Commons Sitting of 28 November 1985

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

      LOTHIAN REGION (EDINBURGH WESTERN RELIEF ROAD) ORDER CONFIRMATION BILL (By Order)
      Order for Second Reading read.
      To be read a Second time upon Wednesday 4 December.

      PETERHEAD HARBOURS (SOUTH BAY DEVELOPMENT) ORDER CONFIRMATION BILL (By Order)
      Order for Second Reading read.
      To be read a Second time upon Thursday 5 December.

    NOTICES OF PRESENTATION OF BILLS
      FRASERBURGH HARBOUR
      Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Fraserburgh Harbour; And the same was read the First time; and ordered to be considered upon Wednesday next and to be printed. [Bill 15.]
      FRASERBURGH HARBOUR (No. 2)
      Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Fraserburgh Harbour (No. 2); And the same was read the First time; and ordered to be considered upon Wednesday next and to be printed. [Bill 16.]
      FRASERBURGH HARBOUR (No.3)
      Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Fraserburgh Harbour (No.3); And the same was read the First time; and ordered to be considered upon Wednesday next and to be printed. [Bill 17.]
Oral Answers to Questions
  NATIONAL FINANCE

    Johnson Matthey Bank
    Mr. Dalyellasked the Chancellor of the Exchequer if he will set up a public inquiry into the Johnson Matthey banking affair.
    The Economic Secretary to the Treasury (Mr. Ian Stewart): No. The City of London police announced this morning that its investigations had discovered evidence of fraud upon JMB in 1981, and a fraud investigation group has accordingly been set up.
    Mr. Dalyell: Given this morning's developments, and given what the Bank of England, the Director of Public Prosecutions and the Attorney-General knew, why did it take Ministers from October 1984 until July 1985 to call in the fraud squad? Why were they so tardy?
    Mr. Stewart: It is not for Ministers to call in the fraud squad. I remind the hon. Gentleman of what my right hon. Friend the Chancellor of the Exchequer said in July when he made the announcement that a preliminary police investigation was to take place. He said that there was not, strictly speaking, prima facie evidence of fraud, even at that stage, although deficiencies of documentation created sufficient suspicion.
    Sir Anthony Grant: Is my hon. Friend aware that criticism of this wretched banking company is not confined to the Opposition Benches? Is he aware that many of us deeply deplore the great worry caused to many decent people working in the Johnson Matthey company as a whole? To preserve the good name of the City, will he ensure that the matter is pursued with the utmost rigour?
    Mr. Stewart: I believe that the police, and the fraud investigation group that is now in being, will pursue the matter with the utmost vigour, but I am glad that my hon. Friend has had the opportunity to say what he has said.
    Mr. Penhaligon: Does the Minister believe that the public have the right to express some outrage at the fact that offences in the City rarely appear to result in anyone going to gaol, whereas people are often successfully prosecuted for minor offences in their own community?
    Mr. Stewart: I take the hon. Gentleman's point. It is an unfortunate fact that the standard of evidence required to obtain conviction in cases of financial fraud has to be very high. My hon. Friend the Parliamentary Under-Secretary of State for Trade and Industry commented on that fact in a speech yesterday. As the hon. Gentleman will know, Lord Roskill has, with his committee, been charged with considering the conduct of fraud trials.
    Mr. Tim Smith: Instead of constantly demanding inquiries into these matters, should we not be concentrating on the need to give fraud investigators much more power to obtain the evidence to bring to book the people concerned? Will the Government ensure that such powers are introduced in the Financial Services Bill?
    Mr. Stewart: I note what my hon. Friend said. The Financial Services Bill is not a matter for the Treasury, but I am sure that note will be taken of what my hon. Friend said. Indeed, my hon. Friend the Parliamentary Under-Secretary said yesterday that further powers would be contained in the Financial Services Bills to assist investigators.
    Mr. Sedgemore: Does the hon. Gentleman accept that all hon. Members will be pleased with today's announcement, especially if it leads to criminals being brought to book, and allows me to get on next week with investigating the Lloyd's scandal? Should not the Chancellor of the Exchequer come to the Dispatch Box to explain how he said in statements on 20 June and 17 July

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    this year that there was no prima facie evidence of fraud, yet parliamentary answers to me in the past two weeks have shown conclusively that the Attorney-General and the Bank of England could have advised him that those statements were untrue?
    Mr. Stewart: I am glad to hear the hon. Gentleman's welcome for today's announcement. The statements in June and July by my right hon. Friend the Chancellor were absolutely true. Had prima facie evidence of fraud been available earlier, no doubt the whole process could have begun at that time.
    Mr. Douglas Hogg: Does my hon. Friend accept that calls for a public inquiry have always been inappropriate, because an inquiry would have precluded the institution of criminal proceedings? Will my hon. Friend do what he can to ensure that the City of London fraud squad has sufficient resources to investigate frauds of this kind properly?
    Mr. Stewart: The Government fully recognise that adequate resources are needed for the fraud investigation group. The proper way of investigating criminal offences is investigation through the police and not through a public inquiry—a point that was made clear not long ago by my hon. and learned Friend the Solicitor-General.
    Mr. Skinner: Should not the Chancellor of the Exchequer answer these questions? Is he evading giving these answers? He knows that full responsibility at the end of the day should fall on him because as far back as 23 October 1984 and 11 November 1984, when I specifically called for the fraud squad to come in, he and the Attorney-General were dodging giving the answers. Is it not a scandal that the parent company, Johnson Matthey plc, has been able today to announce a dividend of £700,000 for a few of its shareholders, but it refused to bear the burden of its errant child, Johnson Matthey Bankers? The parent company allowed the brat, Johnson Matthey Bankers, to make money and to become involved in fraud, yet it got off scot free. Is it not time that the Chancellor resigned?
    Mr. Speaker: Order. That was too long.
    Mr. Stewart: The Johnson Matthey group had to inject a large sum—£50 million—at the time of the rescue. It would not be in its present condition if it, in turn, had not had a very large injection of cash by its own major shareholder, Charter Consolidated.
    Mr. Skinner: That is right: Charter Consolidated.
    Mr. Stewart: The hon. Gentleman may not like the answer, but it is necessary to put the record straight. As for the allegations against my right hon. Friend, it behoved anyone at any stage in this story to make available for investigation any available evidence. Random allegations by the hon. Members for Hackney, South and Shoreditch (Mr. Sedgemore) and for Bolsover (Mr. Skinner) do not amount to evidence.
    Mr. Cockeram: Does my hon. Friend accept that many of us are concerned about the Johnson Matthey affair, especially about the handling of the matter by the Bank of England? However, it is an abuse of the privilege of the House for hon. Members to make insinuations in the House, whether about colleagues in the House or persons outside, when they have every opportunity to take their evidence to the appropriate authorities.
    Mr. Stewart: I hope that Opposition Members will note what my hon. Friend has said about their conduct.
    Dr. McDonald: Is the hon. Gentleman aware that the Government cannot be let off the hook as easily as that? Does not today's news underline the need for a full public inquiry, for which I called as far back as July and which the Prime Minister refused five days before the Chancellor's announcement of a fraud investigation? Is the hon. Gentleman aware that what is at stake is not just the issue of fraud, but, more important, the gross incompetence of the Bank of England in its supervision of the Johnson Matthey Bank and gross negligence by that bank? Will the hon. Gentleman ensure that a public inquiry is instituted into those aspects?
    Mr. Stewart: Had the hon. Lady been listening earlier, she would have heard me answer her point by saying that the appropriate method for investigating criminal offences in this country is a police investigation, not a public inquiry. The hon. Lady can make any allegations that she cares to make about the behaviour and conduct of the Bank of England, but there is no obligation upon anyone else to do so.
    Mr. Dalyell: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

    Tobacco Products (Taxation)
    Mr. Nicholas Brownasked the Chancellor of the Exchequer which factors he takes into account in calculating the extent to which public expenditure is to be funded by taxation on tobacco products.
    The Chief Secretary to the Treasury (Mr. John MacGregor): Many factors contribute to the Chancellor's judgment at Budget time in relation both to the overall amount to be raised in taxation and to the contribution to that of individual taxes, such as those on tobacco.
    Mr. Brown: Is the Minister aware that the dumping of German cigarettes on the British market reduces the amount of revenue that is available to the Exchequer and also brings cigarettes within the price range of young people, to which both the Government and the British industry say they are opposed? Will the Minister say what steps the Government intend to take to prevent this abuse, or tell the House what alternative proposals he has in mind for raising revenue other than by the tax on tobacco?
    Mr. MacGregor: The hon. Gentleman's latter point must be a matter for the Chancellor of the Exchequer at each Budget time. As for the hon. Gentleman's first point, whether or not there is evidence of dumping is a matter for my right hon. Friend the Secretary of State for Trade and Industry. I am informed that there is no such evidence and that imported products are subject to the same excise duties.
    Mr. Sims: Has my right hon. Friend had the opportunity to examine the statistics in the document entitled "The Big Kill", which was issued a couple of days ago by the British Medical Association? Does he agree that an increase in the duty on tobacco products, even if it produced a lower revenue for the Exchequer, would be money well spent on reducing disease and death and that it would reduce the £111 million spent each year by the National Health Service on dealing with smoking-related diseases?
    Mr. MacGregor: The health factor is one among several that my right hon. Friend the Chancellor of the Exchequer takes into account at each Budget time. However, I think my hon. Friend knows that the consumption of cigarettes has declined during the last five years by about 20 per cent. I guess that it is the perception of consumers about the health risk that has caused a decline in consumption.

    Inland Revenue
    Mr. Thurnhamasked the Chancellor of the Exchequer what are the current estimated savings per year from computerising the Inland Revenue; and if he will make a statement.
    The Financial Secretary to the Treasury (Mr. John Moore): Major computerisation projects should produce staff savings over the next three years of 350 by April 1986, a further 1,900 by April 1987 and another 2,200 by April 1988, making a total of 4,450.
    Mr. Thurnham: Can my hon. Friend say whether this programme is running to schedule and when we can expect completion in the north-west?
    Mr. Moore: My hon. Friend will be delighted to know—as, I am sure, will the whole House—that the computerisation programme is running to time and to cost. It is a good illustration of the excellent co-operation between the public sector and ICL on this contract. The expectation is that the computerisation programme in the north-west will be completed in August 1987.

    Income Tax
    Mr. Michael Forsythasked the Chancellor of the Exchequer what information he has as to how the level of income tax threshold for the single man in the United Kingdom compares with equivalent thresholds in other developed countries.
    Mr. John Moore: The United Kingdom tax threshold for a single person is close to the average for European Community and OECD countries as a whole.
    Mr. Forsyth: I am grateful to my hon. Friend for his answer, but is it not a fact that in the United Kingdom people start to pay tax at a very much higher basic rate than is the case in other countries, such as the United States, where they begin at 11 per cent.? Does not the combination of high basic rates of tax and means-tested benefits result in a very high effective rate of tax on the low-paid, which results in increased unemployment? Will my hon. Friends therefore concentrate on cutting rates, rather than on raising thresholds, to deal with this problem?
    Mr. Moore: My hon. Friend is right to draw the attention of the House to the fact that thresholds are only part of the story. Relative earnings are a key factor. My hon. Friend is also right to draw our attention to the starting rate. Hon. Members will be interested to know that, among our main competitor countries, the United States and Japan have a starting rate of 11 per cent. and France starts at 10 per cent., while our starting rate is 30 per cent. That shows that there is a clear difference in this area. That is unlike our average position on thresholds, where we are the second highest in the OECD.
    Mr. Ashley: Can the hon. Gentleman assure the House that he will not be preoccupied only with single men when he considers tax thresholds, and that he will also take account of the problems of women and married couples? They have grave problems as well, especially those who are on low pay, and therefore need more help than those in the upper brackets.
    Mr. Moore: I note what the right hon. Gentleman says. He will be aware that I was asked specifically about single men. I know that he will be delighted with the Government's record over the past three years of raising the tax thresholds by 20 per cent.
    Sir William Clark: Does my hon. Friend agree that single men start paying tax at 30 per cent. as soon as they earn £42·40 a week? Does he also agree that, as the national average wage is now well over £170 a week, this threshold is derisory and that the first priority for any tax cuts must be an increase in the threshold?
    Mr. Moore: I know that my right hon. Friend the Chancellor is listening with great care and will consider that point when drawing up the Budget for 1986. The point that my hon. Friend was seeking to make was that both thresholds and rates can be a deterrent to the work ethic.
    Mr. Blair: Before the Financial Secretary gets carried away by the prospect of tax cuts, will he admit that were it not for the sale of £5,000 million worth of assets and special assets, as well as other sales, last year alone, the Government would be talking not about cutting taxes but about raising them?
    Mr. Moore: The hon. Gentleman is aware that the Government's ability or inability to raise taxation is a reflection of their overall ability to run a successful economy.

    Economic Progress
    Mr. Dubsasked the Chancellor of the Exchequer which economic indicators confirm his assessment of the progress of the economy.
    The Chancellor of the Exchequer (Mr. Nigel Lawson): Inflation is currently 5·4 per cent. and will continue to fall. Growth of national output is likely to be 3½ per cent. this year and is forecast to reach a further 3 per cent. next year. The number of people in work has risen by some 600,000 last year and is expected to go on rising.
    Mr. Dubs: When will the Chancellor stop deceiving the British public about the economy? Does he not agree that, compared with 1979 when the Conservatives took over, output and employment are down, and the only thing that is up is unemployment?
    Mr. Lawson: The hon. Gentleman has obviously forgotten that during the earlier period of this Government's office there was the worst world recession since the 1930s. Since then, we have had the strongest recovery that the nation has had since the first oil shock. Living standards are at an all-time record level and so are manufacturing exports and productivity, national output and investment. Those are facts.
    Mr. Forman: Will my right hon. Friend take the opportunity to spell out to the House and the country the

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    extent to which the excellent prospects for inflation and improving prospects for employment would be vulnerable to another take off of unit pay costs?
    Mr. Lawson: My hon. Friend is right. Among the threats to our economic success, one of the biggest is an excessive rise in unit labour costs. As it is, unit labour costs are rising more rapidly than those of our major competitors, some of which have had a slight fall in such costs.
    Mr. Robert Sheldon: Has the Chancellor seen the latest quarterly survey from the Manchester chamber of commerce and industry? Is he aware that it points out that there will be an especially sharp fall in manufactured exports as a result of the high exchange rate? The Manchester chamber of commerce and industry knows little about monetary matters and other such factors, but it does know something about the state of its members' order books. Will the Chancellor listen to what is happening to industry, rather than listening too closely, as he does, to what is happening in the City of London?
    Mr. Lawson: I listen closely to the voice of industry and to what the CBI has to say. The right hon. Gentleman will know that the most recent CBI survey showed a further growth in manufacturing exports and manufacturing output in the coming year.
    Mr. John Browne: Does my right hon. Friend accept that with the entry of the main player—the United States—the group of five's concerted action in the foreign exchange markets was apparently a success? Will he now agree to persuade the United States to lead the group of five again in concerted action, this time to bring down US dollar and other major currency interest rates?
    Mr. Lawson: My hon. Friend is right in saying that the shift in the United States policy on intervention in the foreign currency markets enabled the Plaza accord in September to be effective. I assure my hon. Friend that the accord is still in being.
    Mr. Foot: Will the right hon. Gentleman tell us what is the real rate of growth, defined by the right hon. Member for Old Bexley and Sidcup (Mr. Heath) in his speech yesterday, and what he thinks of that real statement to the country?
    Mr. Lawson: The right hon. Gentleman is correct in that over the period that the Government have been in office the average rate of growth has been slightly less than it was during the time the Labour Government, in which he served, were in office. However, if one leaves out North sea oil, the rate of growth is the same. The rate of growth under this Government has been as great as that under the Labour Government, despite the fact that we have had to undergo the worst world recession since the 1930s. Since that time, we have had the strongest recovery at any time since the first oil shock.
    Mr. Ralph Howell: May I ask my right hon. Friend to ignore the advice that he has received from ex-Prime Ministers and others and to use all the funds that he can find to raise tax thresholds? Is he aware that it is scandalous that we are taking £5 from the single pensioner with an income of £70 per week and giving over £100 tax free to 16-year-olds who deliberately make themselves homeless?
    Mr. Lawson: My hon. Friend is right to point to the importance of getting income tax down. The Government have done that and we intend to continue to do so when the opportunity arises. However, it is clear that if, by any mischance, there were to be a Labour Government, income tax would be increased very substantially.
    Mr. Hattersley: If the Chancellor is as concerned about wage costs as he said a moment ago, why did the Conservative party's most recent party political broadcast boast that during its six years in office wages had risen more quickly than prices?
    Mr. Lawson: Because they have—very substantially indeed. That is why.

    Black Economy
    Mr. David Atkinsonasked the Chancellor of the Exchequer what is his estimate of the proportion of national income represented by the black economy.
    Mr. Colvinasked the Chancellor of the Exchequer how much revenue in personal taxation and value added tax is estimated to be lost through the black economy.
    Mr. Moore: It is not possible to form any reliable estimate of the size of the black economy or, therefore, of the consequential revenue loss in personal taxation as outside estimates of its size vary very widely from 2 per cent. to 16 per cent. of GDP.
    Mr. Atkinson: Does my hon. Friend agree that there will be a sizeable black economy for as long as personal taxation remains as high as it is and the bureaucratic impediments remain a numerous as they are? What hope can he offer that taxation will soon come down to the levels that he referred to in answer to a previous question, enjoyed by other countries? What progress is being made in amending the sixth directive on VAT within the Community to raise thresholds for registration?
    Mr. Moore: I shall try to concentrate on one of the questions. I recognise, as does my hon. Friend, that the reasons for the black economy are complex and uncertain and involve many social factors, but I do not think that any hon. Member would deny that a history of high taxation and high levels of bureaucracy have obviously been factors in encouraging the black economy. The degree to which we can reduce the levels of taxation and remove the burden of regulation on business will play a part in reducing the black economy.
    Mr. Colvin: What can my hon. Friend do to remove some of the bureaucratic burdens, particularly in connection with VAT, which at present drive people into the black economy? Has he seen the survey published in The Times of 28 October, which shows not only the party political allegiance of those in the black economy, but that members of the Social Democratic and Liberal parties are among those most likely to be on the fiddle?
    Mr. Moore: My hon. Friend will remember the White Paper entitled "Lifting the Burden", which I had the privilege of introducing in the House in July. He will know of the commitment of my noble Friend the Secretary of State for Employment and that of the Government to reducing the burdens.
    The second part of my hon. Friend's question is somewhat subjective in character. However, when one

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    considers the black economy, it behoves all of us to remember that there are two sides to transactions—those who receive the payments and those who make the payments. We should be concerned with that aspect.
    Mr. Willie W. Hamilton: Does the Minister regard fraud in the City as part of the black economy, or what colour is it?
    Mr. Moore: The Government regard all fraud, of whatever character, as completely unacceptable.
    Mr. Campbell-Savours: Why should more civil servants be involved in pursuing social security fraud than Inland Revenue fraud?
    Mr. Moore: The pursuit of fraud is not simply a reflection of the numbers involved. Despite reductions in the number of Inland Revenue staff over the past six years, there has been an increased commitment to Inland Revenue staff in that area. Specifically, 920 were committed to that work in November 1983. The key to the detection of fraud and evasion is better targeting and greater cost-effectiveness. [Interruption.] If the hon. Gentleman will listen for a moment, he will be happy to hear that the yield from investigating evasion went up from £111 million in 1979 to £371 million in 1983–84.
    Mr. Stern: Would my hon. Friend care to estimate the effect on the size of the black economy of the SDP proposal to increase the basic rate to 39p, if it were ever to be implemented?
    Mr. Moore: It is clear from an earlier response that as our starting rate is so much higher than that of our competitor countries, it must have a significant impact as a deterrent to honest declaration of income.
    Mr. Weetch: Does the Minister agree that a great deal of the black economy is in the building industry, especially building contracts of small value? Does he further agree that that is caused by the steep rate of VAT on home improvements and extensions? Does he accept that VAT of 15 per cent. on such things is a retrogressive imposition, especially when the construction industry is flat on the floor in so many such places?
    Mr. Moore: I cannot begin to believe that one could make such a subjective and negative judgment about the building industry. It is difficult to understand why, when the rate of VAT is exactly the same for that industry as for others, that should be supposed to encourage evasion.
    Mr. Fairbairn: Does the Chancellor of the Exchequer appreciate that if those who employ a person did not have to pay income tax out of already taxed income on behalf of that employee, the number of people tempted into the black economy would be vastly reduced?
    Mr. Moore: I have the distinct impression that that is one of our first Budget submissions, and I am sure that my right hon. Friend the Chancellor will have heard it.

    Inflation
    Mr. Foulkesasked the Chancellor of the Exchequer what criteria he uses in forecasting the level of inflation.
    Mr. Lawson: The details of the inflation forecast are set out in the autumn statement.
    Mr. Foulkes: Has the Chancellor seen the report of the Institute of Fiscal Studies, which shows that pensioners'
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    cost of living is going up more than the retail prices index, thereby pushing down pensioners' buying power? Since the Government have allowed for only a 1 per cent.—1p in the pound—increase for pensioners next year, what action will he take to remedy that?
    Mr. Lawson: The increase that pensioners get in the next uprating will be geared precisely to the increase in the retail prices index. If that increase is low, the whole nation, particularly pensioners, should welcome it. Pensioners had an increase of 7 per cent. this month. The pensioner prices index at 5 per cent. is less than the retail prices index at 5·4 per cent.
    Mr. Leigh: Will my right hon. Friend direct the attention of Labour Members to a fact that they seem to have a curious amnesia about—that the forecast rate of inflation at 4 per cent. is exactly half the rate of inflation achieved in the best month of the best year of the previous Labour Government?
    Mr. Lawson: My hon. Friend is right to point to that contrast. The highest monthly rate of inflation during this Parliament is lower than the lowest monthly rate of inflation in the previous Labour Government. It is extraordinary that Labour Members should wish for a high rate of increase in the pension, because, as that is geared to the RPI, it could only mean a high rate of inflation. Is that what they want?
    Mr. Ashton: As this year profits are expected to increase by 28 per cent. and wages by only 7 or 8 per cent. and as since 1981 profits have gone up in total by 96 per cent. and wages by 46 per cent., why does the right hon. Gentleman continue to demand cuts in wages to keep down inflation?
    Hon. Members: What has that to do with the question?
    Mr. Lawson: As my right hon. and hon. Friends point out, that has little to do with the question. Nevertheless, I am happy to answer it if you, Mr. Speaker, are happy that I should do so.
    I welcome the recovery in profitability in industry, which had reached absymally low levels under the previous Labour Government. That recovery has allowed investment to go ahead under this Government, leading to more people in work.
    Mr. Yeo: Does my right hon. Friend agree that the combination of low and falling inflation with steady growth and a good level of company profitability offers the most favourable circumstances for creating new jobs?
    Mr. Lawson: My hon. Friend is correct. It is that combination that we have secured. It is a prize which has eluded previous Governments and which we intend to continue to secure by continuing with the policies on which we have embarked.
    Mr. Hattersley: May I get the Government's view, position and policy on wages and inflation clear? A moment ago the Chancellor endorsed the party-political boast that wage settlements were running ahead of inflation. Is he glad about that, and does he want it to continue for the rest of the Government's lifetime?
    Mr. Lawson: I am sorry that the right hon. Gentleman has such difficulty in understanding elementary economic facts. Under this Government, growth in living standards generally has risen far more than it did under the previous

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    Labour Government. However, I regret that too much has gone to those in work, as a result of which those out of work have increased in numbers. Therefore, greater restraint by employers in awarding wage increases would lead to more people being in work. However, the total rise in living standards overall is three or four times as great as it was under the previous Labour Government.

    Pound Sterling (Value)
    Mr. James Hamiltonasked the Chancellor of the Exchequer what was the trade weighted value of the pound sterling in October 1985 compared with October 1979.
    Mr. Lawson: The average value of the sterling index in October 1985 was 80·4 compared with 88·0 in October 1979.
    Mr. Hamilton: Is that not a further indictment of the Government's incompetence and a denial of all the promises made in 1979? Does it not underline the categorical statement made by the right hon. Member for Old Bexley and Sidcup (Mr. Heath) that the country is now in a parlous state and that, if the trend continues, the pound will soon become confetti?
    Mr. Lawson: I am glad to note the hon. Gentleman's interest in these matters, but I have to tell him that the main reason for the change has been a sharp increase in the dollar against all currencies over that period which has not fully unwound, despite recent events. It would be kinder to my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) if I did not comment on the economic policies during his tenure of office. However, I can assure the hon. Gentleman that there is no chance under this Government of the pound becoming confetti money.
    Mr. Latham: Should we assume from the previous supplementary question that the Labour party wishes to push up the exchange rate and thereby bankrupt British exporters?
    Mr. Lawson: It is difficult to discern the Opposition's policy on the exchange rate. Half the time they want a higher exchange rate, and the other half they want a lower exchange rate. Half the time they complain about the borrowing requirement being too high, and the other half they complain about it being too low. It would be instructive if, at some stage, the Opposition cleared their mind and said what their policy was.

    Age Allowance
    Mr. Andrew Bowdenasked the Chancellor of the Exchequer what was the cost to his Department of the increase in the age allowance for the last financial year for which figures are available.
    Mr. Moore: The increases announced in the 1985 Budget will cost about £160 million in a full year.
    Mr. Bowden: Does my hon. Friend accept that increases in the age allowance are an excellent way of helping millions of pensioners? Will he urge the Chancellor to ensure in next April's Budget that the age allowance is increased at least in line with personal allowances?
    Mr. Moore: My hon. Friend has a long and successful record of trying to ensure real increases for the elderly, especially pensioners, so he will be pleased to hear me
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    remind the House that since 1978–79 we have increased the threshold for the elderly by 10 per cent. in real terms. The threshold for an elderly married couple is the highest in real terms since the second world war. That is in startling contrast to the position under the Labour Government, when the tax threshold for the elderly fell in real terms.

    Inflation
    Mr. Andrew MacKayasked the Chancellor of the Exchequer if he will make a statement about the current level of inflation.
    Mr. Lawson: During the 12 months to October 1985, the retail prices index increased by 5·4 per cent.
    Mr. MacKay: Does my right hon. Friend agree that some pay increases in the private sector, which have been excessive and not linked to productivity, will not only increase inflation but will affect our efficiency and productivity and the drive for jobs?
    Mr. Lawson: I agree with my hon. Friend that if private employers had a firmer grip on their costs, especially wage costs, it would benefit their companies, the ecomony, and, above all, the creation of employment. I was glad to hear the CBI preach that message loud and clear.
    Mr. Skinner: Is not one of the most worrying aspects of inflation the fact that, according to the Government's figures, inflation is running at 5·4 per cent., yet interest rates remain in double figures? In some markets, 13 and 14 per cent. rates are obtainable. Is not the real inflation rate the difference between the Government's figure and real interest rates? That is the problem that the Government must handle. During their tenure of office that gap has been twice as large as it was under the Labour Government.
    Mr. Lawson: It is perfectly true that although the Government have succeeded in reducing inflation to a low rate, which is coming down even further, under the Labour Government inflation went up so high that real interest rates were negative. That is nothing to be proud of.
    Mr. Freeman: Does my right hon. Friend agree that under SDP policies—the SDP is not represented in the Chamber this afternoon—the current rate of inflation would increase significantly? If we reflated, we would not reach a maximum rate of inflation of 7½ per cent., as the SDP forecasts, but a rate substantially greater than that.
    Mr. Lawson: My hon. Friend is right. The chief economic spokesman for the SDP said recently that an increase in inflation to 7½ per cent. would be a good idea. My hon. Friend is right to say that it would not stop there, but would go much higher. The only question that I cannot answer is: where are SDP Members today?
    Mr. Ron Brown: It is abundantly clear that the Government have not solved the inflation problem. Is the Chancellor aware that his 1979 pound is now worth 53p? He seems to believe in mini-Budgets, mini-wages and mini-money.
    Mr. Lawson: Inflation has not yet been reduced to zero, but I am glad to say that we are heading gradually in that direction.

    Nationalised Industries (Assets)
    Mr. Penhaligonasked the Chancellor of the Exchequer if he will list the individual nationalised industries and their respective assets that combine to produce the £90 billion referred to in his speech on the address, Official Report 13 November, column 585.
    Mr. MacGregor: The electricity supply, gas and water industries account for about four fifths of nationalised industry aggregate current cost net asset values. We shall continue to return businesses to the private sector in accordance with our stated and highly beneficial policy.
    Mr. Penhaligon: How much of the £90 billion does the Minister regard as saleable, and for how much?
    Mr. MacGregor: It has already been made clear in the autumn statement that over the next three years we estimate the proceeds of privatisation to be £4¾ billion each year. We have already announced plans for British Gas, British Airways and the British Airports Authority. It is clear that these policies are sensible and right, for a wide variety of reasons.

  PRIME MINISTER

    Engagements
    Mr. Favellasked the Prime Minister if she will list her official engagements for Thursday 28 November.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Favell: Does my right hon. Friend agree that far too little publicity is given to northern industrial towns, such as Stockport, where rates are kept down, free enterprise is encouraged and new industry, commerce and jobs are attracted, and that far too much publicity is given to northern citadels of Socialism, such as Liverpool, which do little else but stand around with arms outstretched for Government handouts?
    The Prime Minister: Yes, Sir. I warmly congratulate Stockport on its splendid efforts and the magnificent cooperation between the metropolitan borough council, the chamber of commerce and all the organisations concerned with getting more small and more new business into the area. They have been very successful.
    Mr. Foulkes: Does the Prime Minister realise that our closest EEC partners and our friends in the Commonwealth supported a resolution at the United Nations calling for negotiations on the future of the Falklands? Does she accept that that was because Argentina made a major concession by dropping its insistence on discussions on sovereignty and instead substituted
    "all aspects of the future of the Falklands"?
    Why does the right hon. Lady not respond to that and agree to restore diplomatic relations with Argentina and enter into discussions about the future of the islands?
    The Prime Minister: Anyone who thinks that a motion that contains the phrase
    "negotiations on all aspects of the future of the Falklands"
    does not include sovereignty must be absolutely bonkers.
    Mr. Stanbrookasked the Prime Minister if she will list her official engagements for Thursday 28 November 1985.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Stanbrook: Will my right hon. Friend confirm that the Government will not seek, nor encourage anyone else, to set obstacles in the way of the Ulster Unionists who wish to resign their seats to provide an opportunity for the people of Northern Ireland to express their opinion on the Anglo-Irish Agreement?
    The Prime Minister: I can reassure my hon. Friend that my right hon. Friend the Chancellor of the Exchequer will follow the habit and custom of his predecessors and accede to any relevant request that he may receive.
    Dr. Owen: Is the Prime Minister aware that during the Falklands war—
    Mr. Nicholas Winterton: The right hon. Gentleman has only just walked into the Chamber.
    Dr. Owen: The Prime Minister has only just walked in, I might add—[Interruption.]
    Mr. Speaker: Order. I call the right hon. Member for Plymouth, Devonport (Dr. Owen).
    Dr. Owen: Is the Prime Minister aware that during the war against the Argentines in the Falklands she used the United Nations charter as the reason why we resisted the aggression of the Argentines? Is she further aware that that same United Nations charter imposes an obligation on Britain, as on all other countries, to try to settle their disputes by the use of negotiations—
    Mr. Churchill: Surrender!
    Dr. Owen: Negotiation does not mean surrender. It is perfectly possible to enter into negotiations on all aspects while reserving our position on sovereignty.
    It is high time that the Prime Minister and the Government recognised the democratic Government in Argentina and accepted that the democratically elected President of Argentina has criticised the junta which preceeded him.
    The Prime Minister: The right hon. Gentleman will be aware that we have tried to negotiate with the Argentines on other matters. Indeed, we have tried to restore normal commercial relations, but they have refused. Nevertheless, we have permitted imports into this country from Argentina. Thus, there is nothing about which to criticise this Government.
    The right hon. Gentleman referred to the UN charter. He will be aware that we tabled an amendment to the relevant motion before the General Assembly. That amendment was designed to uphold the right of self-determination of the people of the Falkland Islands. The UN turned down that amendment.
    Mr. Gerald Bowdenasked the Prime Minister if she will list her official engagements for Thursday 28 November.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Bowden: Will my right hon. Friend find time today to reflect on the sense of despair and outrage that

    1011
    will be felt by the ratepayers of Southwark when they learn that Southwark council has allowed rent arrears to rise to a record £23 million?
    The Prime Minister: I agree with my hon. Friend that such high arrears are absolutely inexcusable, especially in view of the advice recently given by the Audit Commission. I hope that councils with such large arrears will soon take steps to diminish them.
    Mr. Kinnock: The Gas Bill is published today—[Interruption.] Is it not now clear that the Prime Minister, having frittered away the bonus of North Sea oil, is about to do the same with a great national asset that has provided the British people with a steady income and excellent service for many years? Why is the Prime Minister still insisting on giving away the public good of all for the sake of the private profit of a few?
    The Prime Minister: If the right hon. Gentleman has actually been able to read all of the Gas Bill today, I congratulate him. Privatisation is this Government's policy. The assets will be sold to those who wish to purchase them. In particular, the employees will have an excellent chance to purchase shares—a chance that they have never had under any previous Government.
    Mr. Kinnock: The Prime Minister knows as well as I do that the sell-offs that she has undertaken and the one that she now proposes will not bring people's capitalism. Only institutions and rich individuals have made a substantial killing. If the right hon. Lady is so concerned about the general welfare, will she put the interests of 16 million gas users before the interests of a small number of shareholders, whatever their current status?
    The Prime Minister: Most industries that have been denationalised have done far better under privatisation, and I believe that this one will do so. I believe in employees having a chance to have a stake in their business. I know that the right hon. Gentleman cannot stand it.
    Sir Fergus Montgomeryasked the Prime Minister if she will list her official engagements for Thursday 28 November.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Sir Fergus Montgomery: During her busy day, will my right hon. Friend have time to look at The Observer for last Sunday, and particularly at the reference to a secret report to the national executive of the Labour party which expressed deep gloom at Labour's prospects of winning the next general election? Is that not proof, if proof were needed, that the successes—
    Mr. Speaker: Order. The Prime Minister may be asked questions only on matters for which she has responsibility.
    Sir Fergus Montgomery: I was coming to that, Mr. Speaker. Does my right hon. Friend agree that that shows, if it needed showing, that even in the Labour party there are people, such as their policy director, who know that the Conservatives will win the next general election?
    The Prime Minister: I welcome any conversion to realism and any conversion to the knowledge that this Government's policies, which are keeping down inflation, creating jobs, standing up to strikes and to places such as Liverpool are producing the right results.
    Mr. McKelvey: Did the Prime Minister hear about the military style coup that took place in the House last night, when members of the Scottish Back-Bench committee were ousted—or at least the chairman, the hon. Member for Dumfries (Sir H. Monro) was ousted—by those right hon. and hon. elements from south of the border who were brought in as Lobby fodder—
    Mr. Speaker: Order. Again, that is not a matter for which the Prime Minister is responsible.
    Mr. McKelvey: In that case, may I ask whether the Prime Minister is aware that such antics are regarded by Scottish voters as demonstrating a lack of democracy? Will the Government take steps to stop it?
    The Prime Minister: I think that that is more a matter for the Leader of the House than for me.
    Sir William Clark: Will my right hon. Friend remind the House that the institutional investor who has put money into British Telecom and who may invest in British Gas is using the savings of millions of small people who depend on that investment for their pensions?
    The Prime Minister: My hon. Friend will be aware that we firmly believe in the privatisation programme. It brings benefits to employees and investors, and a good income to those who invest in such companies.
    Mr. Foot: Will the Prime Minister answer the question that she failed to answer on Tuesday: when will the effective cut in the real value of child benefit be restored?
    The Prime Minister: The right hon. Gentleman knows the increases that have taken place over the whole social security system. He must wait until a White Paper is published to see what any future plans contain.
    Sir John Biggs-Davison: If the hoped for improvement in cross-border security does not result in good time from the Hillsborough agreement, will the Government allow the agreement to lapse and pursue friendly and close relations with the Irish Republic through diplomatic channels and the Anglo-Irish Intergovernmental Council which my right hon. Friend did so much to set up?
    The Prime Minister: We earnestly hope that there will be an improvement in cross-border co-operation which will lead to an improvement in security in Northern Ireland. My hon. Friend will understand why I say that this agreement must be given a chance to work.
    Mrs. Clwydasked the Prime Minister if she will list her official engagements for Thursday 28 November.
    The Prime Minister: I refer the hon. Lady to the answer that I gave some minutes ago.
    Mrs. Clwyd: Has the Prime Minister read the report in today's Daily Mail, which claims that the 4 million unemployed will be able to work on Sundays without loss of unemployment benefit if the Sunday trading laws are changed? Will she give an assurance that, if the laws are changed, she will not change the rules?
    The Prime Minister: I have not read that report, but I do not accept that there are 4 million unemployed—[Interruption.] That figure is constantly being put about, but it is not correct. I hope that the Sunday trading Bill, which has yet to be debated by the other place and this House, will be passed. However, matters concerning any

    1013
    changes to the laws affecting unemployment benefit are the responsibility of my right hon. Friend the Secretary of State for Employment.
    Mr. Gregory: Has my right hon. Friend had an opportunity to see the early-day motion on the import of dangerous toys? Will she consider the possibility of placing the onus on importers rather than retailers, so that there can be happiness rather than misery at Christmas?
    The Prime Minister: Yes. Some time ago, warnings used to be issued about certain toys. They have not been issued recently because there was some criticism of them. As my hon. Friend knows, there are certain prohibition orders, but it is for both the importer and the person selling the toy to have regard for its safety.
    Mr. Blairasked the Prime Minister if she will list her official engagements for Thursday 28 November.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Blair: Why is it that many months after these affairs took place the case concerning Johnson Matthey Bankers is only now being referred to the DPP? Nothing has been done about insider trading with regard to BT, and nothing has been done about the scandal of the Lloyd's insurance markets. Why does the Prime Minister not realise that, to be effective, the rule of law that applies to the inner cities must apply with equal vigour to the City?
    The Prime Minister: The hon. Gentleman is well aware that matters of fraud are for the police and that matters of prosecution are for the Director of Public Prosecutions. The day that politicians interfere with prosecutions, the rule of law will cease to be upheld.
    Mr. Michael Brownasked the Prime Minister if she will list her official engagements for Thursday 28 November.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Brown: Has my right hon. Friend read the speech made by our hon. Friend the Parliamentary Under-Secretary of State for Education and Science on Monday, in which he suggested that there was still a lack of consumer choice in state education? Does she agree that the solution that he proposed—that the market has a role to play in assisting consumers of education to make their choice—was pointed to in "No Turning Back"? Does my right hon. Friend also agree that that pamphlet contains some solutions, to which many Conservative Members look?
    The Prime Minister: Earlier this week I was asked about the pamphlet, and I have read it. My hon. Friend is aware that the House is to consider an Education Bill, which will strengthen the voice of parents in running schools. I share his anxiety about parents not having a sufficient choice of schools. That is a matter to which we must pay earnest attention.

