 places have been approved at a total cost of £1·5 million. That budget is bigger than that for Hackney, Haringey or Southwark. It shows the priority that we place on tackling the problems in Newham.
      I was encouraged to hear that Newham is sponsoring three schemes with over 90 places — a social services training workshop, a clerical and a building scheme. I was pleased to learn that there is a high ethnic minority participation in those schemes.
      Apart from the council, Newham does not have many large employers to run schemes. I was interested to see that
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      a successful project has been achieved by the Docklands and East London Training Agency, which is acting as a managing agent for a scheme sponsored by Grand Metropolitan Community Services. DELTA has links with 170 potential providers of training—mainly small firms covering a wide range of trades—and, when necessary, it can cater for trainees' individual preferences. Those have included locksmiths, glass blowers and Afro-Caribbean hairdressers. I believe that that shows a potential for providing training linked to local firms and the needs of young trainees.
      In addition, as from April 1986, YTS will be extended to provide two years' training for 16-year-old school leavers and one year for 17-year-old leavers, thus ensuring that anyone under 18 who is not still at school and has no job has the opportunity to receive good quality training.
      In addition to YTS, there are a number of MSC employment initiatives available to young people in Newham, of which the major one is the community programme. Under this, long-term unemployed over the age of 18 are provided with temporary employment on projects of benefit to the community. At the end of April this year there were in Newham a total of 249 community programme places, and I am glad to say the take-up here was 90 per cent. As with the YTS, young people must be encouraged to take advantage of the employment opportunities offered by the community programme, which is being expanded nationally from 100,000 filled places to 230,000 by the end of May 1986. Agreement has now been reached for an initial increase of 50,000 by December of this year, of which 13,500 will be in London. Additional places in Newham and other London boroughs are currently being considered.
      The hon. Gentleman spoke about the resources available to the local authority and complained about cuts in services. Between 1981–82 and 1984–85 the London borough of Newham's current expenditure increased by 30·8 per cent., ranking second to the London boroughs. The average increase was 17·6 per cent. The borough's 1985–86 target of £124·154 million is a 3·76 per cent. increase on the 1984–85 budget. The grant related expenditure of £544 per head ranks highest of the London boroughs and is to be compared with an average of £384. Some of the problems that the hon. Gentleman mentioned of deprivation and some of the client groups in the borough are recognised in some of the figures which I have quoted.
      Mr. Banks: Can the Minister tell us whether Newham will be rate capped in the next year?
      Sir George Young: No, I cannot. That is because the Government have not yet addressed themselves to the important problem of rate capping next year. I think that the hon. Gentleman knows that a number of councils are still grappling with their consciences over decisions for this year. I think that he knows also what the timetable is for rate capping next year.
      The hon. Gentleman mentioned, as I thought he might, the designation of the London borough of Newham under the urban programme. We provide extensive support for projects in Newham that are aimed at both improving the skills of young people and providing social and community support. The hon. Gentleman and his hon. Friend the Member for Newham, South have been consistent in their campaign for more Government resources to be directed towards Newham, particularly in

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      their support of the borough's case for promotion to partnership status. The argument in favour of partnership or programme authority status for Newham under the urban programme has been forcefully stated again tonight. The council narrowly missed such status when the lists were last reviewed in 1983. It had not at that time submitted the powerful submission which I discussed with hon. Members from the borough and representatives of the council, the voluntary sector and the chamber of commerce last December. However, I recognised at that meeting that when the list is next reviewed Newham will be knocking very strongly at the door. The hon. Gentleman asked whether we needed any more evidence. I can tell him that I think we have all the evidence that we need. I accept that the case has been presented forcefully. For the time being, the best course for the borough must be to maximise its benefits from the sources of funding that are available, and these are not insubstantial.
      I am delighted to see that Newham is making a more concerted attempt to benefit from urban development grant. The approval of the £500,000 UDG in March for the redevelopment of a former power station site by Gunson Sortex in the Marshgate industrial improvement area is an indication of the potential of UDG. It will directly lever £2·8 million of private investment and provide 82,000 sq ft of industrial and office space—a significant source of jobs in a depressed area.