Business of the House
3.30 pm
Mr. Neil Kinnock: May I ask the Leader of the House if he will state the business for next week?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): The business for next week will be as follows:
MONDAY 2 DECEMBER—Second Reading of the Dockyard Services Bill.
There will be a debate on a motion on the EEC sugar regime and on starch production refunds. Details of the relevant documents will be given in the Official Report.
TUESDAY 3 DECEMBER—Opposition Day (1st Allotted Day). Until about seven o'clock there will be a debate on the problems of the Northern region. Afterwards there will be a debate on the Silentnight dispute. Both debates will arise on Opposition motions.
Motions on the National Film Finance Corporation (Dissolution) Order and the National Film Finance Corporation (Transfer of Assets and Liabilities) Order.
WEDNESDAY 4 DECEMBER—Second Reading of the European Communities (Spanish and Portuguese Accession) Bill [Lords].
Remaining stages of the Northern Ireland (Loans) Bill.
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
THURSDAY 5 DECEMBER—Second Reading of the Education (Amendment) Bill.
Motion on the Police and Criminal Evidence Act 1984 (Codes of Practice) (No. 1) Order.
FRIDAY 6 DECEMBER—Private Members' motions.
MONDAY 9 DECEMBER—There will be a debate on the fixed channel link on a motion for the Adjournment of the House.
[Relevant European Documents
Debate on Monday 2 December

(a) 8687/85

Sugar Regime: quotas and levies

(b) 8781/85

Intervention price for raw sugar 1985–86

(c) 9178/85

Production refunds on sugar used in the chemical industry

(d) 11172/84

Starch production refunds

(e) 8688/85

Starch production refunds

Relevant Reports of European Legislation Committee

(a) HC 5-xxx (1984–85), para 3.

(b) HC 5-xxx (1984–85), para 4.

(c) HC 5-xxx (1984–85), para 15.

(d) HC 5-xii (1984–85), para 1 and HC 5-xxx (1984–85), para 13.

(e) HC 5-xxx (1984–85), para 13.]

Mr. Kinnock: I see from next week's business that there is still no time allowed for a debate on the autumn statement. That means that the debate will be at least a week later than it was last year. The autumn statement is looking more like a Christmas statement but, unfortunately, without the eventide benevolence. Will the Leader of the House tell us exactly when we shall have that debate, and accept that further delays will begin to look rather suspicious?
Will the right hon. Gentleman tell us when the Government will produce the White Paper on the so-called social security review? It has now been expected for
1016
several weeks. Why has it been postponed? Is it because the Government are embarrassed by its contents, or because they are hoping to slip it in shortly before the Christmas recess?
Why are the Government limiting discussions on the motion on the Police and Criminal Evidence Act 1984 (Codes of Practice) Order to three hours next Thursday? The House should have a proper opportunity to consider the codes, especially as the Government are apparently so reluctant to give us a full-day debate on law and order, which we have sought on previous occasions.
Finally, will the Leader of the House ensure that the Prime Minister makes a statement to the House on her return from the Luxembourg summit next week, and that she does not make do with a press conference, as she did when she returned from Brussels last week?
Mr. Biffen: I assure the Leader of the Opposition, that there is nothing suspicious about the timing of the debate upon the autumn statement, but I join him in recognising the importance of that topic. I assure him that I shall make provision for that debate in my statement next week. The social services White Paper will be published shortly and will provide further evidence of the Government's style and determination to win through to a third period of office.
I hope that the debate on Thursday on the motion on the Police and Criminal Evidence Act 1984 (Codes of Practice) (No. 1) Order has been set in the context of business generally on Thursday and will enable a reasonable debate to take place. We may reconsider the matter if the right hon. Gentleman thinks otherwise.
I am happy to confirm that my right hon. Friend the Prime Minister will report to the House on the European Community summit meeting which will take place in Luxembourg.
Mr. Ivan Lawrence: Will my right hon. Friend find some way of marking the fact that it is now 50 years since the number of days lost in strikes and industrial activity in this country has been so low?
Mr. Biffen: I take note of what my hon. and learned Friend has said. It is a most welcome fact to which he draws the attention of the House. I have my difficulties in finding time, but he may be able to organise a stunning early-day motion on the topic.
Mr. David Alton: Will the Leader of the House say when time may be found to discuss the establishment of the Anglo-Irish parliamentary tier envisaged in the Hillsborough agreement?
Mr. Biffen: I take note of what the hon. Gentleman says. It is an important point, but I can offer no prospect of time in the immediate future.
Sir Anthony Kershaw: Will my right hon. Friend reconsider the answer that he has just given to my hon. and learned Friend the Member for Burton (Mr. Lawrence)? Should not our remarkable strike-free record be debated so that the House may make up its mind about whether further measures are desirable?
Mr. Biffen: I have to make a balanced judgment in all these matters. I still believe that a compelling early-day motion may be the precursor for further pressure.
Mr. Jack Ashley: Is the Leader of the House aware that a gross injustice is being

1017
done to a small group of vaccine-damaged children, and that nearly 200 hon. Members on both sides of the House have signed early-day motion No. 74?
[That this House believes that the proposed £20,000 payment to vaccine damaged children is grossly inadequate for a lifetime of severe disability; expresses its strong support for the immunisation scheme; but calls upon the Government to provide the few tragic and unwitting casualties of this state-sponsored scheme with compensation comparable to that given to industrially injured people, or that awarded by the courts to those similarly disabled.]
The motion calls for a state-sponsored compensation scheme. May we debate that matter next week?
Mr. Biffen: I note what the right hon. Gentleman has said, and the considerable number of names attached to the early-day motion. I shall draw the attention of my right hon. Friend the Secretary of State for Social Services to the point.
Mr. David Heathcoat-Amory: Will my right hon. Friend delay the publication of the social security White Paper until the Government's personal taxation proposals are known, so as not to rule out the integration of the system, because separate dates for the two papers will effectively rule out that highly desirable option?
Mr. Biffen: I shall draw the attention of my right hon. Friend the Secretary of State for Social Services to the point made by my hon. Friend, but I believe that the House would like to have the social services White Paper in its possession as soon as practicably possible.
Mr. Robert Parry: Will the Leader of the House bring early-day motion No. 56 to the attention of the Minister for Overseas Development? It relates to a new deal for the Third world and has been supported by 105 hon. Members.
[That this House supports the call by the Transport and General Workers Union for a new deal for the Third World and for Her Majesty's Government to expand overseas aid to one per cent. of the gross national product, which should be directed into basic rural development for the benefit of the poorest people in the Third World, particularly the continent of Africa; further supports the basis of the World Conservation policy for combined conservation and development to provide for the needs of the people for food, fuel, timber and conserve wildlife, plants, forests and estuaries; calls for preferential trade arrangements for the Third World with an emphasis on agricultural development; and supports substantial increases in aid as called for by the United Nations to help the poorest of the poor.]
The motion suggests a constructive way of giving positive aid to the poorest people in the world.
Mr. Biffen: I shall certainly accede to the request that I draw the contents of the early-day motion to the attention of my right hon. Friend. The hon. Gentleman will agree that the subject was extensively debated but a while ago in the debate on the Queen's speech.
Mr. Tony Marlow: How will the House decide on which side of the fixed Channel link we should drive? Will my right hon. Friend the Prime Minister toss a coin with President Mitterrand?
Mr. Biffen: My hon. Friend can make precisely that pertinent and headline-catching point in the debate.
Mr. Dick Douglas: The Leader of the House has announced the Second Reading debate on the Dockyard Services Bill. Will he ensure that all hon. Members, especially Conservatives, are given some intimation of the views of the Select Committee on Defence, particularly its second report, which again rejects the Government's preferred option? Will the right hon. Gentleman ensure that the information in the Touche Ross report which is available to private contractors on a restricted basis is made available to all hon. Members? It is wrong that this report is circulating in board rooms where directors are bidding for vital public assets but is not available to hon. Members.
Mr. Biffen: I agree that the Select Committee's report is one of a body of evidence that the House would like to consider during the Second Reading debate. I shall look into the hon. Gentleman's second point.
Mr. Albert McQuarrie: I draw my right hon. Friend's attention to notices of motion Nos 35, 36, 37, 38 and 40 which relate to changes in Select Committees which have been effectively blocked by the efforts of the Liberal party, for example in notice of motion No. 39. As this is having a damaging effect on the Select Committee on Agriculture, which will be affected by notice of motion No. 37, will my right hon. Friend take steps to ensure that the blocking activities of the Liberal party are effectively stopped so that other Select Committees are not damaged by the efforts of that minority party?
Mr. Biffen: My hon. Friend is right in implying that when the Standing Orders concerning membership of the Select Committees were drawn up it was never intended that they should be subject to the kind of tactics that have characterised the Liberal party's behaviour in recent weeks. If the Liberal party wishes to be identified with a constructive role in the work of the Select Committees, no doubt it will have second thoughts.
Dr. Oonagh McDonald: Will the Leader of the house consider delaying publication of the building societies Bill until publication of the consultative document on how building societies can turn themselves into companies in order to provide adequate time for public discussion? Has not the Government's recent experience of legislating for an organisation like the Trustee Savings Bank—to turn from one type of organisation to another—suggested that extreme caution in such legislation is necessary?
Mr. Biffen: I am advised that the Bill as introduced will make only general provisions for building societies to convert themselves into companies if their members approve. More detailed proposals will be brought forward at a later stage in the light of views expressed on the consultative paper. There should, therefore, be sufficient time for comments to be taken into account. I hope that this meets the hon. Lady's anxieties. If she is still not happy, perhaps we could consider the matter.
Mr. Michael McNair-Wilson: Is my right hon. Friend aware of the large number of letters received by hon. Members from constituents who are opposed to the proposed legislation on shop hours, especially as it affects Sunday trading? Will he ensure that the two great Christian festivals of Christmas and Easter are exempted from that legislation?
Mr. Biffen: The legislation is now before another place and it will arrive here in due course. In the light of its condition when it reaches us, we can take our debates further and my hon. Friend's points can be argued.
Mr. John Ryman: What is the Government's attitude to a debate on the new independent colliery review procedure? Last Thursday the Leader of the House undertook to write to me about it; he did not do so. Two weeks ago he undertook to speak to the Secretary of State for Energy about it; he did not do so. The right hon. Gentleman is in danger of misleading me and the House on an important topic which now requires urgent attention because three pits are due to make application by way of appeal through the independent colliery review procedure. When will the Government make a statement?
Mr. Biffen: The hon. Gentleman makes it sound as though he were taking on the entire Government machine. He has such heroic qualities that I know he can do that easily enough. I have written to him today.
Mr. Tony Baldry: Is my right hon. Friend aware that there are many Members of the United Kingdom Parliament who want to see the Anglo-Irish agreement succeed and who would like to see the early establishment of an Anglo-Irish parliamentary tier? Will my right hon. Friend be slightly more optimistic in promising time for the House to debate the issue, to enable us to resolve to establish an Anglo-Irish parliamentary tier as soon as possible, and to give every support to the initiative taken by the Governments and Parliaments of the United Kingdom and of Ireland?
Mr. Biffen: I hope that my hon. Friend will realise that I cannot go beyond the answer that I have already given, but I am fully conscious of the anxiety that the matter be expedited.
Mr. Bill Michie: I am sure that the Leader of the House has read early-day motion 138.
[That this House congratulates the trade unionists at the Forgemasters Atlas site, Sheffield, in their stand for continued full trade union recognition; rejects the 1920 style management that has been brought in to manage the company; notes that this follows promises by the Government, when setting up Phoenix 3, that the management would work through the trade union organisation at the Atlas Works; and regrets that the actions of management in sacking the convenor of shop stewards, who had 45 years service with the company including 30 years as chairman/convenor of the Shop Stewards Committee, and the break up of the Shop Stewards Committee have succeeded in bringing about the longest dispute for over 50 years at the company which was supported by over 66 per cent. of the workers in a secret ballot.]
A series of problems has been caused by the strike. The steel unions have always in the past had good relations with the management. In view of the Government's rationalisation of their programme on steel, and the effect that it has had on morale, with the breaking down of all trade union negotiating machinery, contrary to the agreements made by the Government on Phoenix 3, is the Leader of the House prepared to consider initiating a debate on the subject next week?
Mr. Biffen: I shall most certainly draw the hon. Gentleman's point to the attention of my right hon. and
1020
learned Friend the Secretary of State for Trade and Industry. I realise that it is an industrial dispute which has very serious implications for the steel industry in Sheffield.
Mr. Michael Mates: Why has not my right hon. Friend reintroduced the rule giving Mr. Speaker power to discipline the length of Back-Bench Members' speeches during times of great stress in the House? Is he aware that yesterday not one Back-Bench speech was less than 10 minutes, and that that was also the case on the previous day? If hon. Members are not prepared to discipline themselves, should not we pass the matter back to Mr. Speaker so that those who take an interest and want to make a contribution are able to do so?
Mr. Biffen: I take my hon. Friend's point. There are several procedural recommendations which I hope to be able to bring before the House in the very near future.
Mr. Roland Boyes: Is the Leader of the House aware that the Supreme Court of Military Appeal in Turkey is about to make a decision which will affect the fate of the Turkish peace prisoners? In view of the fact that the Turkish authorities listen carefully to the views of this country, will he join me in appealing for clemency for those men and women who have suffered far too long simply for desiring peace in the world?
Mr. Biffen: The hon. Gentleman makes his very moving appeal in the presence of my right hon. and learned Friend the Foreign Secretary.
Sir Kenneth Lewis: When those hon. Members who represent constituencies in Northern Ireland leave us for a temporary period—obviously we shall miss them—what does my right hon. Friend propose to do about legislation concerning Northern Ireland? Shall we have a rest from it until they come back? I have especially in mind orders that are taken late at night. Would it not be sensible to hold up such matters until those Members return to the House?
Mr. Biffen: The Government of the United Kingdom, including all its component parts, will proceed whether or not there are by-elections pending.
Mr. Allen McKay: Will the Leader of the House consider letting the House know as soon as possible the dates of the Christmas recess? It is important, before the recess, to have a statement concerning mineworkers and the non-payment of national insurance contributions, as their benefits run out on 6 January, the day on which we might be coming back.
Mr. Biffen: May I say at once how much I admire the skill with which the hon. Gentleman is trying to finesse out of me a date that I do not yet know. I am most concerned, for the convenience of the House, that it should know, at the earliest opportunity, the dates of the recess, and I shall bear in mind the hon. Gentleman's point.
Mr. Roy Galley: Will my right hon. Friend confirm that Tuesday's debate on the Northern region will be broadly defined and will include the affairs of Yorkshire and Humberside? If that is not the intention, will he pursue that possibility through the usual channels?
Mr. Biffen: The motion will be in the name of the Opposition and they will draw it. However, I have a suspicion that if one is standing in Tyne Bridge, Yorkshire is almost in the Garden of England.
Mr. D. N. Campbell-Savours: When will the House have an opportunity to debate the Select Committee of Privileges report on the confidentiality of the proceedings of Select Committees and when will it also have an opportunity to debate the report of the Select Committee on Members' Interests on the declaration and registration of interests by parliamentary lobbyists? Could those debates be held in the near future—perhaps on a full day that is split in two?
Mr. Biffen: On the hon. Gentleman's second question about the Select Committee's report on the declaration and registration of interests by parliamentary lobbyists, I have already said that I hope that a debate will be held in the near future. As for his first question, I have nothing to add to what I said last week.
Mr. David Madel: Will the announcement of the rate support grant for England be made before Christmas? When it is made will my right hon. Friend ensure that the maximum amount of time is made available between the announcement and the voting of the necessary moneys through Parliament?
Mr. Biffen: I am not in a position to answer my hon. Friend's question but I shall certainly draw it to the attention of my right hon. Friend the Secretary of State for the Environment. I realise that it is a very important topic.
Mr. Jeremy Corbyn: Is the Leader of the House aware that since October, when the Minister of State, Home Office, the hon. and learned Member for Ribble Valley (Mr. Waddington) made his extraordinary allegations against individual hon. Members over their handling of immigration cases the House has been unable to debate the matter? As there have been many requests for a debate on the operation of the immigration laws and the fear and insecurity that faces many immigrant families, can the Leader of the House hold out any hope of an early debate?
Mr. Biffen: I understand that my hon. and learned Friend the Minister of State has received a number of requests and that he is considering them. The discussions that were proposed by my right hon. Friend the Home Secretary will be initiated in due course and I shall ensure that the hon. Gentleman's comments are brought to their attention. In the meantime, he might like to reflect upon the fact that Home Office questions will arise on Thursday of next week.
Mr. Roger Freeman: Has the Leader of the House had an opportunity to look at early-day motion 71 in my name and those of many of my hon. Friends:
[That this House condemns any policy of Government direction of the investment of the funds of occupational pension schemes into a national investment bank; and confirms support for the freedom of trustees of such funds to invest their assets in accordance with their interpretation of the best interests of their members.]
Will he call together the trustees of the House of Commons pension fund and ask them whether they agree with the suggestion of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) of interference with the assets of private sector pension funds?
Mr. Biffen: I shall draw that point to the attention of the chairman of the House of Commons pension fund.
Mr. Jim Craigen: As the Prime Minister has now accepted the extent to which teachers' salaries in Scotland have fallen behind since the Houghton report, when may we expect a Government statement about how they will resolve the two-year crisis that faces Scottish education?
Mr. Biffen: If the hon. Gentleman will allow me to dilute the question by incorporating the rest of the United Kingdom, he may find that he has a chance to put forward his arguments during the Second Reading of the Education (Amendment) Bill on Thursday next.
Mr. Nicholas Fairbairn: Will the Leader of the House arrange for a debate upon the constitution of the United Kingdom of Great Britain and Northern Ireland? There seems to be confusion in the House about its extent, in particular over jury vetting, Sunday shopping and other matters. There is to be an Opposition debate next week on the northern regions of this country, but it will stop at the Scottish border. When we hold that debate can we be assured that the Scots will not be held responsible for the Anglo-Irish agreement?
Mr. Biffen: As ever, I shall give compassionate and considerate attention to what has been requested, but we have had a fairly emotionally exhausting two day's debate about the problems of Northern Ireland, and that should be enough on constitutional matters for the time being.
Mr. Greville Janner: As it has been many years since the Law Commission recommended reform of the law on insurance, and in particular the removal of the scandalous rules on material non-disclosure and exclusion clauses in insurance contracts, are the Government proposing legislation on the subject? If the Government still refuse to legislate, can we at least have a debate?
Mr. Biffen: I cannot go beyond what was revealed in the Queen's Speech, but perhaps my most helpful course would be to draw the point made by the hon. and learned Member to the attention of my right hon. and learned Friend the Secretary of State for Trade and Industry.
Mr. Peter Bruinvels: Will my right hon. Friend consider introducing a debate on the workings of the Church of England and in particular the recommendations of the review body of the Crown Appointments Commission concerning appointment of bishops, and on the Church Commissioners and their current roles? That body has £240 million invested in shops and major stores that will be operating on Sundays, which is something to which the General Synod of the Church of England is completely opposed.
Mr. Biffen: The Government's ambitions are fairly fully extended with the policy proposals and legislation that we now have. Although the suggested topic is a highly entertaining and important one I hope that it will arise from a private Member's Bill rather than from one from the Treasury Bench.
Mr. Dennis Skinner: When will the Leader of the House agree to the request that we have now been making for several weeks for a debate about the fraudulent activities within the City of London so that we can debate the whole question of the Johnson Matthey Bank and the

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way it was abandoned by the parent company, Johnson Matthey plc? Could we not also discuss the question of how Mr. Peter Cameron-Webb and Mr. Peter Dix took away £38 million from Lloyds and how the Government managed to find £250 million to bail out the Export Credit Guarantee Department when it went bankrupt? Do we not need this debate quickly, because all this fraud and embezzlement and bribery has now spread to the National Coal Board?
Mr. Biffen: I hope that the hon. Gentleman will join me in deploring fraudulent activity wherever it occurs in the City, and will join me in saying that that undermines what is otherwise a widespread respect and enthusiasm for the free enterprise system. Having taken him with me thus far, I hope that he will now reflect with me on why, if there is an enormous and overwhelming national scandal, it is not featured on the first Opposition day?
Mrs. Ann Clwyd: Is the right hon. Gentleman aware that on Tuesday evening, some of us attempted to have a debate on a progressive EEC directive on parental leave, a debate that was destroyed by the loutish behaviour of Conservative Members? Those scenes have been described as some of the worst that hon. Members who have been here for 30 years can remember. Will the Leader of the House have a word with the Conservative Members to persuade them to control their behaviour? Does he agree that it is not enough to be enthusiastic about the free market principles of the Treaty of Rome, but it is also essential to be enthusiastic about those principles that improve the rights of workers?
Mr. Biffen: It sounds to have been good parliamentary spectator sport and I much regret that I was not here on Tuesday evening, particularly as it was on one of those happy occasions when the House was rejecting the imperial authority of Strasbourg and Brussels. However, if any word uttered, or any behaviour, wounded the more tender susceptibilities of the hon. Lady, I regret it.
Mr. William McKelvey: Is the Leader of the House aware that the question that I asked the Prime Minister was referred to as his responsibility? As he is the protector of the interests of Back Benchers and particularly of Scottish Conservative Back Benchers, who are an endangered species, will he look into the fashion in which the Scottish Back Bench Conservative spokesman is elected?
Mr. Biffen: I now understand more clearly the anxiety of the hon. Gentleman, which concerns the conduct of the Scottish Conservative Back-Bench committee. I have a vested interest in the committee. I know, from my years in opposition, that if an Englishman turned up on a Wednesday night he would get notice of the following week's business much earlier. As a result, pairing arrangements were much more satisfactory. I have no responsibility here, but I have total faith in the way in which the arrangements were conducted. I have no doubt that it has been much to the discomfiture of the hon. Gentleman, who was hoping for a much greater row.

Foreign Affairs Council
4 pm
The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): With permission, I will make a statement on the Foreign Affairs Council held in Brussels on 25 to 26 November at which I and my right hon. Friend the Minister for Trade represented the United Kingdom.
The Council agreed a mandate for negotiations with Mediterranean partners on the adaptation of their cooperation and association agreements to take account of Spanish and Portuguese accession. This covers measures designed to ensure that traditional trade flows from Mediterranean partners are not adversely affected. Agreement was also reached on a mandate for negotiations with Cyprus on a customs union.
The Commission reported to the Council on its recent visit to Tokyo for discussions with the Japanese Government on the Community's trade relations with Japan.
The Council also discussed the Community's trade relations with the United States, including the renegotiation of the 1982 carbon steel export restraint arrangement. The United Kingdom reserved its position on the proposed arrangement to allow time to consider the information the Commission had received from the United States about access to the United States market for semi-finished products.
The Council discussed the Commission's proposals for the 1986 generalised scheme of preferences.
The Council discussed arrangements for the forthcoming European Council in Luxembourg on 2 and 3 December, and adopted reports on European union and People's Europe which will be noted by the European Council without discussion.
A further session of the intergovernmental conference on the future development of the EEC was held at the same time, at which there was discussion of ways to accelerate progress towards our key objectives on the internal market.
Ministers also considered how to update the treaty to take account of the Community's role in technology and the environment. A meeting with representatives of the European Parliament was devoted to considering ways in which the Parliament might be able to express its views more fully before decisions are taken by the Council.
Mr. George Robertson: I suppose that we should be grateful that we are getting this report at all, but there is so little in it that I do not know what we have to be grateful for. However, next Monday the Prime Minister will attend the European Council, the EC Heads of Government summit, where the main item will be not citrus fruits in the Mediterranean area, trade with Japan or the generalised scheme of preferences but the proposed changes to the treaty of Rome.
Seldom has a European summit considered matters of greater importance or of more significance for the future, yet precisely what have we been told by the Foreign Secretary about the proposals that will be discussed at the summit or about the British position? The answer is: much less than we could have read in today's newspapers and those accounts are just as grey and confused, and almost as uninformative as the Foreign Secretary's statement.

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What we heard from the Foreign Secretary was a series of platitudes with no substance and no detail. The House is still in the dark on those issues.
What will be the Government's stand on the essential issue at the summit of the virtual abolition of the national veto on European Community decisions? Are we prepared to settle for a veto on only the trivia of the European Community? Will we give the veto away with reckless generosity when hundreds of issues ranging from drugs to safety standards need to be discussed? Why are we being told nothing about it this afternoon?
Where do the Government stand on increased powers for the European Parliament, which figures so largely in the original ideas for the intergovernmental conference? Will we really be pressing for more power for the unelected European Commission rather than for the Council of elected ministers representing Governments? What is the Government's position on the new treaty on political co-operation? We have not heard a word about that. If such a treaty is adopted and a secretariat is set up, and we hear that the Prime Minister and the Foreign Secretary are enthusiasts of it, what will happen at the United Nations when the issue of the Falkland Islands arises and we find ourselves isolated by our European Community partners, yet again, in the block-headed and intransigent attitude that we continue to take in that world forum?
Is the Daily Express right in its speculation that a deal was done between Chancellor Kohl and the Prime Minister? Was there a deal to get together to veto the proposals? Will the Foreign Secretary tell the House precisely what the Government's attitude will be? Most important, why is there nothing from the Foreign Secretay or any other Minister about the deliberations on the European Community budget, which overhangs every other issue that is before the Community? yesterday, ministers, including a Minister from our Government, agreed to £800 million being cut from the European Parliament's proposed budget. Why are our Government again in the ignominious position of being in the last ditch of slashing the social and regional funds? They are the two European funds which might make a difference to the 15 million jobless people in the Community.
At the same time, the Government leave the extravagance of agricultural spending totally unscathed. Since those social and regional funds are now frozen, but the books still do not balance and the European Parliament is still discontented, how is the next crisis to be resolved? If it is ever resolved will it again make the poorest and the most deprived nations with the highest unemployment pay for the profligacy of farm spending within the Community?
We have heard a completely unacceptable statement from the Foreign Secretary telling the House, yet again, nothing about the British Government's position on crucial and central constitutional issues for Britain. We must hope that under examination we hear more than we know now.
Sir Geoffrey Howe: I congratulate the hon. Gentleman on having sustained the excitement that he generated when I did not make a statement so that it greets the statement that I have made today.
There will be an answer from my hon. Friend the Minister of State, Treasury setting out the details of what took place at the Budget Council.
Mr. George Robertson: When?
Sir Geoffrey Howe: It will be given this afternoon.
I am afraid that I cannot satisfy the hon. Gentleman's curiosity on the points that he raised about the Council, with which I was dealing, or on the alleged deals with Chancellor Kohl, even when they are reported in the Daily Express. The substance of what is taking place is that the political co-operation topics will be under consideration at Luxembourg. They are being actively considered largely on the basis of proposals put forward by the United Kingdom for the Milan summit.
On the subject of the existing arrangements, we have never argued that the treaty of Rome is immutable or should remain forever unchanged. We have said that it is for our partners to put forward proposals, which may or may not be justified. The conclusion will depend on whether they are likely to carry forward our objectives, above all the improvement of the internal market. The considerations for the Parliament are on the basis that I mentioned in my statement, to see whether it is possible for the European Parliament proposals to be taken more fully into acount while leaving the decision-making power with the European Council. There are no significant proposals for changes in the powers of the Commission. With regard to the veto, there has been virtually no discussion of the Luxembourg compromise at any of the recent meetings, and there are no proposals for changes.
Sir Anthony Kershaw: Will my right hon. and learned Friend be able to press on with the work of political co-operation, which is a desirable objective? If achieved, it might serve to prevent the ill-considered actions of some of our allies, which was demonstrated at the United Nations yesterday on the Argentine proposals.
Sir Geoffrey Howe: I am grateful to my hon. Friend. Improved arrangements for political co-operation in the Community should enable us to achieve common positions on political matters more frequently, but one must not deceive oneself in respect of the Falkland Islands, because the United States, for example, has voted against us for three consecutive years on that, and by no means all of our Commonwealth partners have taken the same view. That does not mean that our position is wrong—[Interruption.]—despite the encouragement that I am getting from Opposition Members. Our position reflects consistently the needs that the House would regard as important—first to seek improvements in our relations with the Government of Argentina, but secondly to do so on the basis that we uphold our commitment to the people of the Falkland Islands.
Sir Russell Johnston: The Foreign Secretary referred to the intergovernmental conference. Does he agree that it will be impossible to improve the establishment of the internal market unless we improve decision making, which means a diminution of the veto? Secondly, will the Government reconsider their opposition to expanding the European Parliament's role, which was highlighted yesterday in the Budget Council, when Britain was isolated in the vote?
Sir Geoffrey Howe: The hon. Gentleman must choose his arguments a little more consistently. I am not sure that the role of the Parliament in relation to the size of the budget as it has manifested itself so far is one of the strongest arguments for enlarging the powers of the Parliament. With regard to those powers, it is important

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to see whether there are ways that give an assurance that its views are taken as fully into account as possible without impeding the decision-taking capacity of the Community. As the hon. Gentleman rightly said, if we are to make progress towards the internal market as fast as we should like, it makes perfectly good sense to consider improvements in that decision-making machinery, including the possible scope for majority voting.
Mr. Teddy Taylor: I congratulate the Foreign Secretary on one of the best statements on Europe that we have had for a very long time, but with regard to the People's Europe proposals, do the Government favour the plan for a European national anthem or a European flag? Can he say when he thinks those things should be sung or waved? Did he give the Council the reason why Her Majesty's Government changed their practice and did not vote against the proposal to give an extra subsidy to provide cheap, top quality beef to the Soviet Union at 15p a pound when they have always voted against such proposals in the past?
Sir Geoffrey Howe: My hon. Friend's final point must be a matter for my right hon. Friend the Minister of Agriculture, Fisheries and Food. He will have the opportunity to ask him about that later. The one point about my hon. Friend's intervention that alarms me is the enthusiasm with which he welcomed my statement. I can assure him that there are no proposals for either anthems or flags before the intergovernmental conference.
Mr. James Lamond: In the talks that the Foreign Secretary had about trade and so on with the United States and other countries, did he have a moment over his aperitif or even over his brandy and cigars to bring up the question of the multi-fibre arrangement, because jobs in my constituency and elsewhere are dependent on a strong MFA being negotiated? Many hundreds of thousands of jobs depend on that. Employers and trade unions are up in arms because they believe that British civil servants are taking the lead in making sure that a liberal MFA is negotiated.
Sir Geoffrey Howe: I have to confess that I was not smoking a cigar and I drank no brandy, and even over the modest aperitif, the topic suggested by the hon. Gentleman did not arise for discussion. However, it is an important matter and the Community is considering what attitudes should be adopted towards the MFA in the wider context of the GATT arrangements. As always, it will have to try to achieve a position that balances the interest expressed so inconsistently by both sides of the House in a sensible protection for our own textile industry, together with a liberal opportunity for the textile industries in the Third world. The problem remains to be solved.
Mr. William Cash: Will my right hon. and learned Friend assure me about a matter that I raised with him last week, when he said that he had no recollection about possible negotiations affecting article 236 of the Treaty of Rome? I refer to proposed increases in the powers of the European Parliament vis-à-vis the Council, the Commission and the Parliament which could enhance the powers of the Parliament at the expense of Westminster. Will my right hon. and learned Friend also assure me that the possible southern blocking minority,
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with the accession of Portugal and Spain, will not result in an increase in the common agricultural policy, and an increase in the budgetary payments for this country?
Sir Geoffrey Howe: On the first part of my hon. Friend's question, one of the arguments advanced is that all the proposals made so far for enlarging the power of the Parliament do not involve the transfer of democratic power from any national Parliament to the European Parliament. That is an important argument, which must be looked at carefully. Our concern is to see that the powers of the European institutions are adjusted to enable them to work effectively and continue to take decisions in a sensible fashion. With regard to the CAP, unfortunately, it must be acknowledged that arrangements for the support of agriculture in virtually every democratic country in the world involve a constant battle with rising costs in an endeavour to meet the technologically expanding production. I do not believe that that task will become any more or less difficult as the result of the accession of Spain and Portugal.
Mr. David Winnick: Do we take it that at the meeting of the Foreign Ministers, what is happening in South Arfica was not touched on? Certainly the Foreign Secretary did not report on that and I would not have expected him to take the initiative of raising it at a Foreign Ministers' meeting. Is it not appropriate that the Foreign Ministers of the EEC should consider the issue at their meetings, bearing in mind the heavy economic investment by EEC countries in South Africa? Even on the issue of Mr. Nelson Mandela, will not the Foreign Ministers take the opportunity of making it clear that he should be immediately released from prison without any conditions?
Sir Geoffrey Howe: The Foreign Ministers' meeting during the past few days was not in the context of political co-operation. They were meeting on the agenda set out on the Foreign Affairs Council together with the important agenda before the intergovernmental conference. Therefore, it would not have been appropriate to deal with the matter. It was not on the agenda. However, the position of the Community has been stated many times, making it clear that we look for the unconditional and early release of Mr. Nelson Mandela as an important contribution to the prospect of stability in southern Africa, so there was no need to repeat it yet again this week.
Mr. Eric Forth: In the context of proposals to increase the role of the European Parliament in Community decision making, does my right hon. and learned Friend agree with many members of the European Parliament who have taken the view for some time that that Parliament already has at its disposal more than adequate powers to exercise its influence on Community decision making? Has my right hon. and learned Friend considered the possibility that, because of its political nature and make-up, the European Parliament tends to be somewhat unstable and volatile, and lacks continuity in the thrust of its decision making? Does he agree that if its role were enhanced we could be in a worse position in terms of Community decision taking than at present? Have those thoughts gone through my right hon. and learned Friend's mind. Will that affect our position in the outcome of the intergovernmental conference?
Sir Geoffrey Howe: I do not suppose that any parliamentary institution in the world could claim that it

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was always free from instability and volatility. It is right to take account of the special nature of the European Parliament, composed as it will be of representatives of 12 nation states which are sometimes drawn by their attachment to their own country as much as by their attachment to the varying political groups that make it up because it is a young Parliament. Therefore, it is also important to make sure that any change in the treaty does not inhibit the effective working of the Community. Even so, it has been a subject of legitimate study whether one can look at the arrangements for the Parliament and its influence without impeding the work of the Community.
Mrs. Ann Clwyd: Does the Foreign Secretary agree that the European Parliament has repeatedly voted for increases in the regional and social funds and that the Council of Ministers has repeatedly put a red line through its proposals? Would not it be a good idea to give the European Parliament more power, particularly if its budget proposals were at the expense of agriculture? Does the right hon. and learned Gentleman agree that if politicians are elected to a Parliament to do a job of work, they cannot be urged to run and be hobbled at the same time?
Sir Geoffrey Howe: I do not think that I can accept the description in the last part of the hon. Lady's question, although I know that she has considerable experience of the working of that institution. The difficulty with that Parliament, as with all others, is that it has to operate within a framework of budgetary discipline and one cannot give it an unbridled licence to increase expenditure on the regional fund without requiring it to have regard to the wider needs of budget discipline as a whole.
Mr. Tony Marlow: Did the Council discuss what has recently been graphically described by the Leader of the House as the imperial diktat of Strasbourg and Brussels—that there should be erected at every external port of the EC a massive sign in however many languages saying, "Welcome to the European Community"? If it was discussed did my right hon. and learned Friend tell the Commission that he thought that it was a daft idea and did he reinforce the policy of Her Majesty's Government that we believe in a Europe of nation states rather than a European nation?
Sir Geoffrey Howe: I fear that that proposal, which has attracted my hon. Friend's enthusiastic attention, has not been discussed in my presence at any of the European gatherings.
Mr. Jeremy Corbyn: The Foreign Secretary mentioned that discussions took place on increasing trade with Cyprus. How is that trade with Cyprus to be increased and did the Ministers discuss the continuing and appalling division of Cyprus and the presence of Turkish troops in the northern part of Cyprus? Is it appropriate for countries within the EC to trade, possibly illegally, with the Turkish federated state of northern Cyprus, and what steps do the Ministers propose to take to hasten Cypriot unification?
Sir Geoffrey Howe: The hon. Gentleman knows that we do not recognise the Turkish Republic of Northern Cyprus and our attitude towards trade with Cyprus has been directed towards ensuring that the benefits of EC arrangements are applied equally to both communities. Article 5 of the co-operation agreement states that the rules governing trade between the Community and Cyprus shall not give rise to discrimination between nationals of Cyprus.
Mr. Richard Holt: Will my right hon. and learned Friend expand a little on a subject not mentioned in his statement but discussed at the Council—the protected steel order with America which is slightly in the air?
Sir Geoffrey Howe: In the context of the arrangement that I described, the United States proposed to impose unilateral quotas for Community semi-finished steel of 600,000 tonnes for 1986, including 200,000 tonnes reserved for supplies from the British Steel corporation to the Tuscaloosa steel company. There will be scope for additional exports under short supply provisions. The United States has also shown willingness to examine a case from companies concerned for increased access for BSC supplies to Tuscaloosa for 1987 and beyond. We shall decide whether to lift our reserve when we have had a chance to consider the implications of the latest information received.

Farmers (Exceptional Weather Aid)
4.24 pm
The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling): With permission, Mr. Speaker, I should like to make a statement.
I announced on 8 October that the Government intended to provide some help for those livestock farmers who had been most seriously affected by the exceptionally bad weather conditions earlier this year and, in agreement with my agricultural colleagues, I am now in a position to announce the details.
The Government intend to make exceptional payments to farmers with suckler cows and breeding ewes in certain specified parts of the less-favoured areas, and to farmers with dairy cows in certain more limited areas.
For suckler cows and ewes, the rates of payment will be £14 and 35p per animal respectively and the areas concerned will be the less-favoured area in Scotland and throughout Northern Ireland; in England the less-favoured areas in Cumbria, Durham, Lancashire, Northumberland, north Yorkshire, excluding the north Yorkshire moors, west Yorkshire and Tyne and Wear; and in Wales the original less-favoured areas in the counties of Gwynedd, Dyfed, West Glamorgan and Mid-Glamorgan and parts of the counties of Gwent, Powys and Clwyd. For dairy cows, the rate of payment will be £4·50 per animal which will be paid to dairy farmers in Cumbria, including the areas outside the less-favoured areas, in England; in Scotland, in the three regions of Strathclyde, Central and Dumfries and Galloway; and in Northern Ireland.
Those payments will be made to farmers in respect of the number of suckler cows, breeding ewes and dairy cows that they expect to have on dates which will be specified. The farmers concerned are being invited to put in their claims quickly. The agriculture Departments will endeavour to deal with them as rapidly as possible and will hope to pay a significant proportion before Christmas.
My colleagues and I recognise that the farmers in these specified areas are not the only ones badly affected by this year's adverse weather, but we believe that we have, in broad terms, selected for assistance those areas and enterprises where the situation is the most serious. In all, these payments are estimated to amount to about £16·9 million.
I am also in a position to announce the determination for hill livestock compensatory allowances for 1986. The agriculture Departments have now completed the annual autumn review of economic conditions in the hills and uplands and, in the light of that review, my colleagues and I are proposing, subject to parliamentary approval, to increase the rates of hill livestock compensatory allowances with effect from 1 January 1986. In the old less-favoured areas, the allowances for suckler cows will be increased by £10 to £54·50, for ewes of mountain breeds by 50p to £6·75 and for other ewes by 25p to £4·50. In the new less-favoured areas the allowances for suckler cows will be increased by £5 to £27·25 and the allowances for ewes will be increased by 13p to £2·25.
In addition, we are proposing to increase the maximum payment per hectare from £60 to £62·48 in the original less-favoured areas, in accordance with the revised maximum specified in the new EC structures regulations and to make a corresponding increase, from £45 to £46·86 per hectare in the new less-favoured areas. We are also
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proposing to introduce some changes in the detailed rules of the scheme in the light of the new EC regulation, including a provision which will enable an HLCA applicant, subject to checks to prevent over-grazing, who afforests part of his land to take the afforested area into account for the purpose of calculating his allowances for up to 15 years.
We shall shortly be laying before Parliament a draft statutory instrument giving effect to those proposals, which are also being notified to the European Commission.
The additional HLCA payments are expected to cost £10·9 million in a full year and will represent an increase of some 11 per cent. on the existing annual HLCA payments which are currently running at about £98 million per year. That represents a significant increase in the Government's support for the hill and upland areas of the United Kingdom.
The combined cost of the weather relief measures and the increase in HLCA rates in the current financial year will be £25·3 million; £5·3 million of this will be found from savings in programmes within my responsibility and that of my right hon. Friends the Secretaries of State for Scotland, Wales and Northern Ireland. Detailed changes to cash limits will be announced later. The remaining £20 million will be a charge on the reserve. Following an announcement in October that the Government were considering these matters, expenditure on such measures was in prospect and can therefore be met within the estimated outturn for the agriculture programmes in 1985–86. The cost in future years of the HLCA uprating will also be met within the totals for the agriculture programmes published in the Chancellor's autumn statement.
Because of the need to make payments to farmers urgently, expenditure for weather relief estimates at £16·9 million will be met by repayable advances from the contingencies fund pending approval of the necessary spring Supplementary Estimates.
I am pleased also to announce other changes which will help livestock farmers who are facing difficulties as a result of bad weather. In England and Wales, farmers in the areas where the special weather assistance will be payable will be exempted, until the end of March 1986, from the charges normally made by the advisory service for the analysis of hay and silage samples. In Scotland, the suspension of charging by the colleges will apply throughout the country.
Agreement has also been reached in Brussels on arrangements which will enable us to make early advance payments of sheep annual premium to less-favoured area farmers in respect of the current marketing year; and we shall hope to make most of those payments before Christmas. Advances will be paid to less-favoured area farmers who have 10 or more eligible sheep at the rate of £2·10 per ewe in Great Britain and £4·70 per ewe in Northern Ireland. This early payment will clearly be welcome to the farmers concerned.
In addition, we have been able to obtain the European Commission's agreement to some changes in the rules relating to the suckler cow premium scheme, which will help farmers who may find themselves in difficulties over maintaining their cow numbers throughout the winter because of fodder problems or abnormal losses. A separate announcement about this will be made shortly.
Mr. Brynmor John: I thank the right hon. Gentleman for his ready co-operation in making the statement. I know that he regards it as detailed, and, having heard it, I realise that we shall have some difficulty in taking in all the figures. However, the principles behind the statement are of great importance not only to the House, but to the many farmers who are desperately anxious to discover how they will feed their livestock this winter after the appalling summer. With the current bad weather, and snow coming early this year, the statement does not come a moment too soon. Indeed, the Minister should have acted earlier.
Last week, I accused the right hon. Gentleman of promising aid by the end of October. I apologise, because it was his noble Friend Lord Gray who gave us to understand that the aid would be available in weeks rather than months. We now know the converse to be true. The difficulties caused by the delay are mentioned in the final paragraph of the right hon. Gentleman's statement. He talked of
"farmers who may find themselves in difficulties over maintaining their cow numbers throughout the winter because of fodder problems".
We are content with the geography of the bad weather assistance for suckler cows and sheep, but the selection of areas for dairy cows seems somewhat bizarre. Large chunks of England, the highlands and islands of Scotland and the whole of Wales are excluded. What is the reason for that? Did not the National Farmers Union of Scotland say that the rate of £4·50 per dairy cow means that in an average herd the farmer can feed two cows during this winter?
The right hon. Gentleman said that the £4·50 would be paid on dates to be specified. Will the Minister give us as much information as possible about the dates on which he expects that the livestock will be counted? The worst affected farmers this summer have already had to sell many animals just to keep going. It is important to resolve this matter as quickly as possible.
The HLCA increase is welcome—any increase is welcome to farmers in such a predicament. However, while the addition of suckler cows restores the HLCAs in real terms, the sheep categories are not restored to the real value of the payments in 1980 and 1981 when they were introduced. There has been an erosion of about 17 to 20 per cent. in the HLCAs for hardy and less hardy ewes.
The right hon. Gentleman said that expenditure would be met out of the agricultural programmes. That means that no new money is being made available, but that £20 million will be found from the reserve and £5·3 million from the budgets of Scotland, Wales, Northern Ireland and the Ministry of Agriculture, Fisheries and Food. Can the Minister tell us how that money will be divided up, where it is to be found, and why the Government have chosen to make this small economy on something that could not have been covenanted? Why does not all the money come from the contingencies fund?
At a time when the right hon. Gentleman asks the Agricultural Development and Advisory Service to be more commercial, who will pay for the costs arising from the suspension of the charges paid to ADAS for the analysis of hay and silage samples?
We welcome the announcement and consider that it will go some way towards reassuring farmers. However, the right hon. Gentleman must recognise that the delay, of
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which his Ministry is guilty, in responding to the exceptional weather, has led to much economic and structural hardship in the fanning community.
Mr. Jopling: The hon. Gentleman has asked many questions and I shall do my best to respond. I am grateful for his kind remarks at the beginning of his comments.
The hon. Gentleman said that we should have acted earlier, but, as I told the House last week, it was difficult to assess the areas that were hardest hit. We took much advice as we wished to make the best assessment of the areas for assistance.
I am glad that the hon. Gentleman believed that the arrangements for bad weather aid were satisfactory for sheep and cows, but he questioned the assistance for dairy cows and asked why those areas had been selected. The advisory service's advice was that the best formula was to put the money into the areas where the dairy industry had been hardest hit.
The hon. Member asked about the dates for applications. For hill cows and sheep, we would expect 1 January to apply and for dairy cows, 1 December.
I appreciate the hon. Gentleman's welcome of the announcement about HLCAs. I thought it was a little hot that he talked airily about restoring the figures in real terms to their 1980 level, although he acknowledged that some have been restored. That comes very strange from the spokesman for a party which, between 1976, when the present arrangements were introduced, and May 1979, when they were hustled out of office, increased the payment for mountain ewes by only 50p to £4·10. For all other ewes and suckler cows, the 1976 figures remained. It is a bit offside for him to criticise us for not being generous.
Sir Hector Monro: I thank my right hon. Friend—and my right hon. Friend the Secretary of State for Scotland—for this valuable announcement. I thank him for dealing with suckler cows and breeding ewes and for bringing in dairy stock, which will be especially important to farmers in Dumfries, Galloway and Ayrshire. I thank him also for the addition to the HLCA and for his suggestion that there might be some flexibility on cow numbers, bearing in mind the severe losses caused by staggers as well as the fact that many farmers had to sell their beasts when they could no longer afford to feed them. I am glad that my right hon. Friend will consider paying the amounts as quickly as possible. Will he try to make the forms as simple as possible to speed payment?
Mr. Jopling: I am extremely grateful for my hon. Friend's generous remarks. I assure him that we intend to pay the funds as soon as we can. For that reason, w e shall try to keep the forms as simple as possible, remembering that we must ensure that the scheme is properly administered.
Mr. Donald Stewart: If we may assume that representations were made by the National Farmers Union in the highlands and islands and by the North of Scotland college of agriculture, can the Minister explain the incredible omission of those areas from the dairy cow assistance? Those areas were also hard hit by bad weather. No one argues that Strathclyde and the other regions mentioned do not deserve the funds, but why were the highlands and islands omitted?
Mr. Jopling: The right hon. Gentleman will recall that I said that the farmers who will receive assistance were not

1035
the only ones who had to cope with appalling weather. However, we have had to try to discover those who were worst affected and to concentrate on areas where the excess rainfall was highest. I appreciate the fact that other farmers had difficulties, but I believe that the hardest-hit farmers are covered by my announcement.
Mr. David Maclean: My right hon. Friend will be aware that Conservative Members who have many fanning constituents, who contribute so much to Britain, will welcome his announcement not just of the increase in HLCAs, but of the exceptional weather payments, especially since the latter have been extended to dairy cows on lower land, not just in less-favoured areas. From the mass of figures that he produced today, can he tell the House what it means in cash terms to average farmers, of whom there are many in his constituency and in mine?
Mr. Jopling: I am grateful for my hon. Friend's generous remarks. Some of the figures are difficult to apply to the average farmer, but perhaps I could illustrate it by saying that a farmer with 40 hill cows and 500 sheep would obtain about £700 extra through the bad weather package.
Mr. Thomas Torney: Would not the adverse weather conditions have provided an opportunity to use some of our massive stocks of cereals as animal fodder, even if we had to give it away to the farmers? Does the Minister agree that that would have been a great saving to British taxpayers, who at present pay a colossal sum just to store the grain, which many people say is completely useless?
Mr. Jopling: Perhaps it has slipped the hon. Gentleman's memory that some time ago we made available some grain in Northern Ireland to meet exactly the point that he raised. The main difficulty in the areas that I mentioned is not a shortage of grain or of high-energy diet foodstuffs, but a shortage of fodder, or high-fibre products such as hay and silage. Therefore, we were right not to operate in the way that he suggested, but to have done what we did.
Mr. Albert McQuarrie: If the farmers of Banff and Buchan cannot have a loaf, I am sure that they will be happy to accept a crumb. Farmers in Scotland lost £150 million because of the severe weather, and a similar crisis exists now. However, I welcome my right hon. Friend's announcement on the HLCAs. Will he try to make the HLCA and less-favoured area payments sooner rather than later, bearing in mind the fact that we are about to enter the worst period of weather in Scotland?
Mr. Jopling: I do not know by what my hon. Friend sets his standards and how he would define a loaf and a crumb. All that I can say is that £16·9 million for bad weather assistance and a £10·9 million addition to the HLCAs is, in the view of most reasonable people, much more than a crumb. In reply to my hon. Friend's specific question, I recognise that farmers have cash flow problems. To help with those, we are considering making advance HLCA payments to eligible farmers in Great Britain early in the new year, and we shall announce details of that as soon as possible.
Mr. James Wallace: I welcome the Minister's long overdue statement. Although it sounded complicated, does he agree that many of its provisions were what the farming unions demanded at the beginning, and that even the areas—with the notable omission of the highlands and islands—are those which were predicted? Is the delay partly attributable to the fact that the Minister lost his battle with the Treasury and obtained only about two thirds of the money that he sought, and is now seeking to dress it up by linking the statement with the annual hill farming review, which simply restores in real terms much-needed money to the HLCAs?
Perhaps I did not hear the Minister correctly, but I understood him to say that the dates at which the livestock will be counted are December this year and January next year. Does he agree that that will not properly compensate farmers who have had to sell cows and sheep to solve their cash flow problems, and are not they the people whom the measures should help?
Mr. Jopling: The hon. Gentleman must not indulge in wishful thinking and try to read into the arrangements what he hoped would happen. We were right to consider the problem of hill land and the difficulties caused by the overall profitability, which was part of the autumn review, with the effects of the appalling weather. It was right to assess those together, so that we could get the whole picture and to give us a little time to evaluate the weather later in the autumn before we made this announcement. When we had a broader picture, we could provide a better solution.
Mr. Hugh Brown: While recognising the many problems associated with the special schemes, may I ask the Minister how much weather relief is likely to go to Scotland, how many beneficiaries there will be, and what the average payment will be? In view of the Government's philosophy on selective assistance, will a means test be applied?
Mr. Jopling: I am afraid that I cannot tell the hon. Gentleman without notice how much will go to Scotland. My right hon. Friend the Secretary of State for Scotland is here and if the hon. Gentleman puts a question to my right hon. Friend, I am sure tht it will be answered.
Mr. Richard Holt: My right hon. Friend the Minister recounted a long list of areas, but I did not hear Cleveland mentioned. I wonder how wet it has to be in Cleveland before that area is added to Durham, Northumberland and all the other areas mentioned in the statement. Farmers in my constituency have suffered just as much as others and there is no reason why they should be overlooked merely because Cleveland is a small county.
Mr. Jopling: I admitted in my statement that there would be some hon. Members whose farmers have suffered weather difficulties and that my colleagues would claim that they should have assistance as well. I recognise the difficulty expressed by my hon. Friend the Member for Langbaurgh (Mr. Holt) but I believe that the Government have to face my hon. Friend's potential criticism in an endeavour to help those farmers who have been worst hit.
Mr. Ron Davies: Can the Minister clarify the policy to extend payments to areas that have been forested and can he say whether any acreage limits will

1037
apply to HLCA payments? Will he confirm that the new arrangements will mean that HLCA payments and forestry commission grants will apply to the same area?
Mr. Jopling: I cannot go further than the comments that I made in my earlier statement on afforestation. That is a technical matter and the hon. Gentleman should reread my statement and study the words that were very carefully chosen. He will then realise what their effect will be.
Mr. Teddy Taylor: The Minister has been successful in giving £17 million of extra money to the home livestock industry because of the exceptionally bad weather. If there is exceptionally good weather next will it be the Minister's policy to reduce subsidies? Can he say whether the Government have any plans to extend this new, generous policy to the ice cream salesmen of Southend and to the landladies of Blackpool, who are suffering severe cash flow problems and have had a disastrous year because of the inclement weather?
Mr. Jopling: It crossed my mind that my hon. Friend might be in the House when I made my statement. I confess that I was bemused as to what form of question he might have put to me, if, instead of finding another seat in the House representing Scotland, he had been re-elected to the House in a constituency with many upland hill farmers.
Mr. Robert Maclennan: Does the Minister's answer to the question of my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) about the date of eligibility for payment mean that farmers who have already had to dispose of stock will not receive compensation or assistance? If the Minister has difficulty in understanding the difference between a crumb and a loaf, he should consider the view of the National Farmers Union of Scotland that the loss caused by the bad weather amounted to about £200 million. The Minister's additional money for the industry is only one tenth of the sum for the whole of the United Kingdom.
Mr. Jopling: I do not think that I have ever pretended, and nor have farmers asked, that the assistance that we were able to offer in these circumstances would fully make up for the losses that have been suffered. Farmers recognise that the commercial business of farming is hazardous and depends much on the weather. All that the payment is intended to be is a contribution to those farmers in the most difficulty.
Mr. Eric Forth: Can the Minister explain to the House and to the taxpayer why those who expect to be helped by the taxpayer in adverse times should not equally be expected to repay that money to the taxpayer when times are more favourable?
Mr. Jopling: My hon. Friend will know that there is an annual review of the incomes of hill farmers. We conducted that inquiry at the end of October and the beginning of November in the normal and traditional way, and all matters are taken into account.
Mr. George Foulkes: Does the Minister accept that many of the Ayrshire farmers, whom I have the honour to represent—many of whom are not as well off as Southend ice cream salesmen—have lost at least a quantifiable £20 million? Ayrshire farmers will consider £16·9 million—
1038
which is, after all, only 10 days' expenditure in the Falkland Islands at the present rate—to be too little, too late.
Will the Minister admit that there will be cuts in his budget and in the budget of the Secretary of State for Scotland to pay for this aid?
It is all very well for the Minister to say that claims will be met quickly, but the red tape of the Department of Agriculture and Fisheries for Scotland and the Ministry is well known to the farmers. How will the Minister ensure that the bulk of the money is paid before December, before some of my constituents go bankrupt?
Mr. Jopling: If the hon. Gentleman had listened to what I said, he would realise that the Government are intending to make weather assistance payments as early as we can and we hope to pay a substantial amount of this aid before Christmas. He would have heard also that we are hoping to make advance payments on the hill land compensatory amounts.
If the hon. Gentleman considers the part of my statement in which I told the House that the Government are hoping to make early advances on the annual ewe payments of £2·10 per ewe, I think that he will realise that it is unfair to suggest that the Government are not fully aware of the cash flow problems that beset farmers. We are taking positive steps to remedy the problems in the three ways I have mentioned.
Mr. Michael Forsyth: Will my right hon. Friend say what help will be provided by his statement for the primary producers, fodder producers—[HON. MEMBERS: "What about steel?"]—and hay producers who are producing an unsubsidised crop—unlike steel producers? Primary producers are facing the greatest cash flow problems of all.
Mr. Jopling: I suspect that my hon. Friend is speaking on behalf of his constituents in Stirling, and I am aware of their problems. As I have said, it has not been possible to satisfy all farmers. The Government have had to concentrate on the worst hit and I believe that under the terms of the statement, a good many farmers in Stirling will receive assistance.
Mr. William McKelvey: Is the Minister aware that the rainfall in Ayrshire was exceptional and was 250 per cent. above average? As a result, much of the harvest remained unharvested and that which was harvested resulted in the ground being badly cut up. Will the Minister consider, at this late stage, a one-off reseeding, drainage and liming grant?
Mr. Jopling: I think the Government have done well considering the difficulties we have faced. I have heard what the hon. Gentleman has said, but I can make no promises that the Government will move in that direction.
Mr. Nicholas Fairbairn: As my right hon. Friend the Minister knows, I represent the underprivileged housing schemes of Perthshire and Kinross-shire. I congratulate the Minister—this is meant to be a compliment—on the surprisingly generous, although disappointingly small, sum. I suggest that the Minister takes action to ensure that most of the weather fund goes to Scotland as that was the worst hit area. Much of that fund should be spent on transporting, and not necessarily paying for, the ground crops of hay and other commodities which were grown in England, upon which

1039
God smiled more kindly. I ask my right hon. Friend to ensure that that is done before farmers find themselves caught in the appalling spiral of the sale of beasts at low prices with consequential and damaging effects on ploughing, seeding and agricultural machinery for years to come.
Mr. Jopling: I am surprised that my hon. and learned Friend has not heard the loud pleas of my hon. Friend the Member for Penrith and The Border (Mr. Maclean), who has been drawing our attention continually to the problems of farmers in his area. I am surprised, too, that my hon. and learned Friend should say that all the aid should be directed to Scotland. I believe that we have dealt with the problem fairly. Those who represent seats in Northern Ireland, for example, have been drawing our attention to the difficulties that farmers are facing in the Province.
Mr. John: I am authorised to say that all the hill farmers of Glasgow, Cathcart, the constituency which the hon. Member for Southend, East (Mr. Taylor) formerly represented, are ecstatic at the aid which the Government are making available.
It is important to know how the Departments will slice up the £5·3 million of programme savings between them, what programmes will be hit and how ADAS is to be compensated for forgoing the charges that it makes normally for the tests that it carries out.
Mr. Jopling: I think that it would be better to answer in detail the hon. Gentleman's question about the finding of the £5·3 million, and I am not able to do so now. For the current year, my ministerial colleagues and I will be contributing some modest savings. As I explained in my statement, £20 million of the costs of the package will be a charge on the reserves.

Tobacco-Related Diseases
5.2 pm
Mr. Harry Ewing: 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 publication of the World Health Organisation's report on the incidence of death from lung cancer and other tobacco-related diseases in Scotland."
The matter is obviously specific, because the report states that Glasgow has the second highest incidence in the world of death from lung cancer and other tobacco-related diseases. It is followed closely and tragically by Dundee, Aberdeen and various other areas of Scotland. The issue is extremely specific.
The importance of the matter can hardly be over-emphasised. I do not want to detain you, Mr. Speaker, or the House in emphasising the importance of the issue, which must be self-evident to all who have read the report.
The urgency of the need to debate the matter is a topic on which I shall dwell for two minutes only. A debate is crucial, for the simple and tragic reason that the Greater Glasgow health board and four other area health boards in Scotland have been told by the Secretary of State for Scotland that, because they are refusing to become involved in the privatisation of the three ancillary services, they must reduce Health Service spending by 10 per cent. That will amount to £9 million for the Greater Glasgow health board.
The matter is urgent because it is a disgrace that the health of the people of Scotland should be used as a battering ram or bludgeon to force health boards into something that they do not want to do, which involves giving away their services to private companies whose services have been found wanting.
The report of the World Health Organisation makes serious statements on the incidence of death from lung cancer and other tobacco-related diseases in Scottish cities, and accordingly I beg to ask leave to move the Adjournment of the House.
Mr. Speaker: The hon. Member for Falkirk, East (Mr. Ewing) 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 findings of the report of the World Health Organisation on the incidence of death from lung cancer and other tobacco-related diseases in Scotland."
I appreciate fully the importance of the matter that the hon. Gentleman has brought to the attention of the House and I have listened carefully to what he has said. I regret that I do not consider that the matter that he has raised is appropriate for discussion under Standing Order No. 10 and, therefore, I cannot submit his application to the House.

Privilege
5.5 pm
Mr. George Foulkes: On a point of order, Mr. Speaker. It was reported recently in the Glasgow Herald that the hon. Member for Stirling (Mr. Forsyth) had complained to you as a matter of privilege about undue pressure being put on him when

1041
a Mr. Ian Lawson was threatening to stand against him unless he changed his view on Gartcosh. Can you tell us how you will communicate your decision?
Mr. Speaker: I do not communicate matters of that sort. The hon. Member for Stirling (Mr. Forsyth) raised the issue with me and I am dealing with it.
Ministerial Statements
5.6 pm
Sir Russell Johnston: On a point of order, Mr. Speaker. There is a clear trend for Opposition spokesmen, when dealing with ministerial statements, themselves to make statements, which are sometimes as long as, if not longer than the Minister's.
Mr. Robert Hughes: They are usually better as well.
Sir Russell Johnston: Indeed, as was the case this afternoon with the hon. Member for Hamilton (Mr. Robertson) and the Foreign Secretary. I ask, Mr. Speaker, that you give this new development some consideration. Is there any way in which these Opposition spokesmen can be restrained?
Mr. Speaker: The hon. Gentleman has raised a matter which the entire House understands, but there is no way in which the Chair can influence the length of replies to statements or speeches. The Chair will be unable to do so at least until the matter is brought before the Procedure Committee.
Mr. Robert Maclennan: Further to that point of order, Mr. Speaker. I ask you to clarify the statement that you have just made and the advice contained within it. If you feel unable to curb the length of questions and statements asked or made by those who occupy the official Opposition Front Bench, would you feel similarly unable to curb the length of statements or questions made or asked by the spokesman of other parties?
Mr. Speaker: There is the convention in the House relating to Her Majesty's Government and Her Majesty's Opposition. There has always been discretion to allow slightly longer questions from members of the official Opposition Front Bench. The hon. Member for Caithness and Sutherland (Mr. Maclennan) was called when the Minister of Agriculture, Fisheries and Food was answering questions on the statement that he made. I think the hon. Gentleman will find that when there are questions on statements, Liberal Members and Social Democratic Members are always called. I do not think that the hon. Gentleman has any complaint.

BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 16 DECEMBER
Members successful in the ballot were:

Mr. Trevor Skeet

Mr. Peter Thomas

Mr. Mark Hughes

BILL PRESENTED
  GAS
  Mr. Secretary Walker, supported by The Prime Minister, Mr. Secretary Brittan, Mr. Chancellor of the Exchequer, Mr. Secretary Hurd, Mr. Secretary Younger, Mr. Secretary Edwards, Mr. Secretary Baker, Mr. Kenneth Clarke, Mr. Alick Buchanan-Smith, Mr. Alastair Goodlad and Mr. David Hunt, presented a Bill to provide for the appointment and functions of a Director General of Gas Supply and the establishment and functions of a Gas Users' Council; to abolish the privilege conferred on the British Gas Council by section 29 of the Gas Act 1972; to make new provision with respect to the supply of gas through pipes and certain related matters; to provide for the vesting of the property, rights and liabilities of the British Gas Corporation in a company nominated by the Secretary of State and the subsequent dissolution of that Corporation; to make provision with respect to, and to information furnished in connection with, agreements relating to the initial supply of gas won under the authority of a petroleum licence; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 13.]
Orders of the Day

  Housing (Scotland) Bill
  Order for Second Reading read.
  5.9 pm
  The Secretary of State for Scotland (Mr. George Younger): I beg to move, That the Bill be now read a Second time.
  The main objectives of the Bill are to extend further our successful right-to-buy policy, by bringing new categories of tenants into the right to buy for the first time, and by increasing discount for large numbers of tenants living in flats. The Bill also aims to improve and simplify the building control system, by cutting down on unnecessary bureaucracy. The measure is in tune with a number of key elements of the Government's programme: it extends individual rights and freedom, it encourages wider ownership of wealth and property, it promotes the privatisation of large local authority estates, and it aims to cut out red tape. I believe that in all these respects it meets the aspirations of tenants and of the public at large, and I trust that the House will give it support.
  Our housing policy has a number of important objectives. First, we have sought to provide a greater freedom of choice in housing matters. Secondly, we have encouraged a variety of housing provision and types of tenure. Thirdly, we have aimed to make more diverse and human the monolithic and unpopular council estates, which have long been a dispiriting feature of public housing in Scotland. With these objectives in mind, it would be appropriate if I were to comment on the campaign which, as hon. Members will know, the Convention of Scottish Local Authorities has launched today to publicise its case for additional investment in public sector stock.
  I agree that councils face problems in alleviating disrepair, condensation and dampness, for example, in their housing stock, but let us not get the problems out of perspective. Over 80 per cent. of all council stock has either been built within the past 15 years or has been rehabilitated or modernised.
  Recently, much was made of the English report which suggested that £18·8 billion was needed south of the border for housing renovation and repairs. I understand that COSLA suggests that the equivalent Scottish figure is £7 billion, or twice as much per house as in England. I believe that this COSLA figure is substantially exaggerated. We have recognised that much work needs to be done and have increased the authorities' capital allocations this year for work on their own stock by over £50 million, or nearly a quarter, but our policies are designed to tackle the problem in a sensible and properly programmed way. COSLA seems to believe that the answer to all problems is just to throw money at them.
  Mr. Gordon Wilson: I am sorry to interrupt the Minister just as he was about to fling money at the problem. In view of his assertion that the COSLA estimate is excessive, why has he refused to grant a housing condition survey in Scotland, which would be an independent inquiry into the condition of houses in our country?
  Mr. Younger: My judgment is that a housing condition survey would cover a small sample and as such would provide no new information. We understand that there is a major problem to be tackled, but it should be tackled within our resources, and we shall do so in a proper, sensible and programmed manner. That is what I am trying to suggest today.
  Let us remember, however, that many of the difficulties with housing today result from the spend, spend, spend policy of the 1960s and 1970s. COSLA is silent about the benefits that can be, and are being, obtained by increasing people's freedom of choice through, for example, the right to buy. Our efforts have been focused on increasing people's opportunities to own their own homes. Surveys have shown that owner-occupation is far and away the preferred form of tenure for the majority of people.
  Mr. Donald Dewar: Before the Minister plunges into the main part of his address, I wish to question him a little further about his remarks on the COSLA survey. He has given the impression that there is no need for a housing condition survey in Scotland because we all agree that there is a problem. However, only a few minutes earlier he made some slighting remarks about the need to get the problem into perspective and suggested that COSLA had greatly exaggerated the matter. There is a serious disagreement, and surely it would be sensible to have the housing condition survey so that we can know what the argument is about and the scale of the problem. Will the Minister comment on the fact that the COSLA document, which he is attacking, has been supported and signed by a selection of district councils which are under Conservative control?
  Mr. Younger: We must work out whether such a suggestion would achieve any benefit. A survey equivalent to that done south of the border would cover only 900 houses. Will the hon. Gentleman reflect on whether a sample of 900 houses throughout Scotland—with a lot of effort put into drawing conclusions and extrapolating them from that survey—would tell us anything apart from what we already know? Does the hon. Gentleman think that it would show that there were no problems and no need for the rehabilitation of housing?
  We know that there is a vast amount to be done. We do not need a new survey, on a minor basis, to tell us something which we already know. We ought to expend our energies on putting the maximum resources into solving the problems. The hon. Gentleman should reflect on that. Although I can see the cosmetic advantage of announcing a housing condition survey, it would be quite pointless and a waste of time.
  Our right-to-buy policy has been a massive success. When we took office in 1979, under 35 per cent. of houses in Scotland were owner-occupied, and this figure had hardly changed from the previous decade. Now the number of households in Scotland which own their own home is over 40 per cent. This is a major change in a little over five years.
  The Tenants' Rights, Etc. (Scotland) Act 1980 gave many people their first opportunity of turning into reality their aspirations to own their own home. Since the Act came into force, almost 75,000 houses have been sold by district councils, the new towns and the Scottish Special Housing Association. What is more, nearly 7,000 sales are at an earlier stage in the process. The hon. Member for
  1046
  Glasgow, Garscadden (Mr. Dewar) will no doubt attempt to evade the issue by claiming that the right to buy is of interest only to a minority of tenants who have bought or who are in the process of buying. I believe that any hon. Member who makes that point has misjudged the situation and is out of touch with the feelings of tenants. The right-to-buy policy has been a success with tenants who have bought or are in the process of buying and with tenants who may have no immediate intention of buying but who nevertheless welcome the fact that they have the right to buy their home at a reasonable price in the future.
  Mrs. Anna McCurley: Is it not a tribute to the success of our housing policy in Scotland that the Opposition have radically altered their policy on the right to buy?
  Mr. Younger: I hope that my hon. Friend's assumption is right and that her optimistic hopes w ill be fulfilled, because that would be a tribute to our policy.
  One of the most important facts about sales is that they release resources for re-use by councils for the benefit of other tenants. This year, councils in Scotland will be able to spend more than £100 million from sales, which is money which would not otherwise be available. It is a massive injection of extra money to help authorities to deal with housing need.
  In line with our objective of extending opportunities for tenants to buy their homes, clause 1 will extend the right to buy to tenants of registered housing associations. These tenants have previously enjoyed security of tenure under the Tenants' Rights, Etc. (Scotland) Act 1980, as well as the other benefits of the tenants' charter. However, they have not been able to buy their homes except at the discretion of their landlord.
  For some time we have been unhappy about the way in which the housing association movement in general has been operating the voluntary sales policy. Up to March 1985, housing associations had sold only 83 homes to their tenants, 60 of them at a discount. This is a small proportion of the association's total general needs stock. The movement is now well established in Scotland, and the arguments which led us to exclude housing association tenants from the original 1980 legislation, which were that Scottish associations were less well developed than English associations and thus less able to divert Their energies to sales no longer carry such force, as the movement has gained in maturity and associations have acquired more stock.
  Housing associations have been given every opportunity to prove that a voluntary sales policy could work, but a number of associations have chosen to adopt policies which preclude sales while others, with positive sales policies, are unwilling to offer discount. We have therefore come to the conclusion that tenants of registered housing associations can no longer be denied the rights which are enjoyed by other public sector tenants in Scotland, and indeed by housing association tenants in England and Wales. It is especially relevant that housing association tenants in England and Wales have had the right to buy since 1980. Suggestions that the movement would be seriously weakened as a result have proved totally unfounded, and I do not see why the case should be any different in Scotland. Some 30,000 housing association tenants will stand to benefit from this new right.
  Sir Russell Johnston: The right hon. Gentleman knows that the Scottish Federation of Housing Associations would contest what he has just said. Why has there been no consultation with that federation for about a year and a half?
  Mr. Younger: I do not think that the hon. Gentleman is right. There has been frequent contact between my hon. Friends, myself and my Department with the housing association movement and the Housing Corporation. I do not know that they would all necessarily disagree with many of the things that I have said. I appreciate and understand the excellent work that housing associations have done. I am a great admirer of that movement, but feel sad that tenants in housing association properties are precluded from the right to buy their homes, which have been built substantially with public money, such as other tenants have. We should not lightly deny them that right.
  Clause 1 also extends security of tenure and the right to buy to tenants of regional councils, police authorities and fire authorities. I recognise that there are houses which those authorities need to retain for operational purposes, such as houses which are being held temporarily, pending development, or houses which they need to let to employees in connection with their work with the authority. Provision is made in the legislation to exclude houses of these types from the right to buy. When houses do not fall into these categories, we have again come to the view that it is difficult to defend not extending to tenants of regional councils the right to buy their homes on the same terms as other public sector tenants in Scotland, and indeed as tenants of comparable authorities south of the border. Many hon. Members on both sides of the House will have had representations, some of them strong, from constituents who feel greatly disadvantaged by being denied that right.
  Clause 2 provides that the discount to which a tenant is entitled under the right to buy will be increased by 10 per cent. when the dwellinghouse being purchased is a flat. The purchaser will be entitled to discount at a new minimum level of 42 per cent. after two years, rising to 70 per cent. after 30 years. We have been concerned that flats, which account for almost half the Scottish public sector stock, have been selling more slowly than other types of houses. When we undertook research into sales, it became clear that tenants of flats were being deterred from buying by the thought of expenses which might affect the purchase after sale, such as common repairs. It seemed to us fair that the sale price of flats should reflect these additional responsibilities—480,000 households stand to benefit from this change, if they decide to buy.
  Clause 3 provides that the rule under which discount may be restricted on newly built houses will be relaxed, by bringing forward the cut-off date from 15 May 1975 to 31 December 1978. I accept that landlords should not, in general, be required to sell houses under the right to buy at less than the outstanding debt. I believe, however, that the date can now be moved forward to the end of 1978 without breaching this principle. The advantages are that authorities will be spared the need to carry out complex financial calculations, knowing that, in the majority of cases, the outstanding debt would be likely to be less than the selling price, and an area of uncertainty is removed for tenants.
  Mr. Michael Forsyth: Can I take my right hon. Friend back to what he said about the difficulties
  1048
  concerning flats and the additional costs that tenants who become owner-occupiers will encounter for maintenance? I welcome the increased discounts, but does not the difficulty experienced in selling flats suggest that valuers are setting too high a price on them, as they are not taking account of those maintenance costs and future obligations?
  Mr. Younger: I see my hon. Friend's point. It is difficult for a layman, even a Secretary of State, to question the professional judgment of valuers. It would be rather easier in many respects if we could. It appears strange that valuations do not to some extent reflect the burdens on purchasers. I hope, however, that the proposed change in the Bill will go some way to right what some tenants regard as a potential liability which they are unwilling to risk.
  Clause 3 also provides that discount may be restricted when a house was modernised after the new cut-off date of 31 December 1978. We have received representations from a range of authorities in recent years that they should not be required to sell recently modernised houses at less than the debt outstanding on that work. There is evidence that some authorities were thinking twice about modernising houses which they believed might be sold. We concluded that it would be better for landlords and tenants alike if we made sensible provision for the treatment of modernisation costs in the legislation. I hope that tenants will accept that that is fair.
  Mr. Robert Maclennan: There appears to be an anomaly in Scotland, because tenants of public authority housing cannot have their time as tenants taken into consideration when calculating discount, as happens in England. In England, tenants of the Inland Revenue, for example, can have that time taken into account. The Bill does not appear to remove that anomaly. Will the right hon. Gentleman consider it?
  Mr. Younger: I had not met that point about the Inland Revenue. I shall be glad to consider it. No doubt it can be arranged in Committee if the hon. Gentleman thinks that it is worth pursuing.
  Clauses 4 to 6 will give the Secretary of State new powers to intervene on behalf of tenants whose landlords might be putting difficulties in the way of purchase. The powers are necessary because some landlords seem ready to go to extreme lengths to frustrate and discourage potential purchasers. Most hon. Members will have had strong representation on that, too.
  Clause 4 will enable the Secretary of State to make directions requiring landlords not to include certain conditions in offers to sell when the Secretary of State is satisfied that such conditions would be unreasonable.
  Clause 5 will enable the Secretary of State to give financial and other assistance to purchasers involved in actual or prospective court proceedings against their landlord in connection with the right to buy.
  Clause 6 strengthens my existing powers to require landlords to provide information concerning right-to-buy sales. When this is necessary to help me intervene on behalf of tenants. I should perhaps mention here that the Bill also places a new requirement on landlords, under schedule 1, not to induce tenants to enter into agreements which purport to restrict that person's right to buy. This is directed at the type of agreement which Glasgow district council requires its tenants to sign, before houses are modernised, to the effect that the tenant will not exercise

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  his right to buy for a period of years, or if he does seek to buy, will repay to the landlord a proportion of the modernisation costs. This also has caused a great deal of annoyance for potential buyers in Glasgow.
  Clause 7 will enable me to contribute towards the cost of schemes to make it easier for tenants to move to a house in a different authority's area. Clause 8 requires registered housing associations to make rules governing allocations. Clause 9 strengthens local authorities' lending powers.
  Clause 10 restores a ground for recovery of possession, where a landlord wishes to transfer the tenancy following the breakdown of a marriage or other relationship. The suggestion that it would be helpful to restore this ground came in a report from the Institute of Housing. We consulted widely on this proposal during the summer, in fulfilment of undertakings given to the House during the passage of the Law Reform (Miscellaneous Provisions) (Scotland) Bill. There was unanimous support for the proposal and we concluded that it would be appropriate to proceed.
  Clause 11 and schedule 1 amend and clarify further aspects of the right to buy and other rights of public sector tenants. Experience of operating the right to buy has suggested a number of ways in which the scheme might be amended to remove anomalies and make it easier for tenants to purchase, and to ease the administrative burden on landlords. A number of proposals are set out in schedule 1. In particular, the provisions governing qualifying time for the right to buy and for discount are clarified.
  In addition, the period within which a person who purchases his house under the right to buy is liable to repay all or a proportion of the discount received is reduced from five to three years. Suggestions that this will encourage tenants to take a quick profit on the purchase of their house are totally unfounded. Research has shown that the vast majority of tenants who buy their houses intend to continue living in them for a considerable period. Where tenants require to move, however, for job or other reasons, the present rules on repayment of discount represent an unnecessary barrier to mobility. We have concluded that it would now be reasonable, in the light of experience of operating the right to buy, that the rules should be relaxed.
  Clauses 12 and 13 will overcome certain difficulties being experienced by housing associations.
  Clause 18 amends the system of building control. Scotland's distinctive building control system has served us well over the years. Following a comprehensive review and wide public consultation, I concluded that the system, while basically sound, could benefit from the introduction of some measures designed to produce simpler and more efficient arrangements, in keeping with present-days needs. These were set out in my statement of intent on the future of building control in November last year.
  The clause also deals with changes which require primary legislation. Its provisions will allow exclusion from the full requirements of the building standards regulations of a range of small additions to buildings—for example, porches, car ports and lean-to greenhouses—where developers, householders and local authorities alike would benefit from a lighter hand on the controls.
  Similarly, the powers in the clause to introduce a measure of self-certification of design and a system of class warrants for standard building types will eliminate unnecessary administrative effort and generally speed up the process of obtaining a building warrant for the kind of
  1050
  work involved. The more flexible fee arrangements which I am seeking will, in particular, enable me to exempt from building control fees work carried out wholly for the benefit of disabled people, allowing the disabled in Scotland to enjoy a concession already available to them in England and Wales, and this will be welcomed by hon. Members on both sides of the House.
  Mr. Willie W. Hamilton: In relation to clause 18, does the right hon. Gentleman recall that the Government issued a consultative document on building regulations in 1982–83? May we have an assurance that the terms of clause 18 will not in any way presume to lay down the standards that the Government sought to lay down in that consultative document, for they represented appalling reductions in the sizes of rooms, kitchens and so on? If he will give that assurance, the whole of Scotland will be satisfied.
  Mr. Younger: I am glad that I can give the hon. Gentleman that assurance. Space regulations and the like will be dealt with separately. They are not altered by or reflected in this measure.
  In different ways, these measures take further the process we have already started of cutting out bureaucracy, encouraging the privatisation of public assets and extending opportunities for home ownership. We are fast approaching the situation when, for the first time in many years, fewer than half of all homes in Scotland will be rented from the public sector. Our policies have led to a major transformation of the housing scene in one of the largest transfers of assets from state agencies to private individuals in modern times. The right to buy has undoubtedly been a major factor in this change.
  I come to the point that was raised by my hon. Friend the Member for Renfrew, West and Inverclyde (Mrs. McCurley). I hope that during the debate we shall receive a clear statement about where the hon. Member for Glasgow, Garscadden (Mr. Dewar) and the Opposition stand on this matter of the right to buy. I hope that he will give a clear and unequivocal statement that his party fully supports the right to buy—this important right for tenants. Such a statement would be welcomed by the vast majority of tenants in Scotland.
  I fear, however, that we may end the debate without having received such a statement, and I shall be disappointed if that proves to be the case. I hope that the hon. Member for Garscadden will not say that he is not opposed to sales in principle, but he believes that it should be left to the discretion of individual landlords to decide their positions. He cannot leave the debate today without making his position clear on that central point of the Bill.
  The public will not be misled by any fainthearted proposals that it should be left to landlords to make their own choices. After all, local authorities had a discretion to sell houses before we introduced the right to buy, and we know how few houses were sold and what tremendous efforts were made by many landlords and local authorities in those days to avoid selling to many tenants who desperately wanted the opportunity to buy.
  We require from the hon. Member for Garscadden a clear statement on whether the Labour party in Scotland is or is not in favour of the right to buy. Can tenants in Scotland look forward, should there ever be another Labour Government, to having the right to buy their homes? The hon. Gentleman is a straightforward person,

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  who will have come to the debate with a voluminous brief. I hope that it contains a carefully drawn up set of words which will satisfy me, so that I shall know exactly where the Labour party stands on this matter.
  The Government have a real commitment to extending freedom of choice and to spreading wealth and ownership as widely as possible. The Bill will extend that process still further, and I have no hesitation in commending it to the House.
  5.37 pm
  Mr. Donald Dewar: I must tell the Secretary of State that it has never been my political ambition to satisfy him, and I fear that he may yet be disappointed again, as he has so often been in his political career. He has had many bitter disappointments of late as Cabinet reshuffles have proceeded. However, I assure him that I shall discuss the Bill in depth, and he will welcome that serious and proper approach.
  I begin on a happier note. I wish to offer, even in his absence, my congratulations to the hon. Member for Tayside, North (Mr. Walker) on his election as chairman of the Conservative Scottish group. It is always good to see an hon. Member rising with the popular vote of his colleagues, and it is particularly touching when some of them travelled so far to support him. It is a tribute to his tact that he has decently absented himself from the field of triumph this evening. We shall watch him at work with interest in the months ahead.
  I know that the hon. Gentleman will read our comments about him in Hansard, so I must add that there is a note of caution on the Opposition Benches. The question being asked is whether the hon. Member for Tayside, North is doing too much. After all, he has great responsibility as his leader's personal representative in defence matters in Scotland. To take on that along with the chairmanship of the Conservative group must give rise to some anxiety. We can only wonder how so small a figure and so modest a frame can shoulder such daunting responsibilities.
  At the same time, we offer sympathy to the hon. Member for Dumfries (Sir H. Monro), who has momentarily left the Chamber. I feel sorry for him because we have all on occasions tasted electoral defeat. It must have been particularly wounding to discover himself being passed backwards and forwards between the Prime Minister and the Leader of the House during this afternoon's proceedings as though he were an unwanted brown paper parcel. I hope that at some point he again finds a home in the Scottish Conservative party.
  Having properly recognised those dramatic happenings, I come to the Bill—the centerpiece, I understand, of the Government's legislative programme in Scotland, the height of their creative, imaginative endeavour in the Queen's Speech.
  In the recent reshuffle, the Parliamentary Under-Secretary of State, the hon. Member for Edinburgh, South (Mr. Ancram), was stripped of half his kingdom. For example, he lost home affairs, doubtless in the hope that better things would emerge from him by narrowing his area of responsibility. But sadly, the end product is this Bill, which seems to be nothing more than an apology and a non-event. Although we shall consider it very carefully in Committee, we cannot give it a very warm welcome.
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  Schedule 1 alone would be the subject of a good Committee stage. I am sure that my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) will be very active in that respect. I hope that the Under-Secretary of State will be able to answer my next question. It involves not a political point but merely a matter of machinery. As he knows, the amendments to the Housing Associations Bill 1985 form one of the important bases of the Bill. Clauses 12 to 15 are cast entirely in terms of amendments to that legislation. But, of course, that Bill has not yet been printed. It is not a case of it being hard to get hold of; it does not even exist. To find out what is in that legislation one has to go back to a Bill from the last session, Bill No. 198, and one has to look at column 1564 of the Lords Hansard for 30 October and translate the 16 amendments recorded there into Bill No. 198. I suppose that one might then have something that approximates to the measure that we are invited to amend. It is extremely inconvenient.
  Today, I tried to make inquiries through the Library as to whether the 1985 Act would be available soon, but no one seemed to know. Will the Minister give us a guarantee that the Committee stage will not start until the 1985 Act has become available? It is ludicrous to try to draft amendments or to try to understand the subtleties of some of the changes when we do not have the basic statute available in any form.
  I should like to know where the Bill comes from and why we are being lumbered with it. There have been all sorts of rumours about that, and I am delighted to see the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) in his place. One of the rumours is that it is an essential part of the Edinburgh, West survival kit for the next election. That has a some plausibility to it. To be fair, the hon. Gentleman has pursued this issue enthusiastically. I understand that he has been under pressure from some of his constituents who might be thought to have an interest in the matter. He has been demonstrably unhappy, and on several occasions the corridors of Westminster have been filled with a persistent but well-bred bleat as he has expressed his distress. We are told that in Barnton people feel very strongly about these matters. Of course, if a Member of Parliament has a majority that has fallen to about 500, it concentrates his mind wonderfully.
  Lord James Douglas-Hamilton: Is not the hon. Gentleman aware that I introduced the Bill well before the election? Indeed, the leaders of every party voted on that Bill and expressed themselves clearly. But I introduced the Bill before the election and the electoral result had nothing to do with it.
  Mr. Dewar: It shakes one's faith in the ethical standards of public schools to hear the hon. Gentleman saying that with such immense and disingenuous authority. But, to be fair, there are other possible explanations, such as ideology and prejudice. The one that I favour is that the Bill has been introduced because the Government could not think of anything better to do. There was almost nothing for Scotland in the Gracious Speech, and I suppose that there had to be something. But the Secretary of State's explanation was not entirely convincing.
  We know that in the 1980 legislation no right to buy was offered to housing association tenants. In 1984 there was quite important amending legislation. In that year there was a specific Bill to amend the Tenants' Rights,

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  Etc. (Scotland) Act. Again, there was no extension to housing association tenants. Indeed, the hon. Member for Edinburgh, West moved an amendment that was resisted by the Minister in quite interesting terms. The Under-Secretary of State, the hon. Member for Edinburgh, South, said:
  "So far, there has been no clear indication of extensive interest by tenants in purchasing their houses, except in the case of the Link housing association, to which my hon. Friend the Member for Edinburgh, West referred."—[Official Report, First Scottish Standing Committee: 8 December 1983, c. 402.]
  Therefore, at the end of 1983 the Minister conceded that there was no interest outside that little group of keen financial people in Barnton. There was no discernible interest in sitting tenants buying their housing association properties. We must ask whether there has been any evidence since then of a great growth of interest. I suspect that the answer is no.
  Most of us who have read the briefings sent to us know that on 27 August 1984—quite recent history—the Secretary of State opened Glasgow's 10,000th rehabilitated house in, I believe, Shettleston. As my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) will know, it had a nameplate on the door saying "John Wheatley". But the ironic comment that that embodied seemed to pass the Secretary of State by. I doubt whether he will be remembered as a great architect of enlightened housing legislation, but he opened that house, and in the following press conference he made one point perfectly clear. According to the housing journal, he "reaffirmed his belief' in the voluntary code and went on to say that there was
  "no need to introduce legislation."
  Thus, at the end of 1983 Ministers conceded that there was no interest in the measure. In August 1984 the Secretary of State made it crystal clear that he had no intention of pursuing the legislative path and totally backed the voluntary code. No real explanation has been offered for this volte face. In the Bill, we have a statement of bold Conservative policy, but that is not enough. We are entitled to examine the practical consequences of what is being suggested.
  If it is not thought unfair, I believe that we should take this legislation seriously today to see what will happen if it is implemented. Consequently, I shall ask a series of constructive questions which the Under-Secretary of State will no doubt deal with at the end of the debate. I understand that the discount for housing association tenants will be based on their public sector tenancy prior to becoming housing association tenants, or their tenancy of the housing association property which they want to buy subsequent to the passing of this Bill.
  Thus, in a year's time, when the legislation comes into operation, we may find that Mr. X, who has spent five years as a district council tenant and who has been nominated for a housing association flat, has moved in. He will immediately become eligible for a discount of about 50 per cent. if he wants to buy. Mr. Y, who lives in the same close, may have lived in and paid rent for his flat for 20 years before any improvement to it. If he then becomes a housing association tenant it may be thought that he is morally in a very strong position. But at that point he will be eligible for no discount whatever, because he will have no previous history of being a public sector tenant. What is the justice or logic in that? But it is certainly a consequence of this legislaton. One man would have a
  1054
  substantial right to discount and the other would have none, and would be starting from scratch. That is a rather perverse result, to say the least.
  The confusion grows. Once the right to discount has been earned by Mr. Y, just as it exists, rather surprisingly, for Mr. X, he will want to know what it amounts to. I understand that the fixed price would be not less than the outstanding debt or the market value, whichever is the less, if the house has been improved or rehabilitated after 31 December 1978. That means the vast majority of housing association improved property in Scotland. Thus the discount cannot take the purchase price to the tenant below the outstanding existing debt. That is extraordinary, because in practice it means that the debt will often be above the market price and so there will be no discount.
  Therefore, we are offering a rather peculiarly weighted discount package, which will not apply to many tenants. It will help the constituents of the hon. Member for Edinburgh, West because their houses were built long before 1978. However, the vast majority of ordinary tenants will say, "I am entitled to a 50 per cent. discount," but will find that they are entitled to no such thing. Even if there were a gap between the market valuation and the book debt, it would almost certainly be only small, which would squeeze the discount.
  Let us assume that a flat is valued at £20,000, and the tenant has a discount of 50 per cent. He will think mat he can buy the flat for £10,000—I have looked into the matter and these are typical and plausible figures—but there may be a book debt of £18,000, in which case his discount will be limited to £2,000. The way in which the discount becomes available is arbitrary. Even if one is eligible for a discount, one may find that it is squeezed or eliminated by the chance factors of the unit cost of the flat. Discount will be arbitrary and confusing.
  Will the Under-Secretary clarify whether the outstanding debt includes acquisition costs? They are mentioned specifically in section 1(a) of the Tenants' Rights, Etc. (Scotland) Act 1980, but have disappeared from clause 3 (b): which refers to housing associations.
  No one will understand exactly how all those strange results happen. A person may have the same tenancy as his neighbour, the same valuation on his flat, and be entitled to the same discount, yet he may end up with a different end price. The Minister finds that funny, but he will have the greatest difficulty in explaining it. The end price will be different because the unit cost of improvement, which must be allocated on each dwelling unit, will vary from flat to flat. Therefore, even if one surmounts all the intermediate hurdles, the purchase price may vary because of the variation in the outstanding debt that remains over the property. Who will be able to explain or comprehend that? What justice and logic is there in the proposals?
  One of the unpleasant results—I am moving towards a matter of opinion—will be that the most profitable deal for sitting tenants will be in the most desirable areas: for example, in Partick in Glasgow. The housing association there has done a tremendous job preserving old tenement property in areas of the city by Dumbarton road. Valuations in such areas will be high. Thus, there will be a bigger gap for the discount between the valuation and the existing debt on the property. In other words, it will be an advantage to have been a tenant in a better area rather than, for example, in Shettleston, where the debt will often be more than the valuation.

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  Barnton is an extreme case. I understand that the Link development went up in the 1960s, and that it is a pleasant middle-class residential development, where housing units are valued at £40,000 or £50,000. There will be no problem about any existing debt on these properties because they were built before the 1978 deadline, and a small number of extremely lucky people will make a substantial killing. I am not sure that that is the sort of social balance that should be prayed in aid to justify the policy. What is the justice and logic in that?
  Can the Minister say a word or two about charitable status? He will have expected that question and prepared an answer for it, which I welcome. In England, housing associations with charitable status are opted out of the right to buy. If one is a sitting tenant in those circumstances, one calculates what would have been available to one in discount and is given it in the hand as a lump sum subject to certain limits and rules. One vacates the property and buys in the private sector. That is an extraordinary arrangement. Obviously, the advice to Ministers regarding England was that if the assets were alienated for a consideration, and if there was a discount arrangement of the normal sort, housing associations would forfeit their charitable status, and with it a great deal of room for operation.
  I do not know whether the Minister has a guarantee that that will not happen in Scotland. Section 360 of the Income and Corporation Taxes Act 1970 and the attendant legislation apply north and south of the border. Will the Minister assure us that there is a guarantee from the Inland Revenue that in Scotland the arrangements for charitable housing associations, which have been avoided in such a complicated way in England, will not affect their charitable status? That is not a frivolous question. The Minister will have seen the letter from Castle Rock housing association, and the representations of the Scottish Federation of Housing Associations on that point, and we are entitled to an answer.
  Many of my hon. Friends will take the point, as I hope Conservative Members will, that the whole scheme does not seem to have been designed for Scotland, although it is a Scottish Office Bill. I am thinking particularly of the arrangements for flats. The starting point of the discount is 32 per cent., and will now increase to 42 per cent., and the maximum climbs to 70 per cent. Ministers have spent many a weary hour in the House denying that the more desirable cottage-style, detached and terraced properties were being sold, but the arrangements are a tacit plea of guilty to that charge. That is undoubtedly why the arrangements have been introduced.
  Presumably the arrangements have been introduced to encourage tenants in multi-storey flats, and depressing five-storey tenements, which were built in the 1950s and 1960s in Glasgow, to buy their flats. It is a special incentive scheme—a sort of legislative equivalent of an autumn sale to shift unattractive stock. However, the definition of a flat means that the arrangement will inevitably apply to the sandstone inner-city tenements, where many of the housing associations operate. Those flats are not hard to sell. They are attractive, popular, and desirable, and will be available because under the Bill, the Housing Corporation becomes a lender of last resort. There is a danger that those flats, in conjunction with the
  1056
  fair rents policy, which puts them a good deal above the normal public sector rent pattern, will go like hot cakes in areas like Partick and Queens Cross.
  If we must offer a special heavy premium to encourage the sale of what the Government now admit to be unpopular properties, it is daft to have the premium in an area where that argument does not apply. The position is even worse—my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) and I feel strongly about this—because if one considers the horizontal definition—I suppose that the hon. and learned Member for Kinross (Mr. Fairbairn) knows all about horizontal definitions—it is clear that for the purpose of the Bill a flat will include four-in-a-block-type housing in areas such as Knightswood or Mosspark. That is the most popular of all types of council housing in terms of the right to buy.
  Such flats are selling well. In Knightswood we have sold more than 800 of them. Yet they will be classed as flats under the legislation, and houses which are not particularly popular will not be eligible for the premium, the 70 per cent. maximum or the additional early discount. It is ludicrous that the most popular parts of public sector housing stock in the west of Scotland, and probably the whole of Scotland, will be favoured in that way. There is no logic in it. The proposal has not been thought out.
  In Committee we shall seek safeguards to correct that. We may seek to restrict the premium to post-1919 tenements, to insist that the building must be of three storeys to overcome the four-in-a-block problem, or to suggest that community-based areas should be excluded. We shall try those formulas on the Minister, and I hope that he will respond, not necessarily by adopting one of them, but by finding some solution to that real and pressing problem.
  Mr. Nicholas Fairbairn: Will the hon. Gentleman allow me to make a vertical proposition? He started his speech quite well—[Interruption.] I wish Opposition Members would wait for the end of my sentence—for him. He demonstrated the unfairness and absurdities, which we can all do by comparing different classifications. He is ending his speech with even more absurdities and unfairnesses by saying that the provision will depend upon the age of the house, the number of storeys and the size of the bathroom. He is falling into the trap which he invented to give himself something to say, which is little.
  Mr. Dewar: I am doing something which should be done more often. I am discussing the Bill and pointing out the consequences of a measure which no doubt the hon. and learned Gentleman, in his blind loyalty—that is not always his dominating fault—may support in the Lobby.
  The Secretary of State should accept that no one with practical experience in the housing association movement wants this measure. We can go to the Scottish Federation of Housing Associations, the Glasgow forum of housing associations, individual housing associations, Shelter or anyone who has worked in the movement and we shall find no one who wants this legislation. There is a universal thumbs down for it.
  The Minister managed, slightly disingenuously, to suggest that there is support for the measure. Can he produce evidence of representations in favour of the Bill from any housing association in Scotland? He will be hard-pressed to do so.

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  The reasons why housing associations do not want the Bill are easily outlined. First, it will make the management of their stock extremely difficult when it comes to holding empty property for decant purposes and when the rolling rehabilitation programme unrolls the sudden arrival of an application to buy can be awkward. If they sell a significant part of their stock it will be difficult for the small associations to maintain a financial base which will allow them to maintain their professional staff. There is the problem of conveyancing costs. I could go on and on. They do not like the Bill because they think that it will make life and the efficient management of their properties much more difficult.
  The Bill has serious implications for the future of tenements. Owner-occupiers will appear scattered throughout the blocks. The classic Glasgow tenement—I say this seriously as someone who has lived in them for a large part of his life—costs an enormous sum to repair and those costs could not be shouldered by the individual owner-occupier. Because they opted out in the past, the whole scheme of repairs foundered and we had a downward spiral. The position became worse and worse and ultimately the tenements fell into such a state of disrepair that a section 24 order had to be slapped on them. Tenements are not wally closes in Hyndland. They are not something owned by the family of the hon. Member for Edinburgh, West in the royal mile. They are difficult and expensive buildings to maintain. I fear that as a consequence of this Bill we shall again put at risk housing stock which is undoubtedly useful and popular and which had been saved by the housing associations.
  I shall not say a great deal about the rural housing associations. The point will no doubt be raised in Committee. Oban and the Isle of Skye housing association is about the newest association to operate. It is possible that there will be sales and that property will move in sharp order into the holiday home market. That worries people who work in the housing association movement.
  Widespread sales will, by definition, impoverish private sector rented accommodation. In the 1979 Conservative party manifesto, there was a good deal of healthy—I say that because it made a fair point—rhetoric about the need to have a significant private rented sector. That sector has been squeezed year after year almost to the point of disappearance. It has been given a lifeline by the housing associations, but it is one that may well be threatened by this measure. That is something about which Ministers and Conservative Back Benchers should think seriously.
  There is a great deal more in the Bill that I cannot cover. I like some of it. Clause 10 is an honest attempt to deal with a genuine problem which occurs on the break-up of a marriage when the home has to be reallocated. Clause 13 is a common-sense measure which allows a committee member of a housing association to rent or buy from the housing association. The present split is far too rigid and leads to genuine hardship and frustration. There are other provisions that I do not like. I see no point in reducing the taper for the repayment of discount from five to three years.
  My overall impression is that the Bill is of almost stunning irrelevance when seen in the context of the Scottish housing crisis. Cuts in revenue support have made the housing support grant a fond and distant memory for many housing associations. Despite what the right hon. Gentleman said, capital budgets have been inadequate and
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  are often shakily based on flogging assets and obtaining the revenue from the sale. The fabric of the housing stock is crumbling. We have a dampness and latter-day dereliction problem which destroys choice for thousands of ordinary tenants. The Bill is the Government's only response to that crisis. It is the sum total of their commitment, and it is something of a bad joke.
  The Government say, in a sense genuinely, that they have done better for the housing associations than with other public expenditure on housing. That is a bit of a tack-handed compliment. In 1982–83, £117 million was spent on the housing associations. In 1985–86, £110 million will be spent. It is not all that good a record. In three years, it is a decrease in—
  Mr. Younger: Would the hon. Gentleman like to give a figure for the Labour Government's greatest help to the housing associations?
  Mr. Dewar: All that I am saying is—[Interruption.] I think that the Ministers' consciences are pricked on this subject. I am entitled to say, and do say, that they praise their record complacently. Spending in 1982–83 was £117 million and in 1985–86 it is expected to be £110 million. That is a cash reduction of £7 million in three years. If we apply the GDP deflator, it is a cut of £21 million, or 18 per cent. The Secretary of State is entitled to say that we did not do well, and no doubt the hon. Member for Edinburgh, South (Mr. Ancram) will say that, but I am trying to put into perspective the claims about the Government's alleged housing record and their complacency. They say that they have done well.
  Mr. Younger rose—
  Mr. Dewar: I shall not give way. The right hon. Gentleman has made his point.
  It is not just a matter of financial damage. I have a healthy respect—I speak for all my hon. Friends—for what has been done by the community-based associations, often in areas of great difficulty. They have done a tremendous amount in rebuilding not simply the housing stock but the community. The Government must take seriously what has been said by the housing association movement. I shall quote what Mr. Donald Maclennan of the Scottish Federation of Housing Associations said:
  "Indications are that disenchantment may lead to desertion and the demise of the movement."
  The Secretary of State may pull faces at me, but that is what Mr. Maclennan said when he contemplated the damage likely to be caused by the Bill. It may not be so. Perhaps he is being alarmist. But there is much truth in what he said. It is a risk that we should not invite the House to run. It is for that reason that I hope that I shall be joined by many hon. Members, not just from the Opposition, in voting against this measure.
  6.8 pm
  Mr. Alex Fletcher: It is some years since I participated in a debate of this kind. I listened carefully, in order to discover whether any of the arguments had seriously changed. I listened to the hon. Member for Glasgow, Garscadden (Mr. Dewar) with great care. He did not say anything about new policies or new ideas. He tended to put his head into the Bill, and it is what he did not say about Labour party policy that is interesting.
  I congratulate my right hon. and hon. Friends on the success of the house sales policies introduced in 1979. Nothing is more important for the Scottish economy, the