      The programme of reclamation, job creation and housing provision by the LDDC is also a continuing positive force in the southern part of the borough. This year alone about £4·8 million has been allocated for environmental works, reclamation and utilities in the Newham area of docklands in addition to £250,000 of support for voluntary projects. In future, the development of the STOLport should attract more employment to the royal docks area. My right hon. Friend the Secretary of State acknowledged that in his recent decision to approve outline planning permission for the airport. Clearly these initiatives do not solve all the borough's problems, but they are not irrelevant to the issue of unemployment.
      I turn to the current position of other urban programmes support. Newham current receives funding for industrial and commercial projects as an other designated district — or ODD as it is generally called — and for social projects under the traditional urban programme. As an ODD, Newham receives grant towards a range of projects aimed at economic regeneration, in particular to help small businesses get established. In 1984–85 such support amounted to £475,000, and for 1985–86 nearly £250,000 has already been approved. A particularly good example of the cost-effectiveness of the support is the Stratford workshops project. We have recently approved a £35,000 grant for improvements and six new workshops, additional to the 89 small starter units already available and in action. They provide cheap and accessible accommodation for new firms and, in addition, grant can be made available to help new firms start up. That could provide the opportunity for new young businesses to build on some of the skills obtained from the training initiatives in the borough. Occupancy of the units is consistently high, and once established many of the firms move to larger premises.
      I have been impressed by the way in which Newham has managed its use of ODD funds and industrial development generally. It is good at giving advice and help to firms, and it receives active co-operation from the
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      private sector in the area, which proved willing to assist in making business expertise available to counsel and advise new businesses. As a result, the borough gives grants only when they are strictly necessary and will be effective.
      Mr. Banks: Is the Minister aware that the Greater London Enterprise Board gives considerable assistance in Newham? However, the Minister for Local Government is putting restrictions on the GLEB, which could jeopardise jobs in Newham and elsewhere. What has the Minister to say about that?
      Sir George Young: I think that I have seen the letter to my right hon. Friend the Minister for Local Government from the GLEB which asked for a meeting to discuss these issues. I hope that a meeting will take place shortly, when they can be discussed in sightly more detail.
      When I met the delegation from Newham in November 1984, it was clear that there were still opportunities for even wider use of urban programme resources to include broader-based training projects, particularly aimed at the young unemployed. I encourage projects of this type. No such schemes have yet been put to me, but my Department would be glad to discuss any proposals with the borough and we would be sympathetic to funding worthwhile projects.
      Regarding the traditional urban programme, we have always recognised Newham's high level of deprivation. For 1985–86 the borough has received the highest level of new approvals, not only in London but in the whole country. Six new projects, costing £400,000, were approved. That represents an increase of 50 per cent. over the level of new projects approved last year. I hope that the hon. Gentleman will accept that that is a clear reflection of our policy of concentrating traditional urban programme funds in the most extensively deprived areas. I hope that it reminds him that nationally, because of the continuing high level of support for existing schemes, resources for new projects have inevitably fallen again by about half. Newham receives considerable support for continuing projects, which amounts to £765,000 for 1985–86.
      The hon. Gentleman touched on the board and lodging regulations, which were debated extensively on 2 April. My only point this evening is that the DHSS is carefully monitoring the effects of the new regulations, and my Department will liaise with it closely. In the light of how the system operates, Ministers will consider whether any changes are necessary.
      The hon. Gentleman mentioned many issues about dealing with juvenile crime in the borough and relationships with the police. I was interested to hear of the way in which the police are working with youngsters in Newham, especially ethnic minority groups. No fewer than 13 initiatives have been brought to my attention, which aim to improve links between the police and young people, increase the understanding of police work, and provide social support for young offenders.
      I am aware that I have not done full justice to the wide range of issues raised by the hon. Gentleman. I shall write to him to deal with the more significant omissions, and perhaps he will table yet another question to me to elicit responses. I assure him that the Government are aware of the problems faced by young people in Newham and that

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      we are trying to help them. I have outlined some of the schemes introduced by the Government to tackle those problems.
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      Question put and agreed to.
      Adjourned accordingly at twenty-three minutes past Eleven o'clock.