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  Scottish labour force and mobility of labour in Scotland than that we should radically increase the number of home owners. The Government set out to do that in 1979, with great success. [HON. MEMBERS: "Why?"] I am amazed at the ignorance of hon. Members, who ask why home ownership and mobility should be related. They seem to know nothing of the fact that static labour forces have contributed, among other things, to unemployment in Scotland, never mind to the failure to develop the economy as we should have liked to develop it.
  Someone said recently, in relation to lack of mobility in housing in Scotland, that it was easier to get a Scot to move from Glasgow to Rio than from the south side of Glasgow to the other side of the river. The housing policy pursued by Labour Governments contributed greatly to the lack of mobility of labour forces.
  What we do not hear about policy from the Labour party we can often read about, and we find that nothing much has changed in that direction. The more the party quotes higher and higher figures needed for newbuild and the maintenance of housing stock in Scotland, the more the party mocks its own policies. If the party ever had the opportunity, it could never find the funds for anything like the expenditure that it insists is necessary for public sector housing in Scotland. The party would rely, not on economic growth, but on public borrowing.
  In case Labour Members have forgotten what happened when their party was last in office, I recommend that on Sunday evenings they watch Channel 4, on which there is an interesting programme about the history of politics in Britain in the 1970s. The programme shows how the Labour party tried to spend its way out of trouble and failed miserably in the process.
  It is usually the Labour-controlled councils in Scotland with the most irresponsible rent policies which shout loudest for more capital. They seem to fail to see the connection between the income on the housing account and the ability of the housing managers to maintain the stock in an adequate manner.
  I am aware, as we all are on the Conservative Benches, and as many people are in Scotland, that in 1979 housing policy needed a new thrust, and the Government were correct then and since then to put the emphasis on home ownership. Most people recognised—including Labour Members—that the large public sector housing schemes were a mistake, not only on environmental grounds, but on social and good housing grounds. The Conservative and Labour parties both contributed to the building of large public sector housing schemes. The difference between them is that we learnt the lesson years ago, and are doubtful whether it has yet been learnt by Labour Members.
  Home ownership can go a long way towards remedying the problems and deficiencies of housing schemes and the mistakes that were made over the years, not least because home ownership helps to attract better facilities, including those from the private sector, into the large housing schemes. It also helps to raise standards in the local communities.
  I support the Bill and its continuing emphasis on home ownership, but, like the hon. Member for Garscadden, I am concerned about the need for rented accommodation, not least in the urban areas and in my own constituency of Edinburgh, Central.
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  Probably all hon. Members have received letters about housing associations. I know that my hon. Friend the Member for Edinburgh, South (Mr. Ancram) recently met the Federation of Housing Associations in Scotland, which expressed to him its concern about rented accommodation and about who would meet particular problems and specialist demands if the houses under its management were to be sold.
  I have heard from the Fountainbridge housing association in my constituency, and I suggest that if housing association tenants are to have increased rights to buy, other means must be found to provide rented accommodation. Central Government have a part to play in that respect, alongside local government. I shall suggest shortly some ways in which that problem might be tackled, but first I want to make some observations about the problems that we face in the inner city areas, speaking particularly from my experience in my own constituency.
  There is the problem of slum landlords, which is creating very serious overcrowding in properties in Edinburgh. There is over-charging and, indeed, racketeering through DHSS frauds. These have been promptly investigated by my right hon. Friend the Secretary of State for Social Services in response to a request that I made to him and to my right hon. Friend the Secretary of State for Scotland, but we have to be careful that we do not permit a spiv market to be created in city centres. Slum landlords, in buying property, can increase the prices for ordinary people. If they are able to influence the market to too great an extent, they can influence the amount of money that the DHSS will be obliged to pay to people who are seeking accommodation in town and city centres.
  Mr. Michael J. Martin: Does the hon. Gentleman agree that that type of activity can cause great difficulties in tenemental property? Although it is unlikely that a Victorian terrace will be bought and completely converted into bedsits, sometimes two or three flats in such a tenement property can be converted, causing great environmental problems for the other tenants.
  Mr. Fletcher: I am grateful to the hon. Gentleman for his intervention. I imagine that, like me, he has had complaints from people—perhaps an old couple—who have lived for many years in such a property and know their neighbours very well. The flat next door is sold to a spiv landlord and suddenly, instead of having two people, they have 22 people living next door, with a very high turnover. It might be said that that is tough luck from a social point of view, but it goes beyond that, because of the behaviour of some of the tenants, with bicycles, motor cycles and oil on the stairs. I receive frequent complaints about such people, and I am extremely sympathetic towards the problems that can arise in those circumstances.
  It was for that reason that I asked my right hon. Friend to consider licensing the activities of landlords. [Interruption.] The hon. Member for Glasgow, Cathcart (Mr. Maxton), from a sedentary position, says that it is a free market, but free markets of any kind work better when there is some regulation, whether we are talking about properties in Edinburgh, Glasgow or elsewhere.
  Edinburgh has tried to find some method of licensing and has run into difficulties. In response to my last letter on the subject, the Secretary of State, in his letter of 27 November, assured me that Edinburgh district council
  "have a variety of powers already available to them"

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  concerning the licensing of such properties.
  My right hon. Friend said:
  "The Housing (Management of Houses and Buildings in Multiple Occupation) (Scotland) Regulations 1964 provide for control by the local authority of aspects such as state of repair, cleanliness, water supply, heating, ventilation, disposal of refuse and escape from fire."
  Those regulations are an important piece of legislation. My right hon. Friend referred in his letter to byelaws with which Edinburgh district council had some difficulty but it should be able to overcome that problem. Most importantly, my right hon. Friend said:
  "Stirling District Council operates a registration scheme under the 1966 Act and…Glasgow and Clackmannan District Councils are in the process of promoting such schemes."
  There is an ability to license, and I would press all local authorities, not least mine, to take advantage of it.
  The secretary of the National Union of Students in Scotland, Mr. Paul Carroll, has complained about housing in city centres, and specifically about what appears to be an accommodation bureau. A company, Home Locators, seems to be good at taking £25, usually from students, and sending out a rough list of names to landlords. An enterprising survey by Mr. Carroll and other NUS members showed that few people were satisfied that a serious attempt was made to find them accommodation. As Mr. Carroll comes from my constituency, I have suggested that if he cares to send the papers to me I shall pass them on to Sir Gordon Borrie, the Director General of Fair Trading, to investigate the extent to which the company is breaking the law.
  Mr. Bob McTaggart: It might be helpful if the hon. Gentleman were to contact the Solicitor-General for Scotland. I raised that matter in a parliamentary question, and the Solicitor-General said that he was investigating it.
  Mr. Fletcher: That is extremely helpful. There are sometimes several ways in which problems can be tackled. Because of my recent experience, I immediately thought of the Director General of Fair Trading.
  Clause 18 refers to building control amendments and regulations. There is no question but that the Government's improvement grants policy has been of great benefit to inner city areas. I think that both sides of the House agree. One difficulty is over complaints about workmanship. Much of the workmanship appears to be very slack. The blame can be levelled not just at the workers, or even the contractors—although one feels pretty sore at them—but at the architects and surveyors.
  After all, the professionals are spending a great deal of public sector money, and I am often infuriated by the absence of any checks by them on the standards of workmanship. I have taken this matter up with Edinburgh district council, which has tried to be helpful by putting more inspectors on to the task of ascertaining what might be done. I remind the professionals of their responsibilities in certifying work, especially in view of the public expenditure involved and the heartbreak caused to families.
  A lady who came to see me said, "I have told the workmen to stay out, although the improvements have not been completed, because they are not renovating but destroying my home." I have received many letters on this subject. Such complaints are regrettable, especially as the improvements often involve the largest single repair contract ever undertaken on a person's property.
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  Rehabilitating the cities and towns is an important part of housing policy. We must ensure that administration is as efficient as possible.
  My right hon. Friend the Secretary of State said that £100 million would be added to housing capital this year from council house sales. I have never understood the Labour party's reluctance to accept council house sales. Owner-occupation can contribute to housing capital. I hope that my colleagues will continue to ensure that the Treasury does not steal too much of that money, because the money can be applied to the local good. We must ensure that those local authorities which are capable of spending it wisely on housing have the opportunity to do so.
  It is ironic that in Edinburgh alone there are about 2,400 empty local authority houses, many of them in a bad state of repair, and many in undesirable areas. What a waste of resources. It is not enough for a local authority to say to central Government, "Give the council money so that we can repair these houses." It is necessary to constrain public expenditure. It is not enough, when rented accommodation is so scarce, for my right hon. Friend the Secretary of State to watch the problem without trying to ascertain what can be done.
  I suggest the setting up of a partnership between the local authority, which owns the properties, the private sector, which might be willing to develop the properties, and a third party, which might manage them. I envisage management under which the properties are repaired to a certain standard and are then let to those in need of rented accommodation.
  If Labour Members and their colleagues in local government would not resent private sector funds being applied in this way, public-private sector rented accommodation might begin to become available in our city centres. Such a scheme might lead to improvements and increases in this kind of accommodation. More rented accommodation obviously means better use of resources.
  I fully support the push towards home ownership, but I hope that my right hon. Friend the Secretary of State will take steps to assist in the provision of rented accommodation, especially in urban areas. If we are to help people in need, the Labour party has an important part to play. Private rented accommodation is scarce because no one thinks that it would be a good investment. People think that as soon as any move was made in that direction the Labour party would say, "We shall nationalise and take it over if we ever return to office." [HON. MEMBERS: "Hear, hear."] That may seem to be such an obvious remark that it gives pleasure to Labour Members, but that attitude does not help the very people about whom Labour Members usually claim to care. Private sector resources are available, but a partnership between the public and private sectors could result in their being applied to renovation of public sector housing along the lines that I have suggested. This could help to alleviate the serious problem that exists in Edinburgh and, I have every reason to believe, in many Labour constituencies.
  It is hard to believe that public sector resources and houses are being properly utilised when about 250,000 local authority houses in Scotland lie empty. That is not a good use of resources. It does not help the very people who are the subject of this debate. The sooner the Labour party applies some imagination, the sooner we can assist those in need of rented accommodation.
  6.29 pm
  Sir Russell Johnston: I am not clear whether the hon. Member for Edinburgh, Central (Mr. Fletcher) said that his hon. Friend the Member for Edinburgh, South (Mr. Ancram), the Under-Secretary of State for Scotland, lacks imagination. I suspect that he was, although he was too polite to say it overtly.
  The hon. Member for Glasgow, Garscadden (Mr. Dewar) said that there is no evidence of a demand for this legislation. He is right. It is difficult to understand why, other than for the doctrinal beliefs to which the Government cling, it has been introduced. Far more important matters should be given priority.
  I do not deny that the Bill contains useful and helpful proposals. Reference has been made to clauses 10, 12, 13 and 18. However, the main thrust of the legislation is not well thought out and could do damage. The Convention of Scottish Local Authorities and the joint local authority campaign in Strathclyde are not the only groups who believe that the major problem is lack of investment in new housing stock and in improving and maintaining the existing housing stock, including substandard stock. The hon. Member for Edinburgh, Central also knows as well as I that this is the main problem. Every time that I hold a clinic or open my postbag I am faced with appeals for help in obtaining housing. I support the right to buy in principle, but I do not believe that it should be an unconditional right. That was our view about the 1980 legislation.
  There is also a right to rent. The Government have profoundly neglected that right, and it was the main thrust of the speech of the hon. Member for Edinburgh, Central. Spending on Scottish housing has been halved since the Government came to office in 1979. Public sector house building is lower than at any time since 1945. The result is lengthening waiting lists, of which all hon. Members have experience. Furthermore, 45,000 to 46,000 jobs in the Scottish construction industry have been lost since the Conservative Government took office. These are major issues for Scottish housing, but the Bill does not address them.
  Equally, the Bill contains illogicalities and weaknesses. Some have already been referred to by the hon. Member for Garscadden, but I should like to refer briefly to a few of them. First, we have not yet received an adequate answer to why, in the Government's judgment, the voluntary code is unsatisfactory. The hon. Member for Garscadden reminded us that it was only just over a year ago that the Secretary of State was praising it. The Under-Secretary shakes his head.
  The Under-Secretary of State for Scotland (Mr. Michael Ancram): It is not true.
  Sir Russell Johnston: I understand that in August 1984 the Secretary of State for Scotland said that he was satisfied with the operation of the voluntary code. Furthermore, I do not think that the Under-Secretary will deny that the housing associations have actively encouraged and helped owner-occupiers, so I do not understand why it is necessary to introduce legislation.
  Secondly, there is confusion over charitable status. I am sure that the Under-Secretary knows that the housing associations are concerned, if not alarmed, about their charitable status. I understand that on the radio this
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  morning in Scotland the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) referred to this matter. The only charitable associations that will be exempt are those which cover the whole of the United Kingdom—for example, the Salvation Army or the British Legion. Charitable associations that are based only in Scotland may not be exempt. Their status is determined by the Inland Revenue in Edinburgh.
  I hope that the Under-Secretary of State will clarify that important point when he replies to the debate and say what effect the legislation will have on associations that have charitable status granted to them by the Inland Revenue and operate only in Scotland.
  Thirdly, there is a serious risk that rural areas will be drained of accommodation that is available at a fair rent. The Bill will not improve the position; it will make it worse. I repeat that I am in favour of sales, but there must be a balance. Local authorities must be able to make provision for continuing need. However, they are unable to do so. My constituency does not experience the same kind of difficulties as are experienced in inner city constituencies, but 1,200 houses in my constituency are classified as being below the official tolerable standard, while over 11 per cent. of the houses are classified as having more than one person per room. There is also a long waiting list. The waiting list in Inverness is as large as it was when I was elected a Member of Parliament. That should not and need not be the case.
  Fourthly, I understand that housing associations in England are given financial help under the Housing and Building Control Act 1984. It enables tenants to leave and buy elsewhere. That is a much better method than the Bill's proposals. I do not understand why the provisions of the 1984 Act cannot be applied to Scotland.
  Fifthly, the hon. Member for Garscadden stressed the problems that are faced by those who live in tenements, especially in Glasgow, Edinburgh and Dundee. Community-based housing associations are special to Scotland. In some places they have helped to bring about a remarkable regeneration of neighbourhoods. They have led to areas being upgraded, and that has had a marked effect on the private sector. The result is that property is very attractive and marketable.
  For the purposes of the Bill would it be possible for the definition of "flat" to exclude pre-1919 stock, thus safeguarding Scottish tenements? I do not need to repeat the problems that surround the obtaining of agreement on roof repairs. Multiple ownership can produce such problems and the housing associations have tackled them very well.
  The Bill is a sad reflection of the Government's priorities. It shows that they have no understanding of the clamant housing need in many areas of Scotland, including the rural areas. There is not evidence that the voluntary code is not being operated successfully by the housing associations, but there is evidence aplenty that much more important work is crying out to be done.
  6.38 pm
  Mr. Gerald Malone: I welcome the Bill. It marks another step in the Government's housing policy, and it will be given a broad welcome throughout Scotland.
  I am upset that the remarks of the hon. Member for Glasgow, Garscadden (Mr. Dewar) about the Bill were so slight. He failed to refer to two important points. First, this

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  Government's policy of selling public housing stock has largely been conceded by the Opposition. They know that they could not reverse that policy. When the Opposition were given the opportunity to say what they would do, it was notable that the hon. Member for Garscadden sat firmly in his place. He did not tell the House what he would do if he were in office. Although the Opposition may contest many of the Bill's provisions, I think that they will find, as they have found with other housing legislation introduced by the Government since 1979, that at the end of the day they are forced to concede that the Government's policy is right.
  The Bill represents another thrust in the Government's policy of handing housing stock back to the people who should have the greatest interest in it—those who occupy it. I do not concede that it represents any threat to the housing associations in Scotland.
  Mr. John Maxton: If the hon. Gentleman has such passion for handing houses over into owner-occupation, why does he not persuade his hon. Friends to extend the right to buy to those in private accommodation?
  Mr. Malone: There is a simple answer. The proportion of public housing stock sold into private ownership was extremely small, but, without any encouragement, a significant proportion of the private rented sector has voluntarily been sold into owner-occupation. I do not understand how the Labour party can say that there should be a vibrant rented accommodation sector when it is as a result of its policies that the private rented housing stock has been sold into owner-occupation as it has fallen vacant.
  Mr. David Marshall: Will the hon. Gentleman tell us, if he can, of any owner of private rented accommodation who sold any of his stock at a discount?
  Mr. Malone: A significant proportion of the private rented housing stock has been sold into owner-occupation. If the hon. Gentleman understood the Government's policy properly, he would know that it is to encourage the sale of public sector housing and to satisfy the principle of owner-occupation that discounts have been provided. That is fairly clearly stated. There is nothing reprehensible about that. It should be positively encouraged.
  I should be interested to hear from the Labour party whether it believes in the principle of owner-occupation. If it does, I would be interested to know why it might oppose the Bill tonight, because the Bill will extend the principle of owner-occupation, which the Government have sought sought to extend since 1979. The Conservative party is faced with a problem that our policy was an initial success, but sales peaked in the first quarter of 1983.
  It is extremely disappointing that flatted property did not form a significant proportion of council house sales. In Scotland, the proportion of flatted accommodation in the public sector stood at about 49·5 per cent. Of the public sector housing sold in 1985, only 11·5 to 12 per cent. was flatted accommodation.
  It is logical, when faced with such statistics, that a Government who, unlike the Opposition, are pledged to return as much of public sector housing stock into the hands of those who occupy it and into their ownership
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  should seek to extend whatever encouragement they can. The Bill provides such encouragement and will be a useful step to increasing the proportion of flatted accommodation in the public sector that is sold into owner-occupation.
  I have listened with some sympathy to a number of points made by the Labour party about the difficulties of maintaining flatted accommodation and of common ownership and the expenses that can arise, but I take exception to a number of points that have been made. The historical difficulty among tenement proprietors in Scotland has not been that they have found it difficult to maintain the property but that factorage, certainly since the war, has not proved a satisfactory way of maintaining property.
  In many areas of Glasgow and Aberdeen of which I have experience, many properties have had their factors removed and owner-occupiers have taken on the management of property. Where that has happened, the property has been properly maintained and many of the difficulties and fears that have been raised this evening by hon. Members have been overcome. Common maintenance no longer represents the difficulty that it used to represent. That problem can be tackled and need not cause insuperable difficulties.
  Mr. William McKelvey: I have several examples in my constituency of council houses that have been sold—not necessarily tenement houses but semi-detached—where repairs common to those houses have been delayed because the owner-occupier refuses to pay his share. Is the hon. Gentleman suggesting that the council should go ahead with repairs and sue for the money, or should the council tenant have to put up with such an outrage, where he might have a leaky part on a common roof and have to put up with it because the person next door refuses to share the costs?
  Mr. Malone: I cannot speak about the hon. Gentleman's experiences, but I can speak from my experience and my constituency case load on such properties. Often, owner-occupiers find that the boot is on the other foot. They find it difficult to get the local authority to pay for repairs on the other side. Although there are problems, it is not beyond our wit to solve them and it is certainly not for owner-occupiers who take on properties such as that to make sure that that problem is solved.
  I should not like housing associations to feel that the provisions of this legislation represent an assault on the work that they are trying to do. It would be wrong if Labour Members represented the legislation in that way. Many housing associations in my constituency do a tremendous amount of good work. Not only do they provide a high standard of basic housing at reasonable rents, but many of them provide for minority interests, which I am sure hon. Members on both sides of the House will concede is a vital development.
  I welcome the fact that the Government have enthusiastically taken on the challenge that housing associations have provided and since 1979 have given a substantial amount of finance, whereas before only token amounts have been provided. The hon. Member for Garscadden shakes his head, but he could not be drawn to give the Labour party's best figure for financing housing associations for the simple reason that it was £40 mill ion during the Labour Government's period of office. That

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  figure is very much below what the Conservative Government have provided on a year-to-year basis, and I take pride in that.
  Mr. Dewar: Does the hon. Gentleman accept that, when the Labour Government were in power, the housing association movement was, to some extent, in its infancy and had not reached the development stage at which it was demanding large sums of money? Over the past three years, taking the estimated figure for 1985–86, there has been an 18 per cent. drop in real terms and a £7 million cash drop. Does the hon. Gentleman support that?
  Mr. Malone: The hon. Gentleman cannot get away from the fact that, in absolute terms, the Government are supporting housing associations to a much more significant extent than did his Government. If housing associations have developed in the past few years, it is purely because of this Government's policies in seeking to fund the good work that the housing associations have done.
  I pay tribute to the work that housing associations have done in my constituency. They operate principally within inner cities, and have rehabilitated many areas of Aberdeen, where the local authority had been inactive. They have not only improved existing housing, but have provided, by and large, a better environment for their tenants than have many local authorities.
  Mr. Fairbairn: The hon. Member for Glasgow, Garscadden (Mr. Dewar) said that the housing association movement—to use the repulsive term that he used—was in its infancy when the Labour Government were in power. Who was the accoucheur of the baby in the first place? It was people with modest respect like myself who put money into the first housing associations and set them up. The Socialists then stole the baby and "malnutreated" it.
  Mr. Malone: I think that that is what my hon. and learned Friend has done to the English language on this occasion. He is usually extremely precise. I am prepared to concede that he may well have been the father of the housing associations. I shall not go into any other area. There seems to be some competition among Conservative Members. My hon. Friend the Member for Banff and Buchan (Mr. McQuarrie) may also be the father. We should not go back into the question of the progenitors of those associations but simply say that they fulfil an exceptionally useful function and provide diverse housing accommodation.
  The Bill does not represent an attack on housing associations. It was never expected that they would have a permanent and long-term hold on the housing stock. It matters little to them that the houses that they built for the original leaseholders are eventually sold. It is not as if the housing stock has been lost, as Opposition Members seem to believe. By and large, the houses are still available for the occupation of the sitting tenants, and I do not think that the Bill damages the work that housing associations do. Indeed, it may allow them to move on to fresh frontiers because within Scotland there are frontiers enough for them to tackle. I do not believe that anything in the Bill represents a long-term threat to them. It might help them to continue in their work and to carry on with different work.
  Mr. Albert McQuarrie: My hon. Friend is referring to the movement away from normal housing by the housing associations. Many housing associations in Scotland are putting their main effort into housing for the elderly, the handicapped and the sick. I am sure that my hon. Friend will agree that we would like to see the money released by the Bill channelled into the avenues that he was talking of just now.
  Mr. Malone: My hon. Friend is right. He will have experience of housing associations in his constituency that provide such housing. The associations have fulfilled a need that has not been fulfilled in Scotland before. They should be encouraged to do that and to devote any funds that they may get from the sale of their properties to continuing those exercises.
  I know that the sale of surplus regional council properties will please several of my own constituents who have had difficulty in attempting to buy property of that sort. In one or two cases there has been a rather strange difficulty. The district council in Aberdeen has entered into missives for the sale to a sitting tenant and it has subsequently been discovered that the ownership of the property rests not with the district council but with the regional authority. I hope that the Bill will deal with that, among other difficulties, and will allow those council houses to be sold.
  I welcome the Bill, but it is a limited measure. Although we have sold a relatively significant proportion of our public sector housing stock since 1979, we have taken only one or two bites at the cherry. The Bill represents another small bite, but it does not make inroads into what I think is the principal problem associated with housing in Scotland, which is that far too high a proportion of our housing stock is owned by local authorities. Local authorities, in the face of grave housing difficulties, which are conceded on both sides of the House, have not acted promptly in many cases even when solutions have been presented to them. Glasgow district council's disgraceful treatment of an offer of development of Hutcheson town E block is but one example of political intransigence damaging the prospect of rehabilitating the housing stock in Glasgow. I suppose that that applies to the rest of Scotland.
  Surely there must be some common ground, no matter who owns the property, whether it be local authorities, housing associations or shared ownership schemes, whether it be by selling to building societies that are prepared to undertake the rehabilitation of long-since derelict property. Whether it be all of those things or any one of them, we should not have closed minds to developments that could improve the housing stock and give a better life to tenants and owners alike.
  Much has been said from the Labour Benches about the lack of resource. The sad truth, as was said by my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher), is that a substantial amount of the resource, because of the way in which it was planned and built, is now standing unoccupied. The fact that we have such a high vacancy rate in our public housing stock in Scotland and long housing waiting lists is nothing short of a public scandal. Many local authorities simply refuse to look at other forms of ownership and stand in the way of schemes that would rehabilitate that stock, such as different rented terms or selling the property into private owner-occupation.

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  If we could get rid of much of the dogma that surrounds public housing stock in Scotland and realise that mixed ownership is the best way to promote the interests of those who rent houses and owner-occupiers, perhaps we would increase the value and habitability of most of our housing stock in Scotland. The Bill represents a step towards that objective. I hope that Ministers' thoughts on Scottish housing will not stop there. I hope that they will go further and that local authorities will be encouraged to move away from the stalemate in which they seem to find themselves so that all of us in Scotland may benefit from a more flexible and better housing stock.
  6.57 pm
  Mr. Bob McTaggart: When the Government announced their intention to introduce the Bill they promised:
  "Bills will he introduced to extend the rights of public sector tenants."
  Hearing such a promise expressed in such language, one could be forgiven for assuming that the Government really did have the interests of public sector tenants at heart. Anyone who was tempted to think along those lines would have been grossly mistaken, because the Government definitely do not have the interests of public sector tenants at heart.
  In the six years that the Government have been responsible for public sector policy, they have inflicted more spending cuts and caused more widespread damage to the interests of public sector tenants than any other Government since the end of the second world war.
  The Glasgow and West of Scotland forum of housing associations has provided a useful summary of that record. It is using it to promote the case for increased public spending on Scottish housing. The summary is equally useful for pointing out, and putting in its proper context, the Government's real attitude towards public sector tenants. It shows that spending on Scottish housing has halved since 1979. Public sector house building in Scotland is at its lowest level since the second world war. Home improvements have slumped since the general election in 1983 and rents are increasing far faster than the rate of inflation.
  Those statistics help to show that while the Government shout from the rooftops of their concern for the welfare of tenants in the public sector, they are acting to threaten and undermine whatever security and well-being those tenants are able to enjoy. There is no doubt that the Government have concentrated their attack on public spending on public sector housing. There is no doubt that they have consistently pursued a policy of promoting home ownership at the expense of those who cannot afford or do not want to own their own homes and opt instead for renting in the public sector.
  Public subsidies to home owners have been maintained at a time of cuts in public spending, but only because cuts could be made elsewhere and with less electoral damage to the Conservative cause. Having heard some of the speeches today, I have no doubt that the Government believe their policy of extending the right to buy their homes to public sector tenants to have been electorally successful. The right to buy one's council house or now even one's own housing association house has been extended to many tenants, but, again, only at the expense of other tenants and would-be tenants in the public sector. Labour Members are all in favour of extending choice. We
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  should like everyone to be able to choose whether to rent or buy the home in which he lives, but we draw the line when one person's choice restricts the choice of others. That is where we differ fundamentally from the Government and the proposals in the Bill.
  The Government's attitude to housing has been consistently divisive since 1979. Their reaction has been determined by the potential for maximising the electoral advantage to the Conservative party. Their main concern with tenants' rights is whether those rights can be translated into votes either for the Conservative party or against the Labour party. The Bill must be seen in that light. The question arises why legislation is necessary in certain areas.
  In 1980, when the Tenants' Rights, etc. (Scotland) Bill was enacted, the housing associations were successful in convincing the Government that the best course was to exclude housing association tenants from the right-to-buy provisions. Rather than forcing them to comply with the right-to-buy clauses, the Government decided to introduce the voluntary code arrangements whereby the decision to sell or retain for rent was left with the housing associations. After all, they knew better than anyone else, in relation to their own housing stock, which type of tenure balance was desirable and best suited to their local circumstances.
  After all, we have the voluntary management committees, unpaid and giving their free time, committed 100 per cent. to the improvement and rehabilitation of the communities in which they live, and they are in the best position to assess the level and nature of local housing demand. They know how long their waiting lists are. They know the individual needs of those on the waiting lists. They know the housing demand in their localities, whether for special needs or otherwise.
  That has been recognised by successive Labour and Conservative Governments. Indeed, the work of housing associations has generally been recognised as one of the outstanding successes in housing. In Glasgow they have made a tremendous impact in transforming areas of the inner city which previously had deteriorated under private landlords and owner-occupiers.
  It is just over a year since the Secretary of State was in Glasgow to open the 10,000th improved flat, and he declared himself completely satisfied with the way in which the voluntary code arrangements were working. We know that a week is a long time in politics, but, regardless of the view on how time changes politicians' outlooks, the case is yet to be made on what has happened in the intervening period to change the Secretary of State's mind. If he was satisfied with the voluntary code then, why is he not satisfied now? Which specific changes have occurred to change satisfaction to dissatisfaction and therefore into the proposals in the Bill?
  Mr. McQuarrie: I had considerable experience of housing associations in 1967, when the housing association of which I was chairman built 67 houses in the constituency of the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey). The hon. Gentleman was asking what made my right hon. Friend the Secretary of State change his mind. Would not it be fair to say that the main reason why he has introduced the Bill is the desire of the occupants of housing association houses to become owners? That is the right which we are trying to give the people of Scotland.
  Mr. McTaggart: The Secretary of State has not even tried to say that at the Dispatch Box. No evidence has been brought before the House to tell us why the Secretary of State has changed his mind.
  I believe that the real motivation behind the Secretary of State's change of mind is entirely party political. In the Government's opinion, it was electorally popular to give the right to buy to council tenants in 1980. They hope fervently that it will be electorally popular to give the same right to buy to housing association tenants in 1985–86.
  With the prospect of annihilation in the regional council elections next May, it is time for any and every desperate political remedy. As an attempt to restore the Tory party's electoral credibility, the Bill is doomed to fail, because it will have a disheartening effect on the management committees of housing associations. Having given so much of their time and skill, and having contributed so successfully to the transformation work of the past decade, they will now see that work threatened by the disruption that will be occasioned by the Bill.
  The only houses that will be sold will be those that the housing associations have already improved. They will therefore have to carry a far higher overall proportion of loss-making, unimproved houses. That must threaten their scale of operations and financial viability. The morale of voluntary committee members will be undermined as they see the housing assets of their associations sold at knockdown prices. That must be considered before we turn to the enormous problems of attempting to pursue a sales policy for housing association properties that can even begin to be accepted as fair or will not prove to be scandalously wasteful of public money.
  As I understand it, the cost of buying an improved flat from a housing association will depend on several factors. Among them will be the date when the flat was improved by the housing association and the amount of rehabilitation work carried out at that time. Flats improved, say, 10 years ago were rehabilitated at much lower costs to the housing associations than flats improved over the past year or so. Moreover, flats requiring a lot of remedial work will necessarily cost more than flats requiring much less work. In the sale of housing association flats, the sale price must never fall below the cost floor debt—the amount of public money spent on acquiring and rehabilitating the flat. That debt will, of course, vary from flat to flat, depending both on the scale of work and on when it was carried out. Flats requiring little work and completed some time ago will have a lower cost floor debt than those needing extensive work and completed only recently.
  Mr. Michael Forsyth: The hon. Gentleman has just explained the protections for the housing associations. Why will housing associations make a loss when they sell properties? Surely if the tenants become owner-occupiers, they will pay a management charge, as opposed to a rent, giving the housing associations an income.
  Mr. McTaggart: I speak as a former member of a housing association in Glasgow. One of the biggest problems that housing associations face in formulating a plan for rehabilitating a number of flats, close by close, is acquiring those properties, decanting the tenants and getting on with a block project. Once flats that have been acquired and rehabilitated—with rents having been received for them—are sold, the housing association will be left with empty flats awaiting rehabilitation, with less income coming from its tenants. That is the reality.
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  Situations could also arise where two similar flats in terms of size and location have different cost floor debts. That could mean that two tenants, entitled to the same discounts and buying similar flats of similar value in the same neighbourhood, could end up paying significantly different sums for their flats. The calculations required are not only complex and time-consuming, but are guaranteed to give rise to grudges, ill-feeling and a sense of unfair treatment among those who believe themselves to have been disadvantaged.
  Mr. Fairbairn: Supposing, in the most perfect of all worlds, everybody could buy an identical flat for the same price, would the hon. Gentleman be in favour of these proposals?
  Mr. McTaggart: I said earlier that Labour Members are in favour of choice. We wish that everyone had the choice to rent or buy their flat. We differ fundamentally only because we object when the choice of one person affects the choice of others.
  One way out of the present situation could be for the Government to disregard cost floor debts by treating all buyers in the same manner, irrespective of the public investment in their particular property. It would thereby be possible for buyers to be treated equally. But if that were to happen, what then of the public interest? What about the taxpayers' money? What does the taxpayer get in return for large investment in housing association properties? The answer seems to be very little—a huge amount of public money for a relatively low level of home ownership in improved properties.
  If the Government were genuinely concerned with helping housing associations, they would listen to what those associations are saying. They should listen when they are told that there is an identified need to rehabilitate and or build about 500,000 houses for people in need. They should listen when the associations identify the capital costs of such a programme as £5 billion at present day prices. They should listen when the associations ask for an increase in their capital allocations to achieve a 7,000-house programme by 1988. That is the way to begin to tackle the housing problems which confront the Scottish people. The Bill is irrelevant to that task and in the areas that I have mentioned it can only make matters worse.
  7.14 pm
  Mr. Nicholas Fairbairn: I welcome the Bill, and I welcome it for a fundamental reason. The state should never intervene between a citizen and his home. That is a fundamental principle which did not exist before 1945, except in the most limited sense, and that has had one of the most disastrous effects on industrial, economic and social prosperity in Scotland ever since.
  It was Labour Governments and Labour administrations in Glasgow which destroyed the centre of the greatest Victorian city in Britain, once known as the second city of the empire; second, as it then was, to Calcutta, not to London. In that great city, which rose from about 150,000 inhabitants to nearly 750,000 in the short space of 40 years, some of the greatest housing was created and was owned and lived in by people whose poverty was comparatively massive when judged by the standard of anybody who now lives in an equivalent housing association house.

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  Most of those great houses, with all their grandeur, which escaped demolition by Labour administrations in Glasgow, have, under this Government, provided magnificent homes in the centre of Glasgow, but around them there is a necklace of some substandard filing cabinets for the unfortunates who have been driven, by the terrible policy that everybody should be in the maw of local authority officials, to live in the great conglomerates of Easterhouse, Blackhill, Nitshill and Castlemilk. That is the shame of Scotland. I accept that the hon. Member for Glasgow, Central (Mr. McTaggart) has been converted to the concept of choice, but Labour Members, in their heart of hearts, believe that the road to political thraldom is to have everybody in a local authority house of some kind. That is at the centre of the philosophy of Labour Members.
  Lest I depart from the dictum of the hon. Member for Glasgow, Garscadden (Mr. Dewar), that I do not always appear to be a sycophant, I shall say something about the Bill before I come on to other matters. I do not imagine that there are many people who, if they looked at this document, which is some 31 pages in length, and who own a house, or are tenants, or wish to own a house or to obtain a house, or to understand what they would have paid in the way of a rebate, or how many years had to elapse before they qualified, would understand it. I do not myself. I say that because the hon. Member for Garscadden is a solicitor, and solicitors always suffer from an inferiority complex because they are in some way the junior half of the profession and send to counsel for their opinions. Let me get over the unfortunate paranoia of the hon. Gentleman. He is a clever man. He has understood the Bill. I cannot understand it. He is the senior in this matter and I listened to his opinion with relish, because I knew that it was wrong.
  That does not alter the need for a simple Bill giving people the right to buy their house after having had the most evil landlord of all, the state, which is much more inscrutable than all the officials with whom the unfortunate tenant must deal. In the most enlightened areas, such as Perth and Kinross, let alone in Glasgow and Strathclyde, the state is the most insensitive landlord.
  Mr. David Marshall: Is the hon. and learned Gentleman seriously asking us to accept that a district council, even a Conservative-controlled one, is a worse landlord than the Rachman-type landlords, such as Norman Properties in Scotland? That is nonsense.
  Mr. Fairbairn: Rachman lived in England, not in Scotland. I do not know Rachman's type, because I never met him. I do not believe that he was a type.
  No one is more insensitive than the officials of housing departments when they deal with their tenants. There may be nice officials and difficult tenants, but it is an artificial and bad relationship. People should own their homes, and be able to choose and to change their homes. The format of the Bill is incomprehensible to any ordinary person likely to be in that position.
  When the late Lord Milligan was Lord Advocate, he made a speech in the other place in which he pointed out that if Parliament decided to legislate that only six people should be allowed to sit at any one time in a railway carriage, it would be unable to pass a Bill to that effect. The Bill would have to state that notwithstanding the provisions of the Railway Act 1953, and as not excepted in schedule 1 of proviso 2 of this Act, under part IV it shall
  1074
  be impossible for any persons to occupy a railway carriage except as so hereafter provided. I agree with that. We should have a simple Bill to do a simple deed. This simple deed is one of the most blessed that any Government can do, and one of the most excellent that this Government have done.
  The right to buy has allowed people to wrench their nest and home, which surrounds them perhaps for ever or only temporarily, out of the hands of Departments and Local authorities. That is of immense emotional and psychological importance and has a huge effect on people's respect for themselves. Whether a house is in a good or bad area, or in the middle of a council scheme, whether it is a police house or a fireman's house, those that are privately owned are those that are made proud.
  Who would spend money on his home if an official could come along and say, "I order you to have a new front door because everyone is getting one," or "I forbid you to have a new sink because nobody is getting one"? That is an appallingly arrogant attitude to the home, which is the womb of the family. It is important that people should have a choice.
  When housing associations were first set up, it was thought strange that a few people could get together, buy shares and provide the money to do up a building so that families could buy it and live there. The money was used to do up the next building. That is how housing associations and the Link association were set up—but not in the constituency of my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton).
  I set up a housing association and did up little houses in East Lothian, Edinburgh and elsewhere. The idea is to generate funds to restore houses so that people can own them and say, "This is mine. This is my family's home," and not feel, as people do when they are in the Army, that they are the temporary residents of a hut or camp. Home ownership is the thrust of democracy and human decency, and is essential for a healthy society.
  Many of the calamities with which I and the hon. Member for Garscadden must deal, have arisen from the terrible circular cities of concrete and negativity that have been built by Socialist councils. The Government have been accused of throwing away the family silver, but we cannot excuse the Earl of Stockton because, as Housing Minister, he probably encouraged those councils to build as they did.
  Many local authorities, housing associations, police authorities and fire authorities wish to keep their empires, staff numbers, importance and power over helpless people. They frustrate the purchase of houses by those who live in them. That effective policy has been achieved by delaying conveyancing and by complaints of lack of staff so that the empire can be increased. They try to persuade the Government that it is a suitable bribe to say that more solicitors are needed in the legal department so that staff can be doubled and the pyramid can rise higher. They say that the local authority grants are being cut, but that they need more money because if the Government say that they must sell council houses, more officials and more conveyancers are needed. That excuse is not overcome by the Bill.
  I ask my right hon. Friend to consider carefully whether the Bill empowers those officials to frustrate the tenant's attempt to purchase his home. Let us not overlook the cruelty of that, because it frequently makes the price to the

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  tenant greater and beyond his reach. It is essential to prevent that from happening. It is fatuous for an official or an authority to stop, by delay, the purchase of a home.
  Clause 7 introduces a new section to a different Act, which it is bound to do, because it would upset anyone who drafted a Bill to make it comprehensible. The problem of mobility comes into play when a secure tenant of one landlord becomes, at his request, the secure tenant of another landlord. Frequently, housing authorities will say, "We cannot give you a house in Crieff because you already have one in Greenock." If the housing authority in Crieff says, "We cannot give you a house in Crieff because you do not have one here," how can a person become a secure tenant? Many people cannot take up jobs because they cannot move house. Their housing authorities are too stick-in-the-mud. Their attitude is extraordinary when one considers that a huge proportion of their properties can be empty at any given time, and frequently are empty for long periods.
  The hon. Member for Garscadden made an extremely valid point at the beginning of his speech when he asked about the category of houses in which some tenants live. For example, the Gorgie and Dalry housing association in Edinburgh has renovated many houses there. Indeed, one of the housing association's tenants was my late client, Mr. James Steel, who used to forge 2s 6d pieces, and latterly florins, because ICI, without telling him, narrowed the strip from which he had made half crowns. His consent was needed before the entire block could be renovated.
  Mr. Donald Stewart: What is the hon. and learned Gentleman talking about?
  Mr. Fairbairn: His name was Steel; no doubt he was a member of the family of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), who usually sits in front of the right hon. Member for Western Isles (Mr. Stewart).
  My hon. Friend should consider whether the point made by the hon. Member for Garscadden is correct. It would be unfair if someone who gave up his private tenancy or ownership to enable a scheme to be carried out did not benefit in the way that someone who joined the association would benefit. I do not know—because I do not understand the Bill—whether the hon. Gentleman is correct, but assuming that he is, the matter must be rectified.
  I do not accept that it is unfair if someone is offered an equivalent flat, which was the hon. Gentleman's next point. I bought a house on the other side of the Thames that is the same distance from Big Ben, on a diameter, as is a house in Marsham court. The house that I bought is infinitely better than any house that I could have bought in Marsham court, and it cost about one twentieth of the price of the latter. I am not impressed by the concept of comparative value, because there are so many differentials that it is difficult to make a comparison. I should be happier to live in any of the restored flats in the Trongate in Glasgow than in the newest houses in Easterhouse.
  The concept of unfairness arises in our postbags every day. Our constituents write to us saying, "Miss Snodgrass got a two-bedroomed house before I did, but she is an unmarried mother and I am a married mother." People will
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  always complain when the local authority is the provider, but one does not hear such complaints when the property is in private hands.
  I cannot welcome enough the surge in home ownership. It is essential to human dignity, to the stability of the family and to people's ability to change jobs. If a man has an asset to sell, he can go wherever he wishes and buy another asset with the proceeds of that sale. Tenants locked in the grip of an authority and its officials do not have that certainty. It is extremely difficult for my constituents to move from one part of Perthshire to another, despite the fact that all houses are administered by the same authority. It is even more difficult to move from one authority to another. Part of my constituency used to be in Central region and part in Tayside. The difficulty of persuading Central region to house someone who already had a council home in Tayside but who wished to move was almost insurmountable. That difficulty would be completely removed by more ownership of houses.
  I would go further than the Bill and introduce a simple measure entitled the Housing (Scotland) Bill (No. 2) which would say simply that anyone who lives in a house owned by a local authority is now its owner for a grassum of 1p. There shall be an assumption that it has been conveyed, and all housing authorities will be removed.
  Mr. William McKelvey: I do not understand the hon. and learned Gentleman's passion for giving local authority houses to their tenants. In many ways I share his view that everyone should be a home owner, but why not apply this to the private sector? Not all private accommodation is of Victorian or Georgian grandeur. I lived in a single-end in houses that were built beside the mill so that the workers would all live nearby. Our family of four were overjoyed to move from a single-end to a council house. Why not extend the right to some of the more desirable areas in the private sector? Tenants who have paid their rent for up to 40 years have the right to home ownership and those houses should be handed over for a penny, on the ground that the landlords have been receiving rent for such a long time.
  Mr. Fairbairn: I have no more fondness for the mill owner than I have for the local authority, which also holds people in thrall. It is abominable, and that is what I wish to remove, but a local authority has no interest in its property, except in retaining its empire. A landlord, or a person who owns a house—I do not like the word "landlord"—which he does not want for the moment, just as one might not need a pair of glasses or a book, should be able to lend it and to get it back again.
  Mr. McKelvey: It is a business.
  Mr. Fairbairn: For some people, it may be a business. The trouble is that the private rented sector, which could have resolved many problems, was destroyed because it was assumed to be wicked. If a man cannot lend his house for as long as he wishes in the knowledge that, eventually, he will get it back, he will not lend it at all. The private rented sector should be infinitely more fluid. Houses do not matter to a local authority. The director of housing is not dealing with a house which he will need back again.
  Subject to allowing those who cannot provide for themselves to rent houses, the more home ownership there is, and the more rights people have to transfer, the happier

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  will be our society in Scotland. I am appalled that such a huge proportion of the population of Scotland are the serfs of local authorities, and I wish that to end totally as soon as possible.
  7.40 pm
  Mr. Willie W. Hamilton: The hon. and learned Member for Perth and Kinross (Mr. Fairbairn) is well known for his wild exaggeration on almost every subject under the sun.
  Mr. Fairbairn: Snap.
  Mr. Hamilton: The hon. and learned Gentleman usually represents nobody but himself and he does not seriously believe what he says on this matter. He would have us believe that everybody is in a position to buy his own house.
  Mr. Fairbairn: Give them their houses.
  Mr. Hamilton: Who will pay for the houses? Will it be the much maligned state which the hon. and learned Gentleman talked about? Millions of people are incapable of buying a house, and more so in Scotland now than for many a long year. Hundreds of thousands in Scotland have been flung on to the dole by the Government.
  The Prime Minister lives rent free in a state-owned house. She obviously objects to that because she is buying a house less than a mile from where I live. Unfortunately, my house has declined in value since that was confirmed.
  I took the trouble of obtaining brochures from Barratt, the jerry-builders in Scotland. However, the Barratt houses in Dulwich are not jerry-built, and I shall read out what will be in the kitchen of the Prime Minister's new house when she moves there from her wretched state-owned home. The following appliances are included in the kitchen: a gas hob, an electric oven, an electric microwave, an electric barbecue grill, a hob ventilator system, a fridge, a dish washer, a sink and tops. Purchasers will be able to choose the colour and pattern of floor and wall tiles. The master bedrooms include a whirlpool bath, two basins, a separate shower, bidet and W.C. all with gold plated fittings. The Prime Minister can buy such a house and the Government are telling the people of Scotland that they shall have the freedom of choice, but they are not telling them that they will not be able to avail themselves of it. Is that the object of the Government's housing policy?
  It is idle to attempt to debate and discuss housing policy in a vacuum, separate from other Government policies. The Secretary of State's speech was an appalling example of how a problem of serious and catastrophic dimensions can be treated with the smug, smiling complacency for which he is renowned.
  The Bill is monstrously irrelevant when considered in relation to Government policy as a whole. The crime statistics for Scotland since 1978 show that robbery has increased by 18 per cent., housebreaking by 46 per cent., vandalism by 40 per cent., fire raising by 63 per cent. and serious assault by 51 per cent. However we interpret the facts, they are catastrophic and terrifying.
  In the same period, unemployment in Scotland, not least among building trade workers, has increased. The monthly average in Scotland in 1980 was 207,900. In 1984 it was 341,600, and in the first nine months of this year
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  the average monthly figure is 353,000. That is an increase of over 75 per cent. in the six years that the Government have been in power.
  These rises in crime and unemployment have been recorded since 1979 when 23,782 houses were completed. In 1984, that figure had declined to 18,670. That is the way in which the Bill must be considered.
  The three crucial areas of escalating crime, rocketing unemployment and virtual extinction of local authority house building for rent are closely interlinked. The increasing feelings of hopelessness, frustration and anger lead to social frictions and to the crime figures that I have mentioned.
  The Church of Scotland Committee on Church and Nation reported to the General Assembly in May and quoted the Scottish Federation of Housing Associations which stated:
  "Scotland is still desperately short of housing for all types of needs…At the present rate of building, demolition and household formation, each new home built will have to last 300 years if the housing stock is to replace itself."
  That is the measure of the problem as deduced by the housing associations and supported by the Church of Scotland, the Council of the Royal Institute of British Architects, the National Federation of Building Trades Employers and by every responsible authority in Scotland and the United Kingdom. That is also the view of two royal princes—and they should know what they are talking about in this matter—Prince Philip and Prince Charles, who have both repeated precisely what has been said by other authorities.
  The Secretary of State rubbished the reports of COSLA although its view is shared by all the other authorities that I have mentioned. A year ago, Shelter calculated that in real terms, between 1979 and 1986, public expenditure on housing in Scotland will have been slashed by over 50 per cent. Whatever authority one considers, from the highest in the land to the lowest, the story is the same. There has never been a more devastating story of negligence and incompetence in housing than in the past four or five years.
  Nobody can accuse my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) of not doing his homework. He does more homework than many Ministers on housing matters. Many of the Ministers did not know what my hon. Friend was talking about and the Opposition will be very interested in the Under-Secretary's answers to my hon. Friend's questions. I suspect that he will not answer half the questions because the answers have not yet been prepared by his civil servants. No doubt we will get them in due course in Committee.
  My hon. Friend the Member for Garscadden accused the Government of having produced in the face of all the evidence an ill-thought-out, ill-conceived and irrelevant Bill. When the Bill reaches the statute book, not one extra house will have been provided as a consequence. There will be no diminution of waiting lists. Young people who are getting married now will not move up the queue. In fact, I received a letter only last week from the Glenrothes new town development corporation. People often write to me asking if they can exchange houses or if a daughter can be placed on the housing waiting lists because she is getting married. The Glenrothes corporation said that it is precisely because it is not allowed to build for rent that it has been compelled to sell. Therefore there is less and less of a pool for renting, and the problems are much more difficult to solve as a direct—
  Mr. Michael Forsyth rose—
  Mr. Hamilton: No, I shall not give way. I promised to make a short speech and before I resume my place I wish to say something about clause 18, which refers to building regulations. I intervened during the Secretary of State's speech to seek some assurances from him. He smiled and told me that I need not worry as building regulations would not be dealt with directly by the Bill. However, he explained that the Bill would lead to minor improvements, which will be welcomed by my hon. Friends and myself. But there is no doubt in which direction the Government will move in subsequent legislation. It is clear from their intentions that they will allow jerry-builders like Barratts a free hand to build what they like within the minimal requirements that will be provided in the new regulations.
  The Government's intentions for building regulations have been clear for over two years. The Government propose to remove minimum space and other standards for housing in Scotland. In early June 1984, they issued a consultative paper in which it was clear that their intention was to allow builders such as Barratts to do just about anything they liked. The Government faced opposition from Kirkcaldy district council, Dunfermline district council and from every other local housing authority in Scotland. They did not want Barratts to be allowed to build to such regulations, but the Scottish Office overruled them and allowed Barratts to build the rabbit hutches that are now to be seen in Dunfermline, Kirkcaldy and other areas.
  In the consultative document to which I have referred, there is no mention of minimum ceiling heights. Is that what the Government intend to set out in subsequent legislation? Are they content that Barratts shall be allowed to build for dwarfs or those who are stunted, like a number of Conservative Members who are now in the Chamber? Under the terms of the consultative document, tiny boxes could be built and be called bedrooms. The proposition was to reduce the minimum space to 70 per cent. of what is provided in the current regulations. The kitchen could be an area below a stair with no natural lighting and consisting of a sink, a cooker and about a cubic yard of storage in some adjacent area. That was described by the Scottish Association of Chief Building Control Officers as "ridiculous".
  The Prime Minister is responsible for that. She will not have a 5 ft ceiling in her home. She will not have a kitchen below a stair. She will have the sort of properties which I have described. No Tory Minister—not even a Tory Back Bencher—would live in the sort of house or hutch that is proposed for tenants in Scotland. The Minister does not understand. No Minister in this Administration understands the housing or other problems of ordinary people who are living on the bread line and are desperately anxious for some shelter. The Under-Secretary should not smile so smugly. Smugness and complacency must be infectious in the Scottish Office.
  The Minister refused to meet the Kirkcaldy district council to talk about its massive problems. It could spend tens of millions of pounds on housing improvements, and the Minister knows well what I am talking about. The district council could spend huge sums on bringing the properties under its control to a decent standard. I have in mind the prefabricated houses and other properties which were built in immediately after the war and still exist throughout Fife.
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  The Government are introducing the Bill because they wish to create the illusion that they are anxious for freedom of choice. They wish also that more people will own their own homes. I recall many years ago that Nye Bevan said that he did not object—nor do I—to anyone owning his own house. I own my house. Nye Bevan objected—and this is my objection—to someone owning someone else's home.
  Mr. Donald Thompson (A Lord Commissioner to the Treasury): Like local authorities.
  Mr. Hamilton: Yes, and private landlords. At least a local authority is elected, and if the people do not like what it does they can kick it out. I suspect that many Tories in Scotland will be kicked out in the elections of May 1986. The Tories are in ill repute in Scotland. They can do what they like in the Bill, or in any other measure, but there will be fewer than 10 Tories representing Scottish constituencies following the next general election. The Bill will do nothing to solve the enormous housing problems in Scotland and for that reason my right hon. and hon. Friends and I will oppose it when the Division takes place.
  7.57 pm
  Mr. Michael Forsyth: I am grateful for the opportunity to welcome the Bill. I wish especially to thank my right hon. and hon. Friends in the Scottish Office for extending the right to buy to tenants of regional councils. When I raised the matter in Committee on what was then the Tenants' Rights, Etc. (Scotland) Bill, my hon. Friend the Under-Secretary of State assured me that he would consult COSLA prior to considering legislation. I felt that that was a sort of ministerial put down and that nothing further would be heard about the matter. I congratulate him on incorporating in the Bill the right to buy for tenants of regional councils. I know that the provision will be welcomed widely in my constituency.
  Equally, the extension of the right to buy to tenants of housing associations is only fair and proper. As a Conservative Back Bencher, I confess that hitherto I have had a slight prejudice against housing associations and the funding thereof. I realise that if the alternative was to fund district councils and the housing authority for the provision of more housing, that would carry the right to buy, whereas it would be voluntary with the housing associations.
  I have a number of specific questions which come from my reading of the Bill. I find the measure extremely difficult to understand as it refers back almost constantly to previous legislation. In some instances I may have missed the point.
  I should like to know which housing associations will be excluded under paragraph 1(f)(ii) of schedule 1. What proportion of the housing stock of regional councils will be excluded by paragraph 18 of schedule 1? We all welcome the improvement in the discount arrangements and the alterations in the cut-off dates, which bring the arrangements into line with what has happened since the right to buy was first granted. In clause 3(1)(b), what is meant by
  "improvements (other than by way of repairing or maintenance)"?
  It seems that that is a potential loophole which could be exploited by local authorities that are concerned to avoid tenants purchasing their properties.
  Do the changes in clause 3(2), to include modernisation costs in the debt to be recovered, affect tenants who are

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  currently in the throes of buying their properties? If it catches those tenants, will the Minister give us an assurance that, in Committee, amendments will be tabled to protect those people? Can he qualify clause 3(3) on the calculation of outstanding debts with regard to housing associations?
  I apologise to the House for asking all these detailed questions, but it is important to ensure that the spirit of these important changes is carried through by the local authorities.
  The Bill will be welcomed by tenants who are unfortunate enough to live in Labour-controlled authorities which are still doing their level best to prevent home ownership. The prevention of the imposition of unfair contract conditions is welcome. What will be done for those tenants who already suffer from unfair conditions? Such help would encourage tenants to take action against district councils and encourage the transfer between councils. The requirement for housing associations to publish their allocation system is also welcome.
  Although I welcome the Bill, it is something of a disappointment. Why has my hon. Friend the Minister not embraced a rather more radical approach? Why has he not listened to views which have been expressed by the Opposition? They are quite right to point out that, for the vast majority of tenants in the public sector, home ownership and the right to buy is not an option. There is a variety of reasons for that—perhaps the property is less desirable, perhaps the tenants are in flatted accommodation. An increase in discount would help to some extent, but they might simply not be able to buy. For them, the prospect of home ownership is as elusive as ever.
  As my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) has said, such people are at the beck and call of the officials who are responsible for managing local authority housing. It may not be a malign intention on officials' part, but tenants who depend on their efficiency and good will for repairs and allocations are sadly disappointed and left with the feeling that they are treated like numbers or items to be disposed of.
  Would my hon. Friend the Minister consider taking whole housing estates or groups of properties and vesting ownership in tenants' organisations? The privatisation of whole estates under the ownership of tenants as a corporate group would, I am sure, be welcomed by the Opposition.
  Mr. Dewar: Will the hon. Gentleman join me in urging the Minister to adopt a more imaginative and generous approach to the value of co-operatives, which, I think, would be of enormous benefit? I recognise that there are three schemes now before us for piloting, but I hope that something of this sort could be included. I hope that the hon. Member agrees with that.
  Mr. Forsyth: I should like to go further than the hon. Gentleman. I would like whole estates to be handed over to tenant organisations for management, perhaps under partnership with building societies and other financial institutions. In that way, estates will be managed according to the needs and wishes of the tenants, and will be better for it. It is significant that the people of Thamesmead, when given the opportunity to vote on how they would like their estate to be managed within the GLC area, contrary to popular expectation, voted convincingly to opt for the private sector rather than conventional local authority management.
  Mr. Fairbairn: My hon. Friend may like to know that one of the last acts, and certainly the most civilised and successful, of the Edinburgh district council before it fell into the hands of the lunatics who now run it concerned Pilton estate, which was said to be an undesirable area in which criminals were supposed to live. The council sold that estate to a private organisation which did it up, and it is now one of the most sought after places in Edinburgh to live in.
  Mr. Forsyth: I am grateful to my hon. and learned Friend. I proposed to mention that example as another strategy for dealing with housing problems.
  I am not talking about a scheme to turn all tenants into owner-occupiers. On the contrary, I am talking about a scheme of vesting ownership in co-operatives which will then be able to manage those estates much more effectively and responsibly. We have already recognised that many tenants would benefit from that for whom ownership is not an option.
  We are all aware of the report on the state and fabric of housing. We do not need to be reminded by management consultants or chartered surveyors that our housing estates are falling to bits. Direct labour organisations are unable to respond to the demands upon them for a variety of reasons. How are we to find the capital and resources to put this right? Much could be clone with an injection of private capital.
  It is right to remind the House of what has been done in Pilton. I pay tribute to those Labour authorities throughout the country who, perhaps biting their ideological tongues, have successfully gone ahead with such schemes. I hope that other authorities will follow. Some authorities—Glasgow's Hutcheson town E block was a celebrated example—are less than enthusiastic to bring in private developers to develop the estates and sell them. My hon. and learned Friend has already pointed out the extraordinary transformation in an area where people would not live in any circumstances as a tenant, with the result that those properties were left empty, but as soon as the properties were done up the same people were the first in the queue of people wishing to buy.
  Mr. Fairbairn: Or rent them.
  Mr. Forsyth: Will the Minister institute a new right to allow private developers to identify blocks on estates, or indeed whole estates, which are being left empty and derelict, as many thousands of houses are throughout Scotland? If private developers could introduce a procedure to bid for ownership of such blocks and rehabilitate these properties for sale in partnership, with or without the support of the local authorities. There are far too many properties in Scotland which are empty and decayed because local authorities think that they may be able to get the money to carry out repairs on them. However, the resources are not available from any Government. The resources will not come from the public sector but are available from the private sector. The tenants would prefer such development.
  If we are serious about mobility—the Bill does something to improve it—we should be aware of the catastrophic effects of the Rent Acts. They dry up the supply of accommodation, prevent the development of rented accommodation in the private sector and tie people into their communities. The Rent Acts have locked them in. We must all know tenants who say that they could

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  perhaps get a job down south but that they cannot afford the housing there, that they cannot give up their council house, that they have a garden and that it has taken 20 years to get that high in the pecking order. Reform of the Rent Acts would open a new vista of opportunity for people to move to find employment and it would free the market.
  Reform can be achieved without in any way upsetting security of tenure and control of rents for existing tenants. By deregulating all new lettings, we could create a new supply. If hon. Members are honest, they will admit that they know young couples and others who have no prospect of being housed by the local authority and who are unable to buy. If we had a new supply of rented accommodation which is now lying empty or being used for holiday or company lets, such people would thank us for it. It is no use saying that we will protect people against market rents and eviction when the owner wants the property back if the price of that is nowhere to live.
  I have already stated the obvious—that there are people who cannot afford to buy. Will my hon. Friend the Minister consider imaginative schemes, perhaps working with local authorities and building societies, to introduce low-cost mortgage schemes for young couples, for example, whose income might not be high enough at the start of their careers to take on a mortgage but whose earning power will increase at precisely the same rate at which the burden of the mortgage declines? There is an opportunity for action there.
  We consider it right to subsidise people who cannot afford to pay their rented housing costs, so what is wrong with subsidising people to enable them to meet mortgage payments? How can it be right for vast sums of money to be spent on bed and breakfast accommodation—the sums are substantial—to keep people in accommodation which they are thrown out of with their families at 8 am so that they must wander the streets until they are let in again at night when that costs many times more than subsidising the same people to have their own private accommodation?
  I am not suggesting that we establish a system which renders the state open to exploitation by the unscrupulous who might think that there is a good way of getting the state to buy them a house. Many people find themselves in bed and breakfast accommodation, however, and for a variety of reasons. We should not be afraid of what might be considered novel or extraordinary and allow ourselves to be trapped into perpetuating a system that wastes public money, does not provide the best for the people who we are trying to help, and restricts our ability to extend home ownership.
  I welcome the Bill. It is a step in the right direction, but my hon. Friend the Minister is being a little too timid. We have a monumental housing problem on our hands, partly because of Socialism, partly as a result of demographic change, and partly because of the system of subsidies that has operated in the housing market. The radicalism that I have described, extension of choice and releasing the energy of the market and the private sector has far more to offer people. The Government should embrace those opportunities. Such action would be popular and they will win a great electoral victory on the strength of such policies.
  8.14 pm
  Mr. Gordon Wilson: I find myself in the alarming situation of having to agree with a great deal that the hon. Member for Stirling (Mr. Forsyth) said. He seemed to be considering housing with fresh eyes. Although I did not agree with everything that he said, especially his clarion call at the end, the extent of our housing problem is such that fresh ideas are needed.
  If the Bill is the flagship of the Government's housing programme for 1985–86, I can only say that it has not impressed me. It is very much like a guttering candle. The Government have built on the tenants' rights legislation—irrespective of whether we agreed with that, it was certainlyradical—but now we have just bits and pieces. The Bill is a rag-bag and I am not excited in the slightest by it. I shall vote against it, largely because I disagree with housing associations being compelled—for that is what it amounts to—to sell some properties.
  I know that housing association properties are in great demand in the inner-city areas that I represent. Their success is demonstrated clearly by that demand, just as the condemnation of the products of the housing policies pursued in the 1950s, 1960s and 1970s is represented by people fleeing the concrete mausoleums that were put up in the name of progress and which have trapped many.
  We have a serious housing problem. In Dundee the number of council houses exceeds demand but there is a striking shortage of the homes that people want. We have built the wrong type of house. If they had been built in areas that could have been garden suburbs or if they were terrace or semi-detached hoses or could be described as having defensible living space, to use the current jargon, they would be in demand. Instead, we have soulless walkup blocks. People are voting with their feet. They refuse to take houses in some areas and press for housing association properties in better areas. I find it alarming that the Secretary of State was willing to admit that the condition of the housing stock is catastrophic but that he seems unwilling to provide the resources necessary to do anything about it.
  It is worth refreshing our memories of the figures. Some 71,000 houses in urban and rural areas lack inside toilets or hot water supplies, heating, lighting or adequate ventilation and suffer from serious disrepair. We need a massive programme to rectify that—to get rid of what are effectively slum houses. For most of my political career we have described such houses as unacceptable, but, like a blemish on society, they are still with us.
  As if that was not bad enough, several hundred thousand houses on modern housing estates built by district councils suffer from dampness or other conditions in which people do not want to live. They tell us of their problems and we batter at the local authorities' doors on their behalf. However, we are aware that local authorities are short of money for rehabilitation work. It is difficult to explain to tenants that the conditions of which they complain—they show us clothing that has gone blue with mould to show how bad their homes are—might be the result of design problems or simply the lack of cash. Nevertheless, it is the tenants who have to live in such conditions.
  We shall make a mistake if we ignore the extent of the problem and we shall let our people down if, through our failure to put pressure on the Government, we do not get fresh funds.

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  I agree with the hon. Member for Stirling that there are several ways of dealing with the problem. I am not against enabling unwanted empty council houses to be converted or improved within the private market. It makes sense that houses that fetch no rent and which may be vandalised because they are standing empty or which may cause a problem to other homes nearby should be put right by the private sector if the public sector is unable to tackle the job.
  It is equally right to invite housing associations to take over, say, certain blocks and to concentrate on special housing needs in the inner cities. We should use all the means available to obtain a diversity of housing to satisfy demand. I was pleased to hear the hon. Member for Stirling call on the Government to respect the principle of co-ownership or co-operative housing. The attraction of such building has never been fulfilled in this country, whereas other countries have done much to extend that form of ownership.
  We should remove the big brother of the housing management sector and allow people more control over their lives, without exposing them to other problems that can arise. I have in mind people being left bereft if it turns out that the homes that they have bought are in extremely bad repair and they have no money to put them right. In other words, we must maintain a balance.
  Many officials and councils do not like the concept of tenant management. Indeed, I sometimes suspect that tenants might not want the responsibility to be wished on them. I agree that it is better to decentralise control over housing to tenants so far as it is possible to do that.
  Although we all agree that special needs must be satisfied—sheltered housing, housing for the disabled and houses in the inner cities—we are no longer concerned with the crude "roofs over people's heads" policy that existed in the past, when we talked not so much of building homes but of building housing units. Those very units are today not recognised by people as real homes.
  We must consider the rehabilitation of housing. However much we may change the method of management or the type of tenure, we still have the problem of lack of quality. Many existing houses were jerry-built, with concrete shells lacking sufficient insulation or having inadequate ventilation. Many design problems cost a great deal to put right, and while the Government have a duty to help put them right, there is no sign in the Bill that a sound maintenance policy is to be followed.
  People suffer draughts in their homes, leaks in their roofs and wood rotting away because the local authority is obliged to extend the period for painting or attending to repairs beyond the usual cycle. Anyone with experience of property will appreciate that it is bad policy not to paint the external woodwork. To do so means a larger bill at a later date. Modernisation schemes for improving our housing stock have largely ground to a halt because of the calamitous decline in the provision of finance by the Government.
  I have no objection to increasing discounts for the sale of flats. Indeed, perhaps a provision to that effect should have been included in the original legislation, to which I objected because of the compulsion on local authorities to dispose of the more attractive properties. They were, naturally, the properties that tenants wanted to buy.
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  I am not saying that there is anything wrong with tenants wishing to purchase the sort of properties they desire, but as the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) pointed out, there also exists the right to rent a reasonable house. Because of the Government's policy, many of the semi-detached and similar houses that people desire are no longer available. That has led to frustration, particularly where a new build policy is not pursued by the local authority.
  Mr. Barry Henderson: Would not the valuation of a house have some impact on decisions of that kind? The valuation of a semi-detached house, because it is a more desirable property, will be much higher than that of a third floor flat. To some extent Mat will compensate for the difference, and the discount will help to compensate more.
  Mr. Wilson: In theory the hon. Gentleman adduces a sound argument. It does not work in practice, however, and the Government have recognised that fact by increasing the discounts for properties that people are not keen to take on. After all, living in tenemental property—I will not mention buying a multi-occupation flat, if one were completely daft, or buying a maisonette in a walk-up block—involves the problem of collective maintenance. Private occupiers are bound to be frightened if the roof is in disrepair or if dry rot develops.
  I speak of that from experience, because in the early days of my marriage we lived in a tenemental flat which suffered a slight attack of dry rot. We felt great fear and alarm when we received big estimates, before getting a local joiner to do the job, although after the work was done I had to crawl under the basement floor in darkness and scoop up bits of rotting timber that had been left there.
  I fear that the Bill does not attempt to get at the root of difficulties that are faced by hundreds of thousands of tenants, and I do not exaggerate when I say that. The hon. Member for Stirling was right to criticise the Government for lacking imagination on this issue. They have failed to live up to the obligations that are placed on them, by virtue of their office, to improve the residential accommodation of many of our citizens.
  8.26 pm
  Sir Hector Monro: The one issue on which we can all agree is that housing is vital. It is a subject about which there is a new Bill every year for Scotland, and the same probably applies to England and Wales.
  The hon. Member for Dundee, East (Mr. Wilson) was right to concentrate on the poor quality of much of our housing and the problems about which we hear regularly in our surgeries. They are particularly the problems of dampness and condensation, with the vicious circle that those problems produce. Condensation usually occurs through lack of ventilation, yet tenants in difficult areas cannot go to work and leave their windows open, because of a fear of their houses being vandalised.
  I am glad that the Government have recognised that this is a serious issue. I hope that if my hon. Friend has money available for housing in future, more will be spent on improvement grants. Expenditure of that kind in recent years has been the most effective way of improving the nation's housing stock.
  We should couple the Bill in broad terms with the building societies Bill which will come later. The more

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  opportunities that are provided for home ownership, the better, and if the building societies had a wider remit, greater opportunity would be provided for home ownership.
  I welcomed my right hon. Friend's remarks about the need to extend the right to buy and I am glad that, through the policy of the purchase of council houses, about £100 million has been ploughed back into housing. I welcome the clause dealing with housing associations in relation to the right to buy, because that, too, will extend home ownership. Will those provisions cover health authorities as well as the regional councils and police and fire service houses? They need a stock of houses to accommodate their staff.
  I must say, "Well done, indeed," to the housing associations for the tremendous work that they have done, particularly in making dramatic advances during the past six years. This year's programme involves about £110 million, and this is the fourth consecutive year in which more than £100 million has been spent on new housing accommodation. That is very good news and we should say, "Well done," to the Housing Corporation and the housing associations for their extremely good work. I hope that they will continue to expand their programmes, wherever possible, into rural areas. By that I mean the smaller towns in Scotland, which are keen to have more housing association accommodation and particularly sheltered housing.
  Those of us who have seen some of the sheltered housing built in the past few years know how highly commendable it is. I refer particularly to the sheltered housing that helps the disabled and infirm. A nice community spirit is engendered by grouping the houses around a central community center. We must encourage all that, and I hope that the Government will do what they can in that regard.
  Tonight I shall concentrate on the wider issue of housing in the countryside. I know that Rural Forum has done much to produce good work on this subject. Indeed, I was glad that my hon. Friend the Minister went to Galloway a few weeks ago to speak to Rural Forum and to show that he believed in its work. We are all keen to try to stem rural depopulation, yet many planning authorities seem to be determined to prevent the construction of houses in the countryside. If we do not have good housing in the countryside, we will end up closing village schools and village halls, and that community spirit that is so vital to the countryside will be lost.
  I hope that the enlightened new circular that was introduced a few months ago to replace circular 40/1960 will be welcomed by planning committees. So far, I have seen little evidence that they realise the opportunity presented by the circular to adopt a more flexible approach towards planning in the countryside. Hon. Members will know that the circular that has been in operation for the past 25 years was very restrictive. However beautiful the countryside might or might not be, new building had to be attached to agriculture or forestry. Of course, the number of those employed in agriculture or forestry is falling, and it is unlikely that anyone would want to build new houses for that purpose. Thus, the new circular is welcome.
  It is worth pointing out that the guidelines are still carefully drawn so that there will be no impact on green
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  belt areas, or ribbon and scattered developments. Nothing detrimental will happen to the scenic beauty of our country. There is now an opportunity to approve more rural developments than in the past. A good house, built with the right materials and to the right design, often enhances the countryside. One need look only at the farmsteads and houses that were built in the 18th and 19th centuries. They enhance the countryside, and there is no reason why houses built in the 1980s and 1990s should not do the same for the next century.
  We have an opportunity to stem the move away from the countryside by making a modest increase in the number of houses built there. We already have an effective appeal system. In the past, reporters have all too frequently been able to found their decisions on the 1960 circular, which has now been replaced. Appeals should now be won more frequently by applicants for planning permission in the countryside. They cannot be turned down purely because of their lack of involvement in agriculture or forestry. In the months and years ahead, I hope that my hon. Friend the Minister will do more to publicise this valuable change in planning policy, as it seems to be taking far too long to sink into the minds of many planning officials.
  I am particularly interested in the countryside and its conservation, but there is nothing frightening about people having the power to give approval to the right developments. No one is saying that that power must be exercised, but perhaps we can now come down more on the side of the applicant if he fulfills all the ideals of quality that I have outlined. Given the importance of housing in the countryside and the quality and quantity of urban housing, I certainly support the Bill.
  8.38 pm
  Mr. Allen Adams: By way of an aside, I must say that the Scottish electorate will no doubt take note of the fact that some Conservative Members have suggested that the de-industrialisation of Scotland during the past six years is somehow due, in part or in whole, to the immobility of the Scots. It seems to be suggested that if people would chase factories all over the country, all would be well. It is implied that because Socialist authorities in Scotland built council houses, people became immobile.
  The population of Scotland stands at about 5 million, yet there are 20 million people of Scottish descent living outside Scotland. That points to the fact that the Scots are very mobile, and may have been more mobile than they really wanted to be. If there had been more money with which to build more good quality public housing in Scotland, some of those 20 million mobile people might still be in Scotland.
  Whether or not the Government like it, municipal Socialism is popular in Scotland. Most of the major housing authorities have been controlled by the Labour party for the past 50 or 60 years. The people have voted that way time and again because Labour local authorities in Scotland have done their job. Unlike some authorities in other parts of the country, who talk about Kit-Kats in canteens, Ireland and about issues involving Africa and Latin America, Labour local authorities in Scotland have got on with their job quietly and efficiently.

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  Anybody who visits the centre of the city of Glasgow or Paisley and Renfrew can see that, even in the past 20 years, immeasurable and lasting improvements have been made.
  Mrs. McCurley: With Conservative Government money.
  Mr. Adams: We shall see where you are at the general election.
  Mrs. McCurley: Still in the same place.
  Mr. Deputy Speaker (Mr. Harold Walker): Order. It is not where I will be at the next general election. I shall look after myself.
  Mr. Adams: Indeed, Mr. Deputy Speaker.
  About a week ago I went to Celtic park to see St. Mirren, my local team, play Celtic. My son and I left Celtic park at 5 pm and took a bus along the London road past Bridgeton cross to Argyle street. At one time that was the east end and one of the most notorious parts of any city in Britain. The slums were appalling. Within 30 years what was an unattractive area has become an extremely pleasant one. The change is phenomenal.
  The same change occurred in my constituency. Only 20 years ago, when I was going to school, the slums and rabbit warrens still existed, but they do not exist now. The Government and their supporters suggest that all was well when it was left to private enterprise alone, but it was not. In my constituency we had the highest tuberculosis rate in Europe at the turn of the century. We inherited that legacy from private enterprise in the 19th century. It was said that Glasgow had the worst slums in Europe outside Vienna.
  People voted Labour in Glasgow and the west of Scotland simply to get rid of the slums, and to be fair to the Labour party, that is exactly what we did—we got rid of the slums. [Interruption.] When hon. Gentlemen have finished, I shall continue. That is not to say that we did not make mistakes. They must be freely and frankly admitted. At a huge tenement block about four storeys high in Fergusley park, I counted about 70 children in one close, yet people wonder why we have social problems. Such blocks were certainly errors of planning and judgment. No one regrets more than I do the break up of the extended family that has occurred because of that.
  The mistakes were largely brought about because of the great pressure on local authorities to build as many houses as possible, as quickly as possible, to house many people in as short a time as possible. The whole project was greatly under-capitalised. Many contractors seemed to receive more for a three-apartment tenement house than for a three-apartment semi-detached private house. Mistakes were made, but great pressure was exerted on local authorities to build quickly and cheaply. We should not make that mistake in future.
  In the public sector we have tended to make it difficult for an individual tenant to identify with his house. There have been far too many silly, bureaucratic and often unnecessary rules. It is nonsense to tell a tenant that before he puts a picture on a wall he must have an inspector come to tell where to put the nail. There is no point in having every door—
  Mrs. McCurley: That is Socialism.
  Mr. Adams: It is not Socialism, but downright stupidity. There is no point in having every door in one street painted the same colour.
  Mrs. McCurley: That is Socialism.
  Mr. Adams: The hon. Lady is confused. That is not Socialism, but bureaucratic stupidity. It has nothing whatsoever to do with Socialism.
  I understand why people became a little alienated. They always had the feeling that the house did not belong to them, but belonged to factors, and that there was little point in investing money in it. A solution is to devolve power from the centre of our cities and our district housing authorities to the periphery. We should give people a real and meaningful say in how their council houses are run. We want power devolved to the streets. The people in those areas know best how they want to live, and they should be allowed to live as they wish.
  The vast majority of people in Scotland continue to live in municipal housing. Frankly, they do not seem to have much choice. There is a great demand for council housing because attitudes in Scotland to public housing are different from those in England, although they are changing. We can argue until the cows come home that that should not be so, or that if this or that had happened in history the position might have been different, but the fact remains that attitudes are and will remain different for the foreseeable future.
  The solution is not deliberately to stimulate demand for private housing by creating a vacuum, cutting the sums available to local authorities, rendering authorities unable to build the sort of municipal housing that people want, and then saying, "People do not want the housing anyway. They want private houses built by Barratt and Salvesen." Yet that is what the Government are doing. They are ensuring that people have no alternative.
  Let us consider an average couple in their early 20s who are getting married and who were brought up in a decent four-apartment semi-detached council house. They put their name down on the local authority list and ask what the chances are of a decent house. They are frequently told that in a few years they may get a three-apartment flat on the fourth storey of a tenement, but on the other hand that they may not and that they certainly will not get a semidetached house with a front and back garden. They are forced either to take a house that they do not want—it is not desirable to bring up a family in those circumstances—or go on the open market. They want certainstandards—standards have risen, which is a good thing—and to bring up a family in a good environment.
  Mrs. McCurley: Will the hon. Gentleman give me an idea of the number of his colleagues who live in local authority housing and the number who live in private housing? Will he say why those who live in private housing do so?
  Mr. Adams: I am coming to that point. It is alwayssuggested—wrongly—that the Labour party is against people owning houses.
  Mrs. McCurley: The hon. Gentleman said so.
  Mr. Adams: No, I do not say that. I said that the economic reality makes it difficult for people to my houses. There is nothing wrong with the principle of buying a house, but it is difficult to do so. People are being deprived because local authorities are being starved of the funds to build proper and substantial council properties.

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  The young average couple whom I mentioned are then forced to go to Barratts, Salvesen or whoever else is building houses. Incidentally, some of the houses are in-substantial and may create problems in 20 years' time.
  Many young couples are being robbed of their youth. Every penny that they earn has to be spent on their house. They cannot move, and they cannot go out. Everything down to the last cigarrette must be budgeted for. Young couples are putting off having families until their mid or late 20s because they are up to their necks in mortgage repayments.
  Mr. David Marshall: Does my hon. Friend have the same experience in his constituency as I have in mine? It is one which, unfortunately, is increasing. Families who are owner-occupiers come to local councillors or myself to see whether we can assist them to obtain a council or housing association house because they have been unable to keep up high mortgage payments or have lost their jobs as a result of the Government's policies. The Bill will do nothing to help those people. It will make it more difficult for them to be housed.
  Mr. Adams: My hon. Friend is correct. Many people come to my surgery every month looking for local authority housing because they have lost their jobs. Many of my constituents have lost their jobs. The state is expected to pick up the tab and provide those people with housing, yet it is being under-financed and put into a difficult position. I, like my hon. Friend, have noticed that that problem is growing alarmingly.
  Mr. Christopher Hawkins: I do not know whether the hon. Gentleman is aware that some building societies are giving redundancy insurance with mortgages. The cost per month is trivial. As he said, people take out a 20-year contract. They assume that if they lose their jobs the state will pick up the tab. I should be happy to see it made compulsory for building societies to build redundancy insurance into the mortgage.
  Mr. Adams: I have no objection to that proposal. As my hon. Friend has said, many people are being forced to seek local authority housing because they have been evicted from the house that they were attempting to buy because they have lost their jobs. That point should be rammed home.
  The state is trying to renege on its obligation to maintain the housing stock. For example, the grant available to repair and maintain roofs in the private sector has been cut from 90 to 50 per cent. When, in the last century, the state withdrew from its obligation to maintain the housing stock and it was left to laissez-faire capitalism, we had appalling housing. Glasgow had the worst housing in Europe. My constituency had some appalling housing, which resulted in premature deaths. Intolerable housing conditions resulted in a life expectancy of 40 to 45 years. The Labour party's policies changed that. I say to the people who want to buy the council houses that those houses would not have existed if it had not been for men like John Wheatley and the Labour party. During the early part of the century they built many of the council houses that those people now wish to purchase.
  Does the Minister agree, as his Department apparently does, that three quarters of all public expenditure cuts in
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  Scotland over the past five years have fallen on housing? What does he say about housing expenditure which has been cut by 31 per cent. in real terms since 1979? I ask the Minister to answer those points when he replies.
  8.54 pm
  Mr. Barry Henderson: I recommend all Opposition Members who have been elected since the Government came to office to read Labour's consultative document on Scottish housing published in June 1977. I am glad to see that the right hon. Member for Glasgow, Govan (Mr. Millan), who subscribed so much to that document, is in the Chamber yet again for one of our housing debates. If the hon. Member for Paisley, North (Mr. Adams) had read the Labour Government's Green Paper he would have learnt a great deal to his advantage, not least on mobility, to which he referred.
  Page 38, paragraph 4.13, of that document states:
  "People should be able to move from area to area as job opportunities change. If the housing system makes this difficult, it hinders Scotland's economic progress…or where ready access to local authority sector depends on residential qualification."
  We put that anomaly right under the Tenants' Rights, Etc. (Scotland) Act 1980. We removed applicants' dependence on residential qualifications. The document continued:
  "The problem is aggravated by the decline of the private rented sector which in the past was able to offer temporary accommodation to incomers until longer-term housing was available. Public sector allocation policies must try to ensure that the advantages to industry and the community of facilitating mobility are balanced realistically against the needs of local residents."
  I hope the hon. Member for Paisley, North will accept that Conservative Members have said that mobility has been a problem and that a factor in that problem was the large public rented housing sector.
  Mr. Allen Adams: It is a question of the Sabbath being made for man and not man for the Sabbath. Does the hon. Gentleman believe that we should move all the people to the factory or move the factory to the people?
  Mr. Henderson: That brings me to the next point in the hon. Gentleman's speech. The hon. Gentleman accepted that great mistakes had been made in the past. I honour him for being straightforward about that. We are all aware of that. Few people can avoid blame.
  Those mistakes were exacerbated by Socialism for one reason if for no other—the lack of a substantial alternative market prevented people from showing their preferences and having them responded to in the market place. He referred to houses built by Salvesen. The private sector's great achievement is that it responds to the needs of the market place. It provides the houses that people want. If the market place had determined the type of houses built during the 1950s and 1960s at the time of the council house boom we would have far better council houses today, but no, the Socialist planners knew better. Nowhere did they know about it better than in the Scottish new towns. Most of the people who planned the new town houses lived outside those towns.
  I welcome the Bill. It has a number of excellent features. Some are better known than others. We all know that one of the Bill's important features extends the right to purchase to housing association tenants. Perhaps even better known is the fact that it will increase the discount available on sales of flats under the right-to-buy policy.

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  That is good. There are many other useful provisions in the Bill, but I will deal with two relatively minor but important points.
  Under clause 11 and schedule 1, as the explanatory and financial memorandum says:
  "The period within which a person who has purchased his house under the right to purchase shall be liable to repay all or a proportion of the discount received is reduced from 5 to 3 years."
  When we were going through the Tenants' Rights, Etc. (Scotland) Bill, we spent some time on that question. It was a matter of concern that people might do quick deals that were not beneficial to housing or to the objectives of the Bill. I think that we were over-cautious and that, in the light of the experience with the sales of council houses, the reduction of the period can be seen as a beneficial provision. It will help in cases where otherwise there might have been unfairness and hardship when people's circumstances changed and they had to move house through no choice of their own.
  As the explanatory and financial memorandum says:
  "Clause 10 restores a ground for recovery of possession of a dwelling house: that the landlord wishes to transfer the tenancy to one of the parties to a marriage, or other relationship, which has broken down, the other partner having hitherto been the tenant."
  That will be a very helpful provision, and I welcome it.
  Earlier in the debate, there was reference to the mistakes of the past, and to a need for a house condition survey. The hon. Member for Glasgow, Garscadden (Mr. Dewar) referred to it, as did the hon. Member for Dundee, East (Mr. Wilson). I agree with the Government that a house condition survey would be a waste of time and money. We do not need to be told the extent of some of the past mistakes which urgently require action.
  I served on the Select Committee which examined the problem of dampness in houses. We identified several of the problems, and concentrated the minds of some of the experts on the need to find solutions to them. The Select Committee's report was valuable. We do not need more surveys to tell us the scale of the problem. We need a consensus and an understanding of the scale of the problem and the priority that must be given to it if it is to be solved.
  Failure to tackle the problem has not been due to lack of money from the Government; it has been due to the refusal of many local authorities, particularly those most seriouslyaffected—notablyGlasgow—to give the same priority that hon. Members generally feel should be given to the rehabilitation of houses which suffer from dampness or the errors of the past. Indeed, Glasgow forwent over £5 million that it could have had for that sort of work because it insisted on a low-rent policy which simply transferred the cost of housing benefit from the taxpayer to the ratepayer.
  The housing associations are currently running a campaign for still more public money. The extreme case is that of the Tayside, Grampian and Fife forum of housing associations, which is urging that the Government should provide more money for housing associations. The secretary of the association said that the associations were
  "having to postpone much-needed developments because of cuts in Government funding".
  That was in the Courier of 2 November, which reports that he
  "warned yesterday that continued under-funding could lead to a return to slum conditions for many people".
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  Those words would cause anxiety to any of us. But, in the same piece of mail from that gentleman, there is a coloured glossy brochure telling of the progress of housing associations in Grampian, Tayside and Fife. It says:
  "Investment by housing associations funded by the Housing Corporation"—
  that is taxpayers' money—
  "in Grampian, Tayside and North Fife over the past five years is shown graphically below. The upward trend is clearly visible."
  Investment has risen from just over £2·5 million to over £17·5 million during the lifetime of this Government. Far from underfunding, that is an eightfold growth. The housing association movement requires a better campaign than that if it wishes to obtain more taxpayers' money.
  The convenor of housing in north-east Fife district—who should know better but was clearly caught up with this kind of nonsense—said:
  "In this area we have a large and increasingly elderly population."
  That is true. He continued:
  "This Government's claim that they are caring and have the interests of the elderly at heart has now been exposed."
  Yet the truth is that in 1979, when the Government came to office, there were 12,570 sheltered houses in Scotland. There are now 34,438, so nearly twice as many have been built by the Goverment as they inherited.
  In north-east Fife, there were 42 sheltered houses in 1979. There are now 318—seven and a half times as many—and the Liberal chairman of the housing committee in north-east Fife does not even know it.
  9.4 pm
  Mr. Michael J. Martin: I am proud that, when I served on Glasgow district council, I saw the community-based housing associations develop in a big way. I am proud of my connection with the Assist project in Govan when I was a councillor. The project was run by a development officer, Raymond Young, who is now the director of the Housing Corporation in Scotland. He is doing an excellent job. I watched the Mansel-St. Monance housing associations develop into the Springburn-Possil Parliamentary housing association in my area of Springburn.
  It is not fair for Conservative Members to criticise housing associations in Glasgow. Those associations would say that the co-operation that they have had from Glasgow district council officials has been second to none. The council has set up a department to work with community-based housing associations. One need only to go through any Glasgow district to see the evidence of rehabilitated tenements—the type of work that could not go on unless the district council and the housing corporation co-operated.
  Governments of both persuasions have been helpful to housing associations. However, this Government are cutting expenditure. I should like the Under-Secretary of State to reassure the House and the housing associations that expenditure will not be cut. About 90 per cent. of the people involved in housing associations are volunteers. In effect, they are doing the job of local government and central Government.
  I have corresponded with the Under-Secretary of State about a housing co-operative that has been set up in Possil Park. This local authority area has deteriorated to such an extent that few people will take a house in it and the majority who live there want to leave. The co-operative was set up to get the houses made wind and watertight. It

  1095
  is an indictment of society that, in this day and age, people need to set up an organisation to achieve that objective. The people want to modernise their houses. By forming a co-operative they have, in effect, set up a housing association. The Under-Secretary of State has told me that there is not enough money to go around and that Possil Park will not be included in the first round of new housing co-operatives in district council areas.
  I ask the Under-Secretary of State, as a second option, to allow the Possil Park co-operative to be registered with the Housing Corporation. That would give the people the power to borrow money. They would be under the wing of the Housing Corporation.
  Mr. Anna McCurley rose—
  Mr. Martin: I am sorry; if I had the time, I would give way.
  A number of tenement dwellers in Balmore road in Possil Park want their houses to be rehabilitated. The Springburn-Possil Park housing association is willing to do that work. Unfortunately, Glasgow has many mines which were worked out many years ago and the foundations are unstable. This may also be a problem in the constituency of my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall). The Scottish Development Association is responsible for strengthening foundations before modernisation is carried out, but there does not seem to be any liaison between the housing corporation and the SDA. Consequently, these houses cannot be modernised. It would a pity if they had to be demolished, but that is what will happen unless something is done about it.
  I am disappointed that the Bill contains no provision for improving the quality of life of those who live in multi-storey flats. Certain right hon. and hon. Members have described them as concrete mausoleums. Some of the multi-storey flats in Glasgow are in very high demand. Before the points system was introduced people had to wait for 10 or 12 years before they were housed, and pensioners were housed in multi-storey flats in my constituency that are now being vandalised.
  Vandals are doing a great deal of damage. It is a pity that money cannot be provided to ensure protection for those who live in multi-storey flats. Nobody is prepared to take on the responsibility of protecting property. Populations equal to the size of a small village live in multi-storey flats but no protection is provided for them. Lifts are put out of action by vandals. People with heart conditions and other serious medical problems then have to climb the stairs to reach their flats on the 19th or 20th storeys. If security were provided for multi-storey flats that type of vandalism could be avoided and the people who live in them would have peace of mind. They would be able to go out at night without having to fear the kind of vandalism that I have described.
  I am disappointed that the Bill contains no provison to encourage the setting up of community-based housing associations in new developments. Many housing associations have modernised their properties. They have also earmarked sites for new development. The Secretary of State for Scotland said that he intended to cut through the red tape, but he did not point out that the community-based housing associations have a great deal of red tape
  1096
  to cut through before they can build the type of sheltered housing that was referred to by the hon. Member for Dumfries (Sir H. Monro).
  If the Secretary of State is serious about providing good housing for those who live in constituencies that are similar to mine, he should consider encouraging housing associations to build new houses. It is nonsense for the Secretary of State to say that, because few flats are being sold, he will provide bigger discounts. He thinks that few flats are being sold because people worry about the responsibility for common repairs.
  All that I can say is that the Secretary of State does not know Glasgow or Edinburgh, because the majority of people in those cities have had to put up with common repairs, and that has not been a deterrent and will not be one in the future. The Secretary of State knows that many of the tenements and housing estates in Glasgow are in a deplorable condition and that the local authority cannot even let such properties, let alone sell them. We need not discounts but rehabilitation to get rid of dampness and to improve the quality of life in the tenements before we get on with the business of selling them. Discounts are not the answer.
  9.15 pm
  Mr. John Maxton: I begin by agreeing with one or two points made by my hon. Friend the Member for Glasgow, Springburn (Mr. Martin). One of those points is that put to him by the Possil park steering committee, which has been in touch with me as well—only today, I spoke to the secretary on the phone. If my hon. Friend joins me in the Committee on the Bill, we shall put down amendments to try to ensure that the Minister does something about this.
  I agree also that some high-rise flats within Glasgow are highly desirable, and people want to live in them. There are two such blocks in Mount Florida, in my constituency. That is the area of Glasgow in which the Minister of Agriculture, Fisheries and Food believes that all the farmers reside. These flats are highly desirable; one of the reasons for that is that they overlook Hampden park and with a good pair of binoculars, one can watch the games from the top flats.
  Having watched Tory Members come and go tonight—they have gone more often—and heard of the events within the Conservative Back-Bench committee, I am reminded of a story told by the hon. Member for Aldershot (Mr. Critchley). Just after the election he was sitting on the Government Benches when a young Conservative sat beside him. The young Member turned to the hon. Member for Aldershot and said, looking at the Opposition Benches, "It is nice to be able to sit here and look our enemies in the eye." The hon. Member for Aldershot said, "No, you have got it wrong. Those people over there are our opponents. Our enemies are behind us." How true that is of the Scottish Conservative party today.
  The Conservative party in Scotland, with constituency parties threatening mass resignations, the candidates association up in arms and refusing to support the Government, with the hon. Member for Stirling (Mr. Forsyth)—he made a speech, but he has not yet returned—wanting to drag ex-Conservative candidates to the Bar of the House because of what he considers to be contempt, while he organises a putsch against the chairman of the Back Bench committee, with the 1922 Committee changing the rules tonight to ensure that that

  1097
  does not happen again, with Back Benchers ensuring that the chairman of the Conservatives on the Select Committee remains the hon. Member for Dumfries (Sir H. Monro)—another decision that has been taken tonight—is in chaos. Despite all this, these people spend most of their speeches demanding what our policies are, saying that we are disunited and claiming that they represent the party with the popular policies in Scotland.
  However, in election after election—district, regional or general—Scottish Conservatives go down and down. They will lose control of the regional elections next May. The hon. Members for Banff and Buchan (Mr. McQuarrie), for Aberdeen, South (Mr. Malone), for Fife, North-East (Mr. Henderson) and for Renfrew, West and Inverclyde (Mrs. McCurley) will not be here, and neither will the Minister. Hon. Member after hon. Member from the Scottish Conservative party will be knocked out. They claim that their housing policies are popular with the people of Scotland, but the district elections, in particular, proved that their housing policies are not popular. Housing is the function that district authorities have. It is almost the only function that they have. In Glasgow, in district council after district council, it is the Labour party that is returned and as my hon. Friend the Member for Paisley, North (Mr. Adams) said, it is the Labour party that is popular in Scotland.
  Mr. Malone: If the policies are so unpopular, will the hon. Gentleman undertake, from that Dispatch Box, to reverse them if the Labour party comes into office?
  Mr. Maxton: There are many aspects of the Government's housing policy that we shall be reversing when we come into power. I can assure the hon. Gentleman of that. Conservative Members have an obsession with our housing policy and what we are going to do after the next election but the question is worth asking only if they believe that we will win the next election. It does not have any meaning if we do not win. I know that we will win—[Interruption.]—and I am glad to hear that Conservative Members believe the same thing.
  I want to ask the Minister the question that was put to him by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). Why is the Bill put before us today? What change has taken place in the past 12 months that means that we suddenly have to give tenants in housing associations the right to buy and that we have to change the discount for the sale of council houses? What has happened is that the Secretary of State said in August 1984 that he fully approved of the voluntary sales scheme practised by the housing associations. The Minister shook his head earlier on that. I want to know whether he is calling all the witnesses a bunch of liars, or will he give us a different story? We want to know why it has happened.
  I believe that that has happened for two reasons. First, as my hon. Friend the Member for Garscadden said, it is the lifebelt, or whatever one likes to call it, for the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton). It is the attempt to save that tiny 500 majority. He was not present when I was naming the hon. Members who will not be here after the next election, but I would certainly add him to the list. Secondly, it is because of the obsession that the Conservative party has with home ownership. Conservatives seem to believe that our society
  1098
  and our industrial position will improve in a home-owning democracy. I am delighted to see that Conservative Members are nodding happily. But let us look at some of the international examples of home ownership to see whether their argument about higher industrial output and more flexibilty in the economy is true.
  The country with the highest gross national product in Europe, in fact one of the highest in the world, is Switzerland. That country has a 30 per cent. owner-occupation rate. West Germany has a 37 per cent. owner-occupation rate and Sweden has 38 per cent. Are Conservative Members saying that those countries are dismal failures because they do not have an owner-occupation rate that is equivalent to ours? That is not the case. One can go further. I know that it is a meaningless statistic, but the country that has the highest owner-occupation rate is Bangladesh, with the lowest gross national product in the world. I shall not make any great point. I do not think that it follows that there is a link between owner-occupation and the economy. But Conservative Members cannot argue that if we increase the owner-occupation rate in Scotland we shall somehow improve our economy and achieve greater mobility of labour.
  Some of the people in my constituency who are in owner-occupied tenement property that has not been taken over and improved by housing associations are trapped into owner-occupation because major structural repairs are required and they cannot sell the property. Even if they happen to get a job, even if they manage to find the place somewhere in Britain where jobs are still available, they cannot move because they cannot sell the property that they own. That is as much a trap, if not more, as being tenants in council houses.
  The obsession with owner-occupation does not extend to tenants of privately owned property. I never understood why the Minister and his hon. Friends believe that somehow they must extend owner-occupation only to local authority tenants and never to those who rent property in the private sector.
  Mr. Christopher Hawkins: It is taxpayers' money.
  Mr. Maxton: Let me explain. My right hon. Friend the Member for Glasgow, Govan (Mr. Millan) and I have houses in our constituencies that were built and are owned by the Western Heritable Investment Company. They were built with taxpayers' money in the 1930s. Those properties have no discount on them. They are sold, but at high prices, and rarely to sitting tenants. No right to buy is available to the tenants. Equally, large numbers of other privately tenanted properties in Scotland are suitable for habitation because of taxpayers' money, because grants have been given to the owners to make them habitable. That is the only reason why they are habitable. I gather that tenants in property owned by Lothian Estates—
  Mr. John McWilliam: Lothian Estates has received no grants.
  Mr. Maxton: My hon. Friend is wrong. I gather that Lothian Estates has received large grants to put the houses right, yet the tenants do not have the right to buy at a discount.
  Mr. Henderson: The hon. Gentleman has refused to tell the House whether his party would take away the right

  1099
  to buy. He now sounds as if he is against the improvements grants that the Government approve of. Will he take them as well?
  Mr. Maxton: To imagine that we opposed improvement grants is ridiculous.
  Mr. Christopher Hawkins: Will the hon. Gentleman give way?
  Mr. Maxton: I shall not give way. I have given way enough. The time available to me has been cut short by my allowing Conservative Members to make interventions.
  If the Government hold the ideal of extending home ownership, I do not understand why they limit it to the public sector, not the private sector.
  With his usual skill, my hon. Friend the Member for Garscadden dealt with the case against the Bill. I should like to take up a couple of his points, particularly his point about extending home ownership. It is astonishing that the hon. Member for Edinburgh, Central (Mr. Fletcher) should make a passionate plea for more rented accommodation in Scotland and at the same time support a Bill that will remove rented accommodation from Scotland. That is exactly what giving tenants the right to buy from housing associations will do. It will take rented accommodation away from housing associations.
  Mr. Fletcher: The hon. Gentleman might just acknowledge the fact that I referred to the 2,400 empty local authority houses in Edinburgh and suggest one way in which they could be rented to those who want accommodation.
  Mr. Maxton: Of course we want all the empty accommodation to be rented, although many of the houses in the public sector that the hon. Gentleman claims are vacant are not because they are not fit for habitation due to dampness and other defects, which are not repaired because of the cuts imposed by the Government on local authorities. That is why properties are empty now.
  The hon. and learned Member for Perth and Kinross (Mr. Fairbairn) is not present, but he gave us a remarkable historical analysis of housing in Glasgow which completely ignored the enormous slums that existed there right up until the 1940s. He also said that housing associations were part of the large bureaucracy of local council tenancies. He seemed to ignore what the Bill was about. Most housing associations in Scotland are community based, with the committee that controls them made up of volunteers elected by the tenants to run those housing associations. How he could call that a faceless bureaucracy is beyond me.
  The Government's dismal failure to consult those housing associations, combined with the fact that the housing associations will no longer be able to control their housing policy because of the right to buy and the enormous anomalies that will be created by the discount system in the housing associations, to which my hon. Friend the Member for Garscadden referred, will lead to many of the most experienced volunteers within the housing association movement chucking it in. We shall lose many good housing experts as a result. All right, they are volunteers, but they have been in the business for many years and many of them will say that enough is enough and that they are no longer interested.
  1100
  If we give tenants the right to buy we shall go back to exactly the sort of circumstances that the housing associations were formed to stop—multiple ownership of tenemental properties in cities such as Glasgow. There are such properties in my constituency. They are not owned by housing associations but by individuals. Some parts are owner-occupied while others are privately rented. If there is a major structural fault in the roof those who suffer are those who live in the top flat. It might be five years before the dampness reaches the ground floor. [Interruption.] The hon. Member for Stirling makes a lot of noise but I hear about this week in and week out at my surgeries. People come to me with the problem of how to get people together to ensure that repairs are carried out. Even when a section 24 order is imposed by a local authority it may take two or three years before the work is done.
  Housing associations have done a magnificent job in stopping that particular problem. If we now start selling housing association property within these tenements so that some still belong to the housing associations while the majority are owned by tenants, even the factoring rights of the housing association may be lost. If we get that we are returning to the situation of multiple ownership that housing associations were formed in the first place to cure.
  My other objection to the Bill is the discounts that it makes available. Even if one accepts the principle of the right to buy, it is not right that such discounts should be given. The Minister has made the great claim that his policy of selling council houses is a success. The fact that he is changing the discounts in the two ways is evidence that the policy has failed completely. What Labour Members said would happen in Committee in 1980 is happening. That was that it would be the best houses and not the flats that would be sold. It would be houses in rural areas and in smaller district councils that would be sold, not those in the city areas. That is exactly what has happened.
  Mrs. McCurley: Ridiculous.
  Mr. Maxton: The hon. Lady says that that is ridiculous, but 88 per cent. of properties sold by local authorities up to the end of March were houses, and only 12 per cent. were maisonettes and flats. That is why the policy has been a dismal failure.
  Mr. Michael Forsyth: That is why we need a Bill.
  Mr. Maxton: It demonstrates that the policy has failed and should be withdrawn completely, not that a Bill is needed.
  The period during which the discount must be repaid has been reduced from five years to three years. There are flats in Glasgow, in Mosspark and Knightswood, that could sell for their market value of £27,000 or £28,000, but which will be sold for under £10,000. Within three years, those houses could be sold for almost £30,000 if inflation is taken into account—[Interruption.] The hon. Member for Stirling (Mr. Forsyth) would love to see that return on his capital investment.
  The Bill is a dangerous irrelevance because it detracts from the major housing problems of Scotland. My hon. Friend the Member for Glasgow, Central (Mr. McTaggart) was correct to say that we wish people to have a choice of houses; but that choice must be equal. A person who buys his house has a decent environment, whereas those who live in council houses face dampness, lack of repair,

  1101
  ever-increasing rents above the rate of inflation and a poor environment linked with social deprivation and unemployment. That is what the Government have done to the council house tenants who do not buy their houses, and that is why we shall vote against the Bill.
  9.38 pm
  The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): I congratulate the hon. Member for Glasgow, Cathcart (Mr. Maxton) on his maiden speech from the Dispatch Box, although we have seen him there at Question Time. We greeted his appointment with interest, especially for its effect on the image of the Scottish Labour Front Bench, which is now 25 per cent. educated in the state system and 75 per cent. educated outside. That compares fairly with the four Ministers, two of whom were state educated. I am sure that this will improve the style of the Opposition front Bench. After five years' experience, it needs that improvement.
  With some disappointment I have to say that the hon. Member for Cathcart is no quieter than his predecessor, the hon. Member for Glasgow, Maryhill (Mr. Craigen). I pay a sincere tribute to the hon. Member for Maryhill for his work on the Opposition Front Bench.
  The debate shows the fundamental differences between the two sides of the House.
  Mr. Maxton: Will the Minister answer the questions?
  Mr. Ancram: I shall deal with the hon. Gentleman's questions later. He signally failed to answer the only question that he was asked. Our arguments are based on realism and common sense and the Opposition's argument is based on confusion mixed with ideology, which is an indigestible cocktail.
  The Bill has been welcomed by Conservative Members because it provides an extension of choice. Indeed, some of my hon. Friends pressed me to go further. The speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar) was interesting because he spoke, not on the principle but on the detail. Perhaps he does not intend to serve on the Committee; he was dealing with the Committee stage on the Floor of the House.
  The speech of the hon. Member for Cathcart was in strict contradistinction. He used the opportunity to launch what I cannot call a new political attack, but it was a political attack none the less. It is charming to note that he believes that if he says over and over again that the Labour party is popular in Scotland it will help him at the next election. He named several Conservative Members who he said would lose their seats at the next election, but I recollect him doing much the same in 1981. He named me and several of my hon. Friends and said that we would not be returning to the House. If his predictions are a correct as they were last time, we should be extremely pleased by his remarks.
  The debate devolved into several areas, the first of which was resources for housing. It is surprising to hear repeated claims of reductions and cuts in public sector housing in Scotland, when last year £50 million more was made available for the current year than was available in the previous year—an increase of nearly 25 per cent. It is also difficult to understand the claim that the Government are presiding over deteriorating private housing in Scotland. We inherited about 121,000 sub-tolerable standard houses in 1979, and by March this year the figure had been reduced to 63,000.
  1102
  The hon. Member for Garscadden talked a great deal about a house condition survey. I have always been prepared to consider such a survey, provided that I can be persuaded that it would provide more and better information than is available to me now. I am continually told to consider the English example, but were I to use the sample size taken in England we should have had a sample of 900 houses across Scotland. It would be ridiculous to suggest that, on the experience of 900 houses, we could get any information in terms of specific need or of geographical breakdown which is not already available to us. A series of ad hoc surveys, the labour force survey and the housing check list provide us with a picture of the problems in Scotland.
  The hon. Member for Garscadden accused the Government of cutting housing finances. I wish to quote some figures that were published in a parliamentary answer to the hon. Member for Maryhill on 11 November 1985. The figures show the gross capital expenditure by all the housing agencies, local authorities, housing corporations, the Scottish Special Housing Association and the new towns for certain years. In 1974–75, at the beginning of the Labour Government's period of office, gross capital expenditure was £1,197 million. By 1978–79, it had decreased to £575 million. I am talking in real terms. On the same basis, during the six years that we have been in office, the figure has decreased to £519 million. When one considers that more than half of the reduction took place under the Labour Government, it is hard to take the accusations that they have been throwing at us.
  Mr. McKelvey: The Minister may be surprised to learn that he may have an ally as regards the value of a housing survey. The Select Committee on Scottish Affairs said clearly—I am sure that the Minister will accept the figures—that Scotland needs about £157 million to start to cure the problem of dampness. No housing survey would do other than underline that. Of course, the Minister did not provide the money. He provided only a small amount—about £3 million—to tackle that huge problem.
  Mr. Ancram: The hon. Gentleman knows that we considered the Select Committee's report carefully, and that it was reflected in the 25 per cent. increase in the housing revenue account allocations that we made last year. Within that 25 per cent., we said that we had supplemented what would otherwise have been given by £16 million directly to reflect the problems of condensation and dampness. Of course, we did not believe that that was the only money that needed to be spent on solving the problem, but we believed that, by giving that enhancement, we would encourage local authorities to undertake such work.
  The second general subject in the debate was the right to buy. I agree with my hon. Friends who said that this policy has been popular, not only because it has enabled people to buy but because it has given a right to buy to people who may not wish to exercise it now but who may wish to exercise it in the future. Every survey carried out in Scotland shows that that policy is popular.
  Mr. Martin: Is the Minister aware that some property owned by housing associations is not necessarily being modernised because the necessary capital is being delayed? Will he allow sitting tenants in unmodernised property to buy their homes?
  Mr. Ancram: The sitting tenants of housing associatons have precisely the same rights as other public sector tenants. The restrictions announced in the Bill relate to the discount which can be applied if modernisation has taken place so that the overall discount is not more than the outstanding debt on the house.
  The hon. Members for Garscadden and for Cathcart failed to answer a simple question: Do they support the right to buy? I began to ask that question in November 1983. I was told then that it was too early after the election and that the Opposition had not formulated their policy. I have asked the question on a number of subsequent occasions and have always been told that they are thinking about it. They have failed to give an answer again tonight. They have not even provided half an answer; they have not given any answer. Perhaps the hon. Member for Garscadden would like to speak on Labour's housing policy for Scotland? Having listened to the debate and compared it with other comments from the hon. Gentleman's colleagues, I find it difficult to understand what that policy is.
  The hon. Member for Birmingham, Perry Barr (Mr. Rooker) said on 9 June this year:
  "There is nothing particularly Socialist about public landlordism on a grand scale. After all, Socialism is about real choice and giving people control over their own lives."?
  That suggests, as the Labour party conference suggested, that there is a weakening in the opposition to the right to buy.
  I read a letter sent to a constituent of my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) from Mr. Alex Wood of the City of Edinburgh district council, who is a Labour councillor. In it Mr. Wood says:
  "We are not only opposed to Council house sales, but while recognising that legally we cannot stop them, we will do nothing which makes such sales easier or quicker and indeed will do all in our power to convince potential buyers of the immorality of such sales".
  That is another Labour voice speaking.
  The hon. Member for Cathcart, who is the Labour party spokesman on these matters, said that the right to buy is an irrelevance. He may be interested to know that Glasgow district council, by its own calculations, will overshoot its receipts estimate by about £2 million this year, and that council has not exactly gone out of its way to sell council houses.
  The hon. Member for Cathcart calls that an irrelevance, but the extra £2 million could have allowed the Glasgow district council to modernise an extra 620 houses within Glasgow. He may think that it is an irrelevance, but I suspect that the tenants of those 620 houses would not see it as such. The right to buy as it relates to housing associations—
  Mr. John Home Robertson: Will the Minister give way?
  Mr. Ancram: I have given way on a number of occasions, so I shall not give way now.
  The first accusation made by the hon. Member for Garscadden was that the Government were not sufficiently financing Scottish housing associations. I find that hard to accept in view of the sums of money made available to the associations by the Labour Government.
  The housing association movement in Scotland in 1985–86 will have a capital programme of about £110 million. That will be the fourth consecutive year in which
  1104
  the programme has exceeded £100 million. In the six years since 1980–81, capital expenditure by housing associations in Scotland will be more than £600 million. That reflects Government support for the housing associations. As my hon. Friend the Member for Fife, North-East (Mr. Henderson) said, when pressed the housing associations have to concede that.
  The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) said that there is no demand or need for the Bill. He wanted to know why we had introduced it. If there is no demand, and if there are no tenants of housing associations who wish to buy the houses in which they are living, I fail to see why the associations are so concerned about the Bill. I believe that they are concerned because they know that some of their tenants have wished to buy at a discount on the same basis as other public sector tenants. They are in housing which has been built by public money and they have been prevented from buying by the failure of the associations to operate the voluntary code.
  Lord James Douglas-Hamilton: Is my hon. Friend aware that there is a strong demand among the tenants of housing associations to purchase with a discount and not to be disadvantaged in comparison with other public sector tenants in Scotland and in the rest of Britain? Will my hon. Friend bear in mind that the demand is present in much general needs housing throughout Edinburgh and is not confined to certain housing association schemes?
  Mr. Ancram: That has been my impression too. I have received a number of representations as a constituency Member and as a Minister. We have received letters from tenants who have felt resentful for a long time because they were within the only group excluded from a right that was otherwise universally available. They realised that the right was available to those south of the border.
  The hon. Member for Garscadden wanted to know what was wrong with the voluntary code and asked why it was not working. Of the 72 associations which were expected to operate the code, 24 chose to adopt the policies that firmly precluded sales and 15 have yet to decide their policy after all this time. That is not a sign that the code has been working. If that needs to be proved, we have only to consider the pathetic number of houses that have been sold at a discount by the association over the past years.
  Mr. Maxton: What did the Secretary of State have to say about that?
  Mr. Ancram: The hon. Gentleman refers to some remarks that my right hon. Friend is alleged to have made. The reports which I have read in the newspapers are based on a misrepresentation of what my right hon. Friend said. he made it clear—he has repeated this since—that the continuation of a voluntary policy was dependent upon a more effective response from associations. That response has not been forthcoming, and for that reason we have taken legislative steps.
  The hon. Member for Garscadden remarked on the effect that the Bill, when enacted, would have on the rented sector. I assure my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher) that we would like to see a healthy rented sector and that we shall be looking for ways in which that can be encouraged and promoted. It is going rather far for the hon. Member for Garscadden

  1105
  suddenly to be concerned for the rented sector when it was his party which effectively slit the throat of the private rented sector.
  The hon. Member for Garscadden raised a point of detail about the printing of the Housing Associations Bill. I hope that it will be possible for the Bill to be printed in time for the Committee stage. If it is not, we shall ensure that photocopies are available for the Committee that considers the Bill.
  The hon. Member for Garscadden talked about arrangements for flats in tenements and four-in-a-block flats as well as for high rise flats. The definition of a flat is widely drawn, it is closely similar to that which appears in the Housing (Scotland) Act 1966, which was introduced by a Labour Government. The definition has been widely drawn deliberately. The measure is not aimed primarily at multi-storey blocks. Flats of all types have sold more slowly than other properties, and that includes tenement flats and four-in-a-block flats as well as multi-storey flats. The exceptions are certain blocks which are popular. If we were to introduce exceptions to the definition, we would make it more complex and would undermine the basic purpose of the provision.
  The hon. Member for Garscadden asked also about charitable status in section 360 of the Income and Corporation Taxes Act 1970. The Bill provides an exemption to the right to buy for charitable associations that are registered under the Charities Act 1960. That is necessary if we are to avoid specific conflict with statutory registration.
  The hon. Member for Garscadden asked about a guarantee. There is no question of a guarantee from the Inland Revenue about sales at a discount. It could not be given. This is a complex area and we will be able to discuss it in greater detail in Committee.
  The hon. Gentleman asked a number of other questions, but I have not the time to deal with them all. He asked about the discount varying, depending on whether the tenancy was in the public or private sector.
  Mr. Dewar: I am grateful to the Minister for giving way as I realise he has only a few minutes left. I can hardly believe my ears. If a charitable association in Scotland sells one of its houses under the discount arrangements, which, as far as I can make out, it has to do under the Bill, can the Minister give any assurance that it will be able to preserve its charitable status and the tax advantages which go with that?
  Mr. Ancram: If they are registered under the Charities Act 1960—several are—they are exempted. I understood the hon. Gentleman to be asking a wider question, which is complex and will have to be explored in greater detail in Committee.
  The hon. Member for Garscadden and my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) asked about the fact that the discounts would vary depending on whether the previous tenancy had been in the public or private sector. I am surprised that the hon. Member for Garscadden finds this difficult to accept because it is precisely how the law has operated in relation to the right to buy with regard to public sector tenancies. There will be no change from the present law.
  My hon. Friend the Member for Aberdeen, South (Mr. Malone) asked about the position of tenants whose houses are owned by Grampian region but let by Aberdeen
  1106
  district, and whether the Bill would give them the right to buy. We have been concerned for some time that certain district councils have sold houses to regional councils which then leased them back to district councils which then sublet them to their tenants. The result was that the tenants lost their right to buy because the district council was not the owner of the property. However, once regional council tenants are given the right to buy the Secretary of State will be able to use his existing powers under section 1(a) of the Tenants Rights, Etc. (Scotland) Act 1980 to intervene on behalf of tenants who would otherwise be denied their rights.
  My hon. and learned Friend the Member for Perth and Kinross talked about the complexity of the legislation. I apologise to him for the fact that in many respects, the legislation is difficult, but this arises partly because we are amending legislation which was so perfectly drafted in his days as Solicitor-General for Scotland. He also asked whether there was still scope for local authorities to frustrate the right-to-buy legislation. I share my hon. and learned Friend's concern about councils which use delays and other tactics to discourage purchasers.
  The 1980 Act gave tenants some important safeguards, including the right to have recourse to the Lands Tribunal to resolve certain disputes. We believe that these safeguards could be strengthened. That is why the Bill includes new powers to intervene on behalf of tenants who are experiencing difficulties. My hon. and learned Friend also spoke about clause 7, the mobility scheme and his difficulties with this clause. Under existing schemes which help tenants to move the fact that the tenant who wishes to move or exchange to another already has a home is not a consideration in deciding whether he could be eligible for assistance.
  My hon. Friend the Member for Stirling (Mr. Forsyth) raised several specific points—those which I cannot cover I will reply to later. My hon. Friend asked why there was no provision to prise derelict or rundown local authority property out of the hands of local authorities and to put it into the hands of willing developers. I heartily encourage such trends, and I am willing to discuss and consider any ideas along those lines with the developers and with the authorities.
  This Bill is about a simple and fundamental principle. The principle is that a basic and popular right should be available to the widest possible number of people, if not to all—it is fundamentally wrong for a right to be prohibited to one category of people for unsustainable reasons—and it is the sort of right which is included in the right to buy and to own one's own home. We are not forcing, nor have we ever forced, anybody to buy his own home. We are giving people a right to do so if they wish. We have protected the rights of individuals in legislation that we have passed previously and are doing so again today. I commend the Bill to the House.
  Question put, That the Bill be now read a Second time:-
  The House divided: Ayes 164, Noes 70.

  Division No. 13]

  [10 pm

  AYES

  Alexander, Richard

  Baker, Nicholas (Dorset N)

  Amess, David

  Baldry, Tony

  Ancram, Michael

  Batiste, Spencer

  Arnold, Tom

  Bellingham, Henry

  Aspinwall, Jack

  Benyon, William

  Atkinson, David (B'm'th E)

  Biggs-Davison, Sir John

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

  Blackburn, John

  1107

  Body, Richard

  Key, Robert

  Bottomley, Mrs Virginia

  King, Roger (B'ham N'field)

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

  Knight, Greg (Derby N)

  Bowden, Gerald (Dulwich)

  Knight, Dame Jill (Edgbaston)

  Braine, Rt Hon Sir Bernard

  Knowles, Michael

  Brandon-Bravo, Martin

  Knox, David

  Bright, Graham

  Lang, Ian

  Brinton, Tim

  Latham, Michael

  Brooke, Hon Peter

  Leigh, Edward (Gainsbor'gh)

  Brown, M. (Brigg & Cl'thpes)

  Lester, Jim

  Bruinvels, Peter

  Lightbown, David

  Buck, Sir Antony

  Lilley, Peter

  Budgen, Nick

  Lord, Michael

  Burt, Alistair

  Lyell, Nicholas

  Butterfill, John

  McCurley, Mrs Anna

  Carlisle, John (Luton N)

  MacGregor, Rt Hon John

  Cash, William

  MacKay, Andrew (Berkshire)

  Chapman, Sydney

  MacKay, John (Argyll & Bute)

  Chope, Christopher

  Maclean, David John

  Clark, Sir W. (Croydon S)

  McQuarrie, Albert

  Coombs, Simon

  Malone, Gerald

  Couchman, James

  Marlow, Antony

  Crouch, David

  Mates, Michael

  Currie, Mrs Edwina

  Mellor, David

  Dorrell, Stephen

  Merchant, Piers

  Douglas-Hamilton, Lord J.

  Mills, Iain (Meriden)

  Dover, Den

  Moate, Roger

  Dunn, Robert

  Morris, M. (N'hampton, S)

  Durant, Tony

  Morrison, Hon C. (Devizes)

  Evennett, David

  Moynihan, Hon C.

  Eyre, Sir Reginald

  Murphy, Christopher

  Fairbairn, Nicholas

  Neale, Gerrard

  Fallon, Michael

  Neubert, Michael

  Favell, Anthony

  Newton, Tony

  Fenner, Mrs Peggy

  Nicholls, Patrick

  Fletcher, Alexander

  Onslow, Cranley

  Forsyth, Michael (Stirling)

  Oppenheim, Phillip

  Forth, Eric

  Osborn, Sir John

  Fraser, Peter (Angus East)

  Page, Richard (Herts SW)

  Freeman, Roger

  Percival, Rt Hon Sir Ian

  Galley, Roy

  Pollock, Alexander

  Gardiner, George (Reigate)

  Porter, Barry

  Garel-Jones, Tristan

  Portillo, Michael

  Glyn, Dr Alan

  Powell, William (Corby)

  Goodhart, Sir Philip

  Prentice, Rt Hon Reg

  Gow, Ian

  Price, Sir David

  Gregory, Conal

  Raffan, Keith

  Griffiths, Peter (Portsm'th N)

  Rhys Williams, Sir Brandon

  Ground, Patrick

  Roberts, Wyn (Conwy)

  Hamilton, Hon A. (Epsom)

  Roe, Mrs Marion

  Hamilton, Neil (Tatton)

  Sainsbury, Hon Timothy

  Hampson, Dr Keith

  Shepherd, Colin (Hereford)

  Hanley, Jeremy

  Sims, Roger

  Harvey, Robert

  Soames, Hon Nicholas

  Hawkins, C. (High Peak)

  Speed, Keith

  Hawksley, Warren

  Stanbrook, Ivor

  Hayes, J.

  Stevens, Lewis (Nuneaton)

  Hayhoe, Rt Hon Barney

  Stradling Thomas, Sir John

  Hayward, Robert

  Temple-Morris, Peter

  Heathcoat-Amory, David

  Thomas, Rt Hon Peter

  Henderson, Barry

  Thompson, Donald (Calder V)

  Hickmet, Richard

  Thurnham, Peter

  Hicks, Robert

  Twinn, Dr Ian

  Hind, Kenneth

  Waddington, David

  Hirst, Michael

  Walker, Bill (T'side N)

  Holland, Sir Philip (Gedling)

  Watson, John

  Holt, Richard

  Wells, Bowen (Hertford)

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

  Wells, Sir John (Maidstone)

  Hubbard-Miles, Peter

  Wiggin, Jerry

  Hunt, David (Wirral)

  Winterton, Mrs Ann

  Hunt, John (Ravensbourne)

  Winterton, Nicholas

  Hunter, Andrew

  Wolfson, Mark

  Jenkin, Rt Hon Patrick

  Wood, Timothy

  Johnson Smith, Sir Geoffrey

  Jones, Gwilym (Cardiff N)

  Tellers for the Ayes:

  Jones, Robert (Herts W)

  Mr. Peter Lloyd and

  Kershaw, Sir Anthony

  Mr. Mark Lennox-Boyd.

  1108

  NOES

  Adams, Allen (Paisley N)

  Kirkwood, Archy

  Atkinson, N. (Tottenham)

  Lamond, James

  Barron, Kevin

  Lloyd, Tony (Stretford)

  Bermingham, Gerald

  McDonald, Dr Oonagh

  Bidwell, Sydney

  McKay, Allen (Penistone)

  Bray, Dr Jeremy

  McKelvey, William

  Brown, Hugh D. (Provan)

  MacKenzie, Rt Hon Gregor

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

  McTaggart, Robert

  Brown, Ron (E'burgh, Leith)

  Marek, Dr John

  Bruce, Malcolm

  Marshall, David (Shettleston)

  Buchan, Norman

  Martin, Michael

  Campbell-Savours, Dale

  Maxton, John

  Carlile, Alexander (Montg'y)

  Michie, William

  Carter-Jones, Lewis

  Millan, Rt Hon Bruce

  Clark, Dr David (S Shields)

  Nellist, David

  Clarke, Thomas

  Patchett, Terry

  Clwyd, Mrs Ann

  Pavitt, Laurie

  Corbett, Robin

  Pike, Peter

  Cox, Thomas (Tooting)

  Prescott, John

  Davies, Ronald (Caerphilly)

  Redmond, M.

  Deakins, Eric

  Robertson, George

  Dewar, Donald

  Ross, Ernest (Dundee W)

  Dunwoody, Hon Mrs G.

  Ross, Stephen (Isle of Wight)

  Eadie, Alex

  Shore, Rt Hon Peter

  Ewing, Harry

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

  Fields, T. (L'pool Broad Gn)

  Silkin, Rt Hon J.

  Foster, Derek

  Skinner, Dennis

  Foulkes, George

  Snape, Peter

  Freud, Clement

  Stewart, Rt Hon D. (W Isles)

  Godman, Dr Norman

  Strang, Gavin

  Hamilton, James (M'well N)

  Welsh, Michael

  Hamilton, W. W. (Fife Central)

  Wilson, Gordon

  Hart, Rt Hon Dame Judith

  Young, David (Bolton SE)

  Hogg, N. (C'nauld & Kilsyth)

  Home Robertson, John

  Tellers for the Noes:

  Hughes, Robert (Aberdeen N)

  Mr. Frank Haynes and

  Johnston, Sir Russell

  Mr. Ray Powell.

  Question accordingly agreed to.
  Bill committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).

  HOUSING (SCOTLAND) BILL [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Housing (Scotland) Bill ("the Act") it is expedient to authorise—

  (1) the payment out of money provided by Parliament of any—

  (a) sums required by the Secretary of State for making grants, loans or other payments, and for any other expenses of his, by virtue of the Act;

  (b) administrative expenses incurred by him by virtue thereof;

  (c) increase attributable to the provisions of the Act in the sums which under any other enactment are paid out of money so provided; and

  (2) the payment into the Consolidated Fund of any sums failing to be paid into that Fund by virtue of the Act.—[Mr. Neubert.]

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

  SUMMER TIME
  That an humble Address be presented to Her Majesty, praying that the Summer Time Order 1985 be made in the form of the draft laid before this House on 23rd July, in the last Session of Parliament.—[Mr. Neubert.]
  Question agreed to.

  Matthew Brown
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
  10.10 pm
  Mr. D. N. Campbell-Savours: On a point of order, Mr. Deputy Speaker. You will know that I applied for the Adjournment debate which, according to the Order Paper, concerns
  "the future of Matthew Brown, following the Monopolies and Mergers Commission Inquiry."
  The subject for tonight's debate is the report of the Monopolies and Mergers Commission, yet it is noticeable that the Department of Trade and Industry has refused to send a Minister to the House to answer—
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman knows that the choice of which Minister replies to the debate is not a matter for me.
  Mr. Campbell-Savours: Earlier I sought to place on record the fact that I am sorry that the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food has been sent to the House instead of a Minister from the Department of Trade and Industry. Although I have every respect for the Parliamentary Secretary, I do not think that she has been briefed in a way that will help us to debate the matter effectively.
  I rise to raise a matter of deep concern to me, to my hon. Friends the Members for Blackburn (Mr. Straw) and for Carlisle (Mr. Lewis), to the hon. Member for Penrith and The Border (Mr. Maclean) and to nearly 200 hon. Members who have signed early-day motion 137. I refer to the current hid for the north-west based brewer Matthew Brown by Scottish and Newcastle breweries, which is one of the big six brewers in the United Kingdom. As anyone who has visited the north-west during the past few months will be aware, a huge groundswell of popular opinion against the proposed takeover has been building up. There have been marches through the streets of the north, letters by the hundred to local newspapers, petitions signed in pubs and on street corners, and all sorts of activity supporting the board and the employees of Matthew Brown in their fight against this unwelcome and unnecessary bid.
  This takeover bid should not be taking place. We do not want it, and I appeal to all shareholders tonight, both private and institutional, with all the powers I have at my disposal, not to sell their shares. Please do not sell to Scottish and Newcastle at any stage.
  One of the most remarkable aspects of this affair has been the quite inexplicable response of the Monopolies and Mergers Commission. In this instance, despite a strong reference by the Office of Fair Trading, the commission appointed has singularly failed in its duty to protect the public interest. The report's conclusions are a farce, a miscarriage of justice and a betrayal of its own so-called commitment to objectivity. The conduct of its investigation is riddled with irregularities, some of which demand the closest of inquiries by the Minister. No wonder the board of Matthew Brown found its recommendations staggering, especially since, as some hon. Members have now been informed, those people seem to have been the last to have been informed of them.
  One must ask, whose unseen hand is to be discerned in the presentation of the report? Who is behind its
  1110
  conclusions? Was it the members of the Commission? Was it the Scottish Lobby of Members of Parliament? They are certainly not registered as having made a submission, and my inquiries show that they were not active. Was it the Scottish brewing lobby? We do not know, but we know that the Scottish Department of Industry recommended in favour. That is remarkable because in making its recommendation it was supporting the closure of breweries in Workington and Carlisle. Every utterance of Scottish and Newscastle should have told the Department that it should have been aware of the dangers. Heads should now roll. The Department had no right to support a case which involved the closure of plants in England. It has exceeded its responsibilities. It is not the task of a Conservative Department of Industry in Scotland to approve the closure of profitable industry in England. Its task is to support the further expansion of industry.
  On every issue affecting the public interest, the Commission's findings were inconsistent with the evidence. The Commission acknowledged the inevitable reduction in competition as "undesirable" but regarded it as "insignificant". How many of the Commission bothered to go to Cumbria and Lancashire to see what statistical reduction in competition meant? Most of the national brewers choose not to trade there. The loss of choice, the closure of village pubs and the disappearance of the amenity in rural areas will be disastrous in every way.
  The Campaign for Real Ale has repeatedly expressed anxiety about the effect on consumer choice, and with reason. Scottish and Newcastle's past record on acquisitions shows no commitment to the preservation of local beers. It seeks one result from the takeover only—more outlets from which to sell its products, and thereby to minimise surplus capacity in its existing plants. Yet it talks about
  "some reduction in licensed outlets trading,"
  and the fact that
  "those trading would in general he improved and would operate to better standards."
  It does not matter to Scottish and Newcastle that a tenant or manager should lose his livelihood, or that the customer must travel twice as far for a drink. The public interest is again the loser.
  I mentioned surplus production capacity. At present Matthew Brown operates four breweries profitably in areas where unemployment is running well above the national average—in particular, in Workington and Carlisle. A job lost there is a catastrophe, and closures will condemn hundreds of people to a lifetime on the dole. Yet the report positively encourages Scottish and Newcastle to rationalise production, with its immediate redundancies, not to mention the knock-on effect on local contractors who rely on the local brewery for work. All that is supported by the Department of Industry in Scotland.
  The Government profess to support small businesses. They even give grants to enable small firms to start. Why then can they not prevent this unnecessary take over, which is unanimously opposed by customers, tradesmen and employees alike, and seems destined to achieve nothing but gratuitous redundancies? Even at this late stage I call upon Scottish and Newcastle's board to stop misleading the public about the continuation of brewing production, and to give some categoric unertakings about current employment levels at all Matthew Brown's breweries. It has refused to do that to date.

  1111
  In its submission to the commissioners, Scottish and Newcastle said:
  "We have stated categorically, publicly and in writing, that without any question whatsoever the Blackburn and Masham breweries are sacrosanct for continued brewing purposes."
  No such assurances have been given for Workington or Carlisle.
  Mr. John Watson: The hon. Gentleman referred to the Masham brewery at Theakstons which, as he will be aware, is in my constituency. Is he interested in knowing that the pledge to maintain brewing facilities refers to only six jobs out of 50 and that well over 80 per cent. of the jobs at the Masam brewery remain uncovered by any pledge that might have been given by Scottish and Newcastle?
  Mr. Campbell-Savours: The hon. Gentleman only further confirms my view that that company has made many misleading statements. I was under the impression that that brewery was to be kept open. We now find that it is to be kept open with a substantially reduced work force.
  The commission went on to say:
  "the continued operating of all four breweries of Matthew Brown could prove uneconomic in the longer term and its programme of rationalisation could result in brewing being discontinued at Workington, Carlisle or both."
  To add the final injustice to injury it concluded:
  "In due course the Carlisle and Workington breweries would be closed by Matthew Brown even if the company remained independent."
  That is nonsense. It is a lie. Matthew Brown has repeatedly given me assurances about the future of brewing in Workington. Its representatives have told me in writing and in conversation that that brewery is safe. I regard its future under Matthew Brown as as safe as the Bank of England, as I have said previously in the House.
  Mr. David Maclean: I agree with much of the hon. Gentleman's argument and share his anxiety and indignation that the Monopolies and Mergers Commission has come, in my opinion, to the wrong conclusion on the evidence. Does he not find it extraordinary that the commission says that there is no real risk to jobs and no evidence that the breweries will close while extolling Scottish and Newcastle's marvellous redundancy scheme?
  Mr. Campbell-Savours: The hon. Gentleman, as his hon. Friend the Member for Skipton and Ripon (Mr. Watson) did, further shows the misleading nature of Scottish and Newcastle's claims.
  Matthew Brown is a well-run, profitable company with a proud history of over 150 years of brewing in the northwest. It is not a lame duck and nor does it need Scottish and Newcastle's help. It should not be sacrificed to fulfil Scottish and Newcastle's objectives of solving its internal commercial problems and consolidating its position in the national brewers' league table.
  The two companies' philosophies are completely opposed. Matthew Brown is a regional company with a strong involvement in the local community, locally based management and short lines of communications. According to the submissions, Scottish and Newcastle is proud of its successful policies, as the hon. Member for Penrith and The Border said, in handling redundancies and
  1112
  closures. I can understand that. It has had its fair share of them as, indeed, it has had its fair share of industrial action. There has been a seven-week strike in Manchester which has only been settled during the past few days. I can only assume that Scottish and Newcastle's management is appalling. Its work force has been reduced by nearly 7,000, or 25 per cent., since 1980.
  In contrast, Matthew Brown can be proud of its employment record—an increase of nearly 500 jobs, or 30 per cent., over the same period. Matthew Brown's industrial relations record shows only four days' work lost in the past 20 years and one 10–day work to rule in 1983. What a record. It must be unsurpassed in the British brewing industry.
  In employment terms, the takeover will do nothing for Matthew Brown other than to turn back the clock five years. In every respect, in recent years Matthew Brown's performance is superior to that of Scottish and Newcastle's. I call upon the House to applaud Matthew Brown's profit performance—£7 million on a turnover of £44 million last year; to applaud its contribution to the prosperity and quality of life of the regions, in particular Blackburn, Workington and Carlisle; and to applaud the way in which it has served its employees, customers and shareholders well. The fate of Matthew Brown now lies with the shareholders.
  I sincerely hope that institutions and individuals alike remember the part that management and employees of Matthew Brown have played in the successful growth of their investment in the past. They deserve better than to see their company go under the hammer to satisfy the desperate desire of a national giant to expand at all costs and resolve its own internal problems. Matthew Brown deserves better than to see the company broken up, with wide-scale redundancies. I emphasise that it deserves the right to continue to operate as a successful, regional, independent company.
  The final two paragraphs of the conclusions of the Monopolies and Mergers Commission read:
  "We discern no material advantages to the public interest arising from the proposed merger; but the question before us is whether the merger may be expected to operate against the public interest, and in our view there are not sufficient grounds for such an expectation.
  We conclude that the merger situation which will be created if arrangements in contemplation by Scottish and Newcastle Breweries plc for the acquisition of Matthew Brown plc are carried into effect may be expected not to operate against the public interest."
  What could be more against the public interest than a reduction in competition? What could be more against the public interest than a reduction in consumer choice, an increase in prices, a loss of employment and a rationalisation of amenities—all admitted tacitly in the export?
  That brings me to an area of the whole affair which certainly needs further examination. Paragraph 7.27 of the Monopolies and Mergers Commission report says:
  "We accept that Matthew Brown has no present intention of closing these two breweries, but we believe that in the long run the closure of one or both of them might come to appear to Matthew Brown to be inescapable in the interest of greater efficiency and cost saving. We believe that, whether the merger takes place or not, the future of these breweries cannot be regarded as totally secure."
  That is a remarkable statement. Indeed, the commission has no right to make it. It is not its role to propose the closure of highly profitable breweries, or to talk about something being

  1113
  "inescapable in the interest of greater efficiency".
  Who do the members of the Commission think they are? What are they trying to do—make recommendations to the management of a company? It is none of their business. They should have kept their noses out of our affairs. It is not their role to interfere in the management of Matthew Brown. They have exceeded their responsibilities and gone beyond their remit.
  The Fair Trading Act 1973, in placing investigative powers in the hands of the commission, was never intended to be used in this way. It was never intended that the commission should sanction the closure of profitable enterprise. Why should the members of the commission have the right to overrule Parliament in such issues? one third of the members of this House signed the early-day motion, and if Conservative members had been free to sign it a majority of this Parliament would have signed it. It opposes the takeover. Should not the Government now repeal legislation that removes from Ministers the right to protect jobs in the public interest?
  Why not amend the law to give the Secretary of State the power to consider Monopolies and Mergers Commission recommendations on takeover, but reserving to him the final right to decide for himself or herself, after parliamentary debate and/or consultation? Surely it is the government that must be accountable. It is the Government that we hold accountable in terms of job losses on this occasion.
  Another solution would be to require that it be proved that a takeover is in the public interest as against the need to prove, as at present, that the matter is not in the public interest. On that benchmark, without doubt, the Monopolies and Mergers Commission would have refused approval in this case. It is quite unreasonable to leave it to a so-called independent committee of inquiry or commission to decide on such matters. The old proposals, which were also the subject of a committee of inquiry, will be coming before this House. The House will have a vote. We need legislation to control the reaction of creditors who are out to secure closure to resolve their own commercial problems.
  Two weeks ago, the Under-Secretary of State for Trade and Industry—the hon. and learned Member for Folkestone and Hythe (Mr. Howard)—told us that the inquiry into the leak which took place on the Thursday would be dealt with internally within the Department. He would not give undertakings that the findings of that inquiry would be brought before the House. I, along with some of my hon. Friends, will start pressing the Minister in a few weeks for the conclusion of that inquiry. We believe that we are entitled to know what happened. We believe that, if we are not told, a cover-up must be going on. That would be against the interests of the House.
  10.30 pm
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): I am sorry if the hon. Member for Workington (Mr. Campbell-Savours) was expecting another Minister to respond. However, the Order Paper states that the hon. Gentleman
  "proposes to raise the subject of the future of Matthew Brown, following"—
  I stress the word "following". My Department has responsibilities for the brewing industry.
  Mr. Campbell-Savours: Not "before."
  Mrs. Fenner: The Order Paper states:
  "following the Monopolies and Mergers Commission Inquiry."
  I am grateful to the hon. Gentleman for providing this opportunity to debate the future of the company, not least because it has allowed us also to focus more generally on the future of the brewing industry in the light of the recent report of the Monopolies and Mergers Commission.
  I cannot accept the hon. Gentleman's allegations about the impartiality of the commission. It is an independent body. Its role is to evaluate the varying views put to it. The commission could only take the evidence and the views put to it by the parties. They made a categorical statement about the future of the brewery at Masham. They intend to continue to brew there and to market this traditional brand. It is not for me to defend the statements to the commission by either party. The report fairly sets out the evidence and arguments that were put to the commission. Although I respect the hon. Gentleman's right to take a different view and to reach different conclusions, I cannot accept that the commission did other than examine the facts objectively.
  My right hon. Friend the Secretary of State for Trade and Industry has announced a review in 1986 of competition legislation.
  I fully understand the hon. Gentleman's concern for the future of Matthew Brown, a company acknowledged to be a highly successful regional brewer making a valuable; contribution to the local economy and amenity in the hon. Member's constituency and, more generally, in the north of England. Much of the evidence that was before the commission argued for its continued existence as an independent brewery and for Government action to prevent its acquisition. I would not want to say anything which detracts in any way from the deserved tributes paid to the company. One must be clear, however, about the role of the Government in these matters.
  In making its report, the commission is obliged by the Fair Trading Act 1973 to report if
  "a merger situation qualifying for investigation has been created and the creation of that situation operates, or may be expected to operate against the public interest".
  It is only if the commission so finds, and specifies the adverse effects that it foresees, that my right hon. Friend the Secretary of State for Trade and Industry is empowered by the Act to intervene. In this case, the commission's report makes it clear that, while the commission could discern no material advantages to the public interest arising from the proposed merger, there were not sufficient grounds for a conclusion that acquisition of Matthew Brown plc by Scottish and National Breweries plc might be expected to operate against the public interest.
  Dependent on one's point of view, of course, it is possible to argue over the details and the balance of the evidence that the commission received. Naturally, both sides put forward claims and counter-claims, allegations and denials.
  Mr. Campbell-Savours: Will the Minister answer a simple question? Is the loss of 170 jobs in the county of Cumbria in the public interest?
  Mrs. Fenner: The commission's view was that the merger is not against the public interest. Furthermore, representations from different interests, unsurprisingly, took different views on the desirability or otherwise of a merger, reflecting, of course, differing perceptions about the effects of a merger. No purpose would be served by

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  our debating tonight the differing views expressed. The commission's task was not an easy one, but its report sets out very clearly the evidence it received, the conclusions it reached and its own careful reasoning. As was made clear in the statement on the report on 13 November, in the light of the commission's conclusion, my right hon. and learned Friend the Secretary of State for Trade and Industry has no power under the Act to prevent the acquisition nor to attach any conditions should a renewed bid involving the two companies in their present form be successful.
  I understand that, following the MMC report, Scottish and Newcastle has renewed its bid, which the board of Matthew Brown continues to find unacceptable. There being no grounds for Government intervention, the future of Matthew Brown lies in the hands of its shareholders.
  I recognise, however, that the hon. Member for Workington is concerned that if the bid is successful the merged company may, as part of a rationalisation programme, decide to close the brewery in his constituency with the resultant loss of jobs. He is, perhaps understandably, not persuaded of the fact that the future of this brewery cannot be regarded as completely secure, even if, the merger does not occur. Nevertheless, that was the conclusion that was reached by the commission after careful study of all the evidence. I recognise that that conclusion offers little comfort.
  The question of reduced competition in north and west Cumbria and in the north east in both the tied and free on-trade should the merger proceed, was one that concerned the hon. Members for Workington and for Blackburn (Mr. Straw) in their submissions to the MMC, which the commission studied very carefully. The commission's well-argued conclusion was that the merged company's increased share of business in the north west would not affect the ability of other brewers to continue to compete for the free trade business there. It noted that the merger would have little effect on competition as far as tied houses were concerned because Scottish and Newcastle currently owns relatively few public houses in the area. While accepting that in principle the elimination of Matthew Brown as a separate competitor in the north east was undesirable, the commission noted that the company's presence there was not yet a significant factor in
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  competition and concluded that the likely effects of the merger on competition in the north east would not be detrimental to the public interest.
  The hon. Member also expressed fears that Matthew Brown's smaller public houses—he mentioned village pubs—would be under threat of closure by the merged company, that there would be the loss of amenities in small communities in his constituency and that this would affect tourism, which is very important to Cumbria. This question was fully exposed and thoroughly aired in the commission's report—
  Mr. Campbell-Savours: But it ignored it.
  Mrs. Fenner: I cannot agree with the hon. Gentleman. It was fully exposed and thoroughly aired in the commission's report, but it did not see closures of pubs as being a material consequence of the merger.
  In the short time remaining in this debate I should like to say a word about the wider issue which concerned many people with an interest in the future of our brewing industry. There has been considerable speculation that if this bid were allowed to proceed, it would signal to the major national brewers that the Government would take no action to restrain a flood of takeovers of the smaller regional brewers. While the Monopolies and Mergers Commission found no grounds for Government intervention in this case, it made clear its view that in the interests of healthy competition, and also in the general interests of the areas in which they operate, it is desirable that there should continue to be viable and vigorous regional brewers. It forewarned that there could well be a strong case on public interest grounds against acquisition of a regional brewer by any of the five largest national tied estate brewers. That message is clearly one to which the Government must pay full regard in considering whether any bids arising in the future should be referred to the commission.
  The hon. Member for Workington raised another point at the end of his speech. As my hon. Friend the Under-Secretary of State for Trade and Industry has announced, an investigation is under way to establish whether a leak occurred. However, it has not been the practice of this or previous Governments to publish reports on internal inquiries.
  Question put and agreed to.
  Adjourned accordingly at twenty minutes to Eleven o' clock